It seems like it was just New Year's, and now we're staring at another holiday. Don't forget that Monday, January 17 is a federal holiday, so "this date cannot be included in counting the seven business day waiting period from when the initial TIL was provided to consummation. When redisclosure of the TIL is required, this date also cannot be included in counting the three business day period from when a revised TIL was provided to a borrower to consummation." A GMAC announcement reminded me of that.

I had one comment about the White House losing value. "You are absolutely correct that the White House, like the rest of American homes, has gone down in value by 24%. In fact some areas would be happy with a decline of only 24%. But, unlike the rest of America, the White House was able to increase its HELOC by about $5 trillion dollars while everyone else had their lines frozen." So wrote a principal of Two River Mortgage in New Jersey.

As one might expect, the 5% retained risk retention decision making is bogged down in the bowels of several federal agencies. According to a story in the WSJ, "Six federal agencies must sign off on the proposal before it is published for comment. One of those -- the Federal Deposit Insurance Corp. -- has been insisting that the risk rules also contain new standards for mortgage-servicing companies, which collect mortgage payments and distribute them to investors...The other regulators involved agree on the need for such regulations, but believe it's better to tackle them through a separate rule or possibly legislation. They are concerned the FDIC's approach wouldn't cover all mortgages." Many in the mortgage biz believe that defining what kind of mortgages are deemed "safe," and therefore exempt from risk-retention requirements, is complicated enough and should not be mixed with the servicing standards. Here is the full story: "Mortgage Rules Delayed In Regulator Spat"

CitiMortgage rolled out their first view of the 4/1 Reg. Z requirements governing loan originator compensation and steering. Citi, which will announce more details in the future, notes that "the requirements prohibit a loan originator from receiving compensation from both the consumer and any other person (including the lender) on a given transaction. Furthermore, a loan originator is prohibited from steering a consumer to a transaction based on the fact the originator will receive greater compensation from the creditor in that transaction than in other transactions the originator offered or could have offered to the consumer, unless the transaction is in the consumer's interest." Compensation will be paid via one of two distinct sources: borrower paid compensation, or lender paid compensation. Citi informs their clients that "the choice of compensation source is still within your control and can vary from one transaction to the next. For example, you may use borrower paid compensation on one transaction while the next transaction may use lender paid compensation."

Citi's statement said, "The amount of compensation is negotiated between you and your borrower(s) and can vary from one transaction to the next. The amount of compensation will be based on a set percentage of the loan amount and cannot vary from one transaction to the next. The borrower may use credits from the interest rate chosen to pay for third party fees, but may not be used to cover your compensation. The borrower may use credits from the interest rate chosen to pay for third party fees. The borrower may pay discount points to reduce the note rate. The borrower may pay discount points to reduce the note rate. The borrower must pay the broker compensation from their own funds or from proceeds of the new loan. The compensation cannot come from the borrower. You may offer concessions, reduce your fees, or pay for tolerance violations. You may not reduce your compensation by offering concessions or paying for tolerance violations.

"The regulation prohibits steering a consumer to a loan based upon the fact that an originator will receive greater compensation from the creditor in that transaction than in other transactions the originator offered or could have offered to the consumer, unless the transaction is in the consumer's interest. The regulation provides safe harbor for the loan originator if: The consumer is presented with loan options for each type of transaction (i.e. fixed, ARM and reverse mortgage) in which the consumer expressed an interest; The loan options are obtained from a significant number of the creditors with which the loan originator regularly does business; and the loan options must include: the loan with the lowest rate; the loan with the lowest rate without negative amortization, a prepayment penalty, interest-only payments, a balloon payment in the first 7 years of the loan, a demand feature, shared equity, or shared appreciation; and the loan with the lowest total dollar amount for origination points or fees and discount points. While utilizing the safe harbor option is not mandatory, compliance with anti-steering is mandatory."


In a story from the Financial Times, Citigroup is seeking buyers for CitiFinancial, the largest consumer finance company in the US. "Likely bidders include private equity groups and other finance companies such as JC Flowers, TPG, KKR, Blackstone, Centerbridge, and Cerberus." Back in August Fortress Investment Group bought American General Finance, the consumer finance arm of AIG. CitiFinancial has about 1,500 branches and a couple million customers, even after closing 300 branches last year and renaming the 1,500 "outlets" OneMain Financial.

