More informal/off-the-record chatter from the MBA's Secondary Conference. Many companies are moving toward a variable cost model rather than fixed costs - a better way to handle the cyclical nature of this business. And costs for lenders are still high, perhaps too high in some cases: many companies are selling MSRs (mortgage servicing rights) due to low production to cover their costs leading some to say that they have not made sufficient cuts. Here's one note I received: "The CFPB refers to itself as 'The Bureau' - what happened to the FBI?" Warehouse lenders everywhere are hungry for business, and cutting their rates below the Prime Rate (3.25%) into the 2% range if certain conditions are met. And yes, attendees were generally optimistic, and although some of the optimism is unwarranted (we'll continue to see consolidation), there is some sense that the virtual pendulum is swinging back, especially as special interest groups complain about credit and documentation standards. And the CFPB does not want to be blamed for creating regulations that restrict credit.

On the retail side, Guardian Mortgage is expanding. "Looking for a partner you can trust? Guardian Mortgage Company, Inc. has been serving generations of homebuyers since 1965, with an average tenure of their loan officers of 10+ years and a servicing portfolio approaching $2.5 billion. Management's approach to the business of residential mortgage is one of integrity, honesty and what is right for the needs of each borrower." Guardian is seeking colleagues for producing branch managers and loan officers as they expand into new southwest markets, particularly Phoenix/Scottsdale, as well as their other markets of Dallas and Detroit/Grand Blanc MI. In addition, they are looking for a leader for their Secondary Marketing function. For the complete job descriptions, more details, or to submit a resume, e-mail a copy of your resume to employment@gmc-inc. com.

And Redwood Trust continues to expand & evolve its operational capacity. Redwood is searching for a Default Oversight Manager and a Transaction Manager. The Default Oversight Manager is responsible for ensuring that all default administration functions performed by servicers and sub-servicers meet contractual obligations, investor guidelines, regulatory and legal requirements and generally accepted servicing practices. The Transaction Manager position will be responsible for management and support of Redwood Trust residential mortgage related purchase / sale and security transactions. Redwood Trust, Inc. (NYSE: RWT) invests in, finances, and manages real estate assets. "Through its ownership of mortgage-backed securities, Redwood credit-enhances billions of dollars in high-quality residential and commercial real estate loans. We value everyone's contribution, actively soliciting feedback at all levels within the organization. Work gets done in a non-hierarchical, hard-working and fun environment." For the complete job description or to apply, write to Dawn Bordeaux at dawn.bordeaux@redwoodtrust. com or go to Redwood.

Here is a list of the fastest growing cities in the United States.

Here's a new term for you to learn: non-disparagement clause. It is basically a gag-rule that servicers are requesting borrowers sign.

Congrats to the STRATMOR Group which just hired Tim Ryan (was in charge of the well-known JD Powers Customer Satisfaction Surveys) to focus on MortgageSAT. STRATMOR launched MortgageSAT last year, a product that measures borrower satisfaction of closed loan customers. STRATMOR surveyed over 5,000 borrowers who closed loans in the past few months. Not surprisingly, borrowers who closed at expected rate and fees generated satisfaction scores averaging 92 out of 100. Borrowers who closed at rates and fees that were not expected scored 75, which is like a C grade. I was surprised it was not lower, but a C grade is not going to get it done in this market.

Cutting cost through efficiency is the name of the game. If you aren't yet receiving your borrower's bank/brokerage statements instantly and electronically directly from their bank into your lending platform you should take a look at AccountChek from FormFree Holdings Corporation. Products such as this are leading the way in moving the industry forward towards instant and direct-from-source data and documentation. Would you rather have the borrower give account statements to their loan officer or retrieve them directly, and instantly, from the borrower's bank into the loan file?  To learn more about AccountChek contact george@formfree. com.

I'd like to start today's vendor, agency, and investor news with an apology about some USDA information I posted. On May 1 I had the following: "The USDA has stipulated that the local health authority or a state-certified laboratory must perform a water quality analysis and that the results must "meet" or "exceed" the EPA minimum thresholds for lead, nitrates, nitrites, and coliform.  The written results must state that the four tests were conducted, list the results, and show that they exceed the established thresholds.  Properties that require a water treatment system for the well water to meet the minimum potability standards are not considered eligible." Several people wrote, asking for the actual bulletin. I always try to keep them (computer memory is cheap, right?) but in this case I could not find it. And those that asked the USDA about it couldn't find its source either. This is unusual - I certainly don't make these things up, but in this case I couldn't find the original citation so believe that it is erroneous, and must apologize for any confusion that this caused.

FirstClose, an Austin, Texas-based mortgage technology service provider, announced the expansion of its Portfolio Review Service for current home values, liens and encumbrances. "Lenders can now access a detailed asset valuation that meets compliance requirements, but also exceeds expectations with a summary of the featured properties' transactional histories. The result is a comprehensive solution for lenders that documents the strength of their portfolios through additional data. An expanded review process is available on first and second mortgages, as well as HELOC-specific portfolios. FirstClose's Portfolio Review Service includes detailed information about factors that negatively or positively influence the assets' value or negatively affect the lender's lien position such as new liens, judgments, foreclosures and other encumbrances."

Ginnie Mae is planning two changes to the Disclosure Data Download web page, which became effective this week. To read the disclosure bulletin, view the website.

Congrats to pipeline risk management & software vendor Mortgage Capital Management (MCM) which is celebrating its 20th year in business. The company founded by Dean Brown "helps mortgage bankers become more profitable through the use of best-in-class pipeline risk management tools and strategies. By combining proprietary, state-of-the-art technology with personalized client service that includes counsel from senior advisors, MCM is able to mitigate client risk, stabilize their earnings, and improve operational efficiencies."

