A credit report is enough to completely steal a person's identity. It is?  Does it take a few weeks?  No - it takes 3 minutes. And we wonder why LOs and those involved in the loan file must have the utmost integrity... I am sure there are plenty of people at Staples with integrity, but that doesn't help their job situation. Staples Inc. will shut about 140 locations this year, part of a store-closing plan announced earlier, as the world's largest office-supply chain responds to online competition.

Bank M&A announcements have slowed down a little with the dog days of summer. In New Mexico (home of Carlsbad Caverns, an awesome geologic formation in which visitors may witness the grandeur of more than 250 million bats) Century Bank ($585mm) will acquire most of the assets and all of the liabilities of Valley National Bank ($202mm). Southern Bancorp Bank ($1.1B, AR) will acquire The Bank of Bolivar County ($17mm, MS) for an undisclosed sum. And in Virginia (home of Colonial Williamsburg, where each day men and women wearing authentic eighteenth century costumes attempt to scratch themselves without anybody noticing) New Peoples Bank, Inc. ($696mm) said it will consolidate 4 branches in VA and WVA as it seeks to reduce operating costs.

But in the mortgage arena, Universal American Mortgage Company, the mortgage banking subsidiary of Lennar, announced that it has acquired certain assets of Pinnacle Mortgage Group, Inc. Deloitte Corporate Finance LLC served as the exclusive financial advisor to Pinnacle. Colorado's Pinnacle has been around nearly 20 years, and is licensed in seven Western states and has 10 established retail office locations in Southern California and Colorado.  Pinnacle will join UAMC's retail mortgage operations operating under the Pinnacle Mortgage Group brand name while transitioning to UAMC's retail brand name, Eagle Home Mortgage.  The combined company is licensed in 26 states and has 100 branch offices.

Banks are further in the news regarding Libor. A licensing fee being assessed by Intercontinental Exchange to use the London Interbank Offered Rate, which it administers, has some banks threatening to drop the benchmark.  Access to Libor had been free, but ICE's fee runs from $8,000 to $40,000 annually. Banks aren't the only ones looking at increased costs. QM compliance has raised lender costs which are passed onto consumers.

A big cost for all lenders is personnel. According to the STRATMOR Compensation Connection survey conducted earlier this year, 90% of underwriters receive incentive compensation in addition to a base salary.  That incentive, however, made up less than 10% of overall compensation.  Did you miss participating in STRATMOR's Compensation Connection Survey earlier this year? By popular request, STRATMOR is reopening all of the original modules for a second round of evaluation. Be armed with compensation data from 40+ participant companies as you head into budget season.  The results will be cumulative from both rounds.  For full details, visit the 2014 STRATMOR Compensation Connection Survey website or email Angie Middlebrook for more details.

The court-appointed trustee overseeing the liquidation of Thornburg Mortgage Inc. has reached a deal with Barclays Capital Inc. to settle a subprime-era lawsuit alleging the bank made improper margin calls that helped drive the mortgage lender into bankruptcy. According to the terms of the proposed settlement filed Wednesday in U.S. Bankruptcy Court in Baltimore, Barclays would pay the trustee $23 million.

In other legal news, the Justice Department is poised to announce a $16.65 billion settlement with Bank of America over accusations that it duped investors into buying toxic mortgage securities. If that is the case, it would be the single largest government settlement by a company in American history.

Prosecutors are also apparently preparing a separate civil case against Angelo Mozilo, age 75. "More than 12 months after a deadline passed to file criminal charges, U.S. attorneys in Los Angeles are preparing a civil lawsuit against Mozilo and as many as 10 other former Countrywide employees...The government is making a last ditch-effort to hold them accountable for the excesses of the past decade's subprime- mortgage boom. The harshest penalty imposed on Mr. Mozilo has been a $67.5 million accord with the U.S. Securities and Exchange Commission from 2010 to resolve allegations that he misled Countrywide investors. In the SEC case he didn't admit or deny wrongdoing.

