Welcome to Fat Tuesday, or Mardi Gras, a rowdy day of hedonism where shipping departments across the nation have great parties and throw bead necklaces at underwriters. Lent begins tomorrow and ends Thursday, April 5 (two weeks prior to the MBA's National Advocacy Conference is April 18-19 in Washington DC) - perhaps lawmakers will give up creating laws about mortgage banking for Lent.

One thing not being given up for Lent is hiring. 1st Advantage Mortgage is looking to grow its origination channel by adding seasoned retail loan originators and origination branches.  Licensed in 22 states, 1st Advantage Mortgage, a Draper and Kramer Company headquartered in Lombard, IL, has a strong presence in the Midwest and is targeting originators and branches in Texas, Iowa and Minnesota in addition to adding to the production units in Illinois, Wisconsin and Arizona.  1st Advantage Mortgage has averaged $1.96 Billion in volume over the last 3 years and underwrites with no overlays as they sell direct to Fannie Mae, Freddie Mac and Ginnie Mae.  Transition guarantees are available to qualified producers.  Visit www.join1am.com for more information and contact JT Current at jt.current@1amllc.com to discuss this opportunity.

No champagne corks should have been popping at the news last week when the permanent payroll tax cut extension was put into place without guarantee fee increases. There was some confusion about guarantee fees. ("After months of wrangling, the House and Senate passed a permanent payroll tax cut extension Friday without imposing controversial guarantee fees for lenders with government-backed mortgages.") The two months of temporary extension was paid for, and will be paid for, by the g-fee increases already put in place. These fees will remain in place for several years in order for the government to pay for the two months. Not only that, but, depending upon the FHFA, it may be more than 10 basis points if g-fee income in the first part of 2012 falls below expectations. And as rates sheets everywhere will tell you, a change in g-fees is the same as a change in rate - thus impacted by the market buy-up or buy-down ratios. And lastly, they're still trying to figure out what to do with FHA's g-fee. Hey, don't shoot the messenger!

Folks are talking about HARP 2.0, but I, for one, am not convinced anyone knows quite what to say - but HARP 2.0 rolls on. Matt Lind with STRATMOR writes, "Based on three HARP 2 workshops STRATMOR has recently conducted with lenders, it appears that large aggregators have not yet decided whether or not to purchase HARP 2 loans originated by their correspondents, including loans that they (the aggregators) are currently servicing.  Despite a tremendous surge of HARP 2 inquiries from existing borrowers, the attitude of some aggregators seems to be that their existing borrowers --- especially those with high LTV loans --- will have no other place to go and so "we'll get to them when we get to them." If this attitude persists, then non-servicing correspondents --- especially those lenders without Agency approvals -- will be faced with few outlets into which to deliver HARP 2 loans; in effect, making HARP 2 a "big servicer" refinance program. With purchase originations remaining anemic, this could make 2012-2013 unnecessarily tough years for mid-size and smaller lenders, who otherwise could use readily available data base marketing services to receive timely and cost-effective HARP 2-eligble leads if they had outlets for HARP 2 loans. We think, however, that the large lenders will likely succumb to external pressures to open up HARP 2 originations to their wholesale channels. Making their existing, good payment-history borrowers wait months before starting an in-house refinance will delay such borrowers the substantial payment reductions of a HARP 2 refinance and both draw and deserve public criticism."

And don't forget that most non-depository mortgage banks use warehouse lines. So far I have not heard of any warehouse lenders anxious to extend monies on 125% LTV (and higher) loans.

On the other hand, I saw this from a research firm on Wall Street. "It's looking likely that small loan originators will benefit from modifications, even as refinance share of activity is beating market expectations.  HARP 2.0 refinancing activity appears to be exceeding earlier projections, with analysts predicting that the surge will continue throughout 2012, and smaller originators will be ideally positioned to pick up market share. The latest figures from DC think tanks suggest that up to 6 million loans could become eligible for refinance activity and that 3.5 to 4 million loans will enter HARP 2.0.  If those numbers hold true, 900,000 to 1.6 million loans could trade up for rock-bottom interest rates. Big banks stand to benefit as well, as HARP could expand by $140 to $200 billion, with $1.1 to $1.2 trillion in out-performances from Chase, Wells, PNC Financial Services, and U.S. Bancorp."

