The old saying, "Give a man a gun and he can rob a bank; give a man a bank and he can rob the world." This 25-year old didn't have either. "Loan officer John Incandela, 25, of Palm Beach, was sentenced Monday to 41 months in prison, three years of supervised release and ordered to pay more than $1.9 million in restitution for his role in a reverse mortgage scheme, the U.S. Department of Justice said: http://www.bizjournals.com/southflorida/news/2011/12/19/mortgage-broker-gets-41-months-for.html. Our industry continues to receive black eyes like this.

Fraud in lending has no statute of limitations – just listen to some of the repurchase stories. But not all fraud stories are from five years ago – more is popping up all the time: http://seattletimes.nwsource.com/html/realestate/2017000670_harney18.html.

Who is expected to be paying for the two-month extension of the payroll tax cut working its way through Congress? How about, “most people who buy homes or refinance beginning next year”? Over the weekend the Senate added a guarantee fee increase for Ginnie Mae mortgage-backed securities to the payroll tax bill, after experiencing heavy lobbying from the MI industry which feared that a 10 basis point g-fee hike for Fannie Mae and Freddie Mac MBS would tilt the market toward FHA loans. (The final bill now includes g-fee hikes for all three: Fannie, Freddie and Ginnie.)

Things change by the day, but the extension of a payroll tax cut and long-term unemployment benefits, estimated to cost $33 billion, will in part be paid for by an increase in the guarantee/guarantor fee charged by the FHA, Fannie, and Freddie. But things aren’t quite that simple in Congress, as we’ve all learned. Rep. Scott Garrett, R-N.J., has legislation that is tied into things somehow that would require the FHFA to establish rules for a privately funded mortgage finance system, repeal the risk-retention rule under the Dodd-Frank Act, move mortgage servicing standards to the FHFA, and prohibits any regulator from requiring servicers to commit principal reductions. Five proposals have been introduced in both the House and Senate that would assemble a future housing finance system and replace the GSEs at the same time. But as I’ve been telling folks for quite some time, don’t look for any substantive changes for another year, or more.

But can we really afford to have government always frozen until the next election? A while back one reader wrote, "Continuing sitting on the sidelines is not spurring activity beyond REO's, short sales and those that have to move. The economy cannot recover without housing, unemployment cannot recover without hiring, and consumers will not spend until the economy improves. It is a vicious circle. Someone has to make a bold step and that involves banks taking a haircut to their asset value. (How many would shed crocodile tears for institutions that have failed their customer base?) Our politicians and civil servants lack the business acumen to successfully steer us out of this and too many bad decisions were made according to political expediency. Constantly aiming recovery efforts at those under water or likely to foreclose will only be a band aid. We need to boldly go where no politician has gone before and do a blanket refinance of all borrowers who are current. Yes, all those people who WOULD spend the $200 or so dollars they would now have over each month. Yes, it will have consequences but what is the alternative ... more wasted billions thrown at situation from the bottom up instead of the top down?"

Mortgage banking drama continues. MetLife Home, currently up for sale by its insurance parent, is rumored to have two primary bidders for parts of its company: PNC Bank and American Express. But the deal won’t include Tom Palmer, a now ex-senior executive in the correspondent lending division of MetLife Home Loans, who jumped ship and headed over to privately held Freedom Mortgage.

And despite Warren Buffett buying a big chunk of stock earlier this year, investors are not enamored with Bank of America: its share price closed Monday below $5 per share to a near three-year low. The bank’s shares are trading at about 38 per cent of tangible book value, meaning investors either do not believe the value of BofA’s assets or fear the company is understating its liabilities, and BofA’s stock is down 63% this year.

Out in California, Redwood Trust’s gaze has been turned on commercial deals, and is building a national correspondent brokerage system of 15 to 20 firms originating loans (such as Colliers International) to fund $50 million per quarter. This is interesting, as Standard & Poor’s announced that collateral backing industrial commercial mortgage-backed securities recently hit a delinquency rate of 12.05%, a 22-year high. But S&P noted that "the industrial segment is the only major CMBS property type for which delinquencies are currently at historical highs. Next year will ‘usher in’ the first major wave of maturities from the 2007 vintage, which were issued during a frothy period at the peak of the market.” Let’s hope for Redwood’s sake the new stuff behaves better.

