Periodically I am asked, "Do you know how many LOs there are in the nation?" And folks periodically write and ask, "How many lenders are there in my state?" I may not know all the answers, or even some of them, but I often know where to find them. For these questions, here you go. We will probably see the numbers drop as the summer winds down, and along those lines I received this note late last week - not unlike other notes I have received about other lenders. "Chase had some sizeable layoffs in its Consumer Direct office in Columbus - 60 LOs, 6 lending managers, and 1 Assistant Vice President, all of which accounted for about 20% of the sales team. Chase did the same in its office in Arizona, and was rumored to do the same to another ex-default office that was turned into Consumer Direct about 15 months ago - about 200 people as well.  The layoffs are rumored to be widespread, with 90-day notices to give people time to try and transfer internally which I'm assuming is policy. Everyone pretty much knew it had to come at some point since Chase pretty much doubled its staff over the last 4 years. I know rates have moved up and the refis are drying up so CD itself will be a smaller piece of mortgage banking in the near future, but is there something else these that upper execs might see coming?"

I am here in Michigan at the MMLA conference, and a portion of the conversation involves the political and real estate problems of Detroit, along with the impact Quicken Loans has on the industry. Quicken, it seems, has moved up to about 20% ARM production.

There has been a lot of chatter in the market about staff reductions in response to falling volumes, but very little real data about how anyone other than the biggest lenders are responding. The STRATMOR group is currently conducting a free survey designed to measure what steps lenders are taking or considering in response to the recent rise in mortgage rates. This survey is a precursor to a more in-depth survey planned for the 4^th quarter by which time most of the financial and operational effects of rate increases will have been felt. If you are interested in participating in this introductory survey click here. The survey is open for responses until August 21.

When I was a kid my Dad called me lazy. I told him that I was actually being proactive and resting before I got tired. But there will little rest in the halls of Pittsburgh's PNC. PNC Financial Services said Thursday that the Justice Department and federal regulators are examining some of its mortgage-related practices, including how it priced mortgage loans. The Justice Department's civil rights division and the Consumer Financial Protection Bureau are investigating whether the way mortgages were priced by National City and PNC "had a disparate impact on protected classes" of homeowners. Here you go. "The language in the filing could mean the government thinks that individuals belonging to certain ethnic groups or income levels were unfairly affected by mortgage-lending practices at National City or PNC." (PNC bought National City in 2008.)

And let us not forget TARP. The government has not, and last week we learned that the Federal Government and the Illinois AG are teaming up to bring the first TARP criminal charges. The Special Inspector General for the Troubled Asset Relief Program (TARP), the FDIC Office of Inspector General, and Illinois Attorney General Lisa Madigan announced criminal charges against former members of the board of directors and senior executives at Premier Bank. The authorities allege that the former directors and officers concealed the bank's financial condition from state regulators, while the board chairman allegedly solicited and demanded bribes in exchange for business loans and lines of credit. The authorities charge that over a six year period, the officers submitted numerous fraudulent reports to their Illinois regulator and used money from third parties to make payments on several bank loans that were pasts due. During this period, the bank applied for and obtained TARP funds that were used to further the officers' criminal scheme. Here you go.

On the Fannie/Freddie/political badminton, from Wall Street D.G. writes, "Rob, Fannie and Freddie have probably lost track of how many times they've both been used and abused for political purposes. They both tested their charter limits but if you look at what some of these banks and insurance companies still do I think it truly is disgusting in comparison. How can these politicians forget about all the great things Fannie and Freddie have done in the past? I'll tell you how, anything for votes! Up until the day they were taken over, F&F were still raising money on their own by issuing debt, and investors from all around the globe still had confidence in them both. If investors were still buying their debt at historical low yields than what was the purpose of the takeover? Politicians needed to play the blame game so they latched onto it and used the media to tell the American people on how bad F&F supposedly were."

"New York, New York, it's a wonderful town, the Bronx is up but the Battery's down..." But somehow I don't think, "New York Codifies Pre-Foreclosure Filing Requirement" will ever be a song lyric. On July 31, New York Governor Andrew Cuomo signed AB 5582, which seeks to reduce the number of incomplete foreclosure cases that are filed, but stalled, awaiting information needed to move the cases to mandatory settlement conferences. To do so, the bill requires a foreclosure attorney who is filing a foreclosure complaint involving a home loan to sign and file a "certificate of merit" with the complaint, stating that, to the best of the attorney's knowledge, information and belief, there is a reasonable basis for the commencement of such action and that the plaintiff is currently the creditor entitled to enforce the applicable mortgage documents. The attorney also must attach to the complaint or the certificate copies of the relevant debt instruments and any instruments of modification, extension, consolidation, and assignment. The new law allows for the filing of supplemental affidavits where the debt instrument is lost. The new requirements take effect August 30, 2013. Here is the bill.