Coester VMS and Weiner Brodsky Sidman Kider PC will be hosting a webinar on the new HARP 2.0 mortgage program offered by the current administration. "Learn what it means to you, your borrowers and your company as well as best practices, limiting risks and valuation practices. In this webinar we will outline FHFA's and the GSEs' announced expansion of HARP resulting in HARP 2.0, which loans are covered by HARP 2.0, further GSE guidance issued since the October 24, 2011 HARP 2.0 announcement and HARP 2.0 requirements, and what future enhancements to these programs might mean for borrowers and mortgage lenders." The webinar is tomorrow from 2-3PM EST; register here.

Last week I noted some upcoming conferences. If you're near Vermont on April 18 & 19, you should know that the Mortgage Bankers/Brokers Association of NH and the VT Mortgage Bankers Association are hosting a "Joint Mortgage Compliance Conference" at the Lake Morey Resort in Fairlee. "Cultivating Success Amid Growing Regulation" - more information can be found here. And the following month in Maryland, the MMBA's Annual Conference takes place May 10^th. Speakers include Dave Stevens, the MBA President & CEO.

Most would agree that "data is power." A few weeks ago I spoke at FNC's customer event. FNC, for more than a decade, has been tracking the data from millions of appraisals nationwide. "As the technology platform for valuation ordering and delivery, FNC blended that data with public record information to give the real estate industry the most up-to-date, most comprehensive property data available. Compiled into FNC's National Collateral Database, the data supports powerful analytic products that loan originators and servicers can use to gain a competitive edge through more accurate valuation decisions." And now FNC has rolled out its "FNC Residential Price Index" which will come out on the 15^th of every month - check it out at www.fncresidentialpriceindex.com.

Here's some good news, and a sign of the times. Digital Risk, "the nation's leading and largest risk management and compliance solutions provider," has plans to add more than 1,000 full-time US-based, professional, positions in 2012. "Positions will include experienced underwriters, attorneys, processors, compliance experts and appraisers...As the company reaches maximum capacity at both its Orlando and Jacksonville facilities, it will either expand existing operations in Texas, Colorado or California, or open new facilities in Florida as soon as March." Sometimes I comment that at some point compliance and legal personnel will outnumber originators - I guess that it is a sign of the times.

Turning out attention to the markets, at the end of last week we learned that the Conference Board's Leading Economic Index increased 0.4% in January, following increases in December and November. Few can deny that there are sporadic signs that parts of our economy are improving slightly. But overseas news took center stage again: Eurozone finance ministers sealed a deal for a second bailout for Greece, including €130 billion ($173 billion) in new financing. Put another way, the finance ministers from the 17 nations that use the euro, known as the Eurogroup, gave Greece the funding it needs to avoid a potential default next month. But the problems will be with us for years: the Greek government needs to trim debt to 121% of the country's gross domestic product by 2020. Greece's debt now stands at about 160% of GDP, and it doesn't help that Greece is in its fifth year of recession and that its GDP fell 6.8% last year.

Every two or three weeks, here in the U.S. we can take a breather from the usual onslaught of economic news - this is one of those weeks. Monday was a holiday, today is nothing aside from a $35 billion 2-yr auction, tomorrow is Existing Home Sales, Thursday is Jobless Claims and yet another housing price index (this one brought to us by the FHFA), and then on Friday the 24th is New Home Sales and another consumer sentiment survey from the University of Michigan. In the early going our 10-yr is up to 2.04% and MBS prices are worse about .125-.250.

In honor of President's Day, yesterday's commentary had some presidential salary trivia. I was all set to have a joke today, but Mr. Hurst with FNC sent me some astounding trivia that was too good to pass up. From Yahoo: "This story sounds too impossible to be true, but it is. John Tyler was born in 1790, and he was the 10th president of the United States in 1841. Believe it or not, he has two living grandchildren. For perspective consider this: When Tyler was born, George Washington was giving his State of the Union address. When Tyler became president, the civil war was still 20 years away! But how is this possible? Here's some math for you: Tyler had 15 children, and in 1853 he was 63 when his son Lyon Gardiner Tyler was born. Lyon had six children, with two of them, Harrison Ruffin Tyler and Lyon Gardiner Tyler Jr., born when he was in his 70s in 1924 and 1928 respectively. Both men, now in their 80s, still live in Virginia."  

If you're interested, visit my twice-a-month blog at the STRATMOR Group web site located at www.stratmorgroup.com. The current blog discusses residential lending and mortgage programs around the world, part 2. If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what's going on out there from the other readers.