And so the debt ceiling legislation passes the House of Representatives and heads to the Senate. So the market's attention turns back to the fact that our economy is languishing, and thus rates are moving down. Evidence of the current economy comes through Central Falls, Rhode Island, which sought Chapter 9 bankruptcy protection as it struggles to meet pension obligations. "A petition was filed today after state officials failed to persuade police, fire and municipal employee unions to accept concessions and to get retirees to agree to lower benefits. The city asked the court to permit the rejection of union contracts. Are other local, state, and federal government issues that different from Central Falls'?

Switching tracks, a word of warning from an industry vet: "Rob, you should warn your readers to be leery of anyone still requiring compliance with the HVCC. The HVCC was eliminated by Dodd Frank.  It does not exist. You can't comply with something that does not exist. Dodd Frank and the GSEs require documented appraiser independence, which continues the spirit and legacy of HVCC, but the HVCC is gone."

Ally Financial reported a net income of $113 million for the second quarter of 2011, compared to $146 million in the prior quarter and $565 million for the second quarter of 2010. Ally's mortgage operations (which include ResCap and the mortgage activities of Ally Bank and ResMor Trust) are broken down into several segments. The Origination and Servicing segment reported second quarter 2011 pre-tax income of $47 million, down from 2010's $249 million, with the drop attributed to lower net servicing income, which was impacted by MSR valuation adjustments, lower production as a result of a smaller overall mortgage market, and compressed margins due to a shift in product mix and lower industry volume. Total mortgage loan production was $12.6 billion, up slightly from the 1st quarter but down from the $13.5 billion in the second quarter of 2010. Ally's "Legacy Portfolio and Other" segment, which primarily consists of loans originated prior to Jan. 1, 2009, reported a pre-tax loss of $174 million in the second quarter of 2011, compared to a pre-tax loss from continuing operations of $19 million in the corresponding prior year period. The big drop was due to a mortgage repurchase expense of $184 million.

The lenders cutting off RMIC continue. Citi sent its clients, "Correspondent pipeline loans with mortgage insurance issued by RMIC will be provisionally accepted however, all loans using RMIC for MI must be purchased by Citi no later than August 24 in order to meet Fannie Mae's pooling date requirements. (Note: there is no specific late date to register, however, time must be allowed for file process in order to meet the August 24 "purchase by" date.) RMIC has been removed as an approved mortgage insurer on Citi's list of approved MI companies. "In response to Fannie Mae's recent announcement, Franklin American Mortgage Company is suspending Republic Mortgage Insurance Company (RMIC) as an approved mortgage insurer effective immediately. Closed loans delivered with RMIC certificates must have a note date on or before August 31, 2011, must be delivered to Franklin American by September 16, 2011 and must be purchased by September 30, 2011, regardless of lock expiration." "Effective Immediately, MSI will not accept loans that are insured by RMIC. Loans currently closed/disbursed (on/before 8/01/11), not yet purchased by MSI: These loans must be purchased by MSI no later than 8/10/11. Loans in process, not yet closed/disbursed (on/before 8/01/11): These loans must have a new mortgage insurance certificate issued by an MSI-approved Mortgage Insurance Company to be eligible for MSI."

Here's a list you don't want to find your branch or company on: the FHA Mortgagee Review Board's roster of administrative actions against FHA-approved lenders who failed to meet its requirements. MRB sanctions against lenders include reprimands, probations, suspensions, withdrawals of approval, and civil monetary penalties. Charges against these companies run the gamut of FHA violations from failure to maintain and implement quality control (QC) plans, to failure to implement and follow HUD/FHA's Home Equity Conversion Mortgage (HECM) program requirements, to charging borrowers excessive and duplicative fees: AdminActions

According to MICA (Mortgage Insurance Companies of America) private mortgage insurers wrote $4.8 billion in new insurance on mortgage loans originated in June, up from $3.92 billion in May. MICA's members include Genworth, MGIC, PMI, Radian, and RMIC. Insurers under the MICA umbrella had $606.3 billion in primary mortgage insurance in force last month, down from $610.8 billion a month earlier. Insurers who are part of MICA received 28,214 applications for private mortgage insurance in June. Of that group, 24,161 borrowers ended up using private mortgage insurance to refinance or purchase a mortgage. During the same month, the companies also reported 45,573 defaults and 38,753 cures on troubled mortgages.

