The commentary on Saturday noted predictions for 2014, and how things were shaping up so far. Attorney Phil Stein observed, "Here is another issue to consider about how 2014 is shaping up so far.  The tide really seems to be turning in favor of correspondents as they continue to face repurchase and make-whole claims from aggregators. Plaintiffs generally have a really hard time proving their claims on the merits when correspondents put them to the test -- and, increasingly, plaintiffs are not getting a chance to get into the substance of their claims, because courts are recognizing that their claims are barred by the statute of limitations. In four of my cases in the last three months, my clients have had claims against them dismissed with prejudice because the claims were filed after the statute of limitations had run. Now that the courts are showing how willing they are to dismiss claims as being too stale to pursue, correspondents have even more reason not to give in to demands that they believe are unjust -- and so do the major banks when confronted with any lingering 'vintage' claims from the GSEs or investors in private-label securities."

On the jobs front, last week the commentary mentioned the explosive growth of LoanStar Home Lending but did not mention that SVP California Production John Giagiari is also aggressively looking for originators in Northern California. John said "I have seven more Intero Real Estate offices to place originators and need to fill those spots immediately!" John can be reached at Jgiagiari@GoLoanStar. com. 

And PHH Home Loans, LLC Midwest is continuing to expand its Retail Division in Chicago and Minneapolis.  PHH Home Loan's is in its 24^th year delivering superior service in the MN and IL markets and seeks experienced LO's who are in need of a broader product menu and dedicated back office support where they are partnered with loan processors  familiar with their predominant product sets. "PHH Home Loans brings the strength of one of the largest non-bank mortgage companies through our parent, PHH Mortgage Corporation and combines it with our local presence, diverse product menu, management guidance, processing support and technology", remarked President Mary Baymler who has been with the company since its inception. PHH is looking to fill Illinois retail positions in its Lisle, Barrington, and Northbrook locations with Minnesota openings in Edina, Coon Rapids, and Maplewood. Interested applicants should contact HR Director Cathy Bauman at Cathy.Bauman@phhonline. com. PHH Home Loans is proud to be an EEO/AA employer M/F/D/V and maintains a drug-free workplace and performs pre-employment substance abuse testing.

I lose track of the number of agencies that can pursue lenders (and borrowers) for wrongdoing: the CFPB, the Department of Justice, investors, other lenders, 50 state Attorneys General - no wonder compliance and legal budgets have ballooned beyond reason in the last year or two. But let's not forget the FBI, which lumps mortgage crimes in with other white collar crimes. But there is some recent news regarding this: despite its public commitment to mortgage fraud enforcement, the Justice Department did not ensure that the problem was a high priority law enforcement matter. Justice Department Inspector General Michael Horowitz said that within the FBI's Criminal Investigative Division mortgage fraud was the "lowest ranked criminal threat'' in the unit's "lowest crime category'' from fiscal 2009 to 2011. And in some of the bureau's most prominent field offices, including Los Angeles, Miami and New York, mortgage fraud ranked low or was not listed as a priority at all during the review period. The inspector general also reviewed a highly publicized October 2012 incident in which the department and Attorney General Eric Holder vastly overstated the success of an enforcement effort involving total losses first estimated at $1 billion. The actual loss involved in the fraud scheme was about $95 million and the number of criminal defendants charged as part of the initiative was 107, not 530 as originally reported by Justice officials. Here's the whole story.

Last week the commentary discussed Millennials, financial literacy, and first time home buyers - yes, they're all linked. I received a few general questions about financial literacy in general. Financial literacy is defined as the ability to understand how money works. It is the measure of the skills and knowledge to make informed and effective decisions about money. What is really interesting though is that the level of financial literacy in the United States came into sharp focus after the credit crisis of 2008. This event brought to light how many people had taken on far more debt than they could ever repay. New laws, the formation of the CFPB and tougher underwriting standards have all combined to tamp down the excesses of that period, but do individuals know more than they used to other than anecdotally? Many potential buyers and borrowers are lacking knowledge of simple personal finance questions. And even inside of mortgage lenders, does management make sure that LOs understood the correlation between interest rates and bonds? About how when prices go up, rates go down, and why?

While government agency web sites like the CFPB have great information, it appears few U.S. citizens are availing themselves of the information. If you Google "how can I improve my credit score," there are plenty of legitimate organizations right alongside fly-by-night debt consolidation outfits. Surveys have found that most people do not seek out financial information, but tend to come by it haphazardly. This can be from friends or family, clicking on an internet ad, or sometimes speaking to someone in a bank. One issue with lighter customer traffic in banks given a shift toward digital channels is that financial literacy in the U.S. as a whole could suffer.

