"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term." Is that statement by the Fed a surprise to anyone? Hardly - but it was focused on by many yesterday when the FOMC let things ride. What also isn't a surprise is that lots of small companies are trying to hang on to their servicing. Some are getting by, others not. Either way it is good to know the accounting angles involved in mortgage servicing rights and Richey May just came out with a White Paper on the topic.

Yes, TRID spelled backwards is DIRT, and the industry is covered in it.

Lenders One conducted a survey at the Lenders One Summer Conference in August and found that sixty percent of mortgage banker members expect 2016 to be a seller's market and 89 percent believe the market could withstand a rate hike. Mortgage bankers are also keeping tabs on issues that could affect the industry such as innovation in bank's menu of mortgage products, increase in home values and lowering acceptable down payment amounts. The majority of mortgage bankers (64 percent) felt that they have the knowledge and tools to adjust to the new TRID requirements, 27 percent stated they were somewhat ready and 9 percent said they are unprepared. Almost half (47 percent) of respondents said that delaying the TRID effective date has made adjusting to the new rules less difficult but another 47 percent said adjusting to the new rules would be the same, regardless of the delay.

Ellie Mae published a RESPA-TILA fact sheet which will be a continuously evolving document written by Ellie Mae's compliance team. The information provided is based upon frequently asked questions from training and webinars that Ellie Mae has hosted. The first four chapters have been posted on its website, with additional chapters soon to follow.

In preparation for implementation of the TILA-RESPA Integrated Disclosure rule effective with loan applications dated on and after August 1 Wells Fargo Funding will no longer purchase single close construction Loans. This includes one-time close construction loans which convert to permanent financing via a construction loan rider or a separate modification agreement.

Weststar Mortgage's Correspondent Lending Division announced that due to impending industry regulations and compliance requirements (most notably TRID) it will be temporarily suspending the purchasing of the One-Time Close (OTC) construction loan product effective immediately. Sellers with locked OTC loans in the pipeline are urged to contact your Account Executive at their earliest opportunity.

TRID changes impacting our industry go back quite a ways. Going through my archives showed that when Zelman & Associates published its June Mortgage Originator Survey indicating that the TRID delay had been viewed positively and lenders are prepared for the change, using the additional two month delay to test compliance systems. Survey respondents reported a 14 percent YoY increase in purchase applications in June. Purchase applications were up 13 percent in the first half of the year compared to 7 percent in the first half of 2014. Credit quality index increased to 65.1 from 64.6 in the prior month and the underwriting criteria reached 65.5 from 65.3, with 12 percent of lenders reporting modest tightening and 42 percent of lenders expecting standards to become more lenient over the next year. The availability of private mortgage insurance was rated at 70.2, an improvement from the 2014 average of 65.5. MGIC, Radian and Essent are well positioned to benefit from strong purchase origination growth and increase entry-level demand. To learn more about the June Mortgage Originator Survey, contact Ivy at ivy@zelmanassociates. com.

And those folks at HUD are always tinkering with things, forcing lenders to do the same and resulting in FHA & VA changes. Where did the new Handbook changes settle?

The National Mortgage Risk Index (NMRI) for Agency purchase loans was 12.09 percent in July, down 0.2 percent from the average for the prior three months, but up 0.6 percent from a year earlier. Agency loan origination has transitioned from large banks to nonbanks in July. The NMRI reached 15.40 percent for first time buyers compared to 9.68 percent for repeat buyers, with the hike in first time home buyers contributing to a strong spring season. About 140,000 purchase loans for first time buyers were added in July, up 16 percent from last year and FHA's reduction in MIP has raised its market share to 29 percent compared to 24 percent a year earlier. The credit standards for first time home buyers has also loosened, as 21 percent of first time buyers had subprime credit, whereas in July of last year, 19 percent had subprime credit.

What are brokers hearing about the FHA Handbook rollout? Plenty. For example, here's what Mountain West is providing its clients.

Regarding the new handbook, Hank Davis with Metasource wrote, "This whitepaper has been updated with FHA's changes."

Effective with case numbers assigned on or after September 14, FHA has updated the Single Family Housing Policy Handbook with the release of the new 4000.1 Handbook. Penny Mac overlays have been updated accordingly.

Peoples Bank (KS) has weighed in on the new FHA Handbook and Guidelines that becomes effective with new Case Numbers assigned on and after September 14. The FHA has made revisions to the Appraisal Guidelines. On a side note, when dealing with a Purchase transaction, it would be beneficial to all concerned parties to ensure that the Realtors and Sellers are aware of the new Appraisal Guidelines.

