"If we don't change direction soon, we'll end up where we're going." That sentiment seems to sum up how most compliance-focused folks in mortgage banking feel right now, as it seems the regulations present an ever-changing landscape.

Starting next Monday, for states that have transitioned to the NMLS, originators will need to provide their NMLS Loan Originator ID (the loan officer signing the 1003) and Loan Originator Company ID (associated with the broker) numbers. Wells Fargo's wholesale channel, for example, reminds brokers that "Company Originator ID Company Originator ID must match the broker's name. Use your Main Company ID, and not the branch ID. The Loan Originator ID must match the Loan Officer's name on the 1003 and be associated with the Main Company (broker's name). Loan Originator ID must be established in the property state. 1003 information must match the information entered into the Broker's First website. 1003 cannot be dated earlier than the date of the approved license."

Late last week the Federal Reserve Board approved a new interim rule amending Regulation Z, which implements the Truth in Lending Act (TILA) and which clarifies a previous interim rule issued in September. The September regulations focus on implementing provisions of the Mortgage Disclosure Improvement Act (MDIA), which amended TILA to require mortgage lenders to disclose examples of how a loan's interest rate or payments can change, and kick in at the end of January. Starting then, "lenders' cost disclosures must include a payment summary in the form of a table stating the initial rate and corresponding periodic payment and, for adjustable rate loans, the maximum rate and payment that can occur during the first five years as well as a "worst case" example showing the maximum rate and payment possible over the life of the loan. The new interim rule clarifies that creditors' disclosures should reflect the first rate adjustment for a 5/1 adjustable rate mortgage, and should show the earliest date the consumer's interest rate can change rather than the due date for making the first payment under the new rate for interest-only loans. The rule also clarifies which mortgage transactions are covered by the special disclosure requirements for loans that allow minimum payments that cause the loan balance to increase" per law firm BuckleySandler. READ MORE

Starting Saturday we have new Fair Credit Reporting Risk-Based Pricing Regulations. Wholesalers are notifying brokers of the changes. For example, Provident Funding sent its broker clients word that "Provident Funding is required to issue a risk-based pricing notice to a loan applicant who is offered less favorable terms than the most favorable terms available. Beginning with loans with an underwriting approval date on or after December 22, 2010 for which a FICO-based price adjustment applies, Provident Funding will send a Risk Based Pricing Notice to each unique mailing address on a loan application...The Risk Based Pricing Notice will first be triggered upon initial underwriting approval (i.e. when a loan first reaches status 60 - Approved) of a loan for which a FICO-based price adjustment applies, regardless of whether the loan is floating or locked...A waiting period of 1 rescission day will be required from the date the disclosure is delivered to the earliest signing date for the loan. Provident Funding recommends use of the e-mail delivery method for loan disclosures to reduce delivery times and waiting periods."

AmTrust, soon to be NYCB Mortgage Company, spread the word to its clients that "Effective for loans with an Initial AU submission on or after January 1st, 2011, the Credit Score Disclosure that is provided to borrowers must comply with the requirements set forth in Sections 609 (f) and 615 (h) of the Fair Credit Reporting Act. The new rule requires, amongst other things, that a distribution of credit scores be presented in a bar graph or a clear and readily understandable statement informing the consumer how his or her credit score compares to the scores of other consumers."

Fannie announced a set of pricing changes that will certainly echo through smaller investors, if they haven't already. Fannie made changes to the loan level pricing adjustments (LLPA's), changing LLPA's for most mortgage loans with LTV ratios at or above 70.01%. "An LLPA will now be charged for mortgage loans with LTV ratios at or below 65% and CLTV ratios between 80.01 to 95%. The CLTV ratio range for loans that have LTV ratios greater than 65% and less than or equal to 75% and CLTV ratios less than 95% has been adjusted. In addition, the LLPAs have changed for the remaining LTV and CLTV ranges (with the exception of CLTV ratios above 95%). LLPAs will remain unchanged for DU Refi Plus and Refi Plus mortgage loans. FANNIE'S ANNOUNCEMENT

Fifth Third correspondents now have a minimum loan amount for Investment properties, pegged at $100,000.

Starting Saturday Nationstar Mortgage will require a copy of the Risk-Based Pricing Disclosure that was provided to each borrower listed on the 1003 loan application prior to issuing a clear-to-close approval. Brokers may contact their Credit Service providers for more information on the disclosure.

Symphony Technology Group, a private equity firm focused on investing in software and technology enabled services companies, acquired First Advantage from CoreLogic for $265 million in an all cash transaction. First Advantage is a global provider of technology-enabled outsourcing and analytic solutions for the human capital and legal markets.