Perhaps the digital answer is a start-up financial web site that aims to fill the need for accessible financial information. The site is called Phroogal and is based upon the idea that a social collaboration approach could be more effective at communicating legitimate financial information than traditional financial web sites which tend to be populated with FAQs. The site provides a search engine-type forum for people to ask questions and for other users to relate experiences and get answers from professionals. The site links in pages from the CFPB with relevant information on a specific inquiry. The idea is to link an informational and social approach for financial questions. I don't know if it will raise the financial literacy of the U.S. but it is interesting nonetheless.

Speaking of learning, on April 23 New Penn Financial is presenting Lou "MBS" Ranieri in a presentation to its client base. "His depth of knowledge in both the mortgage and capital markets arena make him a sought after speaker and influential in developing legislation for our industry and the securitization market. As a member of the Shellpoint Partners Board of Directors we are privileged to be able to offer this unique opportunity to hear his insights on GSE reform, securitization markets and pending legislation that impacts us all today and in the future." 

Let's continue playing catch up on some relatively recent lender & investor news!

Guild Mortgage Co. is opening a new branch in Harrison, Arkansas. The opening is the company's first branch in the state of Arkansas, and part of a large expansion into the South and Southeast. With the addition of the Arkansas branch, Guild now has more than 200 branches and satellite offices in 20 states. (Guild, with its home-grown LOS, had loan volume of $7 billion in 2013 and servicing volume of $13 billion.)

The title says it all: "Ocwen Freezes Future Mortgage Servicing Deals." Ocwen is well known in the industry as the buyer of delinquent or otherwise troubled servicing assets. But this will certainly roil the general servicing market - especially for the non-bank buyers.

Affiliated Mortgage has revised the minimum FICO scores for its FHA programs to allow scores down to 620 with DTIs of 45 or less and 640 for DTIs of 50 or less.  All FHA, VA, and Conventional cash-out transactions in CA, IL, and MA require a minimum score of 640, while Texas 50(a)6 cash-out loans and all other VA cash-out transactions require a minimum of 620.

WesLend has rolled out its new 5/1 and 7/1 Jumbo ARM products, which are available for loan amounts up to $2m with a FICO score of at least 700 and a max DTI of 40.  The program is being offered for owner-occupied and second home purchase, rate/term refis, and cash-out refis for 1-4 unit properties in CA, CO, FL, IL, KY, MN, NJ, PA, OH, TN, WA, and WI.

Compass Point Research & Trading reported on U.S. Bank's earnings. Once again, a big bank's results mimic what many other lenders are seeing. "Mortgage banking resilient in 1Q14, but pressure remains. Total mortgage banking revenue increased to $236M from $231M in 4Q13 due to a 47% increase in servicing revenue ($163M from $111M in 4Q13). The dramatic increase in servicing revenue was attributable to favorable hedging gains that likely won't be repeated. Offsetting the decent servicing income was a 39% decline in origination revenue to $73M from $120M in 4Q13. The decline in revenue was driven by a decline in originations to $6.2B from $8.6B combined with a decline in gain on sale margins to 0.72% from 1.13%. Roughly 70% of USB's originations are derived through the correspondent lending channel and we would expect outsized pressure on all correspondent originators due to the intense competition we are seeing for newly originated MSRs. We currently model margins will decline to 70 bps and remain at that level, but there could be some additional pressure heading into back half of the year as supply starts dry up in the seasonally slow fourth quarter. On a positive note, application volume was only down 4%, which is in-line with volumes indicated by the MBA application index."

Citadel has launched its stated income program, which allows loan amounts from $100,000 to $500,000 for LTVs up to 65% on single-family residences, townhomes, 2-4 unit properties, and condos, both warrantable and non-warrantable.  In addition, all occupancy types are eligible.  For foreign nationals, the funds to close must be verified in USD with a valid banking relationship in the country of origin, and impounds for taxes and insurance are required for all transactions.

Rates have been "stuck" in a range for quite some time. The easiest "benchmark" to discuss is the yield on the U.S. 10-yr. T-note, since it is very liquid. It has ranged between 2.60-2.80% for several weeks, and this morning we're right about at the midpoint. But who knows - some event overseas or news here, might jar us one way or the other. There is a fair amount of news this week, although mostly "second-tier" numbers that rarely prove to be dramatic. Tomorrow we start with a spate of housing news (including Existing Home Sales), Wednesday is the MBA's application numbers and New Home Sales, Thursday is Jobless Claims and Durable Goods, and on Friday is the Univ. of Michigan Confidence number. Speaking of the 10-year T-note, Thursday it closed at 2.72% and that is exactly where we are this morning - and don't look for much change to agency MBS prices either.