It is hard for the lending industry to talk about the mounting costs of paperwork, regulation, and compliance when the public actually sees that closing costs are going down. With headlines like, "US Mortgage Closing Costs Fall 7.4% as Banks Compete" and "Utah mortgage closing costs drop 24% from last year" in the press, it is hard to garner much sympathy from politicians or regulators - or borrowers. Per its website, "Bankrate.com researchers gathered closing-cost data from five to 10 lenders in all states and the District of Columbia." And the information is useful, like "For the last seven years, New York and Texas have had the highest mortgage fees, with closing costs hundreds of dollars more than the national average of $3,754. Missouri had the lowest mortgage fees in this year's survey, averaging $3,006" - link.

There is no doubt that well run lenders are making more money but originators can argue that while costs have gone up much more is now hidden. Lenders are now adding in credits to cover overhead, and making it up in rate. (There is indeed a large price difference between MBS prices and rate sheet prices, unseen by borrowers.) Someone else is eating the cost - usually in the rate difference. The last time I checked, mortgage companies are not non-profit institutions, and costs are passed on to borrowers either in rate or price.

And lenders continue to hire. BMO Harris Bank N.A. plans to hire approximately 100 mortgage loan originators in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. BMO Harris Bank is based in Chicago and a part of BMO Financial Group, a North American financial organization with 1,600 branches and retail deposit base of approximately $180 billion The bank has launched several product and marketing initiatives targeting the home purchase marketplace in response to consumer demand.  "Consumer reaction to our most recent Purchase Campaign offering which provides an interest rate discount to new and existing customers for their home purchase has been tremendous." For more information on the mortgage loan originator career opportunities, candidates should visit the BMO Harris Bank website.

And in New Mexico, Peoples Bank (KS) is looking for a Processor in its Albuquerque facility. Processors should be able to process FHA, VA, and Conventional loans, which includes obtaining and verifying information as required by these products; the ideal candidate should have a minimum 2 years of retail loan processing experience. Resumes should be sent to Spencer Lewallen at slewallen@bankingunusual .com.

With the examination of LIBOR ongoing, requests for historical LIBOR have increased. Thomson Reuters has decided to provide the time series data free of charge (not just LIBOR, but also about 120 Global Benchmark Fixings). I don't see the index disappearing, but look for some changes in measurement - how about where rates really are versus where banks think they are? Regardless, here is the link for data.

One note on CFPB exams before plunging into some backlogged updates. Joel Brenner, the Compliance and QC Manager at imortgage, observed, "I learned that at least one major credit re-seller is undergoing a CFPB exam. I hadn't thought about this aspect of the CFPB's reach.  Representatives from the reseller told me that in addition to being focused on normal controls, the CFPB is looking at the credit providers process for aggregating and reporting tri-merges, rapid re-scores, various FICO products, scoring models, and the manner in which their information integrates into AUS systems like DU and LP. This is another avenue under which the CFPB could possibly enact changes to the industry that could result in higher costs to originators and eventual changes to the way we review credit reports and thus credit risk. It seems every day we learn about another area of finance that the long arms of the CFPB can reach." Thank you Mr. Brenner.

On to some recent miscellaneous lender, investor, conference, and agency updates to give one a flavor of current trends. As always, read the full bulletin for complete details.

GoldenTree Asset Management LP, the $15.7 billion hedge fund specializing in corporate credit, hired an ex-trader from Goldman Sachs in an effort to expand its mortgage bond group. Deeb Salem left Goldman in May; he was among the Goldman Sachs traders who handled its bets against subprime mortgages as the debt collapsed in 2007, at one point trying to manipulate prices of derivatives tied to the loans, according to a report last year by a U.S. Senate panel. Salem denied wrongdoing while he was Goldman Sachs's head trader of non-agency mortgage securities (without guarantees from government-backed Fannie Mae, Freddie Mac or Ginnie Mae). And there certainly is some yield to be picked up in the non-agency, speculative-grade bond market - 7-9% are commonly discussed. For more on that market, see more.

The Pacific Northwest Mortgage Lenders Conference, hosted by the Washington Mortgage Lenders Association, comes around on September 17^th. This is its 35^th year and the opening ceremony will be at the top of the Space Needle! The event includes the SMBA dinner, and heads over to the Seattle Grand Hyatt for the conference. Space is being limited to 300 and the group as a few remaining vendor booths and sponsorships available. The conference website is www.pnmlc.com.

Last week EverBank reminded its clients, "Please note that Today is Our Last day to take the Freddie HARP Submissions. ALL Freddie HARP Loans MUST be Submitted today in order for us to honor the lock and commit to Funding the Loan. If it's not submitted today then we will not be able to honor the file."

Also last week Sterling Bancorp ($2.6 billion in assets) announced that its wholly-owned, New York City-based subsidiary, Sterling National Bank, has acquired the business of Universal Mortgage, Inc., a leading residential mortgage broker in Brooklyn with offices in Brooklyn Heights and Park Slope. Universal's principals and their team, most of who are engaged in mortgage production, will join Sterling. Universal's been around since 1991.

Flagstar got the word out to clients that beginning with loans locked on Friday, August 3, 2012, the price adjustment on the Fannie and Freddie 10-Year and 20-Year Fixed products will be decreased by .25.

