Merlin Pearson writes, "Statistics are like a lamp post to a drunk. They are used far more for support than they are for illumination." A survey by the National Foundation for Credit Counseling finds 18% of people don't think a home mortgage is worth the risk, the lowest level in 19 years. But Inside Mortgage Finance reports that home equity lines of credit and home equity loan borrowing increased 8% in Q1 YOY, the biggest increase in a quarter since 2009. Banks are typically offering such loans only to borrowers in good locations and to a maximum of 80% to 85% of the home's value.

Smaller mortgage companies merging with larger lenders don't quite make the news services like bank action. And the bank M&A action does indeed continue unabated. In just the last week word broke that First-Citizens Bank & Trust Company ($21.9B, NC) will acquire with First Citizens Bank and Trust Company, Inc. ($8.5B, SC) in an all-stock deal. Both companies are majority owned by the Holding family and the move creates the sixth largest bank based in the Southeast. EagleBank ($3.8B, MD) will acquire the five branches of Virginia Heritage Bank ($917mm, VA) for about $183mm in cash (25%) and stock (75%). In Iowa, home of Herbert Hoover's resting place, Peoples Savings Bank ($175mm) will acquire Pleasantville State Bank ($41mm). First Community Bank ($2.6B, VA) will acquire 6 branches (with over $400 million in deposits) in NC and VA from Bank of America for a 1.75% premium. And not wanting to be left behind, HomeTrust Bank ($1.6B, NC) will acquire 10 branches in NC and VA from Bank of America for a 2.86% premium. The branches hold a reported $504mm in deposits.

Last week's news about Redwood Trust's arrangement with the Federal Home Loan Bank Board has turned some heads, especially at companies trying to obtain low financing rates and at the same time tapping into a group of companies in order to purchase loans. But it has also attracted the notice of regulators. (Doesn't everything? I watched Notting Hill over the weekend, and wondered if regulators took note.) Rob Urban, writing for Bloomberg, released a story last week saying, "Mortgage investors are borrowing from government-chartered Federal Home Loan Banks, raising concerns from their regulator that the trend creates unacceptable risks. Three real estate investment trusts -- Annaly Capital Management Inc., Invesco Mortgage Capital Inc. and Two Harbors Investment Corp. -- set up insurance units that allowed them to gain access to an FHLB in the past seven months. Commercial real-estate lender Ladder Capital Corp. joined the network of 12 regional cooperatives in 2012. Two Harbors and Ladder had borrowed a total of about $1.5 billion through March. Lightly regulated investment firms and lenders that lack customer deposits are flocking to the FHLBs for dependable funding, often with better terms than traditional banks or debt markets. Their memberships are drawing scrutiny from the home loan bank overseer, the Federal Housing Finance Agency, because they may affect the safety of a system that operates with perceived taxpayer backing. FHFA Director Melvin Watt said last month he saw 'possible issues' with the insurers' access."

(There has been a lot of talk recently about the growing securitization market, and rightfully so. I try to print what passes across my desk, and over the past few months we've seen a slow trend upwards...especially with Ginnie Mae as more and more originators find margin and liquidity in becoming issuers. June gross numbers month-to-date as of the 13th: FNMA $16.4B, FHLMC $15.7B, and GNMA $10.8B for a total of almost $43B. Compared to the prior two months, for the first 13 days of each month, April was $36B and May was $39B.)

"There are only so many jumbo mortgages that community banks are willing to put on their books. LenderLive Network is positioning itself to buy the ones they don't want to hold." The Denver outsourcer is expanding its correspondent lending channel by offering to buy jumbo loans from members of the Independent Community Bankers of America. LenderLive will buy fixed- and adjustable-rate jumbos with loan balances of up to $2 million. Since last year, the average 30-year fixed rate on jumbo loans has been lower than that on comparable government-backed mortgages, an anomaly reflecting banks' strong appetite for loans in their portfolios. LenderLive, which also provides fulfillment, settlement and document services, entered into an affinity relationship with ICBA four years ago. It launched the correspondent lending channel in July 2013. "The ICBA has partnered with LenderLive because it has several outlets to sell loans and retain the servicing. It won't sell the loans to banks that compete with ICBA members."

I'm starting to get the feeling the CFPB doesn't like affiliated business arrangements. This time the Bureau has expanded RESPA enforcement, and has taken aim with affiliated business arrangement disclosures. K&L Gates write, " its most recent enforcement action, the CFPB entered into a consent order with a real estate brokerage company, alleging that it referred consumers to its affiliate, but failed to provide an adequate AfBA disclosure. The CFPB also alleged that the brokerage company improperly required the use of its affiliate title insurance agency." I believe it is safe to assume that with this recent action, the Bureau is not only looking at AfBA's who may not meet the requirements to be a bona fide entity, but also scrutinizing the ones who do, for possible RESPA violations.

But we have this news: Freedom Mortgage has strategically partnered with Cornerstone Communities, a California-based home builder, to serve as the preferred lender for Cornerstone Communities' home buyers. Cornerstone has built thousands of homes and communities throughout the San Diego region and has recently expanded into Bakersfield and the Inland Empire. The relationship with Freedom Mortgage allows Cornerstone to offer customers home financing solutions from a top 15 mortgage lender with nearly 25 years of experience in the industry.

