What do attorneys read about all day? Stuff like this:Woman dies from suspected freak neck massager accident

There is no word on whether or not the victim was in the mortgage business, but my bet is that attorneys will be involved either way.

Is your company ready to submit its quarterly "NMLS Mortgage Call Report?" Hopefully you didn't answer, "Huh? What call report?" like I did.

In compliance with the SAFE Act, each state law requires companies to submit NMLS Mortgage Call Reports.  The SAFE Act specifically requires, "Mortgage licensees to submit reports of condition to the Nationwide Mortgage Licensing System and Registry in such form and containing such information as (it) may require." The NMLS Mortgage Call Report (quarterly) is intended to be completed by all state-licensed companies and all state-registered companies that employ licensed mortgage loan originators." I guess we find out what they want in April. READ MORE ABOUT THE NMLS CALL REPORT

If you're a loan officer, what are you supposed to do now? Long term rates have crept up about ¾ of a point the last two months, and are the highest they have been in the last 7 months. But rates are still decent if a borrower qualifies. If you have a client who wants to refinance, or buy a house, certainly there are opportunities. (Heck, remember, there was plenty of buying and selling of houses when rates were in the high teens!) But face it - most economists don't see a realistic possibility of rates going back to where they were in October, and a steep yield curve is certainly implying growth, even if it's meager.

In terms of the overall economy, forecasters (who are probably as right or wrong as someone off the street, but are better at stating their opinion) see the U.S. economy growing at a rate that is "neither too hot nor too cold." The news out last quarter suggested that a pick-up in economic activity might lead to overheating, which is inflationary, which usually leads to higher rates. The vast majority of economists, market strategists and money managers say they see indicators pointing to a scenario of modest growth and low inflation in 2011. Stocks are at a two-year high, commodities are rising and bond yields are still very low by historic standards--all contributing to investors' & economists' optimism.

A trader from Cantor Fitzgerald wrote, "In order to win in 2011, you need to be right about the timing of the economy turning around.  In my mind it's still all about the jobs market.  Equities and commodities are bulled up.  Wall Street research analysts are calling for stocks to be up about 10% in 2011. What a shocker - has Wall St. consensus ever called for a down stock market?"

Perhaps the biggest question facing the housing market in 2011 is, "Is this the year housing actually hits bottom?" Of course, all real estate is local, and many markets have rebounded. But some economists feel that, very broadly speaking, home prices are expected to fall another 5% in 2011.

Last week the Wall Street Journal published four housing-related issues to keep an eye on in 2011, which really haven't changed much.

#1 is jobs. "Who's going to buy a house when they're not certain they'll have a job in six months and when it looks like home prices are likely to fall another 5%?"

#2 is delays in the foreclosure process. Much of this has blown over, but still regulators and state prosecutors are in the midst of a series of reviews and investigations that could shed more light on abuses, such as misapplied or excessive fees, by servicers, their attorneys and other third-party vendors.

According to the WSJ, #3 will be whatever comes out of Washington DC in terms of Freddie & Fannie, the Dodd-Frank Act implementation, what does a "qualified residential mortgage" mean in terms of the 5% risk retention, etc., etc.

And #4 on the list is underwriting guidelines. 90% of production now is related to some type of government agency - if those change, private lenders are going to have to step up lending without additional fees, government regulations, down payments, etc. It is a tall order, given the overlays already in place.


But will the US continue to attract investors to our debt if our deficit continues to grow? The Treasury has had success in funding our deficits to date although there are some signs of weakening demand as global economies struggle with their own debt problems. Congress starts back up tomorrow with more than 90 new House Representatives and 12 new Senators. The Republicans take over the majority in the House of Representatives and its leadership has already turned their sights on cutting spending and announcing plans before President Obama's State of the Union address later this month. There are a few of the fiscal issues that Congress will be tackling at the start of the year, not the least of which is President Obama's $1.1 trillion spending bill which was voted down for having too many earmarks. A "stop-gap" bill of $250 billion, which was passed before the holiday break, will fund the government until March 4. This means that Congress will be debating a new budget soon.

Another issue is the debt ceiling. The US currently has roughly $13.9 trillion in debt, so the current debt ceiling of $14.3 trillion will be hit early this year, which means that Congress will have to vote on raising the debt ceiling. Reducing deficits, whether it is with the United States, states like California, or with a family, is rarely easy to do. And of course this month we find out the first draft of the plan for GSE (Government Sponsored Enterprise) reform. But given the current state of the housing market, many analysts feel that the government will not suggest anything major.

The Bank of America settlement certainly has tongues wagging out there. "It will be interesting to see how BofA's settlement pans out. It worked different deals with each agency, supposedly covering a group of loans with one but a specific time period with another. With one agency, it does not include anything from the 2008 vintage - loans originated in that year. As I remember, those were the worst of the worst."

"Despite the settlement, the bank still faces potential liabilities from mortgages it sold to private investors, as well as big losses from home loans it has made and kept on its books. The agreement also doesn't cover challenges from private insurers, investors or Ginnie Mae."

Can smaller companies use the settlement as a template? The unofficial input, and off the record comments, that I have received suggests that large investors are indeed working similar deals with smaller firms. That being said, officially large investors will hold their clients to whatever was contractually agreed upon when loans were sold. Here's the latest from Bloomberg

US Mortgage Corporation dba Mortgage Concepts, located in Bohemia, NY spread the word that it "has never been nor is currently affiliated with the now defunct U.S. Mortgage Corp. and its subsidiary CU National Mortgage formerly of Pine Brook, NJ. This non-affiliation notice is intended to provide clarity to the public since US Mortgage Corporation dba Mortgage Concepts prides itself on its long standing reputation and distinguished service and is cognizant of the potential confusion the similar name may cause." Per the press release "US Mortgage Corporation dba Mortgage Concepts is a multi-state licensed mortgage banking corporation, and is a FHA Title II Non-Supervised Mortgagee. The company is a HUD approved FHA Direct Endorsed Lender, conducting Retail Lending nationwide."

Pricing engines were busy yesterday, installing the new Freddie & Fannie grids for their clients. For example, Franklin American, Citi, AmTrust, uh, I mean NYCB Mortgage Company adjusted pricing. SunTrust updated its Key Products line, and Flagstar updated its government product pricing per Optimal Blue.

We had some economic news of note yesterday, but when all was said and done, MBS prices finished the day roughly unchanged. The ISM number came in at "57", as expected, but the components were a touch stronger than the headline suggests. US manufacturing grew for a 17th straight month, per the ISM. Construction spending was also better than expected and continues to show a positive uptrend, hitting a 5-month high. Equities rallied, and fixed-income securities got off to a rocky start but then recovered much of their losses.


While on a road trip, an elderly couple stopped at a roadside restaurant for lunch. After finishing their meal, the man paid, and they left the restaurant and resumed their trip.

When leaving, the elderly woman unknowingly left her glasses on the table, and she didn't miss them until they had been driving for about forty minutes.

By then, to add to the aggravation, they had to travel quite a distance before they could find a place to turn around in order to return to the restaurant to retrieve her glasses.

All the way back, the elderly husband became the classic grouchy old man.

He fussed and complained, and scolded his wife relentlessly during the entire return drive.  The more he chided her, the more agitated he became.

He just wouldn't let up for a single minute.

To her relief, they finally arrived at the restaurant.

As the woman got out of the car, and hurried inside to retrieve her glasses, the old geezer yelled to her, "While you're in there, you might as well get my hat and the credit card".