Back to school? The U.S. Census Bureau has come to the rescue with a lot of forgettable numbers - but those actuary and statistics majors have to do something, right? There are about 78 million children and adults enrolled in school throughout the country ranging from nursery school to college and comprised of 26% of the population age 3 and older. A quarter of elementary through high school students had at least one foreign-born parent in October 2013. About 74% of college graduates with a degree in science, technology, engineering or math (STEM) were not employed in STEM occupations. And underwriters could probably tell you that the average earnings for full-time workers with a bachelor's degree were $83k in 2012, compared to $41,248 for full time workers with a high school diploma.

Mistakes cost money. ComplianceEase recently released an analysis of compliance defects for closed loans and found that the cost of correcting errors is pushing the cost of origination up by $28 per loan. Their research also indicated that 17 percent of the 700,000 loans analyzed failed for TILA reasons and 6 percent failed for being outside of RESPA tolerances. For the 6 percent of loans that failed the RESPA tolerance test, the average cost for reimbursement was $328 and for 2 percent of loans that had an uncured RESPA violation the average reimbursement cost was $740. With the upcoming TRID regulations, lenders will have to be more cautious as penalties will range from $5,000 per day to $1 million per day for "knowing violations." Also one year after the effective date of the QM rule, ComplianceEase's research showed that 4.5 percent of QM loans failed Safe Harbor tests and 11 percent were mis-categorized as to their QM status.

With about 20 business days left until the TRID hammer comes down on the industry, I have received several questions about penalties if something goes wrong. Brennan Holland with Lenders Compliance Group writes, "The penalties for closing even a single loan in violation of the TILA-RESPA Integrated Disclosure (TRID) regulations can far outweigh any costs incurred in ensuring compliance with the new requirements.... For any violation of a law, rule, or final order or condition imposed in writing by the Bureau, a civil penalty may not exceed $5,000 for each day during which such violation or failure to pay continues.... For any person that recklessly engages in a violation of a Federal consumer financial law, a civil penalty may not exceed $25,000 for each day during which such violation continues... For any person that knowingly violates a Federal consumer financial law, a civil penalty may not exceed $1,000,000 for each day during which such violation continues..."

The Mortgage Action Alliance issued a Call to Action, urging its members to contact their members of Congress in support of legislation that would provide a temporary enforcement grace period and legal safe harbor to ensure smooth implementation of the new TILA-RESPA Integrated Disclosures rules for lenders that make a good-faith effort to comply.  

In the House, H.R. 3192, the Homebuyers Assistance Act, introduced by Rep. French Hill, R-Ark., would provide a legal safe harbor for lenders through February 1, 2016. The bill was approved by the House Financial Services Committee in late July.  In the Senate, S. 1711, introduced by Sen. Tim Scott, R-S.C., would provide a similar legal safe harbor through January 1, 2016. The bill was included in the regulatory relief package that was reported from the Senate Banking Committee earlier this year.

In these waning days of summer vacations the number of announced bank mergers have died down. In the last week there was only a handful. Northfield Bank ($3.1B, NY) will acquire Hopewell Valley Community Bank ($485mm, NJ) for $54.9mm in cash (25%) and stock (75%) or about 1.47x tangible book. In Alabama Avadian Credit Union ($607mm) will acquire American Bank of Huntsville ($127mm). And up north in Illinois Union Federal Savings and Loan Assn ($108mm) will acquire First Federal Savings and Loan Assn of Kewanee ($64mm).

Agency and investor agency news

In Fannie Mae & Freddie Mac news, there are plenty of owners of their stock that are hoping for big returns. Keep on hoping: the WSJ reports that the odds of that happening are pretty small. Speculation that a pro-investor settlement looms in the Fannie Mae and Freddie Mac cases has driven shares sharply higher, but this is wishful thinking. A rapid rise in shares of Fannie Mae and Freddie Mac, which shot up 15% since last Wednesday on reports speculating that the Obama administration could be close to settling a number of lawsuits filed by investors in the two mortgage giants. Doubt it.

For those of you who didn't know, Fannie's Housing Industry Forum was launched in 2013 to provide insights from Fannie Mae on its policies, products, and technology, and commentary of general interest to the industry. New content is posted Tuesdays and Thursdays, and the site includes a searchable archive of past coverage. The content is written by Fannie Mae's staff writers and also professional writers who are experts on the housing market - versus some aging commentary writer. This year, the Forum introduced a weekly news wrap up, opinion pieces from external contributors, and Q&A's with Fannie Mae execs (starting in Sept).

Mortgage lenders are more optimistic about 2015 than mortgage consumers, according to the Fannie Mae quarterly survey of lender sentiment.

Kansas' Peoples Bank has revised its guideline to align with Freddie Mac Guideline Changes. Some of the revised guidelines include: an increase for 4 to 6 on multiple financed properties, removal of the requirement on rental income regarding a 2-year history of managing for the guest, removal of the rent loss insurance requirement, removing the requirement that the Gift Letter must identify the mortgaged premises.

Effective August 31 ditech added LLPAs to all Conventional and Government Fixed Rate products where the loan term is 20 years or more. LLPA changes per state are as follows: TX (+.25), GA (+.20), FL, NY, MO, NC and PA (+.10), CA and NV (-.05).