M&T Bank Correspondent's June 4, 2014 bulletin clarified FHA DTI adding the compensating factor language back that was omitted in the prior bulletin release. The newest bulletin also clarifies SONYMA Plus program instructions regarding hazard insurance and non-owner occupied property. Non-Owner occupied is not permitted and the verbiage has been removed from the page. Additionally, FNMA standard programs have seen an expansion maximum number of financed properties section in its product pages. Contact your Account Executive for complete information regarding M&T's updated bulletin announcement.

SunTrust settled charges (of underwriting and endorsing faulty mortgage loans) with the Department of Justice for roughly $1 billion. And Ocwen is ponying up $3.7 million to the state of Massachusetts for some shoddy servicing practices.

First Community Mortgage Wholesale has updated its knowledge center  with changes to its policy and procedures on e-Signatures. Also, its Admin waiver fee chart has been revised applicable to loans locked on or after June 4, 2014.

Wells Fargo Funding has announced changes to Post-Closing Liquidity Requirements for Non-Conforming Loans; retirement funds are an eligible source of funds. The policy is effective from June 9 - July 20 with 2 options available. This exciting news flash will all the specific guideline information can be found on its website.

New Penn Financial e-sign initial disclosures are available. As of Monday June 2nd, New Penn opened up TPO (Wholesale, Mini-Correspondent, & Correspondent) to be able to accept e-signed disclosures on all loan products EXCEPT for co-ops.

Mountain West Financial Wholesale has added New Jumbo products to its available products effective June 16th. Additionally, MWF has changed its policy regarding accepting conventional appraisal transfers. Conventional appraisal transfers are an option when the required stipulations are met. Contact your AE for the details.

The folks who continue to fret about inflation received some "good" news yesterday when the Consumer Price Index jumped +.3% for May, registering its largest increase in a year. The number suggests that the year-over-year rate of consumer inflation is 2%, right in line with what the Fed would like to see. A jump in airfares, energy, and prescription drugs were the main culprits. But Housing Starts fell 6.5% in May, and Building Permits, an indicator of future construction, fell 6.4% in May - mostly due to a sharp decline the volatile multi-family segment.  The decline was broad-based across regions and type of construction. Single-family housing starts fell 5.9%, while multifamily fell 7.6%.

But the fixed-income markets focused on the higher-than-expected CPI numbers rather than the weak housing numbers, and the noble 10-yr T-note dropped .5 in price, closing at a yield of 2.65%, while current coupon agency MBS prices worsened between .250-.5 depending on the rate.

For thrills and chills today we have the MBA application numbers and the FOMC wrap up: 2PM EST release of the statement followed 1/2 hour later by the post-meeting press conference with Fed Chair Yellen. In the very early going the 10-yr is at 2.64%, and agency MBS prices are roughly unchanged.



In Florida, Capital Markets Cooperative is searching for a Mortgage Loan and Servicing Acquisition Manager. The Manager will ensure that any whole loan and mortgage servicing acquisition processes are completed effectively and provide & oversee the most efficient and scalable processes, employing, among required staffing, appropriate outsource service solution and a customer focused support team. This includes the timely and accurate transfer of data and documents between sellers servicing and origination systems, adherence to legal and compliance standards as well as accurate financial accounting of transactions. Since 2003 CMC has leveraged the collective power of a nationwide network of mortgage bankers to negotiate better pricing, products and service during the process and sale of mortgages. Members choose from a wide array of services including risk management and hedging solutions; a full roster of preferred investor and service providers; MSR valuations and analytics; and servicing acquisitions through its wholly- owned subsidiary, CMC Funding. For a complete job description, or to submit confidential inquiries, contact Laura LaMontagne at

For LOs, "What mortgage company ISN'T looking for the 'best originators in the business' with a full pipeline? But Aspire Lending is looking for more. We're not satisfied with anything less than game changers who are ready to embrace our culture and help us achieve our exciting five-year vision. If that sounds like you, it's time to join the Aspire Revolution." Email Steve Barton at for confidential inquiries.

And "Join an Award Winning Team! Scotsman Guide, the leading resource for mortgage originators, recently ranked Maverick Funding Corp. as a 2013 top mortgage lender. Maverick ranked #15 in Top Wholesale Lenders and #49 in Top Overall Volume. In addition, Mortgage Executive Magazine recently awarded Maverick as one of the 50 Best Companies to Work For! Maverick is currently in the process of recruiting the best mortgage professionals in the industry for up and coming branch locations. Management is looking for qualified self-sourced loan officers and aggressive sales teams to help Maverick continue their tremendous growth streak and propel their success to new heights. Over the last 90 days, we added a total of 118 employees and have recently added over 6,000 sq. ft. of workspace to our Corporate Headquarters Office. We are currently licensed in 32 states and hold GNMA, FHA, and FNMA approval. For Retail Branch Management, Team, and Loan Officer Opportunities contact Careers. For AE positions in our Wholesale Division contact National Wholesale Manager Reno Heine, and for opportunities in our Newport Beach Marina, CA Division, contact

Congrats to Karen Herr, who has joined San Diego's Mortgage Capital Management (MCM) as the company's senior vice president of sales and marketing. "In this executive leadership role, Herr will helm the company's efforts in growing new business while cultivating existing relationships by providing customer support, information and guidance."

Lastly, happy trails to Daniel Bettenburg, President of Stonegate Mortgage Corporation, who last week informed the company that he was resigning effective July 10 "to pursue other interests." The company does not intend to hire a replacement for the President role, given the recent executive team additions and its transition to a business unit driven operating model. Mr. Bettenburg will be working with the executive team to transition his duties prior to the effective date of his resignation.