Here's a Planning & Scheduling Algorithm for any company: "Choose two: Good, Fast, Cheap."


An apparent consequence of Dodd Frank, MetLife Bank is for sale - but not the mortgage company. In a quote that tells it all, "MetLife Bank represented just two percent of MetLife Inc.'s first quarter 2011 operating earnings, and we do not believe it is appropriate for the overwhelming majority of our business to be governed by regulations written for banking institutions," said Steven Kandarian, president and chief executive officer of MetLife Inc. MetLife Inc. said that it is considering the sale of its MetLife Bank N.A.'s depositary business and eliminating the company's status as a bank holding company. The firm said it will still offer residential mortgages through its MetLife Home Loans business. AvoidingBankingRules

Yesterday the OCC officially took over the OTS, assuming responsibility for examining, supervising and regulating federal savings associations.

Here's something that one doesn't see very often: a bulk servicing sale. Whole Loan Capital, LLC is bringing to market a $553 million Fannie/Freddie/bank conventional servicing portfolio. 2,400 loans, $230k average balance, Investors: Fannie/Freddie - 71%; Wells & BofA - 26%, others - 2.5%, etc. For more information & metrics please email or shoot David Akre an e-mail at

Up in Atlanta, SunTrust Bank announced its second-quarter earnings. SunTrust reported a profit of $178 million, helped by slightly higher revenue but also reducing the amount it had set aside for bad debt (which reduced earnings then, but is now helping earnings). During the 2nd quarter SunTrust received permission to repay $4.85 billion it received under the U.S. Treasury's Troubled Asset Relief Program during the financial crisis. Loan-loss provisions fell to $392 million from $662 million a year earlier and $447 million in the previous quarter. Net charge-offs, of loans lenders don't think are collectible, were down at 1.76% from 2.57% and 2.01%, respectively. Nonperforming loans, or those near default, declined to 3.14% from 4.16% and 3.46%.

The commentary has been listing "new" correspondents, but readers should note that some companies, like Flagstar and Franklin American, also have long standing hybrid correspondent programs. Franklin American's, for example, is called the "Emerging Mortgage Banker" program and allows brokers to become the lender with FAMC prior loan approval.  This program is available through the wholesale channel in 48 states.  For information contact Holly Chase at

Last week the commentary carried the news that, "Prospect Mortgage will pay HUD $3.1 million to settle claims of kickbacks to mortgage professionals from the company's alleged 'sham joint ventures' on FHA loans, which is similar to Fidelity National Financial agreeing to pay HUD $4.5 million to settle kickback claims" and received this note from an originator: "It's great that HUD is pursuing justice for the referral 'donors.' But how about pursuit of the 'recipients' of these referral fees?  They are just as guilty and need to be made an example of.  I generate working referral partnerships through great service levels, and to this day, have never paid a referral fee in exchange for business.  But the fact that this practice still goes on is making it difficult to generate new relationships is a big problem for the ethical guys like me.  We need to level that playing field when it comes to these unethical practices."

A lender wrote, "What the NAR executives are saying proves what those of us on the lending side have always knows; that Realtors need more educating as to what lending is all about, or how to go about qualifying a borrower! To say that lending standards are to blame for the housing slow down reveals their lack of understanding of how lending has returned to actually qualifying borrowers. Many think that if they were allowed, Realtors would gladly create another real estate bubble, because it would profit them individually, and plunge is all even further into an economic disaster.  It is truly a sad thing that even as we are, obviously, still reeling from the abuses of the recent past, we have learned absolutely nothing and would repeat the same 'mistakes' all over again. And, to be honest, it's not just the Realtors; too many brokers and loan officers would do it all over again too. Prov. 26:11 'As a dog returneth to his vomit, so a fool returneth to his folly.'"

Mortgage rates are low and holding steady, but Bankrate recently announced that mortgage closing costs rose for a second straight year. The company said the average loan origination and title insurance fees on a $200,000 mortgage total $4,070, up 8.8% from a year ago. And the average bank/mortgage lender charges roughly $1,614 in loan origination fees, up 10.3% from last year. (Loan origination fees include services such as underwriting and loan processing fees, along with loan officer or mortgage broker compensation for closing the loan.) New Yorkers can legitimately chant, "We're #1, we're #1!"since it topped the survey again for the second straight year, with average closing costs of $6,183, followed by Texas at $4,944 and Utah at $4,906. The folks down in Arkansas are #50 with an average of just $3,378 on the survey's typical loan: a $200,000 purchase-money mortgage on a single-family home with a 80% LTV, excluding taxes, homeowners insurance, homeowners association fees, prepaid interest and other prepaid items.

