Don't forget: the bond markets close early on Thursday, and are closed entirely Friday. LOs know that any lender taking locks will price conservatively. But today it is business as usual, although being April 15th retailers are "giving away" deals. Arby's is offer snack-size curly fries - you must print the coupon from its website. McDonald's will give away free small coffees - breakfast hours only. California Tortilla will give away free chips and queso - you must say the secret password though "taxes schmaxes". Hard Rock Cafe will give free dinners away - You must sing a song in front of everyone. BLT Restaurant and Bar locations will have half-off alcohol drinks. Sonic will also offer half-price slushes and soft drinks. Bruegger's Bagels will offer 13 bagels and two tubs of cream cheese for $10.40 (in honor of the 1040 tax form). Boston Market will give away two rotisserie chicken meals for $10.40. will offer 25 percent off on any April 15 purchase. HydroMassage will offer up to 15 minute message between April 14 and April 18 - must have the printed coupon. Office Depot is offering free shredding - up to five pounds - with coupon. Great American Cookies is offer a free chocolate chip cookie per person. There's no other purchase needed or proof taxes were completed. Schlotzsky's is giving away a free "The Original" sandwich - you will need to purchase 1 bag of chips and 32-ounce drink.

On the jobs and growth front, recently voted Top 50 Mortgage Company to Work For by Mortgage Executive Magazine, Premier Nationwide Lending continues to see growth in all channels of origination. Over the last couple of months, the Texas based mortgage bank has opened 6 new branches in 5 new states and is now in 23 states. "74% of the $9+ billion we have originated over the last 5 years has been purchase business. This is possible because we continue to give our producers the products, price, and service they and their customers deserve. Realtors and other referral sources reward this focus and new technology, such as the new Premier mobile app, with more customers," says Production Manager, John H. P. Hudson. "We are also signing up new brokers and non-delegated correspondents at a better than average pace". Premier is actively seeking mortgage professionals to join its team in TX, CO, NM, and TN. Email jhudson@pnlending. com.

One lender we have been following for some time is making news again. iServe Residential Lending has rolled out its new fully delegated jumbo product to $2 million. Delegated jumbo to $2 million is certainly significant in this market.  Another noteworthy product is iServe's new Manufactured Home program.  In addition, iServe continues its national expansion, announcing new Branches in Chandler AZ, Las Vegas NV, Chesapeake VA, Garwood NJ, Madison CT, Orlando FL, Tyler TX, Carlsbad CA and Encino CA.  iServe continues to grow through its core branching network and per Co-CEO Ken Michael, will remain active in its search for new Originators and Branches in key markets throughout the country.  "2013 was a benchmark year for iServe, and as demonstrated by these recent Branch opportunities, our growth will continue to excel in 2014," states Michael.  For more information on this story or on iServe opportunities, contact Allen Friedman at afriedman@iservelending. com.

M&A and acquisitions in the mortgage banking and banking sectors continue unabated.

Tennessee's Wunderlich, an investment firm, announced that 25 mortgage-focused institutional sales and trading professionals from Banc of Manhattan Capital have joined the firm. The BOM folks, who include Tad Dahlke and Hal Hermelee, are in Los Angeles and New York. Sounds like Wunderlich is interested in doing some sales and trading of MBS, whole loan pools, and analytics.

Bofi Federal Bank ($3.6B, CA) will acquire certain assets and all of the deposits of H&R Block Bank ($1.4B, MO) for an undisclosed sum. After the deal, Bofi will provide H&R Block branded financial services products through Block retail and digital channels. Missouri also saw that Old Missouri Bank ($167mm) will acquire Bank of Ash Grove ($71mm) for about $8.4mm.

KBW announced that CB Financial Services, Inc., the Carmichaels-based holding company for Community Bank, and FedFirst Financial Corporation, the Monessen-based holding company for First Federal Savings Bank, signed a definitive merger agreement under which FedFirst will merge with and into CB in a cash and stock transaction valued at approximately $54.5 million.  On a combined basis, CB will have more than $860 million in total assets and will be attractively positioned in the heart of the Marcellus Shale Region to provide a broad array of retail and commercial banking services to customers throughout southwestern Pennsylvania.

First National Bank of Pennsylvania ($13.4B) will acquire OBA Bank ($386mm, MD) for about $94mm in stock. In Indiana MainSource Bank ($2.9B) will acquire Merchants Bank and Trust Company ($225mm) for $33.8mm in cash (40%) and stock (60%). Bank of America has sold 11 branches in MI to Huntington National Bank ($59B, OH) for a 3.5% premium. The branches reportedly have about $450mm in deposits. And Talmer Bank ($2.3B, MI) will sell 11 branches in WI to Wintrust Financial ($18.1B, IL) for $13.5mm more than net book value according to financial filings. The branches hold about $360mm in deposits.

I get a lot of research papers sent to me; I read them all. A lot of them I never pass through the commentary, simply because there are only so many ways to say 'the industry is going to change', or, 'look how far we've come'. Every once in a while a paper is written which touches on a subject I feel is important; such is the case with the FDIC's release of Community Banks Remain Resilient Amid Industry Consolidation. The research and study is on long-term consolidation in banking and the implications of this trend for community banks. Drawing from data over the last thirty years, the paper finds that community banks have remained highly resilient amid the long-term trend of banking industry consolidation. A key finding of the study is that institutions with assets between $100 million and $10 billion - most of which can be considered community banks - have increased in both number and in total assets since 1985. The number of banks with assets between $100 million and $1 billion increased by 7 percent between 1985 and 2013, while the number of banks with assets between $1 billion and $10 billion increased by 5 percent. These groups of institutions also experienced growth in terms of total assets.

