September... ugh. Most latitudes in the U.S. are losing 2-3 minutes a day of daylight; in Anchorage they lose 5-6 minutes a day, Key West only about 1 minute. I mention this because we can't change seasonal factors, and unless a lender has grabbed market share from other lenders, most areas of the nation tend to see a dollar amount drop in purchase business (and therefore overall business) in the autumn and winter months - and companies are preparing for exactly that and keeping a sharp eye on productivity and margins for LOs and staff.

Last week the Agencies released a slew of updates, prompting Noel C. to write, "What am I missing in the HUD final rule about ARMs? 45 days before the rate adjustment, the published index is used to set the new adjusted rate; but, the servicer must notify 60 days (or 15 days before the adjustment index is published) prior to rate adjustment. Sounds like government but I'm sure that I am missing something.

And they are not done. The Federal Housing Finance Agency (FHFA) proposed a rule that would revise the requirements for financial institutions to apply for and retain membership in one of the 12 Federal Home Loan Banks (Banks). The proposed rule would revise FHFA's existing Bank membership regulation to ensure that members maintain a commitment to housing finance and that only eligible entities can gain access to Bank advances and the benefits of membership. As a reminder, back in May FHFA Director Mel Watt delivered a speech before the Federal Home Loan Bank Director's Conference where he described a number of issues, including ensuring that the Banks remain focused on their housing finance mission.

This move would keep investment firms and lenders lacking customer deposits out of the U.S. government-chartered system. The FHFA has voiced concern that firms are using specialized insurers to join FHLBs. The proposed new rules would limit insurer access to home-loan banks to companies dealing primarily with "non-affiliated persons." The existing memberships of captive insurers -- which mainly offer coverage to their owners or customers of those parent companies -- would be "sunset" over five years. And this impacts real-estate investment trusts (REITs) that buy mortgage debt and other lenders known as shadow banks that have been using captive insurers to flock to the FHLBs in recent years for dependable funding that can offer better terms than traditional banks or bond markets.

But the Federal Home Loan Bank system is not remaining silent, and the industry has 60 days to comment. David Jeffers, a spokesman for the Council of Federal Home Loan Banks, a trade group for the lenders, said that captive insurers should remain a part of the FHLBs' membership base because they help support the U.S. housing market, which is the system's mission set by Congress. Over the past year several REITs had gained membership to the FHLB, so the proposed rules would 1) prevent others from gaining membership, and 2) give current members five years to exit. The REITs that are currently FHLB members are NLY, TWO, IVR, RWT, and LADR. Under the proposal there would be a five-year sunset period for these companies' memberships. "We operated just fine for the first 20 years of our existence without FHLB financing," Michael McMahon, a spokesman for Mill Valley, California-based Redwood, said in a Bloomberg telephone interview. "This will have no material effect on our operations."

And there are more possible changes. Moody's Investors Service recently released proposed changes to their RMBS ratings methodology and is soliciting feedback from stakeholders. An announcement of the proposal can be found here. The MBA is currently analyzing the proposed changes and will be forming a working group to evaluate them in-depth, and anyone interested in being part of this working group should let Jim Gross know by this Friday.

John Hoffmann, SVP with NationStar, reminded readers, "I saw your item in Wednesday's commentary about compliance.  I just wanted to confirm for you that we do perform both a credit and compliance check on all loans we purchase through the correspondent division." Thank you John.

Join Fannie Mae to learn more about the new look and feel of the redesigned Servicing Guide. The webinar will provide an introduction to the preview version of the redesigned 2014 Servicing Guide, including a description of the enhancements made that will make the content easier to find and navigate. Register here.

Secure Settlements, Inc., a background data evaluation services company for the mortgage industry, today announced that it has completed the vetting of the respected national title company Closeline Settlements (Closeline) of Rockville, Maryland. The company approached SSI to submit their ownership and key staff to the SSI vetting process voluntarily, without a lender requirement, because they viewed the vetting standard as a supplement to best practices and a credential to help grow their businesses. Closeline passed the rigorous 110 point background evaluation process with a "low risk" rating and is now subject to ongoing monitoring in the SSI nationwide vendor database.

ditech, giving spellcheck routines fits every day, announced an REO financing program with GreenTree Servicing LLC (the 3rd largest non-bank servicer). Ditech Mortgage Corp. will be working with GreenTree Servicing LLC to support its REO program by providing interested buyers with loan pre-qualification services through the Purchase Power program. "The program is a fast and easy way for prospective home buyers to get pre-qualified for a home loan and, knowing their price range, helps them to shop for a home with confidence. As part of its REO financing program, ditech offers prospective buyers a full suite of loan products, financing incentives including moving boxes and $75,000 in moving insurance, as well as dedicated support throughout the processing, underwriting and closing periods."

Rushmore Loan Management Services LLC, "a national residential mortgage loan servicer of performing and non-performing loans," announced plans to extend its specialty residential loan servicing platform to Puerto Rico.  The Company will open a new branch in San Juan, Puerto Rico, which will be fully operational by November 1, 2014. According to Rushmore CEO Terry Smith, Rushmore will immediately begin servicing approximately 4,000 residential loans and REO when the branch office opens in November. The Company plans to hire approximately 50-60 new employees in the San Juan office.  Rushmore's corporate headquarters are in Irvine, Calif., with an additional office in Dallas, Texas.