Wells Fargo Funding is making changes to its Rate Financed Extended Lock Option (RFELO) government rate add-on adjusters, and its standard Extended Lock Option up-front fees, effective September 1^st. Changes include improved RFELO rate add-on adjuster for 360-day Locks on government Loans and increased standard Extended Lock Option up-front fees for Locks greater than or equal to 210 days on conventional Conforming and government Loans.

Some reminders from Franklin American Mortgage Company include its relaxed business transcript requirements by removing the requirement for business transcripts when assets from the business are being used. Business transcripts will continue to be required if the borrower is using additional income from the business for qualification. IRS W-2 Transcripts in Lieu of W-2s - In cases where the borrower is unable to provide a W-2, IRS "Wage and Income Transcripts" are acceptable in lieu of the actual W-2 forms. Also, FAMC expanded guidelines to allow a valid Employment Authorization Document for Non-Permanent Resident Aliens. Guidelines will now allow either a valid/unexpired EAD or an acceptable Visa Revised guidelines to allow a gift of equity on second home transactions.

FHA's Lender Insight provides lenders with up-to-date information about what FHA is seeing in lender approval, recertification, monitoring and compliance, and enforcement.  Each issue contains core information designed to help our lenders better understand the trends and policies that affect their business. FHA's August Lender Insight newsletter focuses on file documentation, processing mergers and acquisitions, lender recertification activities, and a notice to lenders to keep their administrative contact information updated.

Frankly, if I was an LO who specialized in FHA loans my head would be spinning. The New Single Family Housing Policy Handbook goes into effect on September 14^th. Notable changes include an added exception to allow the Family Member of a purchase, who is not a borrower, to be listed on the sales contract without modification or removal and a credit report for non-borrowing spouses in community property states must indicate the non-borrowing spouses' SSN was matched with the SSA, only where the SSN exists. If there is no SSN for the non-borrowing spouse, the credit report must at least contain the non-borrowing spouse's full name, date of birth and previous addresses for the last two years. Donor's bank statement is now required to evidence the withdrawal of gift funds and the Mortgagee must verify the borrower paid the outstanding balance in full on every 30-day account each month for the past 12 months. Other updates include, the Mortgagee must verify and include deferred obligations in the calculation of the borrower's debt and any accounts for which the borrower is an authorized user must be included in the borrower's DTI ratio unless the Mortgagee can document that the primary account holder has made all payments the last 12 months.

Up and down and all around. U.S. Treasuries rallied Thursday - attributed to our stock market changing direction but also... darned if I know. That's the flawless logic you've come to expect from this commentary, right? Starting yesterday, after a nice rally in the US fizzled, stocks are trading poorly everywhere. We can always blame China.

Today we've had the August employment numbers. So before you set sail on this Friday ahead of a 3-day holiday weekend know that +173k, much less than forecast. But August was revised higher - which for some reason is typical of August. The Unemployment Rate clocked in at 5.1%, and Average Hourly Earnings were +.3% a decent number. So things appear to be decent - I am sure the press will be slicing and dicing these numbers all day. For numbers we had a 2.17% close on the 10-year Thursday and we're at 2.13% with agency MBS prices better by roughly .125.

Jobs and Announcements

Wells Fargo Funding is hiring a Mortgage Correspondent Inside Sales Manager. The Inside Sales Manager will be responsible for strategic business development nationally, to attain growth and financial objectives while ensuring adherence to compliance regulations, and policies. They will also coordinate the sales effort for the Correspondent Inside Sales Account Executives to develop, maintain, and monitor client relationships and marketplace approach.  To view this job description and apply go to wellsfargojobs. com and search by Job ID# 5124283. The application deadline is September 12. (Yesterday Wells Fargo named Michael DeVito head of mortgage production, making him responsible for its retail and correspondent lending divisions, and will also oversee sales, operations, quality, compliance, underwriting and support.)

If you like management, Allied Mortgage Group Inc., headquartered outside Philadelphia, is looking for a Vice President of Retail Production. Allied is "a 22 year old company primarily licensed on the east coast with a proven track record of success. The candidate will be responsible for planning and directing sales and recruiting efforts as well as overseeing retail branch management in multiple offices. Additionally, we look for forward-thinking and creative people who can add value to a strong organization. Allied is expanding due to our recent technology investments, exceptional pricing/product matrix, client focused attitude, superior marketing systems and tenured management team."  For a confidential interview, please contact Bob Wexler or click Allied.

Congratulations to Tony Scoma. United Guaranty announced that Tony is its new Senior Account Executive in the Western Region. Tony will work with customers in Northwest California.

Mortgage WOMEN Magazine has appointed Tammy Butler as Managing Editor. "Our new magazine's Mission is to empower women who work in the mortgage industry to achieve their highest potential possible and to enable them to take advantage of the opportunities before them by providing them with educational and inspiring information of both academic and self-help information which will prepare them to achieve the highest level positions possible in the mortgage industry. 'I'm very excited about the future of Mortgage WOMEN Magazine with Tammy at the helm of the magazine. Tammy was an excellent choice to be our Managing Editor and I look forward to her leadership and taking the magazine to fulfilling the goals and the mission of Mortgage WOMEN Magazine,' said Ben Slayton, publisher of Twelve 11 Media." Click to receive your FREE Subscription of Mortgage WOMEN Magazine.