US Bancorp and Wells Fargo lost a foreclosure case in Massachusetts's highest court last week that is turning some heads. "The state Supreme Judicial Court today upheld a judge's decision saying two foreclosures were invalid because the banks didn't prove they owned the mortgages, which he said were transferred into two mortgage-backed trusts without the recipients' being named." One analyst said that "at least in Massachusetts a mortgage "must name the assignee to be valid." FULL STORY

And in nearby states, Vermont and New Jersey recently enacted emergency amendments to each state's foreclosure law that require a case plaintiff to more extensively validate and verify the accuracy of the foreclosure for all residential properties between 1-4 units.

If anyone out there knows of a mid-level Secondary Marketing manager in the Wisconsin area looking to join a good-sized mortgage company, they should check out Consumer Loan Services, LLC. The company is a credit union service organization (CUSO) mortgage operation owned by Marine Credit Union in La Crosse which has been around since 1949. Originations come from Marine Credit Union but also from credit unions and small banks in 7 states. CLS is also building a portfolio by private-label servicing for its correspondent clients, a good niche these days. The position will direct investor development, correspondent relations, and investor communications. If you're interested contact the president Jay Garten at

Mortgage fraud - in Cincinnati? "A 70-year-old man is the last of six family members to plead guilty to mortgage fraud conspiracy in federal court. Seven people total - including an employee of the family's - admitted in United States District Court to operating a mortgage fraud conspiracy between 2004 and 2009." Wire and mail fraud, money laundering, etc. - LOCAL NEWS RECAP

KB Home's fourth-quarter income fell 83% from a year earlier, which included a large tax benefit, although at least it is still a positive: earnings of $17.4 million. But fourth-quarter revenue fell to $450 million from $674.6 million a year ago, hurt by a 96.3% decline in revenue generated from land sales to $1.9 million from $52.7 million.

Friday's employment data really turned some heads. Although December's number was less than expected, there were some back-month revisions higher, and the underlying view about a general economic improvement has not changed. The unemployment rate did drop but it was mixed (household employment up but labor force down). We saw a rise to 297,000 in household employment but a drop 260,000 in the labor force. Some of this decline is likely to be reversed in January. By the time the dust settled Friday, MBS prices were better by .5-.75, depending on coupon (the same as 5-yr T-notes), and the 10-yr yield dropped from 3.40% to 3.32%. For the week, however, conventional mortgage security prices were about unchanged.

This week more of the focus may be on equities than on fixed-income markets. We've already started out the week with some large company acquisition news (Duke Energy putting in a bid for another utility), and we also have companies announcing earnings. For economic news, it is pretty quiet until Thursday's Producer Price Index and Trade balance, and then Friday's Consumer Price Index, Retail Sales, Industrial Production & Capacity Utilization. We do, however, have another set of Treasury auctions to go through: $32 billion in 3-yr's tomorrow, $21 billion in 10-yr's on Wednesday, and $13 billion in 30-yr's Thursday. Also, the FDIC holds a small-business forum on Thursday with Federal Reserve Chairman Ben Bernanke and FDIC Chairman Sheila Bair in Arlington, Va., about obstacles to small-business lending. The event could offer insight about the economic recovery, using small business health as a barometer. Ahead of all that we find our "benchmark" 10-yr Treasury sitting at 3.32% and MBS prices are roughly unchanged.


Before I lay me down to sleep,

I pray for a man who's not a creep,

One who's handsome, smart and strong.

One who loves to listen long,

One who thinks before he speaks,

One who'll call, not wait for weeks.

I pray he's rich and self-employed,

And when I spend, won't be annoyed.

Pull out my chair and hold my hand.

Massage my feet and help me stand.

Oh send a king to make me queen.

A man who loves to cook and clean.

I pray this man will love no other.

And relish visits with my mother.

I pray for a deaf-mute gymnast nymphomaniac with a

big chest who owns a bar on a golf course,

and loves to send me fishing, golfing and drinking. This

doesn't rhyme and I don't give a darn.