Do you think that licensing is not an option for a loan originator? Think again, and view http://www.govtrack.us/congress/bill.xpd?bill=s110-2595. This SAFE licensing became part of HR 3221, signed by President Bush at the end of July. Remember that it is federal law, but states have some time to pass state legislation to license originators. (As best I can tell, all originators must be licensed by HUD.) California, for example, is a state that does not have originator licensing. The DRE real estate license does not qualify under the federal standard as an originator license. The thinking is that California must pass legislation next year to bring our licensing up to the federal standard, and we can place an endorsement on the license for loan originators. Prior to obtaining the endorsement the loan agent must undergo the federally required criminal background check, fingerprints, credit report, education & testing. There are some differing points between the federal act and current DRE licensing. For example, the federal law prohibits all felons from being licensed for 7 years. Felons with certain convictions – identity theft & fraud – will be barred for life, but many states do not prohibit all felons. Confidentiality does not apply with respect to disciplinary and enforcement actions, but will be posted on the National Mortgage Licensing System. Borrowers will be able to look up their agent on the National Mortgage License System, and an originator who has a licensed revoked in any state will not be permitted to obtain an originator license in any other state.

Agents and processors run credit reports all the time. All one needs is a name, address and social security number. But as soon as the credit report is run, it triggers the credit bureaus to “provide” (sell?) that information to subscribing lenders who will then telemarket the person. In order to help with this problem, some agents skip putting in the borrower’s date of birth, or their phone number. Others say that the only way to prevent it is for agents to tell the client to go to www.optoutprescreen.com, but borrowers need to do that 5 days prior to running their credit report. Now, if only agents could get around that payoff demand trigger…

Thornburg said on Tuesday that things are still up in the air since it has failed to resolve a dispute with its own lenders. Thornburg said it extended an exchange offer for some preferred stock to Friday, which would give it more time to negotiate with lenders that made a series of surprise margin calls and withheld some funds from the company after the offer began. Until this is cleared up, Thornburg cannot complete a $1.35 billion bailout that it lined up in March.

Back to our markets. Hank & Ben are continuing their push for an approval by Congress for their plan. At 9AM PST they will be discussing the GSE (Freddie & Fannie, aka FHLMC and FNMA) takeover. Yesterday the 2-yr Treasury auction went well, and it is hoped that the 5-yr auction goes well also. The word from Washington is that, after President Bush’s speech last night, John McCain is suspending his campaign to return to Washington DC to work on the economy, and is seeking to postpone tomorrow night’s debate. (Supposedly Obama’s team is not interested.) This morning’s Durable Goods orders (for things that last longer than 3-yrs, like watching “Ishtar”) dropped by a sharper-than-expected 4.5% in August. Ex-transportation, the number was -3.0%. July was revised from +1.3% to +0.8%. Jobless Claims was +32,000 last week, mostly attributed to the impact of hurricanes Ike and Gustav, to 493,000. It was the highest reading since Sept. 29, 2001, in the aftermath of attacks on New York and Washington. After all of this, the 10-yr is slightly improved at 3.78% and 30-yr, A-paper, fixed rate mortgages are about .125 better in price than yesterday afternoon.

A minister was completing a temperance sermon. With great emphasis he said, “If I had all the beer in the world, I'd take it and pour it into the river.'”
With even greater emphasis he said, “And if I had all the wine in the world, I'd take it and pour it into the river.”
And then finally, shaking his fist in the air, he said, “And if I had all the whiskey in the world, I'd take it and pour it into the river...”
Sermon complete, he sat down.
The song leader stood and announced, with a smile, nearly laughing, “For our closing song, let us sing Hymn #365, 'Shall We Gather at the River’.”
See you at the river!