As you can imagine, every CEO of every mortgage company and bank is following this story. What kind of precedent will it set? Are they at risk to go to prison for policies and procedures that were carried out under their watch? Could they serve time? How valid is the "corporate veil" that separates the personality of a corporation from the personalities of its shareholders, and protects them from being personally liable for the company's debts and other obligations? This protection is not ironclad or impenetrable, and where a court determines that a company's business was not conducted in accordance with the provisions of corporate legislation it may hold the shareholders personally liable for the company's obligations under the legal concept of lifting the corporate veil.

A civil lawsuit is a lawsuit brought to redress a private wrong such as breach of contract, encroachment, or negligence; or to enforce civil remedies such as compensation, damages, or injunction. It is also called a civil action, civil proceedings, or civil suit. Mozilo said he has "no regrets" about how he ran Countrywide, according to a June 2011 deposition he gave in a lawsuit between the mortgage lender and bond insurer MBIA Inc. The financial crisis was a "cataclysmic situation, unprecedented in the history of this country" that Countrywide did not cause, Mozilo said in the deposition. Mozilo said he settled the SEC lawsuit to protect his family from negative publicity. But it is back again, and every CEO of every lender doing business 6-10 years ago is on alert.

Turning from a macro issue to a micro issue, Mark White with GEM Mortgage wrote, "Rob, have you heard any updates from Fannie regarding the explanation code to be used when a FC is discharged through a BK? This is significant as the waiting period is reduced from 7 years to the BK waiting period, usually 4 years. From Release notes on 6/17/14: 'Inaccurate Foreclosure Information: When DU identifies a foreclosure on a credit report tradeline and that information is inaccurate, the lender may instruct DU to disregard the foreclosure information on the credit report. This can be done by entering "Confirmed CR FC Incorrect" in the Explanation field for question c. in the Declarations section of the online loan application and resubmitting the loan casefile to DU. When DU sees this indication, the foreclosure information on the credit report tradeline will not be used in the eligibility assessment.' And from SEL 2014-10: 'Waiting Period for Mortgage Debt Discharged through Bankruptcy: the Selling Guide has been updated to indicate that if a mortgage debt has been discharged through bankruptcy, even if a foreclosure action is subsequently completed to reclaim the property in satisfaction of the debt, the borrower is held to the bankruptcy waiting periods and not the foreclosure waiting period. Lenders must obtain documentation to verify that the mortgage debt in question was in fact discharged as part of the bankruptcy.' 'The Waiting Period for Mortgage Debt Discharged through Bankruptcy is effective immediately. The Waiting Period after a Preforeclosure Sale or Deed-in-Lieu of Foreclosure and Charge Off Accounts - Mortgage Debt changes are effective for mortgage loans with applications dated on and after August 16, 2014 (to align with DU Release 9.1).' We have been told that entering "Confirmed CR FC Incorrect" can be done to alert DU that the FC was discharged through BK, but many underwriters and investors say the wording is ambiguous."

Well, as a matter of fact, Fannie has done a good job answering this in its "DU Version 9.1 August Update Frequently Asked Questions, August 19, 2014. "The foreclosure information included on the following account that may have been subject to a preforeclosure sale was not used in the eligibility assessment because DU was instructed by the user to underwrite the loan casefile without this information.  This was indicated by "Confirmed CR FC Incorrect" being entered in the Explanation field for question c. in the Declarations section.  The lender must document that the foreclosure was completed seven or more years from the disbursement date of the new loan; or that the account was not subject to a foreclosure and the loan complies with all other applicable requirements as specified in the Fannie Mae Selling Guide.  If the account was subject to a foreclosure that was not completed seven or more years from the disbursement date of the new, the loan is not eligible for sale to Fannie Mae."

