"I had amnesia once--or maybe twice." One's mental health is nothing to joke about, and long days can make folks pretty sleepy (just ask any West Coast secondary marketing managers called into a 3PM meeting with a CFO...). We don't listen as attentively in the third hour of an endless meeting as we did during the first. Apparently while we sleep we go through a 90-minute period for the five stages of sleep, and researchers have found something similar during waking hours: moving from higher to lower alertness every 90 minutes. But we override the signals with sugar, coffee, and stress. Some employers have begun providing fitness facilities, energy-rich food, and even napping pods. See? The thought of a "napping pod" has taken your mind entirely off of the debt crisis! But before we talk debt...

For those out there with financial & accounting backgrounds, a Colorado bank is looking for a CFO candidate with duties including financial oversight of bank's $550 million+ mortgage subsidiary. The Chief Financial Officer will be responsible for all financial management components of the Bank, including strategic and regulatory, financial systems and controls, interest rate risk, funds management, investment management, financial forecasting/budgeting process, profitability analysis, and regulatory reporting using GAAP.  In addition to standard Bank duties, candidates should have experience with and understanding of Mandatory Delivery practices and well as Hedging Risk Management.  In addition to the Executive Committee, the CFO will be responsible for participating in Bank Committees including:  Loan Committee, Executive Credit Committee, and ALCO.  Interested parties should contact Brendan Zahl at bzahl@EPEOPLES.com.

A few states over, a well-capitalized mortgage bank in the San Francisco Bay Area is looking for a National Sales Manager to run and grow its wholesale division. This Mortgage Bank is licensed in 12 West Coast states and is currently funding approximately $100 million a month. This is an opportunity for a top level executive to substantially grow a wholesale division, since the mortgage bank has the IT infrastructure, operational talent and funding capacity to double or even triple its volume today. The ideal candidate has a strong network of Account Executives and Sales Managers in the West Coast from which to recruit and hire. If you are interested in this opportunity, please send your resume to me at rchrisman@robchrisman.com and I will forward them on.

Well, there is an agreement reached by congressional leaders and the White House that raises the debt limit and has roughly $1 trillion in spending cuts over 10 years. Another $1.5 trillion worth of deficit reduction would be based on recommendations of a new bipartisan committee. Under the deal, the special bipartisan panel would recommend steps to reduce the deficit. Any impasse by the panel or rejection of its recommendations by Congress would automatically trigger a round of spending cuts, like in defense or Medicare. Today will be spent by the Senate and House of Representatives arguing and then voting on it. The details have not been released, so specifics that deal with the housing-related items such as the mortgage interest rate deduction are not known. (More on market reaction below.)

Fannie Mae told the industry that, "As of September 30, 2010, Republic Mortgage Insurance Company (RMIC) fell below the minimum policyholders' position required by its domiciliary state of North Carolina. RMIC received waivers from this requirement from its regulator, the North Carolina Department of Insurance (NC DOI), and thereby was temporarily allowed to continue writing new business. The recent extension of the waiver granted by NC DOI expires August 31, 2011, with no indication that any further extensions will be granted under RMIC's current circumstances. It is Fannie Mae's understanding that NC DOI will prohibit RMIC from writing any new mortgage insurance policies in North Carolina on or after September 1, 2011. In response to NC DOI's action, Fannie Mae is suspending nationwide both RMIC and its affiliate, Republic Mortgage Insurance Company of North Carolina (RMIC-NC), as approved mortgage insurers effective immediately" Here is the announcement: FannieRMIC.

Lenders are following. For example, RMC Vanguard Mortgage halted any new MI orders from RMIC. (RMC Vanguard still uses MGIC and UG as providers.) Employees were told that "without an agreement from its regulators and the secondary market, that RMIC could stop writing new mortgage insurance business at the end of August 2011."

Working through the appropriate local administrators, Friday's bank-closing FDIC activity included closing Virginia Business Bank and having Xenith Bank assume all of the deposits in Virginia. In Indiana Integra Bank was taken over by Old National Bank in Evansville. And up in South Carolina, BankMeridian was taken over by SCBT in Orangeburg.