SunTrust has removed Tucson, Arizona from a declining market and restored all of the LTV's that were reduced. And SunTrust will begin using email to deliver specific loan documents to correspondent lenders. SunTrust Mortgage will notify you of registrations and lock confirmations, underwriting decisions, purchase review, and purchase advices, using email instead of Webdocs and faxing.

In order to comply with the new ULDD reporting requirements, Franklin American now mandates that, for all conventional conforming loans, the year in which the property was built be disclosed on the 1003 form if neither the product guidelines nor the AUS findings necessitate an appraisal.  Condos where an appraisal isn't required require a completed FAMC Condo Questionnaire or another type of HOA certification. And FAMC reminds clients that real estate commissions (including bonuses) that exceed 8% are not permitted for any loan submitted for purchase.

On July 25^th Fannie Mae issued Servicing Guide Announcement SVC-2012-12, which provides notice of miscellaneous changes to the Fannie Mae Servicing Guide related to (i) the MERS Rule 14 Notice, (ii) approved title company requirements for certain states, and (iii) allowable attorney fees. With respect to the MERS Rule 14 notice, servicers will now be required to notify Fannie Mae whenever they are required to send MERS notice of certain MERS-related legal challenges. Fannie Mae announced that it is eliminating the requirement that servicers select a Fannie Mae-approved title company for work performed in Arizona, California and Washington. Instead, servicers may select the title company of their choice. Fannie Mae also announced changes to the allowable amount of attorney's and trustee's fees in several jurisdictions: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2012/svc1212.pdf.

Stearns Lending has put together a handy list to help clients ensure that their loans are funded as efficiently impossible by making sure that their 4506-T forms are completed correctly.  In short, all names, addresses, Social Security Numbers, and DU findings should be thoroughly checked over to make sure that they're correct, and Box 5 should be left blank, as Stearns uses this for its IRS tracking number. When entering the tax form number in Box 6 ("transcript requested"), it is crucial to check only one box, and Box 7 should only be used when ordering Verification of Non-filing.  Box 8 should not be used at all.  Illegible entries, missing signatures, invalid dates, or modified forms will result in 4506-T forms being rejected.

SunWest has updated its 203(k) Rehabilitation loan offerings for both Prime and Express products, allowing for maximum mortgage amounts up to 110% of the after-improved value.  Borrowers with high credit scores are now permitted to list structural and foundation work, major additions, and utility replacements and/or reconditioning as rehabilitation repairs, and for 203(k) Streamlines, overlays have been revised to allow for up to 50% material draw for a properly bonded contractor.

All quiet in the fixed-income markets Monday. With no U.S. news, and Europe quiet (either on vacation or watching the Olympics), rates didn't move much. The 10-yr closed at 1.57%, and agency MBS prices improved by "not enough to change rates" from Friday's closing levels. (On days like that, the only changes in rate sheets are usually due to things like lowering or raising profit margins.) MBS investors did, however, have some prepayment speeds to chew on, and these showed a slight pickup in prepayments - but nothing out of the ordinary.

The economic calendar for Tuesday here in the U.S. offers up another goose egg, although we will have the first leg of the quarterly refunding auctions as the Treasury auctions off $32 billion in 3-yr notes at 1PM EST as part of the $72 billion offered this week (10s and 30s to follow). In the early going rates are slightly worse than yesterday, with the 10-yr up to 1.61% and MBS prices worse by about .125-.250.

Things Got You Down?  Well then, consider these:

In a hospital's Intensive Care Unit, patients always died in the same bed, on Sunday morning, at about 11:00 am, regardless of their medical condition. This puzzled the doctors and some even thought it had something to do with the supernatural.
No one could solve the mystery as to why the deaths occurred around 11:00 AM Sunday, so a worldwide team of experts was assembled to investigate the cause of the incidents The next Sunday morning, a few minutes before 11:00 AM all of the doctors and nurses nervously waited outside the ward to see for themselves what the terrible phenomenon was all about.  Some were holding wooden crosses, prayer books, and other holy objects to ward off the evil spirits  Just when the clock struck 11:00, Fernando Rodriguez , the part-time Sunday sweeper, entered the ward and unplugged the life support system so he could use the vacuum cleaner.

Still Having a Bad Day?
The average cost of rehabilitating a seal after the Exxon Valdez Oil spill in Alaska was $80,000. At a special ceremony, two of the most expensively saved animals were being released back into the wild amid cheers and applause from onlookers. A minute later, in full view, a killer whale ate them both.
Still think you are having a Bad Day?
A woman came home to find her husband in the kitchen shaking frantically, almost in a dancing frenzy, with some kind of wire running from his waist towards the electric kettle. Intending to jolt him away from the deadly current, she ran outside and grabbed a handy plank of wood and smacked him with it, breaking his arm in two places. Up to that moment, he had been happily listening to his iPod.

Are You OK Now? -  No?
Two animal rights defenders were protesting the cruelty of sending pigs to a slaughterhouse in Bonn, Germany. Suddenly, all two thousand pigs broke loose and escaped through a broken fence, stampeding madly. The two helpless protesters were trampled to death.