Mortgage document prep vendor International Document Services, Inc. (IDS) announced it has launched a comprehensive Resources website within its flagship doc prep system idsDoc. The main feature of the site, a compliance-focused blog authored by IDS Compliance Officer Jonathan Johnson, was made available to clients through the idsDoc doc prep platform. "Lenders are being constantly inundated with changes to mortgage regulations, and it's important for them to educate themselves in order to maintain compliance," says IDS Executive Vice President Mark Mackey. "By making the knowledge our compliance staff possesses available to clients in an easily digestible format, IDS is making good on its commitment to helping its clients generate zero-defect, fully compliant mortgage docs."

PMAC Wholesale announced its Lock Desk now has new extended hours in all Time Zones. The new cut off time will be: 4:30 p.m. PT, 6:30 p.m. CT, and 7:30 p.m. ET. The recent FNMA guideline changes regarding the waiting period requirements for borrowers who have had a previous short sale/deed-in-lieu of foreclosure or pre-foreclosure sale will apply to PMAC's Conforming Classic and Conforming High Balance Classic and LPMI: changes now require a 4-yr waiting period rather than a 2 years, PMAC will continue to NOT accept extenuating circumstances for less of a waiting period. It will follow credit mismanagement guidelines with changes effective for loans with mortgage applications dated on or after August 16.

What has been driving rates lately? Geo politics and "safe haven" buying have generated strong price gains in recent weeks. But we have some added "oomph" from the "US rates are cheap" crowd, the "ECB will begin QE" crowd, and the continued "Yellen is a controlling dove at FOMC" crowd. Crowd funding! But plenty of capital markets people are nervous: a sudden, unexpected downshift in international tension and equally surprising uptick in the economies of the U.S., Europe, China, or Japan would probably reverse current strength in market.

Speaking of economies, here in the U.S. the Institute of Supply Management told us yesterday that manufacturing expanded in August at the fastest pace in three years, and higher than economists had forecast. And heck, if manufacturing picks up, jobs might also, and then things could really begin to heat up - at least that is the thinking. But at this point, given wages, GDP, and so on, inflation is not a concern. But for numbers, Tuesday was not good: the 10-yr T-note dropped .625 in price, closing at 2.42%, and agency MBS prices worsened about .250

The only market-moving news today might be Factory Orders at 7AM PST and the Fed's Beige Book (economic anecdotes from the 12 Districts in preparation for the Sept. 16-17 FOMC meeting) although we did have the MBA's release of mortgage applications from last week (a slight increase). Early on the 10-yr is up to 2.45%, mostly based on lessening tensions overseas and the equity markets thinking economies are improving, and agency MBS prices are worse about .125.


But on the jobs front, PHH Mortgage is searching for Regional Directors of Business Development for a newly formed Regional Financial Institutions channel. The desired candidate will have a strong background working with regional banks and credit unions, the ability to work with C-suite level prospects, while promoting PHH's multiple outsourcing executions including marketing agreements, co-branding, and private label services. The ideal candidates will reside in or around the following markets: Boston, Chicago, Dallas, and Atlanta. PHH is also searching for a strong Correspondent Lending Regional Sales Leader in the Midwest region (St. Louis, Chicago) working with independent bankers, banks, and credit unions. Interested candidates may send their resumes/questions to Recruiting Director Vanessa Godoy, Len Patton, SVP CL/RFI, or by visiting PHHJobs to view the full job descriptions.

Pacific Union Financial, LLC has opened its first Distributed Retail and Operations Center located in Orange County, CA.  This new Distributed Retail and Operations Center will be the flagship office for Pacific Union in Southern California. With Gerry Fernandez and Ryan Boyajian at the helm, Pacific Union continues to grow and expand its Retail footprint to complement its existing Distributed Retail channels in Minnesota, Utah and Nevada.  Fernandez and Boyajian are both veterans of the mortgage industry and join Pacific Union from Crossline Capital where they led high producing, high ranking lending teams and cultivated professional business relationships in the Southern California community.  The pair will oversee day-to-day management and operations of all new branch locations in Southern California and contribute to growing the Pacific Union Financial retail footprint in California. If you're interested in joining the Pacific Union team, contact Glo Blue.

EMAC continues to train recruiters. "Are you loosing candidates to the competition? Or are they just staying put? The key is understanding what truly motivates Top Producers in order to improve your chances with these passive candidates. Join us today for our Winning the Elusive Candidate workshop at 3PM EST. Learn the recruiting strategies used by professionals Headhunters to keep candidates engaged in the interviews process and the steps to get them to the 'Altar'. Reserve your seat to the on-going Mortgage Recruiting Boot Camp eight part series, hosted by Jim McGrath. In this workshop Jim discuss his strategies to attract top tier candidates to stay committed to the courtship and his proven techniques that keep candidates engage throughout the entire process."