"I have a switch in my apartment that doesn't do anything. Every once in a while I turn it on and off. One day I got a call from a guy in France who said, "Cut it out!" Knowing what switch applies to what light is important, just as it is knowing what license applies to what state. Like the recent news on national versus state exams: "Rob, I've heard that only the national NMLS exam will be required for all the states - is that true?" Well, it is always best to ask an attorney well versed in licensing, but to the best of my knowledge only half the states have adopted the combined exams. As a quick example, California is not one of them, and still requires both the state and federal exams. And here in Florida, NMLS, surprisingly, barely takes the time to update its date information.

Companies, like Citibank, with a national lending presence have to know these things. Citi's Partnership Channel (in its retail mortgage division) is currently recruiting Loan Originators and Sales Managers in the following markets: Washington, Oregon, Sacramento, Las Vegas, San Diego, Central Valley, Alaska, Atlanta, Boston, Houston, Austin, San Antonio, Indianapolis, Nashville, Tucson, Phoenix, Salt Lake City, Albuquerque, Santa Fe, Omaha, Sioux Falls, Dallas, Minneapolis, Colorado Springs, Denver and Montana.  Citibank's Retail Mortgage Partnership Channel focuses on the formation of real estate and builder partnerships, generation of purchase mortgage volume, and effective cross-sell routines. "The channel's unique approach redefines the traditional boundaries of the home purchase mortgage with the industry's realtors and builders. Citibank's offering includes competitive pricing and product mix, operational superiority, compliance and regulatory support, competitive pay and benefit package as well as forward-thinking leadership." Experienced candidates who are proven leaders in the mortgage industry should submit confidential resumes and qualifications to Citibank Recruiter Kenda Rice at kenda.l.rice@citi .com.

And On Q Financial is looking for a Chief Information Officer (CIO) to take over management of the Company's computing environment and IT organization.  On Q, a private mortgage lending firm headquartered in Scottsdale, AZ, is experiencing significant growth throughout the US.  The Company has distributed retail branches in 7 states, a centralized call center, and is opening an east coast operations center to support its expansion plans. Requirements include 5 years' experience as a CIO managing a predominantly mortgage origination business, with strong management, problem-solving, communication skills, and a history of proven results-oriented performance. The CIO will report to the CEO.  Candidates should forward their resumes to john.bergman@onqfinancial .com.

I don't know much about "social media", but plenty of home loan companies and lenders use it. Now federal regulators are proposing guidance for social media use. Last week the FFIEC proposed guidance on the applicability of consumer protection and compliance laws, regulations, and policies to activities conducted via social media by federally supervised financial institutions, as well as nonbanks supervised by the CFPB. With regard to compliance and legal risks, the guidance addresses (i) the applicability of existing federal laws and regulations to the use of social media for marketing and originating new deposit and lending products and the use of social media to facilitate consumer use of payment systems; (ii) the need to apply BSA/AML internal controls to customers engaging in electronic banking through the use of social media, and e-banking products and services offered in the context of social media, as well as BSA/AML risks emerging through the growing use of social media; (iii) CRA monitoring of social media sites run by an institution; and (vi) customer privacy issues associated with social media. BuckleySandler wrote, "The guidance also reviews reputational risks related to social media, including risks related to (i) fraud and brand identity; (ii) social media vendor monitoring; (iii) privacy; (iv) consumer complaints; and (v) employee use of social media. Finally, the guidance addresses the vulnerability of social media to malware and the resultant operational risk. The FFIEC is accepting comments for 60 days after publication in the Federal Register. After the comment period, the agencies will issue supervisory guidance and will urge state regulators to follow." Here are the guidelines.

The fallout from recent down payment assistance programs (DAP) rulings continues. The Ohio Mortgage Bankers Association wrote, "On December 5 HUD published an Interpretive Rule regarding sources of funds for the borrower's minimum required down payment for Federal Housing Administration (FHA)-insured loans. The rule exempts state and local governments and their respective agencies and instrumentalities from the prohibitions on lender funded down payment assistance; however, the Rule further states that funds for the borrower's minimum required down payment must be provided directly by the State or local government or instrumentality. In order to comply with this rule, it is necessary for OHFA to change its process for funding both Down Payment Assistance Grant (DAG) and Grants for Grads (G4G). Effective January 24, OHFA will direct DAG and G4G funds to the title agency or other entity that is closing the loans. Lenders must submit the attached ACH/Wire Transfer Form at least 5 business days before the schedule closing. Please note the lender must obtain Wire/ACH information for the title agency or other entity that will complete the closing. The Form should be e-mailed to dpafunding@ohiohome .org as soon as possible; after you receive a loan commitment approval from OHFA is received."

The release goes on: "We regret that we are not able to allow more time to transition to this new process. We are making this change because on January 17, speaking at a conference of the National Council of State Housing Agencies (NCSHA), HUD Deputy Assistant Secretary for Single Family Housing Charles Coulter and Home Mortgage Insurance Division Director Arlene Nunes stated that HUD's interpretation of current law is that HFAs may provide down payment assistance on FHA-insured loans only when the Housing Finance Agency (HFA) provides such assistance 'directly' at the closing table. Nunes explained that this means the HFA must be the direct source of the funds provided at closing. Programs in which HFAs purchase loans from lenders after closing or lenders provide the funds initially at closing are not permissible under this interpretation. Nunes also pointed out that the Interpretive Rule applies to the borrower's 'minimum required investment' (MRI) under FHA rules, not to any down payment assistance provided by an HFA in excess of the MRI."

