For many red-blooded mortgage banking males, it will be hard to concentrate on lending when they know that Tipper Gore is now "available" since Tipper and Al Gore are now separated. But let's bear down, since mortgage traders are still reporting "below normal" trading volumes, whatever that means.

Today we have already had the weekly MBA Mortgage Application Survey for the week ending May 28, which showed apps about flat but purchase apps falling for the 4th straight week. We all know that the crisis in Europe will play out for many months, so volatility will be with us for quite some time. Currently it has benefited US rates, with the flight to quality. We still have our debt and budget problems, which are not going away, but Europe is dominating the news. Few expect rates in the next few months to move higher, given overseas problems.

The National Flood Insurance Program is back on the front burner, since it expired on May 31, and, to the best of my knowledge, starting yesterday the NFIP did not have authority to issue new or renewal policies. Flagstar told its broker clients that "new policies will not be able to be obtained until at least June 7th, 2010. Paid receipts accompanying flood applications must be dated prior to June 1, 2010." SunTrust told clients that "SunTrust will not purchase any loan where the structure resides in a Special Food Hazard Area without proof of flood insurance coverage in the loan file. Unless the borrower has obtained "private" flood insurance, the closing must be delayed until a declaration page is received for the required amount of insurance and the correct flood zone, or until such time funding for the NFIP is restored and SunTrust announces it will accept a copy of the application for national flood insurance along with a copy of the check for the premium."

If you believe that you live in a "distressed area" you can check to see if the government agrees with you. The 2010 list of distressed or underserved nonmetropolitan middle-income geographies came out for CRA purposes: HERE IT IS

It appears that the Midwest has fewer areas that fall into that category. And family-owned mortgage bankers that stick to residential lending basics (FHA- including 203K, VA, conventional, USDA, IHDA, and reverse mortgages) continue to grow, especially in the central United States. For example First Centennial Mortgage, which has been around for 15 years and has ranked among the Top Ten Lenders in the Country by Goldline Research, is continuing to become larger - great to see in this market. First Centennial's branch in Elmhurst, Illinois, is expanding and seeking experienced loan originators. Please contact Katina O'Connor at  for employment opportunities.

And while we're talking about the Central US, Mortgage Services III (out of Illinois) is acquiring Complete Mortgage in the Milwaukee area. (I think its competitor "Incomplete Mortgage" went out of business a while back.)

To the optimist, the glass is half-full. To the pessimist, the glass is half-empty. To the engineer, the glass is twice as big as it needs to be. Both Fannie Mae and Freddie Mac have been busy recently. A few weeks ago Freddie introduced the Freddie Mac HAMP Backup Modification and the Cap-to-Reinstate modification for HAMP-ineligible borrowers. Freddie Update.

Fannie Mae released its updated versions of their servicing guide to address problems with its "Allowable Time Frames for Completing Foreclosure" section.

Freddie announced its requirements for the HAFA plan, implementing the Treasury's "Home Affordable Foreclosure Alternatives" (HAFA) initiative. HAFA can be offered immediately to borrowers, but must be incorporated no later than August 1st. The government's intent with HAFA is to HAFA attempts to "mitigate the impact of foreclosure on borrowers and communities by encouraging the private sale of properties or the voluntary transfer of properties from borrowers to investors." Primarily intended for servicers, Freddie's update can be found HERE. In the same vein, Fannie also released its HAFA information for this program that serves borrowers who are eligible for a loan modification under the Home Affordable Modification Program (HAMP) but were unsuccessful in obtaining one. HERE IS THE FNMA UPDATE

Guild Mortgage told its brokers that "USDA Rural Development has now confirmed that the Agency will continue to accept and process application packages, and will issue Conditional Commitments subject to Congressional action. We may now close loans with this "subject to" verbiage. The agency has also announced increased guarantee fees of 3.5% for purchase loans and 2.25% for refinance loans. If a loan already has USDA's approval (Conditional Commitment / RD form 1980-18) without the "subject to" language, the loan is not impacted by this change. The guarantee fee amounts on approvals already issued will not be increased. Please note that USDA's automated underwriting system, GUS, has not yet been programmed to accept the higher guarantee fees, so loans will have to be manually underwritten and a hard-copy package sent to RD by Guild Mortgage."

Citigroup's CitiFinancial unit (not the same as CitiMortgage) will shut 330 of its U.S. branches and cut between 500 and 600 jobs in an effort to cut costs at the business and make it more attractive to potential buyers. This represents almost 20% of CitiFinancial's 1,833 U.S. branches. The company will stop making loans at another 182 branches. Effective July 1, CitiFinancial will no longer operate full-service branches in Connecticut, Nevada and Rhode Island although it will retain loan-servicing centers in those states.

Mountain West Financial "will not finance properties using the flipping polices outlined in Lending Bulletin 10-40 when the subject property is a 2 unit dwelling.  2 unit properties will be eligible for FHA financing only when the sales contract is dated at least 181 days after the acquisition date."

US Bank told its wholesale clients that, "Due to the unprecedented volumes taking place in the market U.S. Bank Home Mortgage Wholesale Division is anticipating a significant increase in our turn times..." Glad to hear that business is good. The NAR elluded this this problem this morning. READ MORE

SunTrust also told clients that it will require confirmation that certain parties to a conventional mortgage transaction are not found on the HUD Limited Denial of Participation List (LDP) and the General Services Administration (GSA) Excluded Party List, by accessing the websites reflected below. The GSA list can be found HERE and the HUD list HERE. Clients need to either check these lists themselves or hire a service to do so because "if any of the applicable parties are found to be suspended or debarred on the list, the loan is not eligible to be approved or purchased by SunTrust." And don't forget, with SunTrust and other lenders, "Information on applications and in the loan file must include - but is not limited to - any additional credit applied for or incurred during the application process and through loan closing. If any additional liabilities or an increase in existing credit is revealed during the loan application process, the Correspondent client is required to re-qualify the borrower based on this new information."

VA lenders should already be aware that government subsidies, including Section 8 Housing Vouchers, are ineligible with VA loan program or transaction type. Changes to the VA Lenders Handbook will appear on VA's Loan Guaranty website at and/or check out the VA's "What's New" web page at

Yesterday was yet another volatile day in the markets, with both stocks and bonds chopping around a range. Lots of eyes are on Friday's unemployment data, with estimates running between a gain in jobs of 500-600k, and the unemployment rate hovering in the high 9% area. Much of that gain in workers is due to census workers (I had a call last week from one, and I was asked to recount my entire day, minute by minute) but May will be the last month in which the Census adds to employment, as temps are released over the coming months.

A Virginia State trooper pulled a car over on I-64 about 2 miles south of the Virginia/West Virginia State line. When the trooper asked the driver why he was speeding, the driver said he was a magician and juggler and was on his way to Beckley, WV to do a show at the Shrine Circus. He didn't want to be late.

The trooper told the driver he was fascinated by juggling and said if the driver would do a little juggling for him then he wouldn't give him a citation. 

"But I sent my equipment ahead and don't have anything to juggle."

The trooper said he had some flares in the trunk and asked if he could juggle them. 

The juggler said he could, so the trooper got 5 flares, lit them, and handed them to him. While the man was juggling, a car pulled in behind the patrol car. A drunken good old boy from West Virginia got out, watched the performance, then went over to the patrol car, opened the rear door and got in. 

The trooper observed him and went over to the patrol car, opened the door asking the drunk what he thought he was doing.

The drunk replied, "You might as well take my a-- to jail, cause there ain't no way I can pass that test."