fifteen days until Thanksgiving, first celebrated in the fall of 1621 when the
Pilgrims held a three-day feast to celebrate a bountiful harvest. But it did
not become a national holiday until 1863 when President Abraham Lincoln
proclaimed the last Thursday of November as a national day of thanksgiving.
Later, President Franklin Roosevelt clarified that Thanksgiving should always
be celebrated on the fourth Thursday of the month to encourage earlier holiday
shopping - very crafty. The USDA estimates that 248 million turkeys will be
raised in the U.S. this year, weighing in at about 7.1 billion pounds. Minnesota is numero uno in turkey production
with almost 1/5 of the national tonnage. North Carolina and Arkansas tie for
2nd at around 30 million turkeys each, and adding in production from Missouri,
Virginia, and Indiana accounts for two-thirds of U.S turkeys!
360 Mortgage is searching for a GNMA
Issuing expert. 360 is a midsize nationwide wholesale lender, and "the
platform targets retaining the majority of production in servicing. As an
organization we have a focus on technology and offer functionality which is
rare and sometimes unique. We offer originators live internet chat with
an underwriter and a direct connection to HUD utilizing proprietary software
which can generate a case number or CAIVRS in 15 seconds. As an
organization we have seen close to 100% growth each year since 2007." The
ideal candidate is someone with experience ranging from certifying pools to MBS
delivery, and is a "line worker" and not presently at a management
level but interested in a company with a lot of potential. Interested
parties, who either live in Austin or could relocate, should send their resume
Having just attended the Texas Mortgage Bankers Association Education
Conference, it is easy to see the value to the attendees. I mention this
because next week is the MBA's
Accounting, Tax & Financial Management Conference in Phoenix. It "provides
attendees with targeted, real-world solutions to their unique financial and
accounting challenges and provides a valuable opportunity for finance
executives, accountants and tax professionals to get up to speed on the latest
mortgage-related developments as they earn up to 15 CPE credits." For more info
go to http://www.mortgagebankers.org/atfm11.htm.
the TMBA I was fortunate enough to hear Zixta Martinez, the Assistant Director
for Community Affairs from the Consumer Financial Protection Bureau. Although
she pretty much toed the agency line in her speech, one definitely has the
impression that it is alive and beginning to have an impact, for better or
worse. She reminded the group that its birthday is 7/21, and prior to that it
had announced a list of consumer finance regulations it will take over from
seven other federal agencies. CFPB's
focus is primarily on debt collectors, consumer lenders, money transmitters,
and prepaid card issuers. The Dodd-Frank Act requires the Bureau to examine
large banks, thrifts, credit unions, and their affiliates. The Act also allows
the Bureau to conduct routine examinations of nonbank covered persons in
the residential mortgage lending, private education lending, and payday lending
markets, among others. Non-depository covered persons such as these will be
subject to a risk-based supervision program that is designed to assess the
covered person for compliance with Federal consumer financial law, obtain
information about its activities, and assess risks to consumers and to the
consumer financial markets.
of this week the CFPB announced that it will
give a 14-day early warning notice to institutions that are subject of an
investigation in order to get their response before they take legal action.
The agency will be sending out Early Warning Notices to individuals or firms
that are being targeted for enforcement action, informing them that they have
violated consumer financial protection laws. Recipients of the notice will then
have two weeks to make a counter-argument to that claim. However, providing
advance notice will be discretionary, and might not be forthcoming if
"prompt action" is required.
Last week the CFPB began soliciting comments
regarding its proposed collection of information for the development and
testing of new and existing model forms, disclosures, tools, and similar
related materials. The Dodd-Frank Act and federal consumer financial laws
require the CFPB to create and prescribe standard model forms, disclosures, and
other similar materials to explain and notify consumers about complex financial
information in a way consumers can understand. To facilitate the development
and implementation of the model forms and documents, the CFPB plans to collect
qualitative data about existing forms through a variety of collection methods,
including consumer interviews and research. The CFPB also plans to collect
information from covered entities to ensure that the new model materials can be
implemented as easily and cost-effectively as possible. Don't be shy: comments
on the proposed collection must be received on or before January 3, 2012 to be
assured of consideration. For a copy of the Federal Register Notice, please see
The CFPB definitely has mortgage
servicing in its sights.
Law firm K&L Gates sent out an extensive Client Alert about the CFPB and
its Mortgage Servicing Examination Procedure.
"With the October 13, 2011, release of its new Mortgage Servicing Examination
Procedures (the "Procedures"), the CFPB appears to leave it up to scores of
individual examiners to decide in their subjective judgment whether a company's
loan servicing practices raise 'unfair, deceptive, or abusive acts or practices'
("UDAAP") concerns. Even though these new Procedures remain a work in progress,
the Bureau has indicated that it will begin examining servicers in accordance
with the Procedures in the fourth quarter of 2011-that is, the quarter that
started two weeks before the Procedures were released. In fairness,
however, devising an entirely new set of examination procedures is a
substantial project for a new agency, and the Bureau's willingness to fully
disclose so much of its guidance to examiners shows laudable transparency."
