“Papa was a rolling stone. And all he left us was a loan, loan, loan..." Liberties with the Temptations lyrics aside, it has been 43 years ago this month that the song was released and became a soul classic. Hopefully investors don't leave US Treasuries, and agency & non-agency mortgage-backed securities alone. (Like that segue?) The Federal Reserve tells us that non-US central bank holdings of these securities have dropped amid market volatility. Whether this is a response to concerns about a possible interest-rate increase by the Fed, market turbulence or other factors is unclear. And if foreign central banks are cutting back on their demand, that won't be good for prices of MBS. As if TRID isn't enough to worry about, right?

Let's turn to some upcoming events of note!

TRID isn't the only change shaking things up in our industry. New FHA guidelines will impact a borrower's ability to secure financing effective on September 14th. "After hosting a successful webinar on these major FHA guideline changes for thousands of industry professionals across the country, REMN wholesale will be hosting a free second FHA webinar for those of you who missed it - or simply can't get enough! REMN Wholesale continues to support its brokers in every way possible to allow their broker and banker partners to look great to their referral partners. Same-day turn times every day and their dedication to a superior broker experience requires ample staff at every level." REMN Wholesale is looking to recruit experienced AEs nationwide and underwriters in both its Iselin, NJ and Woodland Hills, CA offices. Resumes should be directed to recruiting@remn.com.

You are invited to listen in today on a live interview with Mortgage Coach founder Dave Savage and Dave Ramsey, America's "trusted voice on money", New York Times best-selling author, and one of the nation's top radio hosts with 8.5 million weekly listeners. "Dave Ramsey will share his view on how mortgage professionals can best help millions of families make confident mortgage decisions with better education of the loan process. This special guest interview marks the 400th professional coaching call event hosted by Dave Savage & Mortgage Coach. Today's event is open to all mortgage lenders and leaders: September 3rd, 12PM EDT, 9AM PDT. Registrations are limited, register here."

Many lenders are seeking additional training and information on consumer direct (CD) lending. CD has long been considered the "refi channel" but purchase lending has doubled over the past four years and many lenders feel that it will continue to increase. STRATMOR consultants agree with this and have been offering consumer direct workshops for the past several years, the last one in Chicago earlier this year. Demand for that event was so high that STRATMOR will host a Consumer Direct Lending Workshop in Chicago on September 22-24. This workshop typically attracts banking executives that manage direct sales or marketing for the direct channel tasked with cross selling mortgages to bank customers or with trying to acquire new customers through direct marketing. This workshop, led by Garth Graham, will cover historical and current 2015 production trends for the consumer direct channel, the cost to produce this business, productivity & a host of other operational metrics, and evolving marketing techniques including leverage of data and digital outreach. Find out more about the event at the link above; there is a discount for those who register by September 4.

The upcoming New England Mortgage Bankers Conference is coming up September 16-18 in beautiful Newport, RI. "The conference is one of the largest and longest-running industry trade shows in the nation, and although it is coordinated by 6 state MBA chapters in New England, it is not just a 'banker' show, but inclusive of all mortgage professionals and firms in the region, and serves as an annual reunion event. One of the featured programs is a 'candid discussion' Q&A with the fabled Brian Webster from CFPB."

And Todd Duncan's Sales Mastery event is coming up. In its 23rd year, Sales Mastery will be held from October 13-16 at the JW Marriott Desert Springs Resort and Spa in Palm Desert, California and is the longest running event in the mortgage arena. This event is led by host and keynote speaker Todd Duncan and includes speakers Darren Hardy (Founder of SUCCESS Magazine), Dave Liniger (Founder of RE/MAX), Tom Ferry (Top Trainer in the Financial Services Industries), Bill McDermott (CEO of SAP) and many more. The strong line up of keynote speakers is accompanied by mortgage industry experts and panels that include 12 Minute Speeches (breakthrough business ideas delivered in 12 powerful minutes), mortgage specific social media presentations, and Raising up the Next Generation discussions.

Turning to company news, yes, the Blackstone name has been associated with owning tens of thousands of single family homes, with PMAC, Gateway, Pinnacle, and Stearns. And now the private-equity company is entering the private mortgage insurance business by providing a loan to PMI for working capital and gains the right to take part in future equity offerings. The Golden Rule, right? He who has the gold makes the rules.

Mark Yoder, VP with Old Republic Credit Services, writes, "You listed a question from a reader that stated, 'Your readers should know that part of the new FHA guidelines starting next month require a credit report for the non-borrowing spouse, however, you can't order a credit report without a SSN.'  I did not see where credit was specifically addressed, but wanted to let you know that it is possible to get a credit report without having a social security number.  We, as a credit reporting agency, can request a report without an ssn if we have: Consumer's full name, Address (Must be in the United States), Date of birth, Copy of a photo ID, and Signed borrower's authorization. I don't know if this is helpful for you or your readers, but wanted to let you know that we can, in fact, do this under these circumstances."

And last week I published a note saying "Quicken came out with a handy-dandy grid on what is going to change for FHA." The information prompted Karen Deis to send, "I read the FHA comparison chart by Quicken and just wanted to let you know MortgageCurrentcy found 66 differences between the old handbook and the new handbook whereas Quicken found 55 changes. We also reviewed the 171 Q & A issued by FHA last month to insure that our updates were correct and clarified. We also released a video class outlining the 25 major ones that LO's need to know about." (Quicken has 55 changes - maybe management is quoting their overlays and not the actual changes?)

