Today the village of Plato, Mo., (population 109) will celebrate its selection as the "2010 Census Center of Population" with a little party. "The mean center of population is the point at which an imaginary, flat, weightless and rigid map of the United States would balance perfectly if all 308.7 million residents are counted where they live and all weigh exactly the same." (Pass the Twinkies so that I can shift it west.)

Don't do the crime if you can't do the time. Former mortgage broker Michael Pahutski was sentenced in federal court Friday to 19 years in prison.  It is not a funny topic, although in this fellow's mug shot it looks like he just remembered certain prison-movie scenes. 19YearsinaBunkBed

The largest banks, which are also pretty much the same as the largest servicers, are sitting on huge amounts cash. There are various reasons for sitting on cash, but one of them is, "Citing potential fines and penalties related to its mortgage practices, Wells Fargo raised its reserves for legal expenses by 42 percent to a maximum of $1.7 billion, according to a filing with the SEC. LawyersAren'tCheap

These larger investors have also been either laying off or shifting employees into servicing roles to handle legacy loan issues. But there are companies that are indeed expanding, especially in the retail sector. As an example, National Residential Mortgage (NatRes) is looking for retail LO's from Illinois down to Texas and west to the shores of the Pacific Ocean. NatRes is a part of Heartland Financial USA Company, a publicly held company with $4 billion (yes, with a "b") in assets which owns ten banks and has a successful retail mortgage platform that's in the midst of a major expansion. NatRes' LO's are able to lend in all 50 states with no licensing requirements. The company offers the standard agency products - but with a twist. It will soon be a GNMA issuer, which is interesting, and also offers a jumbo product through a Wall Street conduit. If you're interest or know someone who is, contact Richard Pierce at

It is not often that lenders have the potential of less paperwork. Small lenders noted that HUD recently waived the requirement that they submit annual audited financial statements to HUD. The requirement states that supervised lenders seeking FHA lender approval or renewal must electronically submit audited financial statements to FHA within 90 days of their fiscal year end.  The waiver which goes through next April and which NCSHA sought in comments to HUD, suspends the requirement for a calendar year only for supervised lenders that possess less than $500 million in assets. Supervised lenders that qualify for this waiver must complete all other approval and renewal requirements, including submitting the online certification and paying the renewal fee.  In addition, the waiver does not apply to the requirement that supervised lenders submit an independent auditor's opinion of internal control and compliance with HUD programs. FHAFinancials

Fannie Mae also announced that effective June 1 servicers are no longer required to submit Form 571 requesting payment of incentive fees for eligible pre-foreclosure sales and deeds-in-lieu of foreclosures closed in HSSN. Instead, servicers will receive payment of approved incentive fees once per month during the month following the pre-foreclosure sale or deed-in-lieu of foreclosure. Fannie Mae also announced that it is modifying the Servicing Guide to account for an extension of the expiration of stay of foreclosure proceedings and other legal proceedings pursuant to the Helping Heroes Keep Their Homes Act of 2010. Until December 31, 2012, foreclosure and other legal proceedings on eligible mortgage loans must be stayed for nine months following the termination of a service member's active duty. Here is the announcement: Form571 

Fannie Mae also announced that it will seek $8.5 billion in Treasury Department aid to balance its books after reporting a $6.5 billion loss in the first quarter. Fannie Mae is requesting the money to eliminate a net worth deficit of $8.4 billion for the three-month period that ended March 31. The first-quarter loss was partly attributable to a $2.2 billion dividend payment to the Treasury, along with credit losses and expenses for bad loans totaling $11 billion.

My Mom always told me that I should be an astronaut. NASA Federal offers 100% LTV mortgage with no private mortgage insurance. Don't believe it? Here you go: NASA

If one's town had 1 foreclosure in 2009 and then 2 foreclosures in 2010, statistically foreclosures were up 100% (doubled). Increases in commercial and multifamily loan originations is a fine thing, but keep in mind where the numbers were a year ago. MBAACommercial

As announced in 2008, Wells Fargo's Mark Oman is talking retirement. If anyone is interested: MarkOman

Fifth Third, echoing the FEMA website mentioned in the commentary last week, noted Disaster Areas in over 60 counties in five states: Alabama, Tennessee, Arkansas, Mississippi, and Georgia.