Vendors around the nation are following a new lawsuit: Nevada's Attorney General filed civil fraud charges against Lender Processing Services and two subsidiaries alleging the company engaged in a widespread fraud of forging foreclosure documents. LPS is accused of forging signatures and fraudulently notarizing up to 4,000 documents a day in an effort to quickly process foreclosures on behalf of mortgage servicers. Nevada claims LPS also demanded kickbacks from foreclosure law firms and called those payments "attorney's fees" on invoices given to consumers and submitted in courts. Remember that LPS processes more than 50% of all foreclosures in the U.S. I knew I should have been a lawyer.

Out on the internet, but based in Seattle, Zillow launched the “Zillow Mortgage Marketplace” on AOL Real Estate and DailyFinance, providing tools to research, shop for and compare mortgages. “AOL Real Estate and DailyFinance visitors now have easy access to important home financial information, such as mortgage calculators, real-time mortgage rates, and Zillow's innovative mortgage shopping experience, which allows users to compare personalized loan quotes and lender reviews, and connect directly with lenders. Already this year, consumers have submitted nearly 5 million loan requests in Zillow Mortgage Marketplace, receiving an average of 18 customized loan quotes per loan request.” The launch, announced in October, was scheduled for next year but accelerated to this month – one has to make hay while the sun shines!

Real Estate Mortgage Network (REMN) introduced its wholesale FHA 203(k) Rehabilitation Product “to remove the complexity out of the process for independent retail lenders across the country. This new REMN Wholesale product dramatically improves the 203(k) experience for everyone involved by leveraging an in-house REMN team to manage the entire procedure. Visit them online at http://www.remnwholesale.com.

Also offering a 203(k) program is M&T Bank's Mortgage Division: http://www.mtbwholesale.com/page/51/RenovationLendingPrograms.aspx. Contact Douglas Woodley at dwoodley@mtb.com.

Wells Fargo wholesale spread the word to brokers that the new upfront guarantee fee for refinances for the Guaranteed Rural Housing program – also known as Rural Development (RD) – is effective immediately, changing to the upfront guarantee fee from 1% to 1.5%. Wells warns us that “loans may not close/fund until the United States Department of Agriculture (USDA) allocates funding for the Guaranteed Rural Housing (RD) program.”

Jobs and housing, housing and jobs - they are both very important to the U.S. economy. Homebuilders are more optimistic than they've been about single-family home sales in a year and a half according to a report released by the National Association of Home Builders. It didn’t skyrocket, but the moderate pick up is nice to see ahead of all the housing news this week like Housing Starts & Building Permits, Wednesday's applications and Existing Home Sales, FHFA’s home prices, and Friday's New Home Sales - all expected to have improved marginally over previous reports.

The next two weeks are traditionally slow, and we’ve started off that way: Thomson Reuters’ Tradeweb reported that MBS volume came in at 81% of the 30-day average. The rally may have kept a few folks on the sidelines with the 10-yr improving by .375 (and moving down to a yield of 1.81%) and agency mortgage security prices better by about .125. Later today we’ll have a $35 billion 5-yr note auction, but we’ve already had Housing Starts and Building Permits for November, up about 9% and 6% respectively, both better than expected. Before, and after, the numbers the 10-yr is up to 1.86% and MBS prices are a shade worse.

A priest was being honored at his retirement dinner after 25 years in the parish. A leading local politician and member of the congregation were chosen to make the presentation and to give a little speech at the dinner. However, he was delayed, so the priest decided to say his own few words while they waited:
"I got my first impression of the parish from the first confession I heard here. I thought I had been assigned to a terrible place. The very first person who entered my confessional told me he had stolen a television set and, when questioned by the police, was able to lie his way out of it. He had stolen money from his parents, embezzled from his employer, had an affair with his boss's wife, taken illegal drugs, and sold his sister's jewelry to buy a gun. I was appalled.
"But as the days went on I learned that my people were not all like that and I had, indeed, come to a fine parish full of good and loving people...."
Just as the priest finished his talk, the politician arrived, full of apologies at being late. He immediately began to make the presentation and gave his talk:
"I'll never forget the first day our parish priest arrived," said the politician. "In fact, I had the honor of being the first person to go to him for confession."