"Rob, are you hearing that many companies are paying their LO's less for refinances, and even less for refinances within a company's servicing portfolio?" Yes I am, within the confines of complying with LO comp rules.

The F&M Bank and Trust Company, Mortgage Group, is looking for an assistant to the SVP of secondary marketing in its Tulsa, OK site. The position would work directly with senior management in the maintenance and development of new and existing investors, prepare rate sheets, lock loans with investors, manage pricing model, have a working knowledge of mortgage banking, and proficiency in Excel, word, power-point, and be directly involved in monthly and annual budgeting process. The F&M Bank and Trust Company has been in business for 65 years, and is a "locally owned" $2 billion bank, and its mortgage operation is growing and has offices in Oklahoma and Texas. Interested persons should contact David Laughlin, secondary manager, at DLaughlin@fmbanktulsa.com, or apply on line at WWW.fmbanktulsa.com.

Out in California, a 25 year-old Orange County-based mortgage banker is looking for a VP of Operations with experience in processing, underwriting, doc prep, funding, shipping, insuring, compliance and all other facets of the industry pertinent to such a position. The company is a DE approved HUD mortgagee and is also approved by FNMA. "It offers a very strong compensation/benefits package for the right person." The candidate should either live in Southern California with a manageable commute, or be prepared to relocate. If you know someone who is interested, they should send their resume to me at rchrisman@robchrisman.com.

Let's roll up our sleeves and plunge into...HARP 2.0. The first thing for folks to note is that there is a wide disparity between the potential security market pricing for pools filled with these loans and the prices on rate sheets. Investors, knowing that these borrowers have a good payment history, view these new loans as nearly un-refinancable due to the program, and therefore on their books longer and therefore are more valuable. Lenders, however, due to the newness of the program, the perceived cost of higher fallout, and the general uncertainty about future reps & warrants, are actually charging a higher price for them then "regular" conventional loans. The market should see this price difference diminish over time, but for now it is a fact of life.

From Northern California Mike S. writes, "Some think HARP 2.0 is the holy grail for borrowers and LO's. Others think it's a bust. I think it falls somewhere in the middle, like the weatherman who says there's a 50% chance of rain gets to be right every time. My concern is at what price any success will cost. How many apps will be taken to help the few? If I'm a borrower in an underwater house and the only life boat to come by in four years passes my house to save others do I quit treading water? The premise behind a modification was that if we lowered the payment they would continue to pay. The result of that exercise hasn't exactly been stellar. Is this much different? Once again this program ignores the 5000 lb. elephant in the room: there's no equity and for many there will never be enough equity to get whole. This can will eventually quit getting kicked down the road. Many people I know consider themselves 'renters with tax benefits' in the homes that were once their dream. Are we just lowering the rent so we can deal with the issue 'tomorrow'?"

"Rob, what are you hearing out there regarding a property's estimated value? How are the agencies determining this value? On a HARP 2.0/DU Refi Plus, Fannie has increased the number of loans receiving the PIW option. If the lender executes the PIW (and sends the $75 fee), Fannie accepts the property value estimate submitted to DU as the market value for the subject. Some lenders are only accepting loans with the PIW option available. How are they determining that value - asking the borrower in the application process or using a 'see what value entered gets the PIW and the best pricing for the borrower' method? Fannie has been clear that if the file contains other estimates of value that this could result in repurchase. I am interested in how lenders are approaching this. Finally, Fannie states that there may be certain situations in which a lender needs to obtain an appraisal, even though a DU Refi Plus property fieldwork waiver was offered on the loan case file."

He continued, "One example of this is when the lender has reason to believe that fieldwork is warranted based on additional information obtained about the property, subsequent events such as a hurricane or other natural disaster, or additional information provided by DU regarding the subject property or loan case file. In these situations, the lender should obtain an inspection. If the inspection reveals physical deficiencies or adverse environmental conditions, the lender must obtain a full appraisal (based on an interior and exterior property inspection) and may not exercise the DU Refi Plus property fieldwork waiver offer. If the inspection does not reveal physical deficiencies or adverse environmental conditions, the lender may choose to exercise the DU Refi Plus property fieldwork waiver, or they may obtain the minimum level of property fieldwork as specified by DU. Another example is when the lender is required by law to obtain an appraisal. In this situation, the lender must comply with such requirements, but may still exercise the DU Refi Plus property fieldwork waiver. What are lenders saying about this Fannie guide and how are they addressing?"

These are valid questions, as are any issues regarding the PIW, reps and warrants, and values. Here is the original announcement on HARP 2.0 guidelines...if you go to pages 6-7 you can see info on reps and warranties: . Here's the primary Fannie HARP page.  and down toward the bottom is a "Resources" section that might be useful.  Of particular note is the Options Matrix which lays out some specific guidelines in a useful format.  As always, the best advice is to contact your Fannie rep!

2012 home prices are off to a rocky start if you follow the S&P/Case-Shiller Home Price Indices, which, in both the 10 city and 20 city composites, fell 0.8% in January, with the 20 city hitting its lowest level since early 2003. Year-over-year prices fell 3.9% in the index's 10 major markets, while the 20-city index dropped 3.8%. On top of that the Conference Board's confidence index dropped to 70.2 in March from a revised 71.6 in February that was revised upwards. How does one reconcile this news with the FOMC statement released with some upbeat comments about the economy, the stable/improving labor market, and the other home price indicators showing some decent news? For now the market seems a little more in favor of the "our economy is not that strong" scenario, helping rates slide down slightly.

So Tuesday saw money managers, REITs, banks, hedge funds, and of course the Fed were all said to be buying in current coupons reportedly at a 3:1 (buyers/sellers) pace. Supply picked up as well and totaled over $2.0 billion. MBS prices ended higher/better by about .250, and the 10-yr t-note was better by .5 (closing around 2.19%).

Today we've had the MBA's residential application activity for last week, and once again a decline in refinancing wiped out modest gains in purchase mortgage activity during the week. Overall apps were down 2.7%, with refi's dropping almost 5% and purchases increasing over 3%. Refi's now account for about 72% of all incoming business - the lowest it's been since last July. We also had another GDP revision for the 4th quarter, viewed as old news; later, at 11AM MST the U.S. Treasury will auction $35 billion in 5-year notes. We find our 10-yr at 2.21% and MBS prices worse by about .125.

A man is getting into the shower just as his wife is finishing up her shower when the doorbell rings.  After a few seconds of arguing over which one should answer the doorbell, the wife gives up, quickly wraps up in a towel and runs downstairs. When she opens the door, there stands Bob, the next door neighbor.

Before she says a word, Bob says, "I'll give you $800 to drop that towel you have on." After thinking for a moment, the woman drops her towel and stands naked in front of Bob. After a few seconds, Bob hands her $800 and leaves.

Confused, but excited about her good fortune, the woman wraps up in the towel and goes back upstairs. When she gets back to the bathroom, her husband asks from the shower, "Who was that?"

"It was Bob the next door neighbor and he..."

The husband interrupts, "Great, did he say anything about the $800 he owes me?"
Management Lesson:  If you share critical information pertaining to credit and risk in advance with your stakeholders, you may be in a position to prevent avoidable exposure.