Here's one succinct note that I received regarding Reg. Z: "I am really sick of this comp crap."

Another wrote, "Next week will be very exciting, as LO's working at each company see and hear exactly what competitors' set up for pricing & margins for their LO's. Brokers will have to decide whether to receive more margin on each loan, and passing it on to their agents, or using slightly lower interest rates to keep volumes up - really not that much different than now, right? Some think that borrowers will end up paying most broker commissions because brokers can usually close a loan in 30 days or less, something many large banks wish they could do. But are borrowers, especially those who would have been better off with brokers helping to pay closing costs through an above-par price, really better off? No way."

"Who is kidding who here? Mortgage banks and brokerages are merely setting up 'quality bonus' or 'holiday bonus' plans with the extra monies that will in turn be paid out to top producers. Government interference only goes so far in determining pay - companies right and left are setting up funds to make up any shortfall in 'normal' comp levels."

And at this point it appears that tomorrow will indeed be D-Day. The U.S. District Court denied NAIHP and NAMB's motions for a temporary restraining order and preliminary injunction against the Federal Reserve's loan officer compensation rule. Call me uninformed, but I could almost hear a collective sigh of relief from all those companies that paid out thousands and an industry that spent millions of dollars in manpower and attorney fees in setting up plans geared for tomorrow. COURT RULING

If you want to look at the actual QRM, risk retention proposal, document that is now available for public comment, HERE IT IS

Regarding QRM one correspondent rep from a leading investor wrote, "Just a thought about the following quote from your commentary yesterday:  'The remaining origination volume is being funded through bank balance sheets, so is not affected by risk retention.' You may want to mention that many mortgage bankers don't think about who holds the risk once the loan is sold, and the statement is somewhat misleading.  Since 100% of loans that are funded on bank balance sheets are kept in the banks' portfolios, then all of the balance is definitely retained risk.  5% would be a welcome reprieve if a securitization market were to start up to purchase and participate in the remaining 95% interest."

The MBA weighed in on the QRM proposals. "...we have profound concerns about its implications for residential mortgage financing and the nation's economy today and for generations to come." I don't know exactly what that means, but one can see the entire post on MND. 

"What about jumbo loans? With the High Balance Conforming limit scheduled to drop to $625,000 in September this becomes a little more of an issue. Do you think this will effectively put mortgage bankers out of the jumbo business? At least as far as correspondent lending goes? That would seem to be the case. I suppose they could still broker jumbo loans but, I'm not sure that is really a viable alternative.  If so, a large drop in brokering jumbos could have some significant ramifications for certain markets."

The QRM proposals, now open to public comment, make things a little complicated for premium (above par) securities. One well-informed vet wrote, "To get around the retention of the IO, even if there is premium collateral, the subs will now have super yields and there will be no IOs created."

A few folks wanted some clarification on the different choices for lender-retained risk retention: horizontal vs. vertical.  A "horizontal" slice would require lenders to take a 5% first loss interest in the overall securitization structure, while a vertical, or pro-rata piece, would require lenders to keep 5% of every piece of it, such as subordinated and/or senior tranches. In other words, in the vertical retention option a bank would be required to retain 5% of each tranche resulting in the lender holding small pieces of each tranche. But in the horizontal risk retention option, a bank would be required to hold the 5% of the securitization that largely represents the first loss risk. And an "L-shaped" combination allows for some combination of the two.

And I received this note on Dodd-Frank: "If you asked a government official what the down payment is on an FHA loan, I bet they wouldn't have a clue nor would the press. Who believes in what half of what the press writes or says? The freedom of choice should not be underestimated. When a consumer buys a car, they have a wide choice of brands, and then dealerships. The same with clothes, hamburgers, gasoline, sports teams. My point here is that a consumer has the same options when obtaining a mortgage. But because some consumers are having problems making their mortgage payments, but have the option to shop around for the best rates and lowest fees, let's decide to punish an entire industry? At some time the consumer has to take responsibility as well - just like clothes or gas, where consumer shop around, they should do the same thing with a mortgage. If an individual walks into or calls a bank and just accepts their rate and their fees without comparing numbers with another bank that is that individual's choice, however they can choose to look elsewhere and compare numbers.  The banker that individual spoke to doesn't hold a gun to their head and say sign it or else.  That person has a choice. Which industry will be next?"

