The U.S. Treasury will be selling its remaining shares in Citigroup, not only exiting ownership but making a profit on its investment. It found buyers for 2.4 billion shares at $4.35 a share for $10.5 billion of profit. Can they please manage my retirement account? CitiMortgage was the #5 residential lender for the first half of 2010. The Treasury had already announced $42.8bn in proceeds from the sale of 4.4bn shares to the end of October, including dividends, the repayment of preferred shares and interest. At this point the biggest private stakes left on the Treasury's ledger are in General Motors and AIG...although Fannie & Freddie's futures still have to be figured out too.

Speaking of large banks, Bank of America (#2 residential lender during the first half of 2010) remains committed to shedding non-core assets, even after the company raises the extra equity required as part of its exit from the TARP per a story from Dow Jones Newswire. It "has committed to selling assets it thinks are no longer essential to its business or don't fit the bank's strategic goals." Recently it sold a huge stake in BlackRock and sold the right to purchase additional shares in China Construction Bank. For example, anyone looking to buy BofA's Balboa insurance unit, which sells so-called creditor-placed coverage (a type of home insurance that kicks in when a house enters foreclosure or homeowners stop paying for their own insurance) should give them a call.

There is some good company and hiring news, albeit on a smaller scale, which is always nice to include.

Compass Analytics, a mortgage pipeline hedging firm that has been in the market for several years providing pipeline & servicing rights valuation and hedging analytics & solutions, is seeking a seasoned account/hedge manager with at least five years of hedging and secondary marketing experience for Compass's San Francisco or Washington DC offices.  Interested candidates should submit cover letters and resumes to Lucy Poole at

Mountain West Financial, a mortgage banker located in Southern California, is looking for an individual to manage its Compliance, Quality Control and Risk Management departments. "The position consists of analyzing existing State, Federal Laws and Regulations as well as the implementation of pending legislation.   Individual will be expected to develop and refine current and new procedures in these areas to ensure compliance." Experience and education are a must - anyone interested should contact Gary Martell at

Maverick Funding Corp., (, a privately held New Jersey-based mortgage lender licensed in 21 states and which has more than quadrupled in size over just three-plus-years, needs licensed loan officers for its newest retail center in Woodland Hills, California and its Parsippany, New Jersey flagship location.  Maverick is expanding its retail operation (it already has retail centers in Rhode Island and New Jersey) into Southern California. Contact CEO Ralph Viteillo

Union National Mortgage Co. (Ohio-based correspondent lender) is expanding in several areas of the United States. The company has doubled the size of the retail origination staff each year for the past two years in Ohio, Western Pennsylvania, Kentucky, West Virginia, Indiana, and Tennessee and has added new origination centers in Missouri, Kansas, Colorado and California.  (Union National has recently added a wholesale division.) The company is searching for retail loan officers, wholesale account reps, and brokers looking to sign on. Anyone interested should contact the National Sales Manager, Brian Coleman, at or visit

Platinum Mortgage (based in Madison, AL) alerted brokers that it is expanding and is now doing business in Texas. Visit or contact Randy Jackson at

PennyMac and subsidiary PennyMac Loan Services are no longer allowed to conduct residential mortgage business in the state of Georgia due to a Cease and Desist Order. Penny Mac apparently was operating there without a license. Penny Mac did not have a license to broker mortgages in Georgia," an official said. The documents show that PennyMac was given 30 days to produce a mortgage license and the Cease and Desist was issued when the firm failed to do so. PRESSER HERE

Bank of America alerted its correspondent clients to changes in DU coming up this weekend, "Third Party Origination Requirement Changes for FHA Loans (Mortgagees that conduct business with Sponsored Originators are required to register the originator's legal name, EIN (Employer Identification Number), and NMLS (Nationwide Mortgage license System) lender identification number on FHA Connection's new Sponsored Originator Maintenance Screen. Mortgagees will only be able to order a case number for a sponsored origination if the sponsored originator has been registered in FHA Connection. Mortgagees can view existing or add new sponsored originators by accessing the Sponsored Originator Maintenance screen.),

In a similar vein GMAC alerted its correspondent clients of the impending changes in Fannie's DU program, and provided overlays to the transition that will occur this weekend.

As everyone is pretty much aware of by now, back in May the FHA Reform Final Rule revised its lender approval policy to eliminate the approval of Loan Correspondents at the end of the year. Loan Correspondents will no longer have access to HUD's secure system, FHA Connection, after that date. And so the larger lenders are officially notifying their broker clients of the required changes. Flagstar, for example, sent out a bulletin saying, "Existing Loan Correspondents who are sponsored by Flagstar will automatically be 'grandfathered' into our FHA TPO program on January 1, 2011. Effective with loans disbursed on or after January 1, 2011, Flagstar FHA TPO customers (i.e., those without FHA Direct Endorsement or Authorized Agent approval as of January 1, 2011) must close all FHA loans in Flagstar's name and they must be table-funded."

