"It is a well-known fact that 5 out of 3 people struggle with fractions." What fraction of your day do you spend exercising? Total health care spending in the USA (i.e., total spending from all sources both government/public and private) is expected to be $2.9 trillion in 2013. Per the Center for Medicare and Medicaid Services, that total is forecasted to climb +72% over the next 9 years (2022) to $5.0 trillion. Park away from the office entrance, and skip that candy jar near the underwriting department! Speaking of physical activity, the Olympics are coming up. The Swiss must are always so confident in their chances of victory: they included a corkscrew in their army knife.

Moving from sports to the job market, New Penn Financial, one of the largest and most well-capitalized independent mortgage bankers in the country, is actively recruiting Regional Sales Managers for its Wholesale Division.  Founded in 2008, New Penn (http://www.newpennfinancial.com) "has forged a national industry presence built on competitive interest rates, exceptional customer service, and healthy lending practices. New Penn is nationally licensed and originates both agency and non-agency loan programs.  Experienced candidates who are proven leaders in the wholesale channel should submit resumes to Aubrie Cusumano at acusumano@newpennfinancial .com. All inquiries will be kept confidential. One can also visit here.

And a well-known national lender on a growth trajectory has launched a non-captive warehouse lending platform and has an opening for a seasoned warehouse relationship manager with a proven history of success in the Emerging and Small Cap Mortgage Banker segment. The position does not require relocation. The warehouse lender currently has a growing portfolio across the US, and as such travel may be required depending on location of clients. The responsibility will be to grow and manage a top performing warehouse portfolio. The lender is FNMA/GNMA seller servicer and active in both national and state MBA associations. Please send contact information and resume to me at rchrisman@robchrisman .com.

"Rob, can our investors, vendors, Realtor clients, warehouse banks, and so on, influence our hiring practices?" My kneejerk answer is that in this counter-party laden environment, to some extent, yes. I turned to attorney Brian Levy (blevy@kattentemple .com) since this is pretty "gnarly stuff. He wrote, "Rob, the question regarding whether an investor can influence an originator's hiring practices is timely and raises much broader issues I am observing in the mortgage banking market. The regulations and other changes spawned by the Dodd-Frank laws, coupled with recognition of the previously underestimated impact of repurchase claims and buybacks, have resulted in dramatic increases in the power of investors to control and dictate the internal operations of correspondents and brokers."

Brian's note continued. "Regulator focus on risk in vendor management and an oligarchy of large investors have accelerated this trend. As a practical matter, mortgage lenders dependent on the secondary market must adhere to the compliance and risk interpretations of their investors. You can hire and fire whoever you want, but if your primary investor doesn't like your hiring practices, they do not have to buy your loans. Likewise, you can seek to interpret the ambiguities of Dodd-Frank regulations (such as LO Comp or the QM points and fees test) with your own attorneys in the most favorable way to conform to your business, but if a key investor disagrees (or, perhaps worse, your systems vendor has programmed the issue differently) practically speaking, it doesn't matter what your attorney says. You may still be asked to buy back a loan if your interpretation makes the loan ineligible for sale to that investor. Ultimately, originators are forced to calculate whether the value of the relationship with the investor is more important than their preferred interpretation on these matters. In the past, these kinds of decisions were the province of the originator's internal risk analysis. Whether these developments are a good or bad thing, however, remains subject to further debate and examination." Thank you Brian - these are indeed different times.

Many believe that, since we're about 50% through Dodd-Frank mandated legislation, that counterparty considerations will rise to the top in 2014. For example, are you doing enough business with minority or women-owned businesses? How well do you know your escrow and closing agents? Secure Settlements, Inc. recently conducted its second annual confidential survey of thousands of lawyers, notaries, escrow agents and title agents to examine the status of closing professionals in the increasing regulatory environment. The recent survey, conducted January 13-17 comes nearly one year after the previous industry survey seeking similar information.  SSI uses data from confidential polling to support its mortgage industry pre-funding quality assurance risk management tools.  In the age of the Qualified Mortgage, data about personal experiences relating to the closing process is a critical element to understanding consumer and enterprise risk. Highlights of the poll included a) nearly 45 % of all business is being referred by real estate agents, up from 27% last year, and only 15% is coming from loan officers as opposed to 36% last year. This reflects the movement away from a refinance market to a purchase market where the source of business is more directly tied to the real estate industry; b) the rising cost of E&O and surety bonds are troubling many agents. More than 60% of agents polled are dissatisfied with the cost of their current coverage. This may be a reflection of the insurance market's increasing concern over historical losses surrounding escrow and closing fraud. A number of insurers have recently left the market altogether for legal, title and escrow liability insurance, increasing costs; c) nearly 20% of those polled actually witnessed fraud at a closing last year, up from 16% in 2012, while 36% were asked to commit fraud at a closing and refused to do so, up slightly from 33% last year.

As a reminder, the CFPB has released updates to its mortgage origination exam procedures and mortgage servicing exam procedures (link). The Supervision and Examination Manual provides guidance on how the agency conducts examinations. According to the agency the updates, "harmonize existing procedures for handling mortgage origination and mortgage servicing examinations with the revised interagency procedures that address the new mortgage regulations issued in January 2013, which have now taken effect." The exam procedures for both mortgage origination and mortgage servicing now cover final rules issued by CFPB through November 2013. These examination procedures will be incorporated into the Supervision and Examination Manual at a later date.