Mountain West Financial has made the announcement, per the FHA Appraisal changes, FHA no longer uses the word "inspection", and it now uses "observe" or "observation".  Some examples of the changes include: utilities must be on at the time of observation.  If they are not, the appraisal must be completed, "subject to" utilities being turned on and all applicable mechanical systems being observed. All appliances must be observed whether operational or not. If appliances are present they are assumed to be conveyed in the transaction and should be operational, therefore must be turned on. Local codes and ordinances supersede FHA requirements. The statement, "completed in a workmanlike manner", will no longer be used.  It has been changed to, "was built in keeping with the design, appeal, and quality of construction of the main dwelling."

Do you recall that in the January 29, 2015, issue of the Federal Register (80 FR 4812) the Department of Veterans Affairs (VA) published a proposed rule to amend its ARM regulations? Black/Mann & Graham LLP has provided an article regarding this topic.

Freddie Mac announced it updated Loan Prospector on September 13 to align with the FHA loan requirement changes announced in the August 26 FHA Single Family Housing Policy Handbook (HUD Handbook 4000.1). Loan Prospector will include updated feedback messages for loans with FHA case numbers assigned on or after September 14.

M&T Bank made changes found in its FHA Underwriting & Eligibility Standards product pages effective with registrations on case numbers assigned on or after September 14^th.

Starting September 8 the Federal Housing Administration (FHA) implemented its Electronic Appraisal Delivery (EAD) portal mortgagee onboarding phase registration in its FHA Connection (FHAC) system. Mortgagees are encouraged to register as soon as possible to participate in one of seven available onboarding phases, and must participate in an onboarding phase on or before the EAD portal's June 27, 2016 mandatory use date.

Sun West will continue to honor existing guidelines from Handbook 4155.1 for all loans with FHA case number assignment dates prior to September 14. For all loans with FHA case number assignment dates on or after September 14 applicable guidelines from the new Handbook (4000.1) will be in effect. Log into the Sun West website to view FHA requirements to avoid underwriting delays.

Effective September 10 Pacific Union Financial, LLC began implementing pricing updates for its Correspondent Lending Channel. The 9/10/2015 SRP schedule will reflect updates across Conventional and FHA/USDA programs. In addition, Pacific Union lowered conventional loan balance adjustments for loan amounts from $50,000 to $100,000. This change will reflect a .75 bps price improvement for all conventional programs at all LTVs/CLTVs/HCLTVs.

"To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments."

But to help set expectations Fed Chair Yellen said that the great majority of participants continue to see 2015 as an appropriate time for raising rates. She also noted that all FOMC meetings could potentially result in a liftoff decision, quelling speculation that the lack of a scheduled press conference at the October meeting means that December is the next meeting that is "in play" for a rate hike.

But there was other news as well. Initial jobless claims fell to an 8-week low of 264k in the week ending 9/12 from 275k in the prior week. Continuing jobless claims fell to 2237k in the week ending 9/5. The Philadelphia Fed Manufacturing Index fell more sharply than expected to -6.0 in September from 8.3 in August. But all that was noise versus the Fed news - leaving short term rates alone.

But all of that is so...yesterday. Today we'll have August's Leading Indicators at 9 AM Peru time (10 EDT). We wrapped up Thursday with the 10-year at 2.22% - the same place we were earlier this week - and this morning before dawn we're down to 2.15% and agency MBS prices are better by roughly .250.

Jobs and Announcements

Want an operations management job? Midwest Equity Mortgage, recently named as one of Inc. Magazine's Fastest Growing Private Companies in America, is seeking an experienced Mortgage Operations Professional to serve as its Director of Mortgage Operations.  This position shall serve as a member of the Senior Management Team and the right candidate will be skilled at both strategic and tactical implementations of systems, controls, and procedures throughout our operations department.  Midwest Equity Mortgage has enjoyed significant, rapid growth- but not by accident.  Our core value and culture is to put the right people in the right place to succeed and then to get out of their way.  Our Director of Mortgage Operations will be responsible for ensuring these values are maintained while continuing to scale each of our operational departments.  Excellent compensation and relocation package to Oak Brook, IL is available.  Please direct all confidential inquiries to eric@midwestequity. com.

In retail job news eLEND, the technology-driven consumer direct division of American Financial Resources, Inc. is searching for licensed Outside Loan Originator candidates. This person would be responsible for originating residential mortgage loans through established Realtor, database, and business relationships. They must also demonstrate a strong understanding of mortgage processing, underwriting, and closing procedures. This person will have access to an aggressive compensation package with the ability to grow a team and take their business to the next level. eLEND provides outstanding management and guidance, in-house underwriting, processing support, and a vast suite of mortgage products with competitive pricing. Marketing materials, computer, and a phone will be provided. The ideal candidate must be licensed and have experience maintaining a Realtor, database, and business network. Please email a confidential cover letter and resume to Chris Guerin.