Today we had Initial Jobless Claims. Labor and housing, housing and labor, are the primary drivers of our economy, and Federal Reserve Chair Janet Yellen has a stubborn warning light blinking on her labor market dashboard: a group of Americans larger than Washington state's population can find only part-time work. It is believed that this week's Fed symposium in Jackson Hole, Wyoming, will focus on the labor market, those 7.5 million part-time workers who want full-time jobs are inflating the broad measure of underemployment she watches to gauge job market health. Involuntary part-time workers have gained by 325,000 from February's five-year low. With employment and inflation nearing Fed goals, Yellen has consistently cautioned some labor market measures still show enough slack to warrant keeping interest rates low. Inflation today is stable, but the focus is on the future - and plenty of smart people believe that we need to head toward "normalization" of interest rates.

News today consisted of the weekly Initial Jobless Claims (-14k to 298k, about as expected). At 7AM PST we'll also have the Philly Fed index for August (+23.9 last), Existing Home Sales for July (5.04mm prior), as well as July Leading Indicators (+0.3% previous). The 10-yr had a 2.43% close Wednesday, and in the early going is roughly unchanged and agency MBS prices are worse a shade.

AUSTIN (The Borowitz Report)-Last week's indictment of Texas Governor Rick Perry has sparked widespread bipartisan support for the concept of sending politicians to prison for ninety-nine years. While Americans are divided about the merits of the specific charges levelled against Perry, there is near-unanimous agreement that imprisoning politicians for ninety-nine years is an idea worth exploring further, a poll released on Monday indicates. According to the poll, eighty-seven per cent of voters from both parties agreed that sending politicians to prison for such a lengthy period would "solve a lot of problems" and "make the country safer." Additionally, when asked to name one politician they would like to see incarcerated for ninety-nine years, voters easily rattled off a dozen or more such candidates, with some voters naming as many as fifty. Finally, when informed that imprisoning politicians for ninety-nine years might lead to overcrowding that would require the construction of costly new prisons, eighty-three per cent agreed with the statement, "Money is no object."


Other companies are hiring, including lenders. Colorado's Mortgage Solutions Financial is seeking to add a Mortgage Compliance Officer and a CFO to the senior leadership team. The Compliance Officer is responsible for developing, managing and monitoring mortgage compliance, and should understand mortgage products, services, geographic locations and the potential risks associated with those activities. This officer will also keep abreast of industry changes, company's objectives and the laws and regulations affecting mortgage lending and other areas of the mortgage banking industry, and can be located in MSF's Colorado Springs corporate office or its Kansas City branch office. The ideal CFO candidate should have a proven track record as a strong financial leader, strategic business partner, have in-depth knowledge and experience managing secondary marketing teams and full servicing or sub-servicing relationships. In business since 1996, MSF is a full service direct, wholesale and correspondent lender proud to serve as an approved mortgage banker direct to Freddie Mac, Fannie Mae, Ginnie Mae and Farmer Mac, and is doing business in more than 30 states. Confidential inquiries should be sent to Linda Miller.

On the production side, Intercap Lending is introducing a dynamic new sales program for mortgage originators in Southern California looking to capture more Realtor business. The program targets real estate professionals and is very unique in its ability to create a close relationship between the agent and mortgage originator. "Originators need a strategic plan in order to create realtor relationships and Intercap Lending has created a system to help originators get 'sticky' to agents." CEO of Intercap Lending, Jamil Atcha, states, "In my opinion, in my 22 years of working with real estate agents, this system will create a huge value add for your Realtor partners." If you are an originator in the Southern California market place that is looking to increase their purchase business and would like Intercap Lending to create 10 new realtor relationship for you in the next 60 days then please contact Mark Barley at 949-269-7263 and watch this video. (Intercap Lending is a dba of Suburban Mortgage Company of New Mexico.   Suburban is a FNMA/FHLMC/GNMA, seller/servicer/issuer and is currently licensed in 33 states.)