So let's look at a successful government mandated program, like HAMP. Oh, wait a minute. HAMP is floundering. Tens of billions of dollars remain unspent and hundreds of thousands of homeowners have been rejected. Tuesday the Republican-controlled House voted to kill the foreclosure relief program. But the Senate, which the Democrats control, will probably pursue a rescue. But, the program is grappling with, as American Banker points out, "weak oversight, conflicts of interest, mind-numbing complexity and poor performance by many participating banks."

But by one measure TARP appears to have worked. TARP (Troubled Asset Relief Program) received some good news yesterday when three banks (SunTrust, KeyCorp, and Financial Institutions) repaid $7.4 billion in TARP funds. Including these three, taxpayers have now recouped $251 billion from the TARP program in the form of repayments, dividends, interest and other income. "That exceeds the original investment Treasury made through those programs ($245 billion) by nearly $6 billion," the federal agency said. "Treasury currently estimates that bank programs within TARP will ultimately provide a lifetime profit of approximately $20 billion to taxpayers."

ALTA released some title insurance stats for the industry.  In terms of market share, Fidelity held about 38% of the market in 2010, First American had about 27%, Stewart 14%, and Old Republic clocked in at 11%. The rest was held by regional underwriters. The release can be found HERE

Which states accounted for the lion's share of title insurance premiums last year? California brought in $1.4 billion, down 6% from 2009, Texas $1.1 billion, up 5%, Florida $700 million, New York $664 million, and Pennsylvania $429 million. ALTA reported that 22 states and the District of Columbia reported increases in title insurance premiums last year. Check it out THIS PDF

Fannie Mae released news on its latest updates for mortgage insurance companies, including a list that any personnel charged with sending MI Disclosure Instructions and Released forms to each MI company probably already has printed and stapled on to their cubicle wall. It is the MI CONTACT INFORMATION

Over at Freddie, it provided an update for the effective dates and scope of the Uniform Loan Delivery Dataset (ULDD) requirements for Phase I, along with some additional details on key implementation dates to "support your transition from our existing loan delivery data requirements to the ULDD requirements." Although much of this doesn't happen until next autumn or winter, and setting specific dates nearly a year away may appear "iffy", look for investors to be making changes soon. And if you're asking yourself, "What the heck is ULDD?" you may want to visit FREDDIE.

GMAC Bank's correspondent clients using the Veros Platform to order appraisals now have a "Valuations Team located in our Fort Washington location. This team, comprised of licensed and certified appraisers, will conduct a due diligence on every appraisal ordered through the Veros platform. The review covers items such as, but not limited to: value validation, appropriateness of the comparable selection, adequacy of the market adjusters and individual adjustments to comparable sales, dates of sales, application of appraisal principles, etc." GMAC's clients also learned of the company's new 10 and 20 year terms on the FHA and VA Fixed Rate and High Balance product offerings.

Jobs and housing, housing and jobs... Yesterday the ADP jobs report, always of questionable predictive ability for Non-farm Payroll, came in about as expected. In recent months ADP has outpaced the NFP growth of late - it generally does a better job of capturing new business growth. Later in the day we had the third poor auction of the week, a 7-yr Treasury-note sale that came in around 2.90%. But despite the poor auction, fixed-income securities' prices were higher with the 10-yr down to 3.45%. There is a definite lack of mortgages hitting the market, and the demand is decent. So even though the 10-yr was up about .250 in price, MBS prices were up that and even more, which is unusual. Traders saw "heavy real money buying from domestic banks, insurance companies, REITS and Index accounts."

Today we already had Initial Jobless Claims. Expected to drop, Claims fell 6k to 388k, with its 4-week moving average coming in at 394k.  Rates are a little better, with the 10-yr down to 3.42% and MBS prices a shade higher.

An Italian grandmother is giving directions to her grown grandson who is coming to visit with his wife.

"You comma to de front door of the apartmenta. I am inna apartmenta 301. There issa bigga panel at the front door. With you elbow , pusha button 301. I will buzza you in. Come inside, the elevator is on the right. Get in, and with you elbow , pusha 3. When you get out, I'mma on the left. With you elbow , hit my doorbell."

"Grandma, that sounds easy, but, why am I hitting all these buttons with my elbow?

"What...You coming empty handed?"