I also receive a fair number of compliance questions, although I am by no means an expert in compliance so usually bring in an expert...

"Dear Mr. Chrisman, I have been told that prefunding quality control audits are required by Fannie Mae and/or HUD. Can you explain to me the prefunding requirements?" Sure. While HUD does not specifically require that prefunding audits be performed on FHA loans, it strongly suggests it. HUD's Handbook 4060.1 Rev-2 Section 7-5-B states that, "mortgagees may want to sample cases prior to closing to evaluate the quality of processing and underwriting. Using such reviews, mortgagees may detect problems prior to closing while problems can still be corrected." Fannie and Freddie do require prefunding reviews, and specifically list the audit steps which should be conducted in their guide.

I was recently asked about the differences between "business purpose" and "consumer purpose" loans, and how to distinguish between the two.  There are roughly five primary factors that must be considered in order to determine business purpose from consumer purpose. The first is the relationship of the borrower's primary occupation to the acquisition, which in all probability, the more closely related, the more likely it is to be business purpose. The second is the degree to which the borrower will personally manage the acquisition, once again, the more personal involvement there is, the more likely it is to be business purpose. The third factor is the ratio of income from the acquisition to the total income of the borrower. The higher the ratio, the more likely it is to be business purpose. The fourth is the transactional size; the bigger the transaction the more likely it is a for business purposes. Lastly, and maybe more importantly, is the loan purpose as stated by the borrower on the application.

"There are 'business days', and then there are business days". This is how I responded to an email from someone inquiring as to the application, and use, of the term. 'Business Day' traditionally refers to a day on which a lender's office is open to the public for carrying on virtually all of its business operations. However, when applied for purposes of rescission, the term means all calendar days except Sundays and the legal public holidays (Christmas Day, Thanksgiving, Memorial Day, etc.). When a legal public holiday falls on a Saturday, federal offices observe them on the preceding Friday; this means that the preceding Friday is a "business day" and the Saturday is not a "business day."

Let's continue playing catch up with some recent vendor and investor news!

PennyMac added National Mortgage Insurance and Arch Mortgage Insurance as approved MI companies and as such is now accepting MI from all Fannie- and Freddie-approved insurers for non-HARP Conventional mortgages.  United Guaranty has also been approved for FHLMC Open Access and FNMA DU Refi Plus loans, effective immediately.

I am sure that we will continue to see lenders react to the narrow QM box by rolling out un-QM programs. United Wholesale Mortgage launched its non-QM program to accommodate jumbo borrowers. The new program is called "Big & Easy Plus" - not to be confused with this gal I knew in high school.... Seriously, "There are a lot of borrowers that currently do not fit into the QM category," says Mat Ishbia, CEO and president of UWM. "Our Big & Easy Plus program gives UWM clients the flexibility to originate a 'make sense' loan for Jumbo borrowers with higher DTIs, helping expand their pipelines." Program highlights include a DTI range of 43.01 - 49.00 percent, loan amounts from $417,001 - $1,500,000, 740+ FICOs, and LTVs as high as 75 percent. 

Yesterday Ellie Mae reported its conclusion that "the recent outage to its Encompass services was not a result of a malicious attack and confirmed that there was no breach of customer data. The characteristics of the outage initially appeared to the Company to be consistent with a distributed denial of service (DDoS) attack.  However, following a thorough review of the incident, with assistance from a leading security and cybercrime forensics firm, Ellie Mae has now concluded that there was no malicious attack on its systems. Accordingly, the Company confirmed there was no breach of client or personal borrower data. The unexpected surge in service requests to web servers that resulted in the outage on March 31, 2014 was triggered by a confluence of factors involving network, hardware, software and demand for service. Ellie Mae has already taken a number of steps in response to this incident, including adding capacity and redistributing traffic across its data centers. The IT infrastructure has been functioning normally since mid-afternoon Pacific Daylight Time on April 1, 2014."

In a related but unrelated story, Freddie Mac sent out a warning saying, "At this time Loan Prospector is still experiencing slow response time. This issue impacts all Loan Prospector access methods. We're applying all available resources to resolve this issue and apologize for any inconvenience."

Looking at the markets, there just isn't much going on. Using the yield on the U.S. 10-yr T-note as a proxy, we've sat between 2.60% and 2.80% for quite some time - leading to low volatility - which suits Capital Markets folks just fine. Up a little, down a little. Yesterday was "down a little" on bond prices after a strong Retail Sales number, and current coupon agency MBS prices were worse about .125 while the 10-yr closed at 2.64%.

This morning we've had the March Consumer Price indices (expected roughly unchanged on headline and core, it came out at +.2% on both). We also saw the exciting second-tier NY Fed Empire Manufacturer's survey for April (1.29%) and will see the March NAHB homebuilder's sentiment, expected about flat from +47 prior. In the early going the 10-yr is up to 2.66% and agency MBS prices are worse .125-.250.