One never knows when the subject of mortgage banking will pop up - like yesterday. There I was at the Sundance Ski Resort (the one owned by "Bob" Redford) with my son. (He was there to snow board, I was there trying to figure out an opening paragraph for today's commentary.) I had my 2008 Mortgage Bankers Association canvas computer bag, with "Freddie Mac" printed on it, when up walked a fellow who started asking me about it. It turned out that he is the son of David Glenn. Mr. Glenn was ousted from his job as president and COO of Freddie Mac in 2003, over six years ago, pre-bubble. It turns out that he is doing the same thing now that many other mortgage folks are doing: buying and flipping distressed properties - probably here in Utah.

Look, just because the kids are off from school doesn't mean that investors are taking any time off from making changes.

US Bank's Consumer Finance Wholesale Mortgage Division came out with their policy on Manufactured Housing Financing (no First Time Home Buyer, minimum 680 mid score for both borrowers, maximum 80% LTV, maximum loan amount $200,000, no single-wides, etc.)

BB&T tweaked their USDA Guaranteed Rural Housing 30 Year Fixed Product. (BB&T stands for "Branch Banking and Trust Company" in case you're ever asked.)

Suntrust and Affiliated told everyone that they discontinued their Flex 18% MI product lines.

GMAC updated their Fannie Mae Fixed 7.1 & 8.0 product line guidelines.

Wells' Wholesale channel sent out 9 pages on RESPA reform (with GFE/HUD-1 guidance, etc. reminding clients that starting Friday Wells Fargo Wholesale Lending will require the new RESPA Reform).

Union Bank updated their appraisal policies, saying that they will order appraisal(s) for all loans submitted on and after Friday. For purchases, the appraisal will be ordered at time of submission within established cycle times for "Assignment of File." Union Bank will not collect any appraisal fees up front but will collect at funding.

Flagstar followed FHA's announced guidelines and requirements "for borrowers experiencing short sales or borrowers seeking to refinance properties for which the existing loan servicer will accept less than the full balance as payoff of the existing mortgage." It's effective immediately.

Franklin American followed the Federal Housing Finance Agency (FHFA)'s recently announced national conforming loan limit for 1-unit properties for 2010 (unchanged). Those who live and breathe compliance know that loan limits are defined in terms of general loan limits and high-cost area loan limits, with High-cost areas being those counties where the loan limit is based on the area median home price as established by HUD. High cost area loan limits for individual counties can range anywhere between $417,000 and $729,750. If you have questions check out https://entp.hud.gov/idapp/html/hicostlook.cfm. FAMC's notice goes on to detail HUD's FHA and VA limits, along with time deadlines for delivering loans. VA limits are on the VA webpage HERE.

YSP is still a hot topic out there. Although mortgage brokers had more "pull" in the past, the National Association of Mortgage Brokers is alive and well and publicly urging the Federal Reserve Board to withdraw a proposed rule that would regulate broker compensation and delay any action until Congress finalizes pending consumer protection legislation. The NAMB said the Fed has not met the standard for determining that the payment of yield-spread premiums to brokers is an "unfair and deceptive" practice. "Such a determination should be made, if it is to be made, by Congress, not the board." Under the proposed TILA rule, compensation based on increases in the interest rate or changes to other loan terms would be prohibited, and the Fed suggests that loan officers and mortgage brokers could be compensated based on a set percentage of the loan amount. As an alternative, NAMB suggests a mortgage brokerage business could receive secondary market fees and compensate the brokerage's LOs based on a percentage of the loan amount. "NAMB strongly urges the board to explore this proposed alternative ... prior to finalizing any rule," the trade group says.

NewBridge Bancorp (out of North Carolina) owns NewBridge Bank; NewBridge Bank "has entered into an agreement" to acquire the business operations of Bradford Mortgage (part of ACM Financial, also out of North Carolina). According to the story I read, Bradford's management will lead the new company.

What happens Thursday at midnight in Florida? Well, besides the usual rumba and snake dances through hotel lobbies, anyone who provides loan modification services in Florida must be a mortgage broker, which entails $240 and passing a state test, as well as have a clean criminal record. This is very well publicized, to the point where Florida's Office of Financial Regulation has received 4,600 mortgage broker licensing applications since July, more than double the amount requested for all of last fiscal year! Not only that, the OFR estimates that about 685 loan modification companies already operate in Florida.

One item that escaped some recently was the relaxation of GSE portfolio size requirement by the Treasury Department. Until recently Freddie and Fannie were required to reduce their servicing retained portfolio by 10% every year. Now the maximum portfolio of the GSEs (which is $900 billion each) is to be reduced by 10% every year. In other words, the maximum portfolio size of each GSE is now set at $810 billion by the end of 2010, but since their portfolios are currently at around $760-$770 billion each, things look pretty good. What this means to the loan agents in the trenches, however, is that although neither Fannie nor Freddie will be adding much to their servicing portfolios neither will be big sellers of it either.

Speaking of Fannie Mae, servicers were notified of "Temporary Review Period for Active Home Affordable Modification Program (HAMP) Trial Modifications Scheduled to Expire on or before January 31, 2010", "Clarification on the Retirement of Risk Profiler", "Quality Assurance Reviews for Acquired Properties", etc. Once again, best to check out the actual announcement if you service for them: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0938.pdf

There has been some recent news about HVCC. Specifically, the House voted to terminate the Code of Conduct once a new Consumer Financial Protection Agency begins operations. "As part of its financial and mortgage industry reform bill, the new agency would assume primary federal responsibility for equal opportunity in credit, real estate settlement procedures, financial disclosures to borrowers, plus unfair and deceptive marketing in mortgages and other financial products." Be careful what you wish for! READ MORE

The market? Rates were up again yesterday (the 10-yr was up to 3.85%), but then improved ever so slightly in spite of a mediocre $44 billion 2-year note auction. The bid/cover ratio was 2.91, below the average for the last four months, and "Indirect bidders" bought 34% of the issue versus 45%, which is the average over the last several sales. $118 billion is a lot to swallow during a holiday weekend. One thing working in our favor is that the bond market is technically extremely "oversold", so, like a spring, may be due to head the other way. But there is no bounce-back yet: the yield on the 10-yr is sitting at 3.85% and mortgage prices are worse by another .125.

(Warning: PG-rated.)

A virile, middle-aged Italian gentleman named Guido was relaxing at his favorite bar in Rome when he managed to attract a spectacular young blonde woman. Things progressed to the point where he invited her back to his apartment and, after some small talk, they retired to his bedroom where he rattled her senseless.

After a pleasant interlude he asked with a smile, "So, you finish?"

She paused for a second, frowned, and replied, "No."

Surprised, Guido reached for her and the rattling resumed.

This time she thrashed about wildly and there were screams of passion.

Things finally end and again, Guido smiles and asks, "You finish?"

Again, after a short pause, she returns his smile, cuddles closer to him and softly says, "No."

Stunned, but damned if he was going to leave this woman unsatisfied, Guido reaches for the woman yet again. Using the last of his strength, he barely manages it, but they end together screaming, bucking, clawing and ripping the bed sheets. Exhausted, Guido falls onto his back, gasping.

Barely able to turn his head, he looks into her eyes, smiles proudly and asked again, "You finish?"

Barely able to speak, the beautiful blonde whispers in his ear, "No, I Norwegian.