K&L continues, "The Bureau seems to be
using its examination authority as a way to discourage practices that it views
as potentially unfair, deceptive, or abusive, without providing concrete
guidance to examiners or examinees. If so, this poses heightened risks to
servicers, because supervision is not subject to the transparency or judicial
review inherent in the formal rulemaking process. Fortunately, the
Procedures suggest that servicers can mitigate some of this uncertainty by
developing robust and effective systems of internal controls...mortgage servicers
might want to clarify and formalize existing policies and procedures, consider
their current practices in light of the Bureau's UDAAP focus, and implement
strong controls with an eye to the mitigation of compliance risk."
will request an additional $7.8 billion from you and me after "soured
derivatives bets" caused the company to record a $5.1 billion quarterly loss. (In fact, Fannie has had a quarterly
operating profit only once in the
last four years!) Derivatives and securities trading resulted in a $4.5bn loss
for the quarter, versus a $500m gain in the same period last year.
keeping track, Fannie has now requested more than $111 billion from the US
Treasury to stay afloat, while Freddie is #2 at $72 billion in taxpayer money.
good news doesn't stop there. Ally
Financial (that took $17 billion of U.S. aid) is considering a
bankruptcy-protection filing for its mortgage-lending unit, "said people
familiar with the situation." (Things are always true when the press uses those
words.) Per stories in Bloomberg and the WSJ, Ally is being advised by law firm
Kirkland & Ellis and investment bank Evercore Partners Inc. on a possible restructuring of ResCap. "One
option under consideration: a so-called strategic bankruptcy that would aim to
limit Ally's exposure to ResCap and pave the way for an eventual initial public
offering of Ally, 74% of whose shares are owned by the U.S. government. Walling
off the parent from the financial and legal woes of its subsidiary could make
Ally shares an easier sell for public investors." Remember that Bank of America
decided that a bankruptcy filing for its Countrywide Financial mortgage
subsidiary carried too many risks. "Legal observers warn that the gambit is
seen as a last resort for a good reason, in part because bankruptcy can be
unpredictable." "There's a reputational hazard," said Harvey Miller,
a veteran bankruptcy lawyer at Weil, Gotshal & Manges. "Once you put a
subsidiary into bankruptcy, people start to wonder: How safe is the parent? How
safe are the other affiliates?" Go to: http://www.bloomberg.com/news/2011-11-08/ally-s-rescap-mortgage-unit-is-said-to-hire-centerview-for-restructuring.html.
some have a 3-day weekend coming up. Investors such as PHH are reminding clients that Veteran's
Day is a federal holiday and therefore it is not counted as a business day
when determining the Right of Rescission 3 day waiting period.
least lock desks around the nation reported some good news last week. The MBA's
weekly survey, which covers 75% of retail production, showed apps were up over 10% with refi's up 12%
and purchases up almost 5%. Nationwide refi's account for almost 79% of the
the markets, yesterday news that Italy's Berlusconi would supposedly resign
encouraged some risk takers with Treasuries selling off and the Dow gaining
modestly. With no news in the United States, our markets definitely trade on news
from across the Atlantic, and by the end of the day 10-yr T-notes were worse
about .625 and up to 2.06%. Mortgage volume was pretty light, MBS trading-wise,
but MBS prices ended worse by about .250-.375.
highlight is the second leg of the Treasury Refunding with $24 billion in
10-year notes going off at 13:00 EST. And with the Italian turmoil, money is moving into U.S. fixed-income
securities so the 10-yr is down to 1.94% and MBS prices are better by roughly
For the older folks out there:
1. She was in the bathroom, putting on her makeup, under the watchful eyes of
her young granddaughter, as she'd done many times before. After she applied her
lipstick and started to leave, the little one said, "But Grandma, you
forgot to kiss the toilet paper good-bye!" I will probably never put
lipstick on again without thinking about kissing the toilet paper good-bye....
2. My young grandson called the other day to wish me Happy Birthday. He asked
me how old I was, and I told him, 62. My grandson was quiet for a moment, and
then he asked, "Did you start at 1?"
3. After putting her grandchildren to bed, a grandmother changed into old
slacks and a droopy blouse and proceeded to wash her hair. As she heard the
children getting more and more rambunctious, her patience grew thin. Finally,
she threw a towel around her head and stormed into their room, putting them
back to bed with stern warnings. As she left the room, she heard the
three-year-old say with a trembling voice, "Who was THAT?"
interested, visit my twice-a-month blog at the STRATMOR Group web site located
at www.stratmorgroup.com. The current blog takes a look at the
impact of HARP 2.0 and the differences in the agency's programs. If you have
both the time and inclination, make a comment on what I have written, or
on other comments so that folks can learn what's going on out there from the