By the way, the State of New York has issued a temporary order that excludes the FHA MIP increase from the APR calculation as it pertains to state subprime regulations after a substantial number of loans failed to pass the subprime test due to the effects of the MIP requirement and rising interest rates.  The order is due to expire in late September; however, note that not all investors are effecting the MIP exclusion.

Let's take a look at some relatively recent agency, vendor, and investor news.

Freddie Mac has reinstated the cash adjustor for all fixed rate loans with LTVs between 105 and 124% and has adjusted the cash adjustor value for LTVs that exceed 125%.  While the cash adjustor value was previously available through 1-800-FREDDIE, sellers can now access it by going through a link in the Selling System Resources section of the Selling System welcome site.  Once a contract has been taken out and priced, the cash adjustor amount will be netted against the contact price displayed in the system.

Freddie's condo requirements have been streamlined with the elimination of "mixed use" and "live-work" as project review types; instead, these classifications will be given specific underwriting considerations, and the pertaining definitions of "Amenities," "Common Elements," "Limited Common Elements," and "Project Documents" have been updated.  The ULDD data point for detached condo projects will also be updated on October 1^st.

Sellers are now required to submit all mortgages secured by manufactured homes through LP; as such, LP should be supplied "Automated Underwriting System Type" ULDD data point along with the loan's LP Key number associated with the "Automated Underwriting Case Identifier."

Effective for all properties in subdivisions and projects with resale restrictions, Freddie has eliminated its previous resale requirements.

As a reminder, Freddie Mac will be enforcing new eligibility standards for all loan applications received dated January 10, 2014 and after.  These require loans to be fully amortizing (no interest only and no loans with the potential for negative amortization), have terms of 30 years or less, and not exceed 3% of the loan amount when it comes to total points and fees.  As sellers will also be required to rep and warrant that all such loans comply with the points and fees limitation, Freddie will be implementing new ULDD data points that will identify exempt mortgages, total loan amount, total points and fees, and APR, all of which will determine whether or not the loan in question falls within the acceptable parameters.  For further details, refer to Industry Letter 2013-06.

Wells Fargo has revised its pricing adjusters for its Non-Conforming products, both Best Efforts and Mandatory.  Effective immediately, all loan amounts between $417,000 and $625,500 are subject to a -.500 adjuster, while the adjuster for loan amounts under $417,000 has been changed from -1.00 to -1.500.  The purchase special has been reduced from .750 to .625.

Essent Guaranty has announced the integration of the FICS Loan Producer software, through which lenders can directly order mortgage insurance coverage using the MISMO Mortgage Insurance Interface instead of manually keying in data.  Lenders can also receive a rate quote or commitment by completing and submitting a single form, responses to which are returned immediately.

Jane Matusek has joined Informative Research as its SVP of New Business Development.  Formerly the Director of Strategic Sales at Corelogic Credco, she will be heading the growth of Informative Research's products and services.

Turning to rates, last week was pretty quiet. Let's not forget that supply is way down - we'll find out how much on Wednesday when the MBA releases its apps numbers - but traders report that supply from mortgage bankers averaged $1 billion per day while the Fed continued to buy at a daily equivalent pace of over $3 billion. (The difference, of course, is the buying through reinvestment of paydowns: for nearly two years monthly buying through reinvestment of paydowns from the Fed has ranged between $24 billion and $35 billion, or an average of $29 billion.)

We have a lot more scheduled economic news this week upon which to chew! There is zip today, but tomorrow is Retail Sales (a good measure of consumer spending's impact on the economy), Import & Export prices; Wednesday is the Producer Price Index followed by Thursday's Consumer Price Index. Also on Thursday we have Jobless Claims, Capacity Utilization & Industrial Production will report on the output of the nation's manufacturing, mining and electric and gas utilities, and the Philly Fed numbers and the NAHB Housing Market Index. And lastly on Friday, August 16^th, Housing Starts and Building Permits will measure the number of residential units in which construction is begun each month, as well as a productivity number and Michigan Consumer Sentiment number. The 10-yr wrapped up last week at 2.58% and in the early going it is 2.60%, and agency MBS prices are off a shade.