Hey, who wouldn't want to have some steel-cut oatmeal with FHA Commissioner Carol Galante? Ride a ski lift with HUD Secretary Donovan? Argue over a boot warmer with the CFPB's Peter Carroll? Or talk shop over s'mores with Seth Wheeler, a senior adviser at the National Economic Council? Given the very limited number of folks allowed into the MBA's Mid-Winter Conference, you can do all of that.

At the other end of the spectrum, Barclays said it would axe up to 12,000 jobs this year - up to 9 percent of employees could go, including 7,000 in Britain, where half of the affected staff had already been notified. The cuts are not concentrated in any single business area.

I just lost one of my sources of cash: Fifth Third has joined a host of other large banks in announcing it will no longer offer payday (deposit advance) short-term loans. In other banking news, Citibank has agreed to pay $110 million to settle a lawsuit that it forced thousands of homeowners to pay property insurance premiums through force-placed hazard and flood insurance. And Morgan Stanley agreed to pay $1.25 billion to the Federal Housing Finance Agency to resolve claims that it sold shoddy mortgage securities to Freddie and Fannie. Were they filled with loans made to people who lied about their incomes? Or maybe mis-rated by the rating agencies? Those questions aside, the securities were created in the heady days of 2005-2007 and totaled $11 billion.

Can an underwriter require a borrower to state where they have their hair cut? Maybe not (yet) but in England, sure.

"Rob, what do you hear about ARM production? All of my LOs and doc drawers are scared to death of them in this QM era." Tell them to buck up. (Yes, that's with a "b".) Last week's MBA applications numbers showed adjustable rate mortgages were 7.5%, up from 2013's 5.8%. It is still well below recent era averages - since 1990 ARM share has been closer to 15%. In the secondary markets, jumbo ARMs are doing pretty well - last week Goldman Sachs formed a $500 million 7/1 deal with pre-QM originations (read: lots of IO), and I believe that about 90% of the loans were 90% jumbo ($800k average loan balance).

In other current events, "mortgage guy" (for lack of a better term) Marc Savitt rolled out his Congressional web page.

While we're on politics, a few weeks ago the President gave the yearly State of the Union Address, and if it wasn't for the fact it pre-empted reruns of the Big Bang Theory, I would have missed it. As I sat there wondering how much money had been spent on business suits in that room, I heard the President fumble with the word, myRA, and I knew it wouldn't be the last time my ears would hear it. The official Treasury Department release over the weekend claims, "Only about half of all workers have access to an employer-based retirement plan, such as a 401(k). And left on their own, few workers save. It is estimated that fewer than one out of 10 eligible workers actually contribute to an IRA." I hate being left alone, by the way. While the details are extremely vague, the basic starting points of the program have been established, and they are: 'an investor can start with an initial deposit of as little as $25, with subsequent contributions as little as $5; if an employer chooses to participate, contributions are made through automatic payroll deductions; there are no fees, 100% of any contribution goes into the account and is invested in a Treasury security; and finally, the myRA is not tied to any one employer, it can be rolled into a Roth IRA, and in the event of a withdrawal (which can happen at any time) the contributions are tax-free'.....now let's talk about yield.

Turning to a different Washington, what, they didn't like Starbucks rainforest policies? "Effective end of day Friday (midnight EST) February 7, 2014, Fifth Third Correspondent Lending is temporarily suspending loan registrations in the state of Washington. All state of Washington transactions must be registered no later than the end of day Friday February 7, 2014. State of Washington transactions in the locked or registered pipeline prior to this deadline will be eligible to be delivered for purchase. When Fifth Third is ready to resume business in Washington, we will send another communication re-opening our Washington registrations."

Keeping on with lender, investor, and vendor news...

As a follow-up to our recent EPO discussions, a leading provider of client retention tools is offering an interesting niche product to lenders that provides an effective last line of defense against EPO penalties. Monitoring Advantage, a service of Advantage Credit, Inc., is a compliant, full service monitoring service that has the power to greatly mitigate EPO cost and increase income for lenders and originators. "A great complement to a lender's CRM system, Monitoring Advantage can also be delivered outside of a CRM environment. The service provides the most timely, actionable information for lenders to ensure high client retention rates and a very compelling ROI." Contact Rebecca@monitoringadvantage.com to learn more.

Carrington Mortgage Services announced its Wholesale Lending Division is offering a 15 day on-time closing program. The program includes "get your loan ready for CTC in 15 days or your borrower gets a $500 closing cost credit", both FHA and agency loans are eligible, along with purchase and refinances down to a credit score of 580. "Early disclosures are available to move your loan more quickly to closing and prequalification letters for your purchase loan borrowers." Learn more here. (By the way, Carrington is expanding, and is hosting a job & career webinar on Wednesday the 12th.

"PHH remains committed to providing our correspondent partners with pertinent information regarding the upcoming CFPB rule changes. In support of our continuing efforts, please click here for an updated version of our Frequently Asked Questions (FAQ's) document which provides answers to questions received to date regarding PHH requirements for CFPB regulations. This document, along with additional information on this subject, is posted on our SOAR website. Please access SOAR and select "CFPB Resources" under the "Hot Links" section for additional details."