WesLend Financial Corp wholesale division has updated program information to include pricing adjustment changes to Direct Arm, LP Super Conforming, and Weslend Direct VA products effective May 5th. Both its Direct Arm and Jumbo products changes include copy of borrower's ID is required and the Net Tangible Benefit Form is required for all loans in the states of Maryland and Colorado. Clarification regarding second appraisal ordering through RELS on FHA flip transactions has also been added. Contact your Account Executive for specific information.

C3 Compliance Solutions has merged with Strategic Compliance Partners. The announcement was made by Mr. Karen, who in addition to his legal practice will act as CEO of Strategic Compliance Partners.

FHA is seeking comment on the proposed standards related to (1) the interest rate adjustment period, known as the "look-back" period, and (2) disclosure and notification requirements. A copy of this Proposed Rule, Docket No. FR-5744-P-01, is posted in the Federal Register. The public is invited to submit comments for 30 days from the date of publication, May 8, 2014. Public comments will be accepted through

FHA's deployment of LEAP 3.0 has been rescheduled for May 27, 2014. Lender recertification date requirements will be posted in the LEAP 3.0 User Guide Information page on May 19, 2014. For more information on the LEAP 3.0 initiative, please visit the LEAP Information page under the "Approvals and Renewals" section.

Fannie Mae updated requirements for submitting lender-placed insurance certification to Fannie Mae. The SVC-2014-06 announcement from May 9th also defines terms related to servicing transfers and updates the timeline for submitting a Request for Approval of Servicing Transfer or Subservicing (Form 629) to Fannie Mae. For complete information visit the website.

What is the future of the secondary market and the non-GSE market? CMBA's 42nd Annual Western Secondary Market Conference scheduled for July 14-16 in San Francisco, slated with panelists providing an update of the Capital Market's recent activity, including discussion of new players and their rolls for creating a robust (non-GSE) marketplace. Additionally, post the Dodd-Frank Act's required implementation of QM panelists will discuss their thoughts regarding where the Non-QM world is likely to go in the near and distant future as well as recent trends in the secondary markets that may assist in achieving better execution in your shops.

The Mortgage Bankers Association of New Jersey is presenting Wholesale Lending Fair, July 16th in Atlantic City, N.J.  The focal point will be wholesale lending and the Mortgage Broker originating in the QM World. There will be a panel of experts from top national wholesale lenders to discuss the challenges facing the wholesale lender and the future of the mortgage broker after the implementation of QM as well as changes that wholesalers will be implementing over the next 12 to 18 months.

SNL Banker is offering Fundamentals of Derivatives for Depository Institutions, June 18-19 in New York. This program provides an introduction to the derivative products (swaps, options, futures, etc.) used to manage/hedge various risks, as well as the changes in proprietary trading brought about by the Volcker Rule. This is the only session scheduled for 2014.

Impac Mortgage correspondent updated Leasehold Estate eligibility on its Fannie Mae fixed, Libor and Homepath products. Beginning May 13, 2014, Impac is implementing, procedures for FHA 203K and escrow holdbacks including a review of the HUD-1 for 203 (k) loans prior to your closing, Escrow holdbacks on 203B and conventional loans are allowed on an exception basis only. Contact your representative for complete list of items required.

LoanLogics has unveiled the LoanHD AppQ Network, that provides lenders with service ordering and delivery interfaces to third-party providers through the LoanHD platform. The network represents the latest way that LoanLogics is enabling clients to move closer to the goal of zero defects.

New Penn Financial is requiring an ABA Attestation on each Mini-Correspondent loan submitted beginning May 15, 2014. An amendment has been added to both wholesale broker agreements and mini correspondent agreements specifically as it pertains to Portfolio Loans. For more information, contact your account executive.

Plaza Home Mortgage wholesale has updated both programs and products. Its Elite Jumbo product has loan level price adjustment improvements, FHA product now offers a 5/1 High Balance ARM, its VA product has been updated to include a Jumbo 5/1 ARM and Jumbo 15-year fixed rate product. Additionally, Fannie Mae products clarification have been made regarding maximum LTV for DU transactions, as previously communicated, is capped at 95%. For complete information regarding program and products updates, visit the website or contact your representative.

Looking at interest rates, the Fed minutes released yesterday focused on inflation not currently being a problem (well below the 2 percent goal) and the stimulus continuing for a while to help lower unemployment. Thomson Reuters mentioned that "MBS spreads were notably tighter again today on an improved technical outlook." For the layperson, that means that there is more demand for MBS than supply (from lenders), and thus prices/rates did better than Treasury prices/rates. Selling from originators looked to barely reach $1 billion today, while private demand for MBS was strong and came from short covering, yield-based investors, outright purchases, and of course the Fed. So MBS prices "only" worsened by .125 while the 10-yr T-note was worse by .250 in price and closed at a yield of 2.54%.

Investors will get more on the state of the housing market tomorrow and Friday with existing home and new home sales, respectively, for April which corresponds to the start of the seasonal home buying season. Initial Jobless Claims came in at +28k, to 326k from a revised 298k with the 4-week moving average -1k. We'll also have Existing Home Sales and Leading Economic Indicators, both for April. Don't forget that tomorrow the bond markets are closing early ahead of Monday's holiday, so don't look for cutting edge pricing after lunch - there's no way to hedge the production - unless secondary marketing staffs are hedging estimated locks today or tomorrow morning. After the Jobless Claims we're nearly unchanged from Wednesday's close and the 10-yr is sitting at 2.54%.

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