Every CPA out there knows that in the District of Columbia, this Friday, April 15th, is Emancipation Day. Therefore, taxes aren't due until Monday the 18^th. Who said you never learn anything by reading this commentary?

PHH announced that Bank of America Merrill Lynch intends to "in-source" some of its fee-based originations volume starting in two weeks. In conjunction with the announcement, PHH stated that it was withdrawing its previously announced earnings guidance to analysts of "breakeven to modest profitability" in 2016. PHH estimated that this change could represent a reduction of 20% of Merrill Lynch's 2015 volume (or 5% of total PHH closing volume). Merrill Lynch will also in-source its subservicing portfolio no later than December 31. The sub-servicing portfolio is about $40 billion UPB, or 18% of PHH's total MSR portfolio.

While this is a negative for PHH, and the profitability of the private label contracts remains uncertain, stockholders are hoping that this could be a further catalyst for the company to take strategic action. For example, on the flip side, Morgan Stanley exercised its right to extend its contract to October 2017 and has informed PHH it is assessing the arrangement beyond that point. Morgan Stanley will maintain its sub-servicing portfolio with PHH. We'll hear more about it during the earnings call in early May. Critics, however, wonder what PHH's role will be in residential lending going forward.

But wait - there's more! The industry is watching as PHH's court case based on captive insurance will be heard. Oral arguments start tomorrow on the CFPB's abuse of power, although don't expect a verdict until later this year. Perhaps Richard Cordray, in his efforts to "weed out the bad actors," will try to overturn that as well if the court sides with PHH.

Lenders aren't the only ones grabbing headlines. Annaly Capital Management (NLY) announced yesterday that it is acquiring Hatteras Financial (HTS) for $15.85 per share, or 0.85x of book value at the end of February. This represents about an 11% premium to the closing price of HTS shares on 4/8. The transaction is structured as an exchange offer and over two-thirds of shareholders need to exchange their shares in order for the transaction to close.

Analysts suggest that the acquisition will provide Annaly with some portfolio diversification, and that this transaction raises the possibility that we could see more acquisitions of mortgage REITs that trade poorly. This is the fourth mREIT buyout of the year and most expect more deals in the space to occur. But will some larger potential acquirers be willing to clear the hurdle of management fees owed to break up an externally managed mREIT.

And lenders and mREITs aren't the only ones grabbing headlines. Yesterday federal prosecutors announced a $5 billion deal with the Goldman Sachs Group Inc. to resolve claims over Goldman's misconduct in packaging and selling mortgage-backed securities from 2005 to 2007. The deal includes $1.8 billion for consumer relief.

That's a lot of ducats, although The New York Times reports that, "But that is just on paper. Buried in the fine print are provisions that allow Goldman to pay hundreds of millions of dollars less - perhaps as much as $1 billion less - than that headline figure. And that is before the tax benefits of the deal are included. The bank will be able to reduce its bill substantially through a combination of government incentives and tax credits. For example, the settlement calls for Goldman to spend $240 million on affordable housing. But a chart attached to the settlement explains that the bank will have to pay at most only 30 percent of that money to fulfill the deal. That is because it will receive a particularly large credit for each dollar it spends on affordable housing.

"They appear to have grossly inflated the settlement amount for P.R. purposes to mislead the public, while in the fine print, enabling Goldman Sachs to pay 50 to 75 percent less," said Dennis Kelleher, the founder of the advocacy organization Better Markets, referring to the government announcement. "The problem all along, with all of these settlements - and this one highlights it even more - is that they are carefully crafted more to conceal than reveal to the American public what really happened here - and what the so-called penalty is."

Goldman and other banks were given extra credit for activities that the government wanted to encourage, like funding development of low-income housing or providing relief to areas hit by natural disasters. And the final bill for Goldman is less than the settlements of mortgage giants like JPMorgan, which the government said was paying $13.3 billion, but more than the $3.2 billion settlement the government secured with Goldman's closest competitor, Morgan Stanley.

How about something a little more constructive, like some recent news about new products offered by lenders?

In addition to Weststar Mortgage's new website, it has new ARM Loan options with 3/1 and 5/1 ARMS now available. New enhancements include Delegated Service Level review, pricing, agency alignment. Product enhancements include Leasehold properties, escrow holdbacks, 203K streamline with construction consultant, and coming soon; two-time construction loans.

Jordan Capital Finance, one of the nation's largest lenders to residential real estate investors, spread the word about its suite of products to be a one stop shop for all types of residential investor loans. "Products include single family and small multifamily, fix and flip, ground up new construction, long term rental loans, renovation, and refinances. Jordan offers free pre-approved lines of credit from $100,000-$7.5 million. They can close loans in as little as a week, because they lend their own funds." Also offered are "ground up new construction, free lines of credit, long term rental loans, and paying broker fees."

NYCB's Warrantable Condos and attached PUD's will be available up to 90% LTV/CLTV/HCLTV for a second home, purchase and rate/term refinance transactions for new loans registered on or after March 4^th.

12-month bank statements to 2.5 million, 1-year BK seasoning, minimum 660 FICO - interested? Contact Justin Smith for HomeBridge product offerings.

