I found this article particularly enticing considering the change in banking/regulatory models over the last few years, and the downside risk for anyone with a "The Buck Stops Here" plaque on their desk. Stephen Morris and Ambereen Choudhury write, "London's banks that were once among the most coveted employers in the global financial system are struggling to fill top roles because potential penalties are seen to outweigh the perks....Bankers are concerned about regulations that could see executives thrown in jail for failing to spot serious misconduct on their watch, which has shifted the City of London's reputation from a light-touch Babylon to a risky place to work. Combined with British politicians' desire to name and shame, an unforgiving press and diminishing cash compensation, the nation's banks have been left struggling to fill senior positions, lawyers and recruiters said."

My cat Myrtle realizes that the CFPB has its benefits and its detriments, and she is closely following events in the PHH/CFPB hearing. On Tuesday, PHH and the CFPB presented oral arguments to the DC Circuit Court in the on-going litigation saga. Questions posed by the court included inquiries about the authorities of the CFPB, statutes of limitations, and, of course, RESPA.

Jonathan Fox at Lenders Compliance Group writes, "This is the litigation where PHH appealed to the DC Circuit Court because the Bureau's Director Richard Cordray raised an administrative law judge's $6 million penalty for mortgage insurance kickbacks to $109 million. Here is one aspect of the litigation: the implications of the court's view of an administrative agency led by a single director rather than the more typical commission structure. Entitled Going after the Big Cheese (PHH takes on CFPB's Director)," Jonathan's article is worth reading.

And Fred Small with Compass Point Research and Trading echoed what others have said. "The opening oral arguments in the PHH vs. CFPB case increased our conviction in the probability of a positive outcome for PHH. The CFPB's argument was met by a clearly unsympathetic bench and our view is the U.S. Court of Appeals for D.C. is set to deliver PHH a victory. We think there is a 75% probability that the CFPB's $103M increase to the original PHH fine will be substantially reduced or vacated entirely. Regardless of the appeals court decision, we think an appeal is likely. Link the audio recording of the hearing. (71 min)

"While we expected a positive outcome for PHH in court, the degree to which Judges Kavanaugh and Randolph appeared to question the CFPB's administrative order surprised us (note: Judge Henderson was not in attendance but is still hearing the case). Outside of the broader arguments about the CFPB's structure and authority, the key points against the increased fine revolve around the CFPB's re-interpretation of the industry's 'settled expectations' regarding RESPA and its use of an administrative action to avoid any statute of limitations. Judge Randolph asked several questions focused on the statute of limitations, noting that in other venues where no statute of limitations exists it is borrowed from somewhere else. Judge Kavanaugh focused on the lack of 'fair notice' given standard industry practices and expectations regarding RESPA that were in place at the time.

"We expect a decision early this fall. Our view is that no matter the outcome of this decision, the odds of an appeal are high which suggests that the legal road ahead is still long and winding."

"Beyond the direct impact on PHH, our view is that a CFPB loss in this case would force a near-term retrenchment of the bureau's enforcement and rulemaking efforts which would be viewed positively for auto lenders, the entire mortgage complex, student loan servicers, and payday lenders. Furthermore, we believe that a CFPB loss in this case would significantly strengthen legislative efforts to shift the bureau's leadership from a single director to a commission.

"'You're concentrating in a single person a huge amount of power and the president has no authority over that. - Judge Kavanaugh"

Turning to the markets... there isn't much to turn to. Steady as she goes. Aside from some intra-day chop among securities and coupons, we ended Wednesday about where we were at the close of Tuesday. In fact, there hasn't been much movement at all, which is fine with capital markets folks.

Today we've already had the latest decision on rates from the Bank of England where the BoE left its "target rate" unchanged at 0.50%. And we've had Thursday's usual Initial Jobless Claims (-13k to 253k), March CPI (+.1%, slightly less than expected, year over year core +2.3%), and March real earnings (last -0.5%). At 1:00pm, the final leg of this week's set of auctions will be completed when the Treasury auctions $12 billion of reopened 30-year bonds. We closed the 10-year yesterday at 1.76% and in the early going it's at 1.78% with agency MBS prices worse a tad.

Jobs and Announcements

How much does a clever compliance trainer make with the CFPB? Here you go.

Are you a DE Underwriter or Loan Closer in CA or AZ? If so, Network Funding, LP needs you! Network Funding has been ranked among the "Top 100 Mortgage Companies in America 2015" by Mortgage Executive Magazine and is already experiencing significant growth in 2016. They are also adding multiple support and operations roles in other areas of the country to accommodate this continued growth.  Learn more about the company and the available positions at www.join.nflp.com or send resumes to Executive VP Brett Snortland.

It is that time again for Mason-McDuffie Mortgage's annual Tahoe Summit. "This year, we have a great lineup of speakers who are joining us to discuss the future of our industry. Specifically, how new technology is shaping and will shape the future. We will also be talking about modern sales marketing and our roadmap for success in the Information Age. We believe that this information is critical for all Loan Officers who want compete in the new era of lending. So, if you would like to hear the knowledge from Jim Keenan (Sales Guy Inc.), Katie Lance (Katie Lance Consulting), Ginger Bell (Morf Media), and Nima Ghamsari (Blend Labs), please go to this link and sign up for our 'Tahoe Summit Replay.' The replay will be available 1 week after the conclusion of the conference. Please contact Jason Frazier if you would like any more information on it or careers at "Mason Mac." We look forward to connecting with you!"

