Yesterday I shared a list of acronyms that folks in the mortgage business have learned to love. In response, one agent wrote, "You forgot to include one of the most frequently used TLAs (three letter acronyms) heard from the lips of MLOs (mortgage loan originators) everywhere, every day: "WTF?" (She then elaborated with an example of income documentation over-kill.)

If I lived in Virginia, this "free and open to the public" event might be pretty interesting to attend. "The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve System will host a two-day symposium on October 25 and 26 on mortgages and the future of housing finance. Federal Reserve Board Chairman Ben Bernanke will deliver opening remarks, and FDIC Chairman Sheila Bair will be the keynote luncheon speaker...Experts from the public, private and academic sectors will participate in the symposium to discuss mortgage finance, foreclosures, loan modifications, and securitizations. Chairman Bernanke's opening remarks and Chairman Bair's luncheon address will be webcast on Monday, October 25 beginning at 8:30 a.m. EDT through the luncheon keynote. RSVP to Greg Hernandez, FDIC Office of Public Affairs, at  or call (202) 898-6984 - seating is limited and pre-registration looks to be booked so you will probably end up watching the webcast HERE.

This is a pretty timely meeting, given that the entire mortgage business is bruised and battered. No wonder mortgage-related stock prices are doing poorly - there is too much uncertainty. Bankers are facing a two-front war because of issues with their foreclosure documentation. Homeowners are challenging foreclosures, while mortgage-bond investors are voicing concern and demanding a refund. The cost of buying back troubled mortgages that were bundled into securities could be a bigger issue for banks.

Fidelity National announced yesterday they will require lenders to sign a warranty assuring their paperwork is valid before backing sales of foreclosed homes. In New York, the judicial system is requiring lawyers handling foreclosures for banks and servicers to sign a form verifying the procedure has been done properly. On a multi-billion dollar scale, one side of the US Government is working to support banks and keep the financial industry stable. Another side is suing BofA, as I mentioned yesterday. The Federal Reserve Bank of New York, along with others, is trying to force Bank of America to repurchase mortgages packaged into billions of dollars in securities. It is a conflict of interest on a huge scale. One former research director at the Federal Reserve Bank of Atlanta said, "They're transferring the loss from what would have been Bear Stearns through the Fed to the originators of the mortgages."

I knew I should have become a lawyer. Bank of America has filed suit against the FDIC to recover $1.75 billion for Ocala Funding investors  who were allegedly swindled by Colonial Bank, Platinum Community Bank and Taylor, Bean & Whitaker. Ocala Funding funded TBW's mortgage originations by issuing short-term notes and purchasing the loans, and BofA was the trustee of those notes. And as you may recall, Colonial Bank was the primary lender to TBW before it was put into receivership by the FDIC. The suit says that TBW executives conspired with Colonial and Platinum to divert funds away from its borrowing facilities to cover up significant liquidity problems and created false mortgage loan data in order to create the appearance that those loans had been sent to the facilities, allowing funds to come back to TBW.

In Illinois, the Cook County Sheriff is refusing to enforce foreclosures. "I can't possibly be expected to evict people from their homes when the banks themselves can't say for sure everything was done properly," he said in a statement.

On the good news side of the ledger, at the company level, yesterday we learned that Wells Fargo's repurchase obligations fell in the third quarter - certainly good news for them. Wells Fargo, who has not stopped foreclosure processes, reduced its reserve for repurchases to $1.3 billion from $1.4 billion in the second quarter, and outstanding buyback requests fell to $3.8 billion of loans from $4.3 billion in the previous quarter. U.S. Bancorp, the #6 lender by volume in the first half of 2010 and the fifth-biggest U.S. commercial bank by deposits, said third-quarter profit rose 51%, beating analysts' estimates, as costs declined for delinquent loans.  Net income increased to $908 million. The bank's $995 million in new provisions for loan losses were equal to net charge-offs, leaving the allowance for losses at 3.1 percent of loans at the end of the period. And Fidelity National, the largest provider of title insurance in the US, also beat estimates, citing higher fees and volume for its title insurance operations. Fidelity's earnings were up 13.4% over the year-ago period although revenue dropped 3.4% - a reflection of stronger margins on each transaction.

Poor MERS. They've been around 15 or so years, staying out of the spotlight and probably making decent money for the mortgage companies that own it, and now the company is front-page news. Three states have ruled that MERS, listed on about 20 million home loans as the mortgage owner, standing in for lenders and investors, is not the true owner because it only maintains the database. And if you're not the owner of the mortgage, you can't foreclose. The HUD Secretary, however, has stated, "Administration officials have not found any evidence of underlying structural issues" with the MERS process. But there are now class-action suits in California, Nevada, Arizona and Kentucky challenging its right to foreclose on delinquent loans. The Reno-based lawyer running the California suit said, "What we see is a systematic, industry wide fraudulent scheme in which the true owners of the loan do not participate in the foreclosure."  MERS has 65 million loans registered in its database, and was created to speed up legal recordkeeping of mortgages as it tracks repeated sales of mortgages as they go through the process of being turned into packages of loans and the basis for securities sold on Wall Street. MERS also allows banks to avoid the trouble - and the recording fee of up to $50 - of filing deeds and other documents at county registrars' offices every time ownership of a mortgage changed hands - in theory lowering the cost to the borrowers. THE CASE FOR MERS and THE CASE AGAINST MERS

On to something simple - like the markets. We learned from the Fed's Beige Book yesterday that the economy continued growing between September and early October but at a modest pace and with lingering weakness in the housing market with lower home sales in most districts. Stocks certainly took it as good news, especially when combined with some decent earnings news, and the DOW shot up 130 points. FULL RECAP OF BEIGE BOOK

Brokers and agents sometimes hear from their clients, "Hey, the 10-yr improved, why didn't mortgage rates?" Yesterday the opposite happened, with the 10-yr ending the day basically unchanged and MBS prices better by .125. Fannie & Freddie 3.5% securities (containing 3.75-4.125% mortgages) are near a 1.5 premium - add on some servicing and you're talking a big premium. The "tightening" was due to continued strong demand for mortgage products and limited supply - only $1.8 billion. AQ EXPLAINS THE RELATIVE PERFORMANCE OF CURRENT COUPON MBS


Part I "For Northerners moving to the South, or going to conferences in Atlanta" (The MBA Conference is next week!)

In the South: If you run your car into a ditch, don't panic. Four men in a four-wheel drive pickup truck with a tow chain will be along shortly. Don't try to help them, just stay out of their way. This is what they live for.

Don't be surprised to find movie rentals and bait in the same store. Do not buy food at this store.

Remember, 'Y'all' is singular, 'all y'all' is plural, and 'all y'all's' is plural possessive

Get used to hearing, "You ain't from round here, are ya?"

Don't be worried about not understanding what people are saying. They can't understand you either.