One of the trends in our industry over the last year or so has been a renewed interest in regional and special interest mortgage groups, and the conferences of those groups. For example, one such group is the Community Mortgage Lenders of America, which represents over 80 of the leading independent lenders in the country, generating an annual origination volume of over $100 billion in mortgage loans. "CMLA was founded out of the concern that emerging federal policies threaten to severely diminish community based lending, while increasing regulatory concentration to the detriment of competition and consumers. Typical CMLA member are both bank and non-bank community based lenders with a strong commitment to fundamental underwriting standards and prudent lending. The CMLA provides a critical voice for the middle market community lender who feels that many other advocacy efforts do not represent them as lenders or the communities in which they serve." If you're interested in learning more, shoot an e-mail to Kevin Cuff at, or check it out at

In New England, the 24th annual New England Mortgage Banking Conference (NEMBC) is gearing up for September 21-23 in Newport, Rhode Island. "Thriving in a Challenging in Market" is the theme ("Together we will navigate through the maze of industry challenges while identifying areas of opportunity. Learn more about the top regulatory issues facing our industry today such as Dodd-Frank, MLO Compensation and the Consumer Finance Protection Bureau and regulatory issues.") For more information contact Melody Bohl, Conference Director, at or go to NEMBC.

Another is the Mortgage Bankers Association of the Carolinas which is hosting its 56th annual convention titled "News You Can Use", September 23-25 in Myrtle Beach, South Carolina. Along with various speakers, educational opportunities, and exhibitors, there will be continuing education and ample networking time. Contact Rhonda Marcum at for more information.  Details are available at at "Upcoming Events".

Heading west, the Colorado Mortgage Lenders Association is having its annual meeting tomorrow and Thursday in Vail - for more information go to Colorado.

And farther west, the Pacific Northwest Mortgage Lenders Conference is September 18-20 in Portland, Oregon. "This annual conference is a unique opportunity for the mortgage professionals in the Northwest and across the country to gather, share insights and hear from some of the nation's leaders in our industry.  The guest speakers will cover topics that include regional and national economic forecasts, updates from FNMA, FHLMC, HUD and MI.  The national MBA will provide critical and timely updates on local and national legislative issues that affect our business. Go to PacNorWest.

GMAC's correspondents learned that New Jersey Title Insurance Company is no longer an acceptable closing agent, or provider of title insurance commitments/binders on loans delivered to GMACB. ("Loans delivered with New Jersey Title Insurance Company as the closing agent or title insurance issuing company are ineligible for sale to GMACB.") GMAC also tweaked its pricing for the 7/1 and 10/1 Non I/O ARM adjustment for High Balance and Super Conforming, moving it from -.250 to -.500.

Flagstar let its broker clients know that, "FHA statutory loan limits are expected to decrease on October 1, to pre- Housing and Economic Recovery Act (HERA) limits. Though FHA has not yet published the implementation process, we expect FHA to allow loans to close at today's higher loan limits provided credit approval is issued on or before September 30, 2011. Loan limit changes to our system will be ready to implement when the changes take effect. At this time, we have not determined a cut-off registration and/or submission date for loans that will be affected by the upcoming loan limit decrease."

Turning to "los mercados," it is almost as if the focus has already shifted from the US debt and deficit issues back to the fact that our economy is dragging. Yesterday the ISM manufacturing index, which is closely monitored for a gauge of manufacturing activity, plunged to 50.9 in July from 55.3 in June - way below expectations. Economists continue to cut their GDP forecasts for 2011 below 2% - stagflation? - and this latest nightmare in Washington DC won't help the consumer, the jobs market, or the housing market.  But every loan rep focused on refi's is pretty happy (assuming their clients are clean and have equity). Mortgage-backed securities were up/better about .375 yesterday on heavier-than-normal volumes. 10-year notes rallied 18/32nds and down to a yield of 2.74%.

People born before 1946 were called The Silent generation.

People born between 1946 and 1964 are called The Baby Boomers.

People born between 1965 and 1979 are called Generation X.

And people born between 1980 and 2010 are called Generation Y. Why do we call the last group Generation Y?

Y should I get a job?
Y should I leave home and find my own place?
Y should I get a car when I can borrow yours?
Y should I clean my room?
Y should I wash and iron my own clothes?
Y should I buy any food?