Let’s hope that anyone in mortgage banking doesn’t think that they were wrong for going into this profession. What am I hearing from the origination trenches out there? Well, for the most part it mixed, but I won’t sugarcoat things. I receive a fair share of e-mails saying, "Hey, Rob, I really like your newsletter, but I am leaving the business. Can you keep me on your list? Just change my e-mail from 'BobJones@ABCMortgage.com' to 'BobJones@g-mail.com'. Or else, "Hey, Rob, I really like your newsletter, but I am changing companies. Can you keep me on your list? Just change my e-mail from 'BobJones@ABCMortgage.com' to 'BobJones@CitiMortgage.com'.

One agent recently wrote to me and said, “I think most brokers are just starting to wake up to the realization that things are going to be different in 2010.  But, they’ve not yet managed to figure out just how different, and how it will affect them. Bankers are in the same boat, but in addition trying to make sure that we implement it all to make sure everyone’s complying and no one gets in trouble.”

Another wrote and mentioned, “Brokers are in shell shock over the new RESPA and GFE and the fear that human error is going to cost them big if they misquote a fee. And then with the DRE national registry and new NMLS&R about to pull originator's credit over the next year, there is another level of panic on whether personal financial issues are going to result in licenses being pulled. Does the medical profession require that a doctor be of great health for the last year in order to practice medicine?”

Many argue that we are in the midst of “irrational regulation, when it is the mission of seemingly every state and federal legislator to do something to make sure a credit crisis like this never happens again. Certainly originators, especially multi-state, anticipate an increase in cost of doing business, whether it is in upfront compliance or in buybacks continuing for years, that will have the unintended consequence of higher rates and fees to the consumer.

Confused about Yield Spread Premium? Join the crowd, but it seems that going forward brokers cannot simply receive YSP.  It is generally agreed that brokers have to show the origination fee on the GFE, and then show that using some/all of YSP the broker “offset” that origination fee in addition to any processing, underwriting, and other miscellaneous broker fees.  If there is more YSP then total broker origination fee, a portion of the YSP goes back to the borrower and cannot simply go to the broker. Check out http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm

Yesterday I mentioned updates that SunTrust had made to their guides. In it I stated that,”SunTrust also reminded clients that “FHA case numbers assigned on or after January 1, 2010, are not eligible for submission to or purchase by SunTrust under the SunTrust FHA Government Sponsorship Program.” Clients should note that SunTrust has ended purchasing loans from sponsored lenders through the correspondent channel but that they continue to participate in the sponsorship program in the broker channel. Good to know!

Why was Wells Fargo's stock up yesterday? A suit against Wells in Baltimore (the first major city to accuse a mortgage lender of violating the Federal Fair Housing Act) was dismissed. Baltimore's lawsuit accused Wells Fargo & Co of steering minority borrowers to expensive home loans; its defeat may not derail efforts by local governments to hold the biggest mortgage providers responsible for lending they contend hurts cities, but “the dismissal of Baltimore's two-year-old federal lawsuit is another setback to legal efforts by state and local governments to combat the economic and social costs of mounting foreclosures and falling housing prices” according to the article. Last August, a federal judge dismissed a similar lawsuit brought by Birmingham, Alabama against Bank of America and Citigroup.

Fannie Mae sent out a special lender letter (Lender Letter LL-2010-01) dealing with certain condominium projects in Florida. They created a specific approval designation whereby lenders “are relieved of standard condominium project eligibility representations and warranties for loans secured by units in condominium projects with the Special Approval designation” for the next 18 months.

No lender likes to make the news these days, especially if the story concerns elder abuse and then-popular loan programs and can be thought of as unbalanced: http://www.nytimes.com/2010/01/08/us/08sfmetro.html?emctnt&tntemail1y

I am not savvy enough to know what this means to a typical person in the mortgage biz, but it is rumored that the FDIC fund already has a negative balance, and some believe that the prepaid premiums from the banks are only a temporary solution. Regardless, the FDIC issued an “Interest Rate Risk Advisory” “reminding institutions of supervisory expectations for sound practices to manage interest rate risk (IRR). This advisory, adopted by each of the financial regulators, reiterates the importance of effective corporate governance, policies and procedures, risk measuring and monitoring systems, stress testing, and internal controls related to the IRR exposures of depository institutions. It also clarifies elements of existing guidance and describes some IRR management techniques used by effective risk managers….The financial regulators expect each depository institution to manage its IRR exposures using processes and systems commensurate with its complexity, business model, risk profile, and scope of operations.”

The Fed purchased $12 billion net in agency MBS over the past week, bringing its total net purchase to $1.123 trillion. As locks and applications slow, or as the Fed attempts to stimulate the private secondary market, purchases slow…

How about “dem” rates? Overnight we saw rates move a little higher after underperforming yesterday. But then this morning’s unemployment data came in showing that the U.S. unexpectedly lost 85,000 jobs in December (expected unchanged) versus revisions showed payrolls increased the prior month for the first time in almost two years. The headline Unemployment Rate held at 10 percent. So basically the recession may be technically over, but companies are still cautious about making permanent additions to their ranks. The average work week held at 32.2 hours in December, while average weekly earnings rose to $624.16 (up 2.2%). In other news, we still have Wholesale Inventories at 7AM PST, along with a bevy of Fed speakers. There weren’t many fireworks after the number: the yield on the 10-yr is at 3.78% and mortgages are better by perhaps .250 or better.

(Warning: PG)

The husband leans over and asks his wife, “Do you remember the first time we made love together over fifty years ago? We went behind the village tavern where you leaned against the back fence and I made love to you.”

 “Yes”, she says, “I remember it well.”

 “OK,” he says, “How about taking a stroll around there again and we can do it for old time's sake?”

“Oh Jim, you old devil, that sounds like a crazy, but good idea!”

A police officer sitting in the next booth heard their conversation and, having a chuckle to himself, he thinks to himself, I've got to see these two old-timers having sex against a fence. “I'll just keep an eye on them so there's no trouble.”

So he follows them.

The elderly couple walks haltingly along, leaning on each other for support aided by walking sticks. Finally, they get to the back of the tavern and make their way to the fence. The old lady lifts her skirt and the old man drops his trousers. As she leans against the fence, the old man moves in.

Then suddenly they erupt into the most furious sex that the policeman has ever seen. This goes on for about ten minutes while both are making loud noises and moaning and screaming.

Finally, they both collapse, panting on the ground.

The policeman is amazed. He thinks he has learned something about life and old age that he didn't know.

After about half an hour of lying on the ground recovering, the old couple struggles to their feet and puts their clothes back on.

The policeman is still watching and thinks to himself, “This is truly amazing; I've got to ask them what their secret is.”

So, as the couple passes, he says to them, “'Excuse me, but that was something else. You must've had a fantastic sex life together. Is there some sort of secret to this?”

Shaking, the old man is barely able to reply, “Fifty years ago that wasn't an electric fence.”

Rob

(Check out http://www.mortgagenewsdaily.com/channels/pipelinepress/default.aspx. For archived commentaries, check www.robchrisman.com, or to subscribe/unsubscibe write to rchrisman@robchrisman.com.)