I don’t think the HUD program above is being offered in Philly, which is where the family of Freddie’s CEO Charles Haldeman lives. I mention him because he will be stepping down next year after about two years running the company. Freddie’s definitely had its management ranks “thinned” over the last few years, attributed by some to a “siege mentality” that has had made it more difficult for top leaders to execute decisions quickly. In addition to that, the future of the company is uncertain, as we all know. In a speech this month, Mr. Haldeman said uncertainty over Freddie's future was having a "really negative impact on the morale at the company." Including a base salary of $900,000, Mr. Haldeman stands to make as much as $6 million in deferred and bonus pay for 2011. Brush up that resume to send to Freddie!

I always feel like I am opening a can of worms when I bring up LO comp. But the issue just won't die. I received this note: "There seems to be some confusion out there among lenders on rebates. Who do they belong to? If a lender is operating under a borrower-paid compensation plan, and there is a rebate that exceeds the third party fee, some lenders seem to assume that it is their money, whereas others' policies are to give the funds to the borrower within the 1%/$2000 limit of a no cash-out refi. In our exciting new regulated world, how can regulators allow different lenders to have different policies with regard to excess rebate?"

In a similar vein, Home Savings of America spread the word that, "Under the Regulation Z LO Compensation Rules, Premium Points (amount above par) must be credited to the borrower and may be applied to borrowers 3rd party closing costs, per diem interest, escrow impounds deposits and lender. HSOA has made changes to our policy to allow for the payment of property taxes from excess premium pricing under certain conditions.   Once the premium points have been applied to the 3rd party closing costs, per diem interest, escrow/impounds deposits and lender fees premium points may be applied to property taxes that are current and due at closing.  Premium points cannot be applied to the payment of any delinquent/past due property taxes. Premium Points cannot be applied to property taxes for FFG products or for properties located in the state of TX. Premium points cannot be applied to broker fees. Borrowers are not allowed to receive a credit for the excess premium at closing.”

Recently the commentary noted, "Lenders say they are charging relatively higher mortgage rates because of tighter lending standards, falling home prices and a lack of capacity to process new home loans, all of which have increased costs. And the Fed can't mandate that, right?"

Someone wrote in, “Yes, lenders have the flexibility to easily charge more or less at any time they desire and also to derive that compensation from both the borrower AND through the sale of the loan. Unfortunately the 'Fed' via Dodd Frank HAS mandated exactly the opposite for mortgage brokers.  Brokers can only change their compensation at specific intervals determined by the wholesalers they work with. The flexibility to change compensation is either good for both, or it's not.  In addition, brokers can only derive compensation from the lender or borrower, not both like banks do.  Clearly for the borrower, having the flexibility to pay broker compensation both directly and through lender compensation is an advantage.  Yet the discrepancy in both setting compensation and how it is paid exists.  Begs the question why?  The reason brokers flourished is because they proved their worth to the consumer.  Obviously these many obstacles imposed on brokers have contributed to their reduced numbers. Licensing requirements are another impediment to brokers’ ability to expand while banks have no such limiting requirements, yet the banks are unable to handle capacity so they raise their rates and consumers pay more.  So again, how has this helped the consumer?”

Yesterday the commentary mentioned Zillow, and how it is coming to an iPhone near you. Now the consumer is being given Nail Your Mortgage. This company uses trademarked PocketQuote, giving them an automated mortgage quote that consumers can generate anonymously, for free. The company claims that it shows real, up-to-the-minute rates and fees based on information provided by the consumer. “Its accuracy is personally guaranteed by Mark Pickett, CEO of Nail Your Mortgage, who is so confident in the accuracy and competitiveness of PocketQuote that Nail Your Mortgage has offered to pay 3,000 Illinois residents' mortgage payments for one year, under the Nail Your Mortgage Challenge, if they can find a cheaper mortgage option than Nail Your Mortgage.” “Nail Your Mortgage connects consumers and wholesale lenders. Wholesale lenders are able to offer their mortgages at wholesale interest rates with zero margin or markup and consumers are able to see all information affecting the rate and fees quoted. Finally, unlike other companies that only claim to be online mortgage providers, Nail Your Mortgage allows consumers to manage the entire mortgage process online. A document management feature allows consumers to handle all their paperwork online, while an auditing platform enables consumers to monitor the progress of their mortgage application without phone calls or emails.” (And no, this is not a paid-for announcement.) Write to Mr. Pickett at mark.pickett@nailyourmortgage.com  or go to www.nailyourmortgage.com.

Here in the Northeast Berkshire Hills Bancorp has agreed to acquire The Connecticut Bank and Trust Company for approximately $30mm in cash and stock (138% of Connecticut Bank’s tangible book). And in North Carolina, seeking to boost capital, Waccamaw Bankshares will sell 11 branches, $180 million in deposits, and $98 million of performing loans to First Bancorp for a 1.5% premium.

Looking at a little big lender/investor news, Bank of America issued a disaster update for the state of New York over the remnants of Tropical Storm Lee. GMAC Bank Correspondent Funding (GMACB) will begin to assess $125/loan fees for missing Final Documents aged greater than 180 days based on the November 2011 Missing Final Document Report (which focuses on the Recorded Mortgage, Recorded Assignment and Final Title Policy). And starting December 1, for conventional conforming loan applications GMACB will require “successful submission of UAD compliant appraisals to the UCDP prior to purchase as described in bulletins CL11-090 and CL11-096. If using GMACB's VEROS Appraisal Management System exclusively, no further action by you is necessary.”

Well, rates are up this morning. But yesterday rates were up also, more on potential news from Europe rather than U.S. economic news. (We did, however, have New Home Sales increase by 5.7% in September – a five month high! The supply of homes at the current sales rate fell to about 6 months, the lowest since April of 2010.) 10-year notes plunged .625 to 2.20%. Rate-sheet mortgage prices were worse by about .250. Mortgage banker supply came in around $1.5 billion, just fine given demand from the Fed, servicers and money managers.

The big news overnight was from Europe, but here third quarter GDP was +2.5%, as expected, although the price index was a little higher than expected. Weekly Jobless Claims came in at 402k – hardly any change. (Later we’ll have Pending Home Sales, and a $29 billion 7-yr note auction.) But across the Atlantic European leaders agreed to boost the region's bailout fund and struck a deal with private banks and insurers to accept 50% losses on Greek bonds, along with foreseeing a recapitalization of hard-hit European banks and a leveraging of the bloc's rescue fund to give it firepower of 1 trillion euros ($1.4 trillion). Stocks liked the European news, and with “less risk” in the world bond prices are worse: the 10-yr is up to 2.30% and MBS prices are worse about .375.