Liberty Savings Bank announced to brokers that it only charges the "early payoff penalty" for 120 days and only if the broker is responsible for the borrower refinancing their mortgage.  If the borrower sells their home or refinances their mortgage with another institution during this 120 day period, there is no penalty.  Liberty does wholesale in the following states:  CO, FL, IN, KY, MI, MN, NC, OH, SC, UT, WI.  (Any brokers that may be interested can contact John Mertz at john.mertz@libertysavingsbank.com.)

Provident Funding sent clients an update to the Program Guidelines for Conforming Products has been published which is effective immediately. "Please refer to the updated Program Guidelines for complete details. 1.3.1. Standard Conforming - Fixed Rate and ARM, 1.3.2. Super Conforming - Fixed Rate and ARM: the maximum allowable LTV/CLTV limits are unchanged, but added notes which reflect recent maximum LTV/CLTV restrictions on Adjustable Rate Mortgage (ARM) products submitted to Desktop Underwriter (DU) version 9.1. Loans exceeding DU's limits but within Provident Funding's limits must be submitted to Loan Prospector (LP). 2.5.9. Validation of Tax Returns: Added a requirement for loans with qualifying income derived from a corporation, S-corp or partnership to provide an additional fully executed 4506-T form for each Business Federal Tax Return and a requirement to provide the IRS Form 7004 (Application for Automatic Extension) and obtain the 4506-T transcripts confirming "No Transcripts Available" when business returns are on extension for the most recent year. 2.11. Power of Attorney: Updated the acceptable use of a Power of Attorney to be restricted to transaction types of Purchase or Rate and Term except as required by applicable law. Also added a requirement that at least one borrower on the transaction must physically sign the loan documents unless the attorney-in-fact or agent under the power of attorney is either the borrower's attorney-at-law or the borrower's relative."

BOK Financial Correspondent Mortgage Services now allows for 100 percent gift funds without any overlays for FNMA products. This allows all of the borrower's down payment and financing costs to be paid by a gift from a relative, fiancée or domestic partner. Pete Tamoney, Mid-Atlantic Region sales manager with Correspondent Mortgage Services, says now is the perfect time for originators and correspondents to update their channel offerings and consider what their partners have in the way of gift fund programs. Tamoney said they're actively pursuing new relationships with community banks and credit unions nationwide and accepts inquiries at clientrelations@bokf.com.

Envoy Mortgage CLD has announced a reduction in the minimum credit score requirement for FHA loans from 640 to 620.  Due to the additional risk of purchasing loans where borrowers have credit scores below 640, additional overlays will be applied for credit scores from 620 to 639.  Transaction types are limited to 1-unit purchase or rate/term refinance transactions only.  Loans must also receive an AUS approval and cannot exceed a 45% overall DTI.  Lenders must review Envoy CLD's FHA product description for all overlays that will apply to these transactions.

Horizon Bancorp, the parent company of Horizon Bank, announced its second acquisition in four months: an agreement to purchase all the assets of Indianapolis-based 1st Mortgage of Indiana, Inc., a full-service mortgage lender with a single location in central Indiana. Horizon will buy the assets of 1st Mortgage in a 100 percent cash transaction. The amount was not disclosed. (In November, Horizon spent about $18.4 million to buy Summit Community Bank, which has two locations in the Lansing, Mich., area.)

As a reminder, the FHA is now accepting electronic signatures for all documents in the case binder for mortgage insurance, servicing, loss mitigation, and insurance claims as well as for HUD's REO Sales Contract and other related addenda.  The new policy is effective for FHA Single Family Title I and II forward mortgages and HECMs.  For full details, refer to HUD Mortgagee Letter 2014-03.

In an effort to both allow access to credit and to manage its own risk, the FHA has effected new manual underwriting requirements, the full details of which are explained in Mortgagee Letter 2014-02. The letter provides an explanation of maximum qualifying ratios based on the borrower's minimum decision credit score and compensating factors, which vary depending on whether or not the borrower has discretionary debt and how many units the property has.  It also details out how underwriters can document compensating factors for a mortgage with a ratio that exceeds the standard qualifying requirements in order to consider borrowers who do not meet automated credit assessment criteria.  The new guidance also requires cash reserves equal to one or more total monthly mortgage payments for 1- and 2-unit properties, while the existing reserve requirements for 3- and 4-unit properties remain unchanged.

Turning to the fixed-income markets, demand continues solid but supply is down (just ask most lock desks).  There just wasn't much to talk about, so I am not going to waste your time. And there isn't much news today aside from the Treasury starting its quarterly refunding auctions this week, with a 1PM 3-yr note sale of $30 billion. The 10-yr yield closed Monday with a yield of 2.68% (about where we were much of last week, give or take a little) and in the early going today it is sitting around 2.69% and agency MBS prices are down/worse a few 32nds.


A news flash from the Olympics, care of The Borowitz Report:

SOCHI - Construction in Sochi is "very much on track" to be finished in time for the 2018 Winter Olympics, Russia's head of Olympic planning said today.

"I've been accused of being overly optimistic, but I really think we're going to make that 2018 deadline," the official, Dmitri Brilosky, said. "Fingers crossed."

Mr. Brilosky pointed with pride at the progress his team had made in constructing bathrooms at the site. "We've finished installing the surveillance cameras," he said. "Now we're getting ready to put in the toilets."

The Russian official was more guarded when asked by a foreign reporter if all the elevator shafts would have elevators in them by 2018. "I'll have to check on that," he said. "That might be cutting it close."