Mortgage Services III responded to the FHA's recently issued "Special Edition Statement" and will extend the deadlines noted in Mortgagee Letter 2010-20. "FHA 'Loan Correspondents' with case assignments issued in 2010 now have until 3-31-2011 to close/disburse those FHA loans, provided that MSI has fully approved (credit profile/AUS and FHA appraisal) by 12-30-2010. MSI customers who currently enjoy an 'Authorized Agency' relationship may proceed transacting their FHA production with MSI as they have heretofore until 6-30-2011. FHA has announced a new deadline of 7-1-2011, for 'Principals' to obtain their "Unconditional Direct Endorsement" approval."

There are some folks out there who believe that GE has not made the best mortgage-related business decisions. For example, back in 2006 one of GE Capital's programs in Mexico was the "Mexican Dream Mortgage": Mexican retirement properties would be sold to US citizens who had their eye on retiring. The program was set up under GE Money's WMC Mortgage Corp. division, but as the subprime-housing market began to implode GE sold off its WMC division and recorded a $1 billion loss. Things didn't improve for them since it also had to deal with problems in its commercial real-estate and European mortgages divisions during the past two years.

Most recently, as in late last week, Spain's Grupo Santander agreed to purchase a $2 billion mortgage portfolio of Mexican real-estate assets from General Electric Co.'s finance division for $162 million plus the assumption of debt. Grupo Financiero Santander Mexico is slated to acquire all of GE's consumer-mortgage business in Mexico, including its $2 billion consumer-mortgage portfolio as GE tries to exit non-strategic businesses. One doesn't need a calculator to notice those terms, and this makes Santander #2 in providing mortgages in Mexico.

Way back on Thursday MBS prices finished the shortened day worse between .250-.375. MBS prices are worse again this morning between .125-.250, based on China raising its rates (to head off inflation) and the fact that New York is suffering a bout of inclement weather - and we all know how hard it is to come to work after a 3-day weekend. It is a light week for news. Tomorrow we have the S&P/Case-Shiller indices, along with Consumer Confidence. Thursday we have Jobless Claims and the Chicago Purchasing Manager's numbers. The Treasury is scheduled to auction $35 billion of 2-yr notes today, $35 billion of 5-yr notes tomorrow, and $29 billion of 7-yr notes on Wednesday. 

President Barack Obama was in the Oval Office when his telephone rang.

"Hello, President Obama" a heavily accented southern voice said.   "This is Boudreaux, down here at the Joes Crab Shack, Acadia Parish, Louisiana, I am  callin' to tell ya'll dat we are officially declaring war on ya!

"Well Boudreaux," Barack replied, "This is indeed important news!  How big is your army?"  

"Right now," said Boudreaux, after a moments calculation "there  is myself,  my cousin Pierre, my next-door-neighbor Francois, and the whole Evangelinehunt club. That makes eleven!"  

Barack paused. "I must tell you Boudreaux that I have one  million men in my  army waiting to move on my command."  

"No for sure!" said Boudreaux. "I'll have ta call back at ya!"

Sure enough, the next day, Boudreaux called again. " Mr. Obama, the war is still on! We have done acquire some infantry equipment!"  

"And what equipment would that be Boudreaux?" Barack asked.

"Well cher, we have two combines, a bulldozer, and Francois's farm tractor."

President Obama sighed. "I must tell you Boudreaux, that I have 16,000 tanks and 14,000 armored personnel carriers. Also I've increased my army to one and a half million since we last spoke."

"Lord above", said Boudreaux, "I'll for sure be getting back to ya."  

Sure enough, Boudreaux rang again the next day. "President Obama, the war  is still on! We have done managed to go git ourselves airborne!    We for sure  up an' modified Pierre's ultra-light with a jess a few shotgun in the cockpit, and four boys from the Legion have done come and joined  us as well!"

Barack was silent for a minute then cleared his throat. "I must  tell you Boudreaux that I have 10,000 bombers and 20,000 fighter planes.  My military complex is surrounded by laser-guided, surface-to-air missile sites.

And since we last spoke, I've increased my army to TWO MILLION!"

"Oh Lord," said Boudreaux, "For sure I'll have to call back at you."

Sure enough, Boudreaux called again the next day. "President Obama! I am sorry to have to tell you that we have done had to call off dat war what we was talking bout."

"I'm not surprised to hear that", said Barack. "Why the sudden change of heart?"  

Well, cher," said Boudreaux, "we've all done sat down and had a long chat over some crawfish, and we done come to realize that there's just no way we can feed two million prisoners."
 
CAJUN CONFIDENCE CANNOT BE SHAKEN