What is the public hearing and seeing regarding the April Fool's Day changes? "Starting April 1, under a new compensation rule from the Federal Reserve, borrowers who get their mortgages through brokers will most likely pay less for their services and must be offered the lowest possible interest rate and fees for which they qualify. The new rule also affects those dealing with small banks and credit unions, which typically do not fund loans from their own resources. But most banks and other direct lenders, including the few mortgage companies that function like banks, are exempt." SOUNDS MISLEADING!

Details of the latest Redwood Trust March 1^st deal are emerging. The $290 million residential MBS are backed by 303 loans, roughly 2/3 from First Republic Bank and the rest by PHH Mortgage. The average loan size is $977,000, according to the filing, with over 50% being from California. The deal holds an aggregate principal balance of $296.3 million with the underlying loans a mix of 30-year fixed-rate mortgages and 10-year hybrid loans. The master servicer will be Wells Fargo with Citigroup acting as the trustee.

What investor is going to buy any of the deal without a rating? Apparently Redwood began working with more than one rating agency. Fitch gave the deal its highest grade, but the other two rating agencies (Moody's and Standard & Poors) offered unsolicited opinions that raised doubts about Fitch's assessment including questions about the risks attributable to the geographic concentration of the mortgage loans.

Last week we learned that in the Great State of Texas, Vista Bank will be purchasing Founders Bank. At the other end of the deal spectrum, however, the FDIC announced that in Georgia (unofficial slogan: "Without Atlanta, We're Alabama")  Habersham Bank was closed and its depositors moved to SCBT National Association (SC), and Citizens Bank of Effingham was absorbed by HeritageBank of the South. Out in California (unofficial slogan: ""By 30, Our Women Have More Plastic Than Your Honda") Bank of Marin assumed all the deposits of Charter Oak Bank, and First California Bank assumed all the deposits of San Luis Trust Bank.

Provident Funding released details of its compensation plan. "Provident Funding will require a Broker Fee Agreement (between the broker and the borrower) to be uploaded for each transaction at Initial Registration beginning on March 1, 2011. You may use your own Broker Fee Agreement forms, provided all of the following requirements have been met: Must be signed and dated by the interviewer and all borrowers, must specify all broker fees to be charged in the transaction, regardless of who will be paying them, and the total for all broker fees reflected on the Broker Fee Agreement must match the GFE (i.e. Block 1 minus Lender Fees). When the GFE fees are input into the system: the Broker Origination Fee can be either a flat fee or percentage of the loan amount, and a Broker Processing Fee and up to 3 additional miscellaneous broker fees can be input. These must always be flat fees and cannot be based on a percentage of the loan amount; otherwise the GFE will be rejected."

Provident's bulletin goes on to note, "Where state law permits the broker origination fee to be based on a percentage of the loan amount, but the Broker Fee Agreement does not have a designated space for broker compensation to be specified as such (i.e. only as a dollar amount), one of the following is required: The agreed upon percentage of loan amount for broker compensation can be handwritten or typed in, as long as it is initialed by the borrowers, or an addendum signed by the borrowers and specifying that the broker compensation is based on a percentage of the loan amount can be provided. If neither of the above is provided, all broker compensation is presumed to be a flat fee."

Recently at Bank of America, its correspondents learned that it is now adding "loan-level suspensions to loans where state licensing requirements appear not to be met." Correspondent clients, by now, should have sent BofA copies of all current state licenses. Bank of America, by the way, has discontinued its Conforming Home Possible program line.

Other "discontinuations" include M&T cutting its FHA 30-yr fixed buydown, 203k rehabilitation buydown and VA 30-yr fixed buydown products, MSI discontinuing its USDA Rural Housing 2/1 Buydown program, and Affiliated Mortgage cutting its FHA and VA 30 Year Buydown products. 

Conversely, Flagstar Bank announced that the temporary suspension of "to be determined" (TBD) properties has been lifted. But like practically every other investor, Flagstar Bank is suspending all products that include a temporary interest rate buydown. Starting yesterday Flagstar is allowing "all approved FHA Sponsored Originators (formerly known as FHA TPO and FHA Sponsored Loan Correspondents) to order their FHA Case Number Assignments via Loantrac," and also told clients that "new construction attached PUDs located in Florida are eligible properties, provided the project or subdivision has a 50% pre-sale ratio. Flagstar continues to prohibit FHA and VA financing of new construction attached PUDs located in Arizona."