Last week the commentary mentioned news that Ocwen introduced a shared appreciation plan for loan modifications. I received this note: "I just have to send an 'AT LAST!' about the Ocwen news.  For years I have asked 'Why don't we use shared appreciation as a component of modification?  Letting people walk away from their responsibilities is un-American and unfair!' In my previous job, I was responsible for workouts. When the circumstances warranted it, I would approve modifications that included principal forgiveness and interest rate reductions.  But every modification that included principal forgiveness included language that recaptured any forgiven principal upon the sale of the property.  Borrowers of course kept any profit beyond the forgiven principal, but I saw no reason then or now for the bank to write off a portion of the loan balance if market conditions returned it to the borrower over time.  I didn't use deficiency judgments - we only recaptured whatever was there - but the borrower had signed a note for the entire balance and I felt I was honoring my commitment to the shareholders of the bank by both maintaining a paying credit and ultimately seeking to recapture what was owed...No borrower complained when he borrowed $200,000 and sold his house 5 years later for $400,000, but it's suddenly the lender's fault when he bought his next house for $400,000 and 3 years later it's worth only $300,000?  I don't buy it." READ MORE

Another note: "Over the past couple of months I've been hearing from several folks in my network about their difficulty in resolving title claims.  Recently, in speaking with one of the GSE's they say that they too are having no better luck with a large title company.  Has consolidation and increased market share changed how large title companies approach resolution of claims?   It appears as though claims are initially denied (regardless of validity) and that resolution does not begin until legal action is initiated.  I was curious if your readers are finding the same experience or is this just an example of a small non-random sample." Shoot me a note if you like.

Late last week the commentary mentioned a customized amortization mortgage rolled out by WEI. It turns out that other lenders/investors offer similar programs. For example, GMAC wholesale offers a "Clients Can Pick Their Amortization Period" plan with GMAC. "On Conforming Fixed Rate Product up to $417,000 Owner Occupied / Investment Properties / 1- 4 units, Amortization Period ~ Min of 5 years up to 40 years in annual increments. Don't qualify for a 15 yr., but already paid down 8 yrs. on a 30/30? No problem, offer a 22 yr. term! Or, OO / Cash Out for 27 Years, or Investment Property / R&T for 17 Years Fixed." At Quicken, QLMS rolled out a custom term option earlier this year - "it's called the YOURgage program. Our lender partners not only have access to this product, we offer a calculator on our portal that can whip up a cost comparison within seconds.(attached) Lastly, if a lender partner is serious about offering this to their clients, we will provide marketing creative that they can customize and use to get the word out to their network."

The markets are tentatively happy with the debt deal - not so much the specifics, but more the belief that there has been at least some progress. Looking back to Friday, Q2 GDP came in well below expectations, and Q1 was revised from +1.9% to 0.4%.  The US economy now, and previously, was weaker than data had suggested was the case. The 10-yr Treasury Note rallied 1.25 points down to a yield of 2.81%, a new low for 2011

On Friday 3.5% MBS's improved by about a point (1.0) - throw the value of servicing in there, and suddenly 4 - 4.125% 30-yr mortgages are back in style. Suddenly "R-E-F-I" is back in vogue and small originators are checking early pay-off penalties from investors while secondary marketing managers are worried about pull through percentages and renegotiation policies.

This week could be quite the week for volatile interest rates - not that I am any good at forecasting things. After Friday's rally we have mortgage rates at the lowest point they've been all year. We still have the US debt passage vote, along with all the troubles in Europe. And for weekly & monthly US economic news, we have a full platter. Today we have one of the ISM indexes, and Construction Spending, at 9AM CST. Tomorrow we have Personal Income & Consumption, and some PCE price numbers. Wednesday is the always-questionable ADP employment numbers, along with Factory Orders and another ISM number. Thursday we take a breather with "only" the weekly Jobless Claims number. And then on Friday we have all the employment numbers - remember, jobs and housing, jobs and housing are going to be the cornerstones to push the economy. The market is roughly unchanged from Friday's levels, with the 10-yr at 2.81%. 

(Warning - Parental Discretion Advised)
It was entertainment night at the Senior Citizens Center.
Claude the hypnotist explained: "I'm here to put you into a trance; I intend to hypnotize each and every member of the audience."
The excitement was almost electric as Claude withdrew a beautiful antique pocket watch from his coat.
"I want you each to keep your eye on this antique watch. It's a very special watch. It's been in my family for six generations"
He began to swing the watch gently back and forth while quietly chanting, "Watch the watch, watch the watch, watch the watch..."
The crowd became mesmerized as the watch swayed back and forth, light gleaming off its polished surface.
Hundreds of pairs eyes followed the swaying watch, until, suddenly, the chain broke. It slipped from the hypnotist's fingers and fell to the floor, breaking into a hundred pieces.
"S%&T!" said the Hypnotist.
It took three days to clean up the Senior Citizens Center. Claude was never invited back.