And on: "While both OHFA and U.S. Bank were aware of the Interpretive Rule, we believed that OHFA's commitment letter for the DAG or G4G and the borrower's signature on the acknowledgement form would satisfy HUD's requirement that an instrumentality of state government directly funded the down payment assistance. Based on the explanation of Ms. Nunes, OHFA's process for closing and funding loans with DAG or G4G does not meet the requirements of the rule. OHFA will honor all DAG and G4G commitments as long as the loans close with funds provided directly from OHFA to the title agency. For loans that receive commitments after January 24, OHFA will be revising the commitment letter to clarify that unless DAG or G4G funds are provided directly from OHFA at closing, the borrower must meet the minimum required investment under FHA rules before any DAG assistance is applied."

The size of the agency MBS market has increased nearly a trillion dollars over the last five years. This can be contributed mainly to an increase in both the size of banks, savings, and credit unions, as well as mortgage REITs. Although all mortgage REITs put together owned only $140bn agency MBS two years ago, their net purchases over the past two years were as significant as net purchases by all domestic banks and money managers and REIT holdings of agency MBS have increased by about $210 billion since the beginning of 2011. Mortgage REITs have become an important investor group in the agency MBS market over the past two years. Another interesting note is domestic money managers own only about $1 billion agency MBS as of the end of 2012 versus $1.67 trillion they owned in December 2008 (immediately before the Fed started QE 1. Finally, the outstanding balance of agency MBS changed very little over the past three years versus the annualized growth rate of $450-$550bn seen over the prior three year period of 2007-2009.

Turning quickly to some regional events, seminars, and training news...

"BUS WITH US on FEBRUARY 4^th, to our STATE CAPITOL for Legislative Day." So wrote the Washington Association of Mortgage Professionals. "This is a wonderful opportunity to join your industry professionals and make your voice heard.  Bus pick up locations are Bellevue and Tacoma.  For more information, please visit www.mywamp.org.

The California Association of Mortgage Professionals will be hosting its annual Lender Fair in Newport Beach, CA from January 30^th-February 1^st.  This year's event will focus on the changing regulatory landscape, compliance, and marketing.  For more information and registration links, go here.

The Illinois Mortgage Bankers Association is hosting a mortgage industry seminar on February 14 in Oak Brook on originating loans in the world of QM, Fair Lending Considerations, and an update from the IDFPR (Illinois Department of Financial and Professional Regulations). For more information go to www.imba.org or contact IMBAInfo@att .net to register for the seminar.

Fannie Mae will be providing two online training sessions discussing the new requirements for the FNMA Mortgage Release (deed in lieu of foreclosure) processes as part of its wider Servicing Alignment Initiative on January 29^th and 30^th.  The webinars will cover the three options available to borrowers completing Mortgage Release, which include an immediate move, a three-month transition with no rent payment, and a twelve-month lease with market rent payment.  As a reminder, the new policies will become mandatory on March 1^st, but it is strongly encouraged that servicers implement them before then.  To register, (for the 29^th) or (for the 30^th).

Law firm Ballard Spahr is presenting a webinar on the CFPB's recent Ability to Repay/QM, servicing, and LO compensation regulation on January 30^th.  The program will discuss the two-pronged approach to the QM concept, products that lenders may discontinue, proposed changes that would affect LO compensation as part of the points and fees relevant to QM requirements, rate/payment notice requirements, servicers' responsibilities concerning consumer complaints, and implications for the foreclosure process, amongst other things.

On the heels of the recent QM developments, Ballard Spahr will be hosting a webinar that breaks down Ability-to-Repay and Qualified Mortgage litigation on February 5^th.  Liability risk for violating the rule, how to determine repayment ability, points and fees, LO compensation, and the proposed HAMP/HARP exclusions are all on the agenda.

Ballard Spahr is presenting another CFPB-focused webinar on February 13^th, this one on defense against and insurance for governmental investigations.  This training provides an overview of CFPB, FTC, and AG enforcement; how to control the associated costs; and how to obtain the appropriate insurance coverage.  Register here for all these webinars.

Moving on to some recent economic trends, the   new  home  sales  data  continues  to  balk  at  providing  a  simple reinforcement  of  what everyone now takes for granted, that housing market conditions are improving in most major markets. The most likely explanation is that Hurricane Sandy washed out sales in October, they came roaring back in November, and then corrected from the correction in December. Underlying the zigs and zags through the second half of 2012 we can make out at an upward trend that needs to be extended if it is to be believed.

As data for the fourth quarter of 2012 rolls in there is evidence of an economy that can be described as tentative but not stalled. December retail sales improved slightly but auto sales fell. Inflation was not an issue at year-end as the producer price index for finished goods fell by 0.2 percent in December (with both food and energy down). However, the savings rate could fall from a high level as consumers feel more confident with increasing home and equity prices.

And yes, mortgage rates have risen in recent weeks, but the rise has been pretty negligible with the 30 year fixed rising 11 basis points since hitting its all-time low around Thanksgiving. We know that mortgage rates tend to rise when the economy is doing well, or expected to do better, but are also influenced by other factors such as supply and demand. U.S.  economic  data  was  mixed  last week with a solid Leading Indicators report for December and another good read on January unemployment insurance claims,  but  mildly  disappointing  December  home  sales.  Equity markets rallied with the Leading Indicators report highlighting the potential for more positive feedback between good economic data and improving household wealth. With all this the 10-yr closed Friday up at 1.95% - but few see rates moving much higher.

Leading up to the Super Bowl, how about some clever bad lip-reading courtesy of the NFL: http://biggeekdad.com/2013/01/nfl-bad-lip-reading/.