Fifth Third correspondent clients learned that next Tuesday, since Freddie Mac is revising their policy to require funds to close to be verified on refinance transactions (LP will not reflect the amount of funds required to be verified to close), neither will it.

CitiMortgage Correspondent's channel announced a re-org. Starting March 1^st CitiMortgage will support your Correspondent relationship with a newly assigned Correspondent Account Executive.  Our sales coverage model offers multiple benefits, including: a seasoned, consultative Sales Account Executive that has the experience and knowledge to deliver on our commitment to you, a dedicated Client Services Consultant who will provide proactive communication and tailored support, etc. The reorganization resulted in lay-offs, as one would expect.

Mortgage Services III (MSI) posted several changes that are now on its website. Changes include revisions to refinance guidelines & verification of funds, and a revised MSI Document Preparation Form & updated procedures.

PHH told its clients that starting next Tuesday, users of its "Fastrieve" system will notice that the "PreSubmission" option will no longer be available In order to simplify the document submission process. (Users will now choose between the two remaining Package Status options, "Final" or "Conditions" and plan accordingly for existing documents.) Late last week PHH followed changes in agency guidelines, specifically with LP scored and manually underwritten loans for refinancing purchase money transactions. ("for no cash out loans scored through LP or Manually Underwritten, the mortgage being refinanced must have a Note Date of at least 120 days prior to the Note Date of the No Cash Out refinance transaction") and the verification of all assets stated on the loan app. PHH also reminded clients that "the borrower must explain in writing all inquiries shown on the credit report within 120 days prior to the date of the credit report for all LP and manually underwritten loans. Loans scored through DU are required to provide explanations for credit inquiries within the previous 90 days prior to the date of the credit report. Previously it was 90 days for all loans." Check the bulletin for exact details.

At least pricing in some areas is improving. For example, late last month Wells Fargo Funding rate sheet (for correspondent clients) pricing began reflecting an uncapped base rate sheet price (although its maximum "all-in" base price cap of 102.75 on all Best Effort Correspondent Loans remained unchanged). "For Conventional and Government Best Effort Loans, the final price, excluding SRP, may not exceed 102.750, the final base price paid to the Seller will be capped at 102.75 after adjusters have been applied, even if the "pre-adjuster" price exceeds the cap, and Servicing Released Premiums, including the non-escrow waiver, are not included in this calculation, and are applied after the all-in base price is calculated."

Remember, it's already Tuesday! I lose track of all the housing indices that come out, but today we have the Case-Shiller 20-city Index, along with Consumer Confidence. Tomorrow is not much aside from Existing Home Sales and weekly mortgage app numbers from the MBA, which, as expected for 2011, have not been setting the world a 'fire lately. Thursday we can look forward to Jobless Claims, Durable Goods, another housing price index, and New Home Sales. On Friday we'll have our second look at the GDP from the 4th quarter (old news?) and a Michigan Sentiment number. In addition to the average news week, there will be Treasury auctions today, tomorrow, and Thursday, and which always have the potential of moving Treasury and mortgage rates one way or another.

Fill up those gas tanks! For news, the focus is on continued geopolitical unrest in the Middle East and Libya, the earthquake in New Zealand, and a possible downgrade for Japan by Moody's. Oil and gold are on the rise, early indications point to a "down stock market" but the 10-yr Treasury is better by about .5 in price (and down in yield to 3.52%) and MBS prices are better by roughly .250.

Marriage is sharing.

The old man placed an order for one hamburger, French fries and a drink.

He unwrapped the plain hamburger and carefully cut it in half, placing one half in front of his wife.

He then carefully counted out the French fries, dividing them into two piles and neatly placed one pile in front of his wife.

He took a sip of the drink, his wife took a sip and then set the cup down between them. As he began to eat his few bites of hamburger, the people around them were looking over and whispering.

Obviously they were thinking, "That poor old couple - all they can afford is one meal for the two of them."

As the man began to eat his fries a young man came to the table and politely offered to buy another meal for the old couple. The old man said, they were just fine - they were used to sharing everything.

People closer to the table noticed the little old lady hadn't eaten a bite. She sat there watching her husband eat and occasionally taking turns sipping the drink.

Again, the young man came over and begged them to let him buy another meal for them. This time the old woman said "No, thank you, we are used to sharing everything."

Finally, as the old man finished and was wiping his face neatly with the napkin, the young man again came over to the little old lady who had yet to eat a single bite of food and asked "What is it you are waiting for?"
She answered:

'THE TEETH'