Flagstar (#10 lender in the 4th quarter with a 1.7% market share) recently told brokers that Florida properties are exempt indefinitely if the NMLS application was submitted prior to 12/31/10. (Proof of NMLS status and date is required to be provided with each file when submitted to underwriting.) The investor also reminded brokers of its pre-funding QC review process implemented last July. "On a daily basis, Flagstar Bank randomly selects loans that have reached a Final Approval Clear to Close status and will review these loans." Flagstar Bank is making several updates and pricing adjustments to the Guaranteed Rural Housing program, LO comp-related policy & system enhancements, Calyx-related changes since it has released its latest update to Point, Loantrac changes regarding submitting a TBD loan to underwriting where a GFE and TIL were not disclosed to the borrower, etc. Flagstar continues "to require FHA Sponsored Originators (TPOs) and FHA Authorized Agent correspondents who are not approved for appraiser independence compliance to order all new FHA appraisals through Loantrac Appraisal Management. Lenders were pleased a few weeks ago when "Flag" lowered its minimum credit score requirements for VA transactions to 600.

Flagstar is also embarking on an FHA training program, mandatory for those who are applying for FHA Sponsored Originator approval with Flagstar. "Customers who were converted from FHA-approved Brokers or Correspondents to FHA Sponsored Originators on January 1, 2011, are not required to take this class." Live Webex classes have been scheduled for May 11 and May 23 - check with your rep for registration details. Flag also recently sent out notices reminding brokers & correspondents that it is their responsibility to warrant the subject property is in an acceptable condition at the time of delivery, improving the price adjustments on the Fannie and Freddie 10-Year and 20-Year products, and stated that "all loan fundings will be temporarily suspended for properties in Memphis and Millington Tennessee. When funding resumes, a property re-inspection will be required for loans with appraisals dated on or before May 6."

Bank of America correspondent clients were notified that, due to HUD Mortgagee Letter 10-36 which eliminated the requirement that the sum of all liens not exceed the geographical maximum mortgage limit for both purchase and refinance transactions, for BofA's clients only FHA-insured first liens are subject to FHA maximum mortgage limits.

SunTrust Mortgage (#11 in the 4th quarter of 2010) is revising the non-permanent resident alien guidance to include additional visa classifications, additional requirements for an expiring visa or an expiring I-797 Notice of Receipt/Notice of Approval, and alternative income documentation requirements for clients who do not have to file US tax returns. The investor is also releasing a series of bulletins associated with internal Quality Assurance audit results in an effort to show clients a "best practices" way of (this month) handling AUS loans closing but not consistent with the final AUS run with the investor, income calculation/documentation for non-verbal VOE, and limited denial participation and general services administration verification.

On to the markets and interest rates! For market-moving scheduled economic news this week, today we will have zip, tomorrow are import & export prices, Wednesday are some trade figures, Thursday things pick up with the Producer Price Index, Retail Sales, and Jobless Claims, and on Friday the 13th is the Consumer Price Index. That all being said, eyes appear to be more on volatility in commodity prices, especially after the killing of Osama bin Laden which helped trigger the commodity selloff. Commodity prices were already poised to fall, reflecting recent interest rate hikes in China and India, designed to cool those economies off, as well as higher margin requirements on certain metals trading, most notably silver.

Friday's Non-Farm Payrolls was a surprise with 244k jobs (268K in the private sector) but the unemployment rate did tick up by .2%. Recently 10-yr Treasury notes hit their lowest yields of 2011 (3.13%) and agency MBS prices are indeed good. But this week is a new week, with the economic news listed above along the refunding supply starting tomorrow with $32 billion in 3-yrs, $24 billion 10's, and $16 billion 30s. The 10-yr is at 3.17%.


Mrs. Ravioli comes to visit her son, Anthony, for dinner. He lives with a female roommate, Maria. During the course of the meal, his mother couldn't help but notice how pretty Anthony's roommate is.

Over the course of the evening, while watching the two interact, she started to wonder if there was more between Anthony and his roommate than met the eye. Reading his mom's thoughts, Anthony volunteered, "I know what you must be thinking, but I assure you, Maria and I are just roommates."

About a week later, Maria came to Anthony saying, "Ever since your Mother came to dinner, I've been unable to find the silver sugar bowl. You don't suppose she took it, do you?"

"Well, I doubt it, but I'll email her, just to be sure."

So he sat down and wrote an email: "Dear Mama, I'm not saying that you 'did' take the sugar bowl from my house; I'm not saying that you 'did not' take it. But the fact remains that it has been missing ever since you were here for dinner. Love, Anthony.

Several days later, Anthony received a response email from his Mama which read: "Dear son, I'm not saying that you 'do' sleep with Maria, and I'm not saying that you 'do not' sleep with her. But the fact remains that if she was sleeping in her own bed, she would have found the sugar bowl by now. Love, Mama"