Bill Rogers writes, "Could this be a trend for Generation Y and how they achieve homeownership and tackle mounting student loan debt?" (And regarding the old residential lending advice, "Don't lend on anything with a license plate or wheels", I didn't see a license plate.)

Freedom Mortgage is pleased to announce that Jeffrey P Mastro has joined the company as VP Renovation/Correspondent Lending based in the Clifton Park NY office. Jeff has 30 years renovation experience in retail, wholesale and correspondent lending, and will be expanding Freedom's renovation lending team nationally. Jeff will be recruiting correspondent AE's with renovation experience to work with Freedom's national correspondent network. Renovation lending is an important product for borrowers purchasing or refinancing homes in need of repairs or improvements, and Freedom Mortgage looks forward to providing the expertise to revitalizing homes across the U.S. Jeff can be reached at Jeff.Mastro@Freedommortgage. com.

California's Redwood Trust, Inc. is seeking a Correspondent Credit Operations Manager for its Residential Mortgage Conduit. "Redwood Trust, Inc. is searching for a highly motivated and experienced Credit Operations Manager to oversee the workflow management for an established conventional conforming and jumbo correspondent lending program. Redwood is successfully purchasing closed loans from over 125 originators and it's the responsibility of the Credit Operations Manager in working with other managers to ensure that the originators' committed loans are data validated, re‐underwritten, conditioned and funded within the established service level agreements. In addition to meeting turn times, the candidate will be also be responsible for designing, modifying and implementing optimal system and process workflows and departmental configurations to achieve the future targets of additional originators, increased loan volumes and expanded mortgage products. The candidate will have a very high level of interaction with purchase operations, sales, credit policy, post purchase operations, compliance and capital markets as well as an ongoing external communication with Redwood's correspondent originators." To apply for the position, look for "Careers at Redwood" (the company currently has several openings) or email Dawn Bordeaux at dawn.bordeaux@redwoodtrust. com.

And MENLO Company, a premier Investment banking consulting and retail Mergers & Acquisitions firm, focuses on small to mid-market, mortgage brokerage and mortgage banking firms whose purchase production ranges from $3M/month to $25M/month.  "The market is consolidating due to the costs of legal and compliance for most firms", says Rick Roque, MENLO's founder, and also Managing Editor of Mortgage Compliance Magazine.  "We are focusing on helping bona fide groups of mortgage professionals in all 50 states, connect with more mature and stable Retail Mortgage Firms, and to get clients competent leaders in target markets".  If you or your team falls within this production range, contact Rick at rick@menlocompany. com.

Bank of America bought Countrywide and Merrill Lynch in 2008 and 2009 respectively. How is that investment paying off? Well, it just cost BofA another $9.5 billion.

And while we're talking about jaw-dropping numbers, the MBA released its latest profit figures for independent mortgage bankers. " average profit of $150 on each loan they originated in the fourth quarter of 2013, down from $743 per loan in the third quarter..." Remind me: why are many lenders willing to assume the liability of potential buybacks? Never mind - here is the story: Mortgage Profits Hit Record Lows in Q4.

HUD has issued a proposal to avoid FHA loans from being prohibitive under CFPB rules which take effect next year. Last week, HUD published a proposal to eliminate the requirement that an FHA loan borrower be required to pay interest after the loan is prepaid. Well that's nice of them...but sort of intuitive, isn't it? Well not really. It's all based off of monthly interest accrual with FHA loans; if an FHA loan is prepaid on a date that is not a regular payment due date the borrower must pay interest through the end of the month even though, officially, the loan has been paid off. This is a clear violation of Reg Z high-cost provisions, however, set forth by the CFPB. Ballard Spahr write, "In connection with the adoption of the Regulation Z ability to repay rule and modifications to the Regulation Z high-cost loan provisions that became effective in January 2014, the CFPB revised the definition of "prepayment penalty" to provide that interest charged consistent with the monthly interest accrual amortization method is not a prepayment penalty for FHA loans consummated before January 21, 2015, but is a prepayment penalty for loans consummated on or after such date." HUD's proposal can be found on the Federal Register.

While I am yammering on about HUD, someone recently asked me about Greystone. I replied with, "It is a big company." (That's why I make the big bucks, right?) Seriously, Greystone "provides mortgage finance solutions across multiple platforms, including FHA, Fannie Mae, Freddie Mac, USDA, CMBS, bridge, mezzanine and other proprietary loan programs. In 2013, Greystone was ranked #1 in combined multifamily and healthcare FHA lending, ranked #1 in Small Loans and #3 in Affordable Housing as a Fannie Mae DUS lender in 2013, and is a top-5 Freddie Mac lender for seniors housing." It was in the news a few weeks ago when it announced it had provided a $40.4 million HUD loan to refinance Viera Cool Springs Apartments in Franklin, Tennessee. "The FHA financing was structured as a non-recourse 35-year fully amortizing HUD 223(f) loan. Viera Cool Springs Apartments is a sprawling 468-unit market-rate townhome community. The property, built in 1987, is ideally located in the Cool Springs submarket within Nashville, equidistant from Memphis and Knoxville. The location benefits from a superb transportation network and is known as one of the premier business centers in the Southeast." If you need more information about it, go to Greystone.