Back in September, the CFPB issued a final rule expanding the exemptions to the requirement that creditors create escrow accounts for a minimum of 5 years for certain first-lien HPML's. The rule broadened the exemption from the requirement available to certain small creditors that operate predominantly in "rural" or "underserved" counties. Instead of limiting the exemptions to such creditors that had operated predominantly in rural or underserved counties in the preceding calendar year, the exemption was broadened to include such creditors that operated predominantly in rural or underserved counties in any of the previous three calendar years. The change took effect January 1^st, which means that creditors will be able to qualify for the exemption in 2014 if they operated predominantly in rural or underserved counties in calendar years 2011, 2012, or 2013. The CFPB has added a list of rural and underserved counties for calendar year 2011 to the lists they had already posted on their website. To view that list.

In a smattering of training and events news:

Over the course of January 27th and 28th, Plaza Mortgage will be offering seminars on selling to the realtor market in Orlando, Tampa, Ft. Lauderdale, and Miami, FL.  Participants will learn about effectively prospecting, setting appointments, making sales calls, and implementing follow-up plans.  To register for Orlando,  Tampa, and for Miami.

The California Association of Mortgage Professionals is putting on its annual sales and marketing event in Newport Beach, CA on February 6th and 7th. Vendor management, Compliance Management Systems, LO comp, and compliance marketing all feature on the agenda.  To register, go here.

The SNL Knowledge Center will be hosting its Fundamentals of Banking Valuation educational program in Atlanta, GA on March 27th and 28th.  The course goes over key operating levers of bank financial statements, the primary ratios used to analyze banks, discounted cash flow modeling, capacity-to-pay/earnings dilution analysis, dissecting and interpreting a fairness opinion, and various best practices.  It is also eligible for CFA Institute and CPE continuing education credits.  To register and find out more, go to http://pages.snl.com/080PQS12300034C005PGl00.

The Oklahoma Mortgage Bankers Association will be holding its annual conference, titled "Break Through," in Tulsa, OK from April 21st-22nd.  Further details to follow.

The Maryland Association of Mortgage Professionals will be hosting several events over the next few months, the first being a seminar on mini-correspondent lending on February 6^th in Columbia, MD., and including its annual conference in April. More information and registration links can be found at http://www.mdmtgpros.org/.

On March 6^th, the 2014 Examiner Seminar will be held in Arnold, MD (register, followed by the 2014 Regional Conference of MBAs in Atlantic City, NJ from March 9-13^th.

This year NAMB's Ultimate Mortgage Expo will be held in New Orleans, LA from July 7-9^th and will focus on marketing, product development, and lead generation.  Sponsorship opportunities are available as well; see here for more information.

On January 28^th, MGIC will be offering a webinar on evaluating income and assets.  Participants will learn how to identify various sources of income and assets and document and calculate the relevant information.   Go here for more information.

The Ohio Mortgage Bankers Association will be hosting a series of webinars entitled "The Secrets of Top Producers in a Purchase Market" on February 4^th, March 4^th, and April 1^st.  A wide variety of topics will be covered, including referral sources, business models, working with realtors and financial advisors, and social media.  To find out more and to register, go to omba@ohiomba .org.

In conjunction with MBA Education, the Mortgage Bankers Association of New Jersey and the Maryland Mortgage Bankers Association will be offering a Compliance Essentials course designed specifically for smaller independent and community-based lenders.  The curriculum focuses on upcoming regulation and how to implement the necessary controls to comply.  To register, go to www.mbaa.org/.

Rates improved last week (the 10-yr closed at a yield of 2.74%) due primarily to some weak manufacturing numbers out of China. And if China slows down, watch out! We saw what the news did to stocks. But it is a new week, with new news including the FOMC monetary policy statement on Wednesday afternoon (more tapering?) and $106 billion in Treasury coupon supply, which includes a 2-year floating rate note, auctioned from Tuesday through Thursday. We'll have the first peek at Q4 GDP on Thursday and Chicago PMI and Personal Income on Friday. New Home Sales will come out today. Durable Orders, another important indicator of economic growth, will be released on Tuesday. Pending Home Sales will come out on Thursday. Personal Income, Core PCE inflation, and Chicago PMI manufacturing will be released on Friday. And there will be those pesky Treasury auctions on Tuesday, Wednesday, and Thursday. But the most significant economic report this week will be Thursday's release of fourth quarter Gross Domestic Product (GDP), the broadest measure of US economic growth.

In the early going rates are slightly higher. The 10-yr is at 2.76% and agency MBS prices are about .125 worse than Friday's close.

The average age of Realtors is 58, and for mortgage bankers it is 71. Okay, just kidding about 71, but here are some handy-dandy texting codes for seniors:

ATD - At the Doctor's

BFF - Best Friends Funeral

BTW - Bring the Wheelchair

BYOT - Bring Your Own Teeth

CBM - Covered by Medicare

CUATSC - See You at the Senior Center

DWI - Driving While Incontinent

FWBB - Friend with Beta Blockers

FWIW - Forgot Where I Was

FYI - Found Your Insulin

GGPBL - Gotta Go, Pacemaker Battery Low

GHA - Got Heartburn Again

HGBM - Had Good Bowel Movement

IMHO - Is My Hearing-Aid On?

LMDO - Laughing My Dentures Out

LOL - Living on Lipitor

LWO - Lawrence Welk's On

OMMR - On My Massage Recliner

OMSG - Oh My! Sorry, Gas

ROFL..CGU - Rolling on the Floor Laughing...Can't get Up!

TTYL - Talk to You Louder

WAITT - Who Am I Talking To?

WTFA - Wet the Furniture Again

WTP - Where's the Prunes

WWNO - Walker Wheels Need Oil

Hope these help! GGLKI - Gotta Go, Laxative Kicking in