The earthquake in Japan is no laughing matter. Just ask Aflac - it fired comedian Gilbert Gottfried as the voice of its duck after a series of Twitter jokes about the earthquake in Japan, Aflac's most important market.

From an economic perspective, world stock markets are hitting 2 1/2 month lows today, and Treasury yields have dropped due to the devastation. Contrary to what some Wall Street analysts believe, one reader wrote, "What happened in japan is a complete human and economic disaster, not an opportunity for economic growth.  Rebuilding projects after a natural disaster are not stimulative whatsoever - the immediate economic effect of the quake/tsunami was that tons of capital and material wealth/assets were destroyed instantly (not to mention all the lives lost).  Rebuilding the infrastructure returns that area to where they were before the quake/tsunami.  That doesn't equal growth in an economic sense - you have to distinguish between the seen (so-called job creation of the quake/tsunami) and the unseen (economic growth potential of that same labor and capital had there been no quake/tsunami). If one quake/tsunami is 'supportive to economic growth', wouldn't that mean that 10 quake/tsunami's would be phenomenal for economic growth? That makes no sense whatsoever."

The MERS saga continues. We're continuing to see various rulings by various states on MERS' ability to actually assign and foreclose on mortgages. Most recently it was the Supreme Court of the State of New York, which ruled in favor of Mortgage Electronic Registration Systems. The ruling judge wrote, "Plaintiff has shown that the assignment of the mortgage was not made retroactively...Although the assignment refers only to an assignment of the mortgage, physical delivery of the note is sufficient to transfer the obligation, and plaintiff has established that the note was delivered to it prior to the commencement of this action."

Data improvements continue to be made. For example, the GSEs are focusing their efforts on providing resources to assist lenders and the appraisers they work with to prepare to implement the UAD (Uniform Appraisal Dataset). Any lender interested can visit Fannie's and Freddie's websites to glean more information than I can repeat here, which is recommended since it is the "wave of the future:  FannieUAD and FreddieUAD.

Out in California, Paramount Equity Mortgage (CA, OR, WA) announced plans to partner with infomercial direct-sales company Guthy-Renker. The two will roll out a mortgage, insurance and solar power marketing platform as early as this summer - draw your own conclusions. Guthy-Renker is primarily a marketing company, and is taking a "significant" equity interest in Paramount's mortgage banking operation. It will work with Paramount to create multi-media marketing for Paramount's three main products, which includes home mortgages, life & auto insurance products, and residential photo-voltaic systems. "The mortgage market is really poised for growth right now."

In the mortgage software vendor space (doesn't that sound techy?) PCLender.com has been acquired by Lender Processing Services, Inc. (LPS). LPS is a provider of technology solutions for mortgage origination, processing, settlement, valuation, appraisal, and default services. "Joining forces enables LPS to provide PCLender's leading enterprise mortgage software and technology solutions along with Empower, LPS' premier, enterprise-wide loan origination system. Together, under LPS' Origination Technology Solutions division, we can now provide lenders of every size with state-of-the-art, end-to-end loan origination solutions to maximize operational efficiency, further reduce costs and better serve your customers."

In other corporate news, Grandpoint Capital (CA) will buy Orange Community Bancorp (CA) for $30mm in cash, or approximately 1.5x book value, and in Louisiana Iberiabank will purchase Cameron Bancshares for roughly 1,7x book value.

Wells Fargo Funding - the correspondent channel - has been busy lately. Yesterday, as a result of Freddie Mac's announcement that it will require verification of funds for refinance transactions, Wells Fargo requires "LP Approve/Eligible case files of refinance transactions without verification of funds to close be purchased by Wells Fargo Funding on or before April 15" and loans should be delivered to Wells Fargo Funding on or before April 1. Also in response to a change made at Freddie regarding the seasoning of purchase money mortgages for 120 days prior to refinancing as a rate/term (or "no cash-out") refinance transaction, Wells will also require, for all manually underwritten loans: 120 days of ownership (using the note date). Anything in pipelines with less time needs to be purchased by 4/15 and delivered by 4/1.

As a follow up to bulletins focused on Reg. Z non-compliance penalties, in mid-February Wells released information on its Counterparty Policy and Procedure Review (Correspondent Seller Compensation Questionnaire, Attestation of Compliance, Loan Origination Policies and Procedures,  Attestation of Compliance, and so on), Annual Recertification, and Wells Fargo Wholesale Lending's requirements for brokers. "Effective with applications taken on and after April 1, 2011, for any transactions where the anti-steering "safe harbor" liability protection is applicable, Wells Fargo will require that an anti-steering loan options disclosure be used and evidenced in the Loan file, including the borrower's signature acknowledging receipt, in order for such Loans to be eligible for purchase by Wells Fargo. Sellers may include a loan options disclosure in Loan files where the safe harbor protection is not applicable, if they choose. The information is helpful to borrowers on any transaction."