Steve W. asks, "Does anyone a an explanation why the 20 year APOR Rate is almost a full point lower that the 30 year APOR rate when you can only get an 1/8 to a quarter better in a real rate on the street. This is causing 20 year loans to be HPMLs more often than they should be. I know it sounds impossible but could the FFIEC have made a mistake on their tables?" Dave Gottfried from Cantor Fitz volunteers, "Rates on the fixed side are calculated mainly for 30yr and 15yr product and when calculating other rates they think are important they use interpolated levels. It appears 20yr rates default to the 15yr APOR rate levels. See link below and read: Methodology for Determining the "Average Prime Offer Rates". I think this answers your question."

The industry is catching its first whiff of Maxine Waters' plan for Fannie Mae and Freddie Mac. Many continue to say that any chance of a plan being solidified during an election year, passed by Congress, and signed by the president during an election year is slim. And it can't be much fun for the folks at F&F to have their future being batted around in the press and in the halls of Congress. Here is the latest on Maxine's plan.

SIFMA set up a website that discusses agency reform. It is good reading for anyone requiring a deeper look.

Let's flip over to some recent state-level changes.

Missouri Department of Insurance, Financial Institutions and Professional Registration recently amended 20 CSR 1140-30.240 regarding the supervision of residential mortgage loan brokers. The amendments will require that before renewing or applying for a Missouri loan broker license, the applicant must register with the NMLS. Applicants will be required to obtain a unique identifier through the NMLS and maintain an active status by paying the applicable application and renewal fees. Also, each licensee must annually attest to the completeness, truthfulness, and accuracy of its records filed with the NMLS. Failure to do so can lead to a suspension of the broker's license. The amendments to CSR 1140-30.240 become effective on April 30, 2014.

Wyoming has recently made provisions to its notary fee schedule. With the passage of Enrolled Act No. 26, the state's Legislature has amended W.S. 34-26-302 to increase the allowable fee a notary may charge (from $2 to $5).  Several notarial acts are affected with this passage; taking an acknowledgment, administering an oath or affirmation without a signature, jurats, witnessing or attesting a signature, certifying or attesting copies, taking a verification upon oath or affirmation, and noting a protest of negotiable instruments. These changes become effective on July 1, 2014. Wyoming Notorial Act.

New Jersey as re-adopted, and has made changes to, its predatory lending regulations.

Margaret Wright of Bankers Advisory writes, "The Predatory Lending regulations implemented under New Jersey Home Ownership Security Act ("the Act") have been re-adopted and certain definitions have been technically amended to be consistent with new January 2014 federal Home Ownership and Equity Protection Act ("HOEPA") amendments. The Effective Re-adoption Date is February 12, 2014 and the Effective Amendment Date is March 17, 2014." Amended definitions along with the re-adoption of consumer protections contained within the Act, can be found here.

Hey, either you like talking about convexity or you don't. The Federal Reserve Bank of New York LOVES talking about convexity. The bank's recent publication, Convexity Event Risks in a Rising Interest Rate Environment, addresses a few market specific concerns, such as how major changes in the composition of agency MBS ownership caused by the large-scale asset purchase programs may have prevented a major convexity event triggered by MBS duration extension hedging. The bank's researchers conclude that MBS hedging activity remained muted by historic standards and likely contributed only modestly to the rise in interest rates.

I continue to hear some company's activity is picking up while for others it is languishing. (Certainly no loan officer who has been around more than five years thinks that the loans have become any easier to do.) Any residential lender who has seen their volumes continue to bump along the bottom is in good company, as the MBA's applications numbers from yesterday are further sliced and diced. The Composite Index, a measure of total loan application volume, fell by 3.5% in the latest week, while the refinance index declined by 8% with the purchase index up 3%. The refinance index now makes up 54% of all applications, the lowest level since April 2010.  No wonder we are seeing guidelines being relaxed - some would say a race to the bottom - the low rates are not enough. Has everyone who could refinance already done so?

And yes, rates continue to do well. Yesterday we saw a nice rally with both the 10-yr and agency MBS improving about .250 in price. The reason? Thomson Reuters wrote, "There were a number of influences pushing prices higher including some month- and quarter-end buying, a strong 5-year note auction, a continued flight to safety bid associated with Russia, and mixed economic data." Traders supposedly saw lower-than-average MBS selling from originators - which makes sense with applications continuing to slow. This morning we'll have Initial Jobless Claims and the final read on Q4 GDP (+2.7 expected from +2.4). The GDP number is "old news" given that we're almost done with the first quarter of 2014 already. Later we'll have Pending Home Sales and a $29 billion 7-yr note auction. Prior to those numbers we're looking at an unchanged market from Wednesday afternoon.