In 2010, the Federal Housing Administration (FHA) changed the recertification requirements for FHA approved "supervised mortgagees," a category which includes institutions, such as banks, that are overseen by another federal regulatory agency. Now supervised mortgagees have a wide range of recertification requirements, which must be complied within 90 days of the end of the mortgagee's fiscal year. Thus, the first of the new recertification submissions (for those mortgagees whose fiscal year ended December 31, 2010) were due no later than March 31, 2011. Experts believe that given the problems that a tremendous number of approved mortgagees have had with satisfying what FHA's recertification office believes is required by the regulations and other guidance, it is extremely likely that a substantial number of the 1,400 supervised mortgagees will have their recertification submissions deemed inadequate. They predict that perhaps as many as 75% of those mortgagees are not in compliance, and warn of an increase in the number of Notices of Deficiency (NOD), which will lead to referrals to the Mortgage Review Board for mortgagees who do not come into compliance.

Speaking of which, what have HUD and the FHA been up to lately? A notice was sent out about FHA Credit Watch Termination (for origination approval agreements). To read this notice in its entirety please visit: CreditWatch and/or CreditWatchII. HUD also issued a final rule that made "technical corrections and certain clarifying amendments to HUD's RESPA regulations" now that it has some experience under its belt. To read this new final rule in its entirety please visit: FinalRule . Another final rule came out about minimum standards for licensing, NMLSR, and the SAFE Act: MinimumStandards.   


Just in time for summer reading on the beach, FHA published the Summer edition of the FHA Appraiser Newsletter or to find out more about FHA appraisals please visit Appraisals.

Originators of Home Equity Conversion Mortgages (HECM's) should know that the list of Frequently Asked Questions (FAQs) has been updated. Please visit FHA's HECM Lenders webpage to view the FAQs or please view the updated FAQs directly HERE .

And Mortgagee Letters have been issued the Condominium Approval Process, the Type I special forbearance program as it pertains to unemployed borrowers, and a few others. To read them go to CondoML .

This week was filled with housing-related news. The modest pop in housing starts (led by multifamily), was positive though most analysts believe that there is little reason to believe that the U.S. will see a real pickup in home construction any time soon. Housing Starts have been running well below long-term trend for over three years, and with good reason: the most recent data from the Census Bureau shows 13.4 million vacant homes, roughly 3 million above a normal market. Much of this is from the big increase in vacancies that we saw in 2005-2006 when overbuilding hit its peak. The fastest-growing category of vacancies is in homes that the owner would like to sell or rent but are currently "held off" the market, and it is yet another form of shadow inventory that will eventually have to be absorbed.

We also had the FHFA Home Price Index increase by .4% in May, the second consecutive monthly increase and better than the expected 0.1% increase. April's results were revised downward to a 0.2% increase from an initial estimate of a 0.8% increase.   Year over year, home prices were still down 6.3%, and the index remains 19.6% below its peak in April 2007 and roughly equal to the level of January 2004.

Rates crept up during the latter half of the week, mostly due to speculation that Greek bonds will receive some type of European guarantee. Just as investors move money during a "flight to safety," they move it out again when risk is reduced - and that is what we saw yesterday. So the EU side of the debt drama appeared to be making some progress as opposed to the US debt ceiling impasse. The 10-yr closed at 3.01%, and traders reported higher selling of mortgage-backed securities on the sell-off. There are no economic releases scheduled for today so the markets will stay focused on the deals being reached in Europe and in the US with an eye on what our stock market is doing. 

All you Need to Know about Government Bureaucracy & Complexity:

Pythagorean Theorem: 24 words.
Lord's Prayer: 66 words.
Archimedes' Principle: 67 words.
10 Commandments: 179 words.
Gettysburg address: 286 words.
Declaration of Independence: 1,300 words.
US Constitution with all 27 Amendments: 7,818 words.
US Government regulations on sale of cabbage: 26,911 words.     

If you're interested, visit my twice-a-month blog at the STRATMOR Group web site located at . The current blog takes a look at early actions taken by the new CFPB and the political situation affecting it. If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what's going on out there from the other readers.