And Fannie & Freddie seller/servicer American Capital Corp is gearing up to increase business in its Wholesale channel. The name has changed from ACBN to ACC Wholesale. ACC is looking forAccount Executives for the following areas: Seattle, Texas, San Diego, Pasadena/Santa Barbara. AEs have the ability to bring on Retail and Wholesale clients as well as originate themselves if they are licensed.  Please email ACC@amcap.mortgage if you would like to be considered.

On the flip side of all this hiring Fifth Third Bank ($139B, OH) has confirmed it offered voluntary early retirement packages to 775 (about 4%) of its 18,500 employees, as it seeks to cut costs.

PrimeLending and Mutual of Omaha Bank have signed a joint venture agreement to form Mutual of Omaha Mortgage, LLC. "The new company will combine Mutual of Omaha Bank's strong brand, marketing expertise, financial strength and nationwide reach with PrimeLending's broad product portfolio, proven compliance processes, commitment to technology and strong reputation in the mortgage space.  Mutual of Omaha Mortgage will begin recruiting for a wide-variety of positions within the next 45 to 60 days. After building its team, Mutual of Omaha Mortgage is expected to begin operations in the third quarter of 2016. For more information, email recruiting@mutualmortgage.com.

And Assured Guaranty Ltd. announced the acquisition of CIFG for approximately $450 million in cash. The acquisition is expected to close in mid-2016. AGO will acquire CIFG through AGC, the same operating subsidiary that acquired Radian Guaranty. AGC's dividend capacity is currently limited by its investment income; CIFG had $16 million of investment income in 2015. CIFG Holding Inc. is the parent of financial guaranty insurer CIFG Assurance North America, Inc. (CIFG NA). At the end of 2015, CIFG had $5.6 billion of net par insured and had $637 million of statutory capital. CIFG's portfolio consists mostly of asset-backed guarantees; student loan ABS, corporate synthetic CDOs, and CLOs make up just more than 50% of the portfolio, while U.S. municipal finance exposure makes up about 22% of the portfolio.

For various reasons the announced bank mergers and acquisitions continue to a much greater degree than de novo bank creation. In just the last week it came to light that Citizens National Bank ($1.7B, TX) will acquire Kilgore National Bank ($83mm, TX). In nearby Louisiana four-bank holding company Louisiana Community Bancorp Inc. ($934mm) will acquire Tri-Parish Bank ($208mm). In the home of the Pittsburgh Pirates DNB First ($749mm) will acquire East River Bank ($311mm) for about $49mm in cash (13%) and stock (87%) or about 1.6x

tangible book. State Bank and Trust Co ($3.5B, GA) will acquire The National Bank of Georgia ($375mm, GA) for about $68mm in cash and stock. Westfield Bank ($1.3B, MA) will acquire Chicopee Savings Bank ($677mm, MA) for about $110mm in stock. United Community Bank

($9.6B, GA) will acquire Tidelands Bank ($466mm, SC) for about $2.2mm in cash. First Interstate Bank ($8.7B, MT) will acquire Flathead Bank of Bigfork ($232mm, MT) for about $34.2mm.

But plenty of banks are interested in other lines of business, and it isn't against the law (yet) to pursue them. Ally Bank ($111B, MI) will acquire online wealth management and brokerage company TradeKing Group for about $275mm. Trade King provides online trading tools for

Self-directed trading of stocks, bonds, options and mutual funds to individuals and manages $4.5B in client assets. The management team of The Palisades Group, an investment advisor subsidiary of Banc of California ($8.2B, CA) will pay an undisclosed sum to buy out the subsidiary company. Union Bank & Trust ($7.7B, VA) will acquire independent registered investment advisory firm Old Dominion Capital Management (VA). Old Dominion manages about 300 client relationships.

What's new with some of those crafty vendors and rascally tech firms?

LoanCraft has rolled out some new OCR technology to improve turn time on its Tax Return Analysis. Typically, you get a full analysis of tax returns for personal and business in less than four hours, and the standard price is only $25. This is a nice complement to its transcript analysis service, and it can sure save your underwriter time, which I'm sure they will welcome.  Contact Ron George at rgeorge@loancraft.net.

Indecomm has launched its new proprietary Income Analyzer, Web-based platform that electronically reads documents using sophisticated Optical Character Recognition (OCR) technology. It reads and analyzes data, calculates qualifying income associated with the mortgage loan, and alerts the lender to underwriting conditions. Agency income documentation and calculation messages are clearly and visually presented to users, providing a consistent methodology for the successful approval of loans. Lenders now face an increase in the period from application to closing. Income Analyzer recaptures the lost time. Some highlights of its Income Analyzer includes, calculating and analyzing income by extracting data from income documents. Customized alert messaging reducing errors and adding efficiency through processing and underwriting. Income Analyzer also streamlines self-employed borrower underwriting. Visit the Indecomm website for more information on its Income Analyzer technology.

DebtX has been awarded a five-year contract by the U.S. General Services Administration (GSA) to provide loan sale advisory, valuation and due diligence services to federal government agencies. Effective through February 2021, DebtX has been approved to act as Program Financial Advisor, Transaction Specialist, and Due Diligence & Support Services provider.

loanDepot, has partnered with Orchard Platform, a technology and data provider for marketplace lending. Under the agreement, loanDepot will integrate its industry-leading performance data into the Orchard U.S. Consumer Marketplace Lending Index and Market Data products. Through this partnership, the U.S. investment community will gain deeper insights into the strong performance of loanDepot personal loan products relative to other marketplace lenders and the industry as a whole.