Plenty of heads turned this week when the Federal Housing Administration (FHA) re-released the Single Family Loan Level Certification for an additional comment period of 30 days and the Annual Certification for an initial comment period of 60 days. Dave Stevens with the MBA reports that, "Unfortunately, the language, as it's currently written, lacks clarity as to the insurability of a loan and doesn't embody a reasonable diligence standard for FHA underwriters, address the significance of any errors in terms of risk to the FHA, or allow for an opportunity for lenders to correct any mistakes, regardless of how minor they may be. This lack of clarity continues to leave the door open to possible enforcement actions, and also encourages additional federal agencies, other than FHA, to take action against lenders. Both the Loan Level Certification and the Annual Certification are available online. MBA will be submitting a comment letter on each certification in the near future and I encourage you to send any suggestions you may have to Tamara King at tking@mba. org."

HUD said the proposed revisions are also designed to provide greater clarity to lenders. Key proposals include a provision in the Loan level certification that requires lenders to certify they have completed a pre-endorsement review of all loans and that no deficiencies or defects were revealed that would render the loan ineligible for FHA insurance. There is added language to the loan level certification, requiring those directly involved with the borrower and the loan application to certify they have not participated in a prohibited activity. This proposal will be open for comment for 30 days. And a provision to the Annual Lender Certification requiring lenders to certify they have not been barred or suspended by any Federal department or agency, and that they have not been indicted or convicted of any wrong doing that would call into question their ability to carry out the responsibilities of the FHA program.

Last week, FHA announced the deployment of its anticipated supplemental performance metric to be used in assessing lender performance. Previously, the primary metric used by FHA to assess lender performance was a lender's compare ratio. (A lender's compare ratio compares a particular lender's rate of early defaults and claims for insured single family mortgage loans originated or underwritten by the lender in a specific geographic area with the rate of early defaults and claims for other lenders originating or underwriting insured single family mortgage loans in that same area. FHA evaluates all lenders with a compare ratio above 150% and may propose termination for lenders with compare ratios that meet or exceed 200%, and whose default and claim rate exceeds the national average. FHA also uses a lender's compare ratio to determine a lender's eligibility for FHA's Lender Insurance (LI) authority.)

The new system compares a lender's actual default rate against their mix adjusted default rate using FHA's benchmark seriously delinquent rate. But FHA's initial Credit Watch Termination evaluation based on a lender's compare ratio will not change. However, a lender's supplemental performance metric will now be considered as an additional factor in the total evaluation. FHA will now examine a lender's supplemental performance metric when considering action related to both its Credit Watch Termination Initiative as well as the issuance of LI authority.

Bopping over to the bond markets, not that rates moved much, but we had some news yesterday: Factory orders rose 0.4% in July, and ISM New York dropped slightly. U.S. Treasuries declined somewhat in a "curve-steepening sell-off" after Q2 productivity figures came out better than expected and the Fed's Beige Book noted reports of increasing wage pressures. Private-sector employers added 190K jobs in August according to ADP. Productivity growth in the U.S. economy for the second quarter was revised up to 3.3% from an initial estimate of 1.3%. The Fed's Beige Book showed modest to moderate growth in the 12 Federal Reserve Districts between July and mid-August.

But that was yesterday. Today we've learned that the August Challenger Job Cuts fell to 41k. Initial Jobless Claims clocked in at +12k to 282k for the week ended 8/29. July's Trade Balance showed a deficit of $41.9 billion. We wrapped up Wednesday with the 10-year sitting at 2.19% and this morning, after all these numbers, we're at 2.16% with agency MBS prices better by about .125.

Jobs and Announcements

Congratulations to United Fidelity Funding: this 20 year old company is celebrating the success of its California headquarters. "Longtime industry veteran, John Bell,  has built a well-capitalized and stable wholesale platform serving the West Coast with a combination of competitive pricing, a competitive comp plan, a full product menu and a core Ops Team that has worked together for over 10 years. United Fidelity is looking for only a small handful of highly professional and seasoned AEs and/or Sales Managers to work the entire state of California. (Management is open to bringing your entire team aboard as well.) United Fidelity Funding is a FNMA/FHLMC seller-servicer, offers FHA and VA, and is currently licensed in 18 states. It is not looking to be the biggest wholesaler in the West but they want to be a place where people love to come to work and will be treated incredibly well. All inquiries will be treated in absolute confidence and with utmost discretion." Please email your resume to Mike McCarthy or John Bell.

For anyone needing internal QC help, "a continued trend found in Fannie MORA exams shows that there's a huge internal audit deficiency in the market for mortgage companies. The challenge arises in that most mortgage companies don't have the resources, expertise, or time to set up an ongoing internal audit program.  With more than 300 lender/servicer/vendor audits in the last two years, MQMR, and its subsidiary company, HQ Vendor Management, and sister company, Subsequent QC, provide lenders with a fully outsourced program supported by a team of experts in operations, QC, servicing, vendor management, and compliance. MQMR's internal audit program begins with an in-depth initial risk assessment, followed by a customized 12-36 month audit plan, and ongoing testing." For more information, contact Casey Hughes (818.304.8395) or reach out to connect at the upcoming Motivity and RMQA conferences.