(And this weekend, with the new DU version coming out, Flagstar, "in conjunction with the removal of the Fannie Mae Flexible 97 and HomePath Flex 97 products Flagstar will be expanding the price adjustment on loans with LTV 95.01-97%" for certain programs to .5 from 0. Flag also told its brokers about a change to its revolving charge accounts and unsecured lines of credit - they "are open-ended and should be treated as long-term debts and must be considered part of the borrower's recurring monthly debt obligations. These trade lines include credit cards, department store charge cards, and personal lines of credit. Equity lines of credit secured by real estate should be included in the housing expense. If the debt is to be paid off at closing, the credit line must be closed and cancelled prior to closing and an acknowledgement letter provided from the creditor. If this cannot be provided, the borrower must be qualified with the debt." Check the exact guidelines for specific details.

PHH told its clients, "As part of the upcoming FHA Reform, Tier 6 clients, who will no longer be able to close loans as a lender, will be required to have their current FHA pipeline with PHH closed by December 31..PHH will no longer be accepting Tier 6 FHA registrations from these clients after December 3. PHH offers a couple options to its "Tier 6" brokers who are originating FHA loans, and anyone interested should read PHH's bulletin." Great news! PHH Mortgage is pleased to announce it will now purchase loans with private mortgage insurance coverage from Radian that includes the Free After Five® feature. The Free After Five® feature is only available when the wholesale or correspondent lender orders the MI commitment directly from Radian. Free After Five® is an exclusive program that rewards homeowners who maintain a good payment history for five years by automatically terminating their MI premium payments, without an appraisal. The MI coverage continues to remain in effect for the lender until the loan is cancelled due to payoff or the LTV reaches 78%.

On the USDA front, "On November 29, 2010, USDA Rural Development announced the exhaustion of funds for Section 502 Guaranteed Rural Housing refinance loans. Until additional refinance funds are available, Conditional Commitments will be issued "subject to the availability of congressionally appropriated funds for refinance transactions." Purchase funds remain available and are not affected by this notice. During this lapse in funding, Correspondent Lending will accept Conditional Commitments "subject to the availability of congressionally appropriated funds" on Guaranteed Rural housing refinance loans. Please note that Clients will assume all loss default risk for the loan until Rural Development is able to issue the Loan Note Guarantee."

Flagstar's broker clients learned of a cap "For refinance transactions only, we are re-instituting our $25 million funding cap until RD's refinance funding is restored. No rate lock or other restrictions are being placed on refinance transactions. They may continue to be registered, submitted for underwriting, locked, closed, and funded without restriction unless or until the $25 million cap is reached prior to RD receiving additional funds for refinance transactions. Purchase transactions are not affected in any way by the exhaustion of RD funding for refinances."

Yesterday we had some nice improvement in MBS prices, which unfortunately has basically been given back this morning. Money managers were in buying MBS's, and traders reported that originators were buying back hedges. (Let's hope that they're not putting those hedges back on this morning at worse levels.) MBS volume was significantly below normal, and MBS prices closed from 3/8th to nearly 3/4 of a point higher along 5s down through 3.5s, respectively, while higher coupons gained just a few ticks.

But here on Pearl Harbor Day rates have moved higher here due to the tax cut extension news: Obama agreed to extend the Bush tax cuts. That compromise also bought Obama the bargaining chip to extend unemployment for another 13 months and cut the payroll tax by 2%. Of course this does little to help the deficit and therefore increases Treasury issuance, but takes pressure off of the Fed and should boost GDP. The US headlines also overshadowed news that the EU committee decided there would be no immediate relief packages for the likes of Spain and Portugal. We still have a $32 billion 3-yr Treasury auction ahead of us, but for now the 10-yr yield is up to 3.08% and rate-sheet MBS prices are worse by about 755bps.

A guy walks into a cafe with a shotgun in one hand, pulling a male buffalo with the other. He says to the waiter: "Bring me some coffee."

The waiter says, "Sure, thing. Coming right up."

He gets the man a tall mug of coffee, which he drinks down in one gulp, then turns and blasts the buffalo with the shotgun, causing parts of the animal to splatter everywhere. He then stands up and just walks out.

The next morning the man returns. He has his shotgun in one hand, pulling another male buffalo with the other. He walks up to the counter and says to the waiter:

"Bring me some coffee."

The waiter says, "Hold on there! We're still cleaning up your mess from yesterday. What was all that about, anyway?"

The man smiles and proudly says, "I'm training for a position in United States Congress. Come in, drink coffee, shoot the bull, leave mess for others to clean up, and then disappear for rest of day."