Turning our attention to interest rates, if you don't mind a touch of intra-day volatility things pretty much ended Monday as they ended Friday. An overnight rally in global equities ebbed throughout the course of the day. The U.S. economic calendar was empty and the next big releases are retail sales and producer price data for March on Wednesday morning. U.S. One news source sagely observed, "Treasury yields have become more responsive to economic data over the past year than they were during the prior four years, suggesting that investors are increasingly viewing monetary policy actions as data dependent." Is this news?

Today we'll have March Export Prices ex-ag. and Import Prices ex-oil - not typically much of a market mover, and the Treasury will be selling $24 billion in 3-year T-notes. What may be of more importance to interest rates are weak earnings announcements from U.S. corporations, like Alcoa's this morning. We closed Monday with the yield on the risk-free 10-year T-note at 1.72% and this morning it is up to 1.76% with agency MBS prices worse about .125.

Jobs and Announcements

A National Charter Bank located in Jacksonville, Florida has an excellent opportunity for a dynamic professional to join its rapidly growing Mortgage Division as a Closing Manager. "The successful candidate will manage the closing team and oversee all aspects of the closing process, and ensure the accuracy and completeness of loan documents and their timely delivery. Relocation assistance will be offered to the successful candidate. The Bank has cultivated an energetic, fun team environment where everyone strives to deliver an exceptional customer experience with every loan. We have a stable and tenured leadership team and knowledgeable and experienced staff. In addition, the Bank is looking to expand its VA underwriting team with nationwide positions available. If you are also energetic, positive and feel you would be the perfect fit please can send confidential resumes to me (please specify opportunity).

On the wholesale side of things, founded in 2008, and licensed in 48 states, New Penn Financial, a Shellpoint Partners company, and its reputation has grown substantially under the guidance of a management team with years of experience in the mortgage industry. New Penn Financial has been recognized in the top 20 Third Party Originations Lenders and was recently voted as being a great mortgage lender to work for by sales professionals. New Penn Financial is hiring experienced Account Executives in San Francisco, CA, Sacramento, CA, Fresno, CA, and Utah! For more information, or if interested, please submit confidential resumes directly to Wells Constantine (VP, Wholesale Sales) for the Northern CA opportunities and Bryan Cross (VP, Wholesale Sales) for the opportunity in Utah. 

Congrats to Michael Kuentz who has joined Altisource as Vice President, National Sales for the Lenders One Mortgage Cooperative. He will be responsible for managing the Lenders One sales effort and implementing new initiatives for the benefit of members, and brings over 18 years of sales and management experience in the mortgage industry. Justin Vedder has taken over the role of Vice President, National Sales for Origination Solutions. He will oversee all sales and client service functions across the business unit. Justin has more than 15 years of sales and management experience in the mortgage and insurance industries. He joined Altisource in July 2015, through the acquisition of CastleLine where he served as EVP, Risk and Insurance Services.

And Stonegate Mortgage Corporation announced that Michael Bender has returned to the company and been named East Regional Manager. In this role, he will lead the East Region's Third Party Origination sales teams, selling products in the company's four TPO channels - broker, non-delegated correspondent, delegated correspondent and bulk mandatory. He will report directly to John Pantalone, SVP TPO Eastern Division.

Training and Events

Can anyone have enough training and opportunities to mingle with mortgage banking brethren?

All MLOs should block out Thursday, April 14 at 2:00 PM EDT on their calendar to join another quality webinar from our friends at National Mortgage Professional Magazine. This webinar presented by Ron Vaimberg will give strategies and tactics on "How to Get the Appointment with Any New Referral Partner." With closed offices and real estate agents that rarely come into the office, connecting with them is getting almost near impossible unless you know the secrets to getting their attention. The secret is you have to know exactly what to say and do. Click here to reserve your seat for this FREE Webinar.

"No one will be 'singin' the blues' at this year's sold out Great River Mortgage Bankers Association Conference (formerly Tri-State MBA)! Exhibitors and attendees from the States of Tennessee, Arkansas, Mississippi and, new this year, Missouri, will gather April 13th - 15th at The Peabody Hotel in Memphis, Tennessee. The conference kicks off with a golf tournament at Windyke Golf Club. Speakers include, David Luna, President Mortgage Educators and Compliance, Scott Nowak, Assistant Director of State Government Affairs MBA, Barry Habib, Founder/ CEO MBS Highway, Ralph DeFranco, Economist Arch MI, and myself along with some very talented industry leaders such as Chrissi Rhea, Mortgage Investors Group, Hank Cunningham, Cunningham and Co., Retta Gardner, Guaranty Trust, Logan Pichel, Regions Bank, Rob Henger, FirstBank, and David Bryles, Iberia Bank.

If you have some time on Thursday, April 28, at 11AM PDT, the California MBA is offering up a free webinar on, "Internal Audit Best Practices for Mortgage Companies." One can dig in, to their heart's content, to the purpose and benefits of internal audit, internal audit mission and standards, structure and independence, and the internal audit process. And don't forget risk assessment, executing the audit plan, and remediation & follow up. The speakers are Heidi Weir, Managing Director, CrossCheck Compliance, and Steve Mikolajczak, VP of Internal Audit, Guild Mortgage. (Materials will include instruction on how to spell Steve's last name.)

May 9-11 is the Annual OMBA "Home" Conference in Catoosa at the Hard Rock Hotel. Don't forget about the Golf Tournament on the 11^th! With a powerful line up of speakers, this year is sure to be a memorable one. Conference details and registration information are available here.