(That begs the question, "What is the safe harbor?" When a rule offers a "safe harbor," it means that if certain steps are taken, you are considered to be in compliance, which is a valuable benefit. The safe harbor in this rule offers benefits for loan originators, lenders, investors, and borrowers.)

Over in Wells' wholesale channel, it has been busy as well. Yesterday brokers learned that the non-conforming rate sheet pricing will change to include the 0.25% rate reduction for borrowers who enroll in the Preferred Payment Plan with a Wells Fargo or Wachovia checking or savings account. Cross-selling! And this is the last week to lock reverse mortgages with Wells - brokers learned that the rate and origination structure for HECM products (Standard and Saver) is changing and will now be priced at 5.06% and include an origination charge calculated as a 1% Maximum Claim Amount (MCA) with a $2,000 cap. But send them in soon.

Wells' brokers took note of a 3/26 date: consumer- and lender-paid models will be available for loans registered with Wells Fargo. "Loan files priced under the current compensation rules will need to have a Wells Fargo application date on or before Friday, March 25, or will be subject to the new compensation requirements." "How Wells Fargo reviews the GFE will be different than it is today with the lender-paid option. Wells Fargo will conduct an enhanced review of all fees represented on the initial GFE before acceptance. On a lender-paid transaction, if after review of the GFE, it is apparent that a GFE refund will be required, then Wells Fargo will not accept the GFE."

Last month Wells Fargo announced that it will lower its minimum FICO requirement from 600 to 500 for loans originated through retail channels. For third-party originations Wells' minimum FICO will remain at 640 and over on the retail side, to balance things out, low FICO borrowers will be required to put down larger down payments in order to qualify. This expansion of credit comes as the Secretary of HUD has encouraged banks to expend their underwriting guidelines. And now Plaza Home Loans announced it will go down to a 580 FICO. There are, of course, more stringent DTI and LTV guidelines than for higher FICO borrowers.

Investor changes continue our way. GMAC tweaked its government pricing. SunTrust updated its Agency Plus and DU Refi Plus product lines, and discontinued its Agency Plus 30-yr fixed IO product. Chase and Mortgage Services III posted updated pricing for their USDA products.

I have one small correction to some information from yesterday regarding Stearns Lending. I stated that, "loans have to fund by 3/31 to be under the old rules" but Stearns requires loans be locked and submitted by 3/31 to close under current compensation guidelines. So loans locked and/or submitted after 4/1 are subject to the new rules - a file received by 3/31 does not have to be locked to be protected under current regulations.

HSOA sent out links to its forms in preparation for the two compensation options scheduled for 4/1. "Brokers will have the option to receive compensation from either the lender or the borrower, but not both on any one transaction...HSOA will allow changes to the compensation agreement on a monthly basis. All changes will be effective on the 1st day of the following month. Change requests must be submitted to HSOA by the 22nd of the current month to be effective on the 1st day of the subsequent month. Their forms: Comp and Addendum.

Caliber Funding told its brokers that the margin on Government ARMS has changed from 2.250 to 2.000.

For the markets, MBS prices ended Monday nearly .250 better in price, while the 10-yr Treasury improved by about .375 and closed out at roughly 3.35%. Pushing bond and equity markets are, of course, the disaster in Japan, unrest in the Middle East-North Africa area, and European sovereign risk issues - all helping move money into US Treasuries. Believe it or not, one mortgage trader mentioned, "While supply has been limited, there are concerns that it will pick up some with the recent decline in mortgage rates."

Today we have had Import Prices (+1.4%) and Export Prices (also +1.4%) and the Empire State Manufacturing data (stronger than expected at "17.5" versus February's "15.4"). We also have the start of another FOMC meeting, but no change to rates is expected. Keep in mind that these monthly economic numbers really pale in comparison to the monumental events overseas. We are now at the low yields of the year, with the 10-yr down to 3.25% and MBS prices are better by .5.

I was in the airport VIP lounge in Seattle yesterday afternoon after giving a speech. While in there, I noticed Bill Gates sitting comfortably in the corner, enjoying a drink.  I was meeting a very important client who was also flying into Seattle, but she was running a little bit late.  Well, being a straightforward kind of guy, I approached the Microsoft chairman, introduced myself, and said, "Mr. Gates, I wonder if you would do me a favor."

"Yes?"

"I'm sitting right over there," pointing to my seat at the bar, and I'm waiting on a very important client. Would you be so kind when she arrives as to come walk by and just say, 'Hi Rob.'?"

"Sure."

I shook his hand and thanked him and went back to my seat.  About ten minutes later, my client showed up. We ordered a drink and started to talk business.

A couple of minutes later, I felt a tap on my shoulder. It was Bill Gates.

"Hi, Rob," he said.

I replied, "Get lost Gates, I'm in a meeting."