As we approach October and the usual slate of mortgage conferences, attendees should know that there is a new development in alcohol. California winemakers realize that the mortgage banking management segment is aging so vintners in the Napa Valley area, which primarily produce Pinot Blanc, Pinot Noir, and Pinot Grigio wines have developed a new hybrid grape that acts as an anti-diuretic.  The new wine is expected to reduce the number of trips older people have to make to the bathroom during the night. The new wine will be marketed as PINO MORE. Ask for it at the conference hotel bar.

J.P. Morgan Chase, the #3 volume mortgage lender after Wells and BofA, announced that it will freeze foreclosures in 23 states because of "flawed paperwork". First #5 GMAC, now #3 Chase - watch for other servicers to follow. This will affect 56,000 borrowers where allegations of forged documents and signatures and other similar problems are being used to try to overturn court-ordered evictions. Rating agency Fitch said it is considering whether to lower the grades it gives to the mortgage servicing divisions of the nation's largest lenders. READ MORE ABOUT THESE ISSUES

In a related issue, RealtyTrac estimates that banks will take over a record 1.2 million homes this year, up from around 1 million last year and about 100,000 in 2005 before the housing bust. The company also noted that foreclosed homes accounted for 24% of all second-quarter sales, at an average price discount of more than 26 percent compared with homes not in the foreclosure process. In a "normal" market, foreclosure sales account for less than 5% of total sales - but for the next few years look for something in the 25-30% range.

Some folks out there are clever, but for all the wrong reasons. It is rumored that real estate and mortgage licensees have become the target of a scam. An individual, claiming to be a representative of the Division of Real Estate, is calling licensees and telling them that they have failed to respond to a notice sent out by the Division informing them that they are required to submit updated fingerprints. The individual warns that, due to this failure to respond, the licensee's license is going to be suspended. The individual then claims that this is a courtesy call from the Division, that the licensee may pay a small fee to avoid having his or her license suspended, and that the fee can be paid over the phone by credit card. It was reported to me that the Division will never contact any licensee and ask for a credit card number over the phone. The only licensees who are being required to submit updated fingerprints at this time are mortgage originators who are establishing their records in the nationwide mortgage licensing system (NMLS). All required payments for this fingerprinting are handled through the NMLS website, NOT over the telephone, and anything different should probably be reported to the Division of Real Estate.

If and when I go to find another home loan, is Zillow going to set the rate? Is Zillow going to underwrite it? (Sorry - venting a little here.) In a report that some would say is "Big Brotherish", according to research by Zillow Mortgage Marketplace, done with, any potential borrower with a credit score less than 620 is unlikely to receive a 30-year fixed-mortgage, even if they offer a relatively high down payment. Yet, according to, 29.3% of Americans have a credit score below that number. Zillow tracked over 25,000 loan quotes and purchase requests in the first half of September, and potential borrowers' credit scores 720 or higher received the lowest interest rates on Those with credit scores below 620 received too few loan quotes to calculate the average APR, Zillow said. The question is, "Should anyone with a low credit score be able to receive a home loan from a mainstream lender?" And if they can't, is that news?

How does one sell 191,000 properties? And why would the market ever believe that Fannie and Freddie selling them would have no impact on the real estate market? Fannie Mae has once again upped the ante to encourage home buyers to purchase, and real estate agents to market its REO properties. It is estimated that Fannie Mae and Freddie Mac, the two government sponsored enterprises (Enterprises) currently in conservatorship, own a combined 191,000 properties taken through foreclosure. Fannie Mae markets its REO through a program called HomePath Properties. Under the new incentive program, owner-occupants and public entities that buy a HomePath Property between now and the end of the year can receive up to 3.5 percent of the purchase price in closing cost assistance. The funds can also be used to purchase a home warranty. Properties bought from pools, at auction, or by investors are not eligible. The sale must close within 60 days. MORE DETAILS

Yesterday I had a survey that showed how residential loan officer salaries had moved higher by 17%. An experienced agent wrote, "Residential lenders may be getting a salary increase, but with the new laws and regulations put in place they traded their commissions (as much as 45% of their income) for a 17% increase in salary. In reality residential lenders have taken anywhere from a 25%-35% cut in their annual income. The question that really needs to be asked is, 'What is this going to do to the lending institutions?' Retail lenders (true loan officers) have an entrepreneurial spirit, and with the decrease in their pay I would expect more to leave - but who is going to do their jobs? Who has the experience to get the loans closed - hourly workers in banks? This is an extremely high stress job and as a lender one needs to really know the business, especially today with all the new guidelines. The idea that law makers and politicians have who think cutting our pay is a great idea to protect the consumer is idiotic. The only thing they have done is put this industry in more jeopardy than it was before. Your major investors and shareholders of these companies are the only winners in this entire debacle."

And regarding suggested mass government-backed refinance plans: "The focus of all the intervention by the government so far has been to 'aid' those at the bottom end of incomes while ignoring the power house of the economy - the middle class consumer. Hence the stagnation of consumption and continuing job losses. As little as the 'mass refi' would do for my pocketbook as an LO in the short run, it would stimulate the pockets of those middle class consumers and get the economy rolling. Re-employment creates demand, demand creates even more employment but most of all, house values would go up and foreclosures would decline - not to mention people trading up their houses (which would bring LOs back into the picture). The hardest question is how do we get those guys in DC to understand that the answers don't have to be complex and to change their focus?"

Lastly, an originator from Southern Capital Mortgage Group out of Georgia wrote to say, "We do HARPs all the time with 2nd mortgages.  Most lenders are agreeing to re-sub, though sometimes freezing them, etc., but one is able to do a HARP refi with sub financing."

Back to the markets! Wednesday $2.4 billion in MBS's crossed the wires, and unfortunately selling interest outweighed buying interest and by the end of the day the 10-yr closed at 2.51% and 30-yr current coupon mortgages were worse between .250-.375. A few investors had price changes. On the plus side 7-yr notes were sold at a record low yield of 1.89%, which was below the previous low of 1.989 pct set in August. Markets can be like springs, and the fact that the 10-yr note's yield has fallen more than 25 basis points was enough reason for some profit taking.

We've already had Jobless Claims, which were better than expected at 453k, and the 4-week moving average was down about 6,250. Sure, the fact that it is less than 475 or 500k is good, but it is generally thought that weekly jobless claims like this are not strong enough to really help the economy. We also had the GDP (Gross Domestic Product) number for the 2nd quarter came in +1.7%, slightly better than the +1.6% that was originally reported. Stocks are pointing higher, the 10-yr is sitting around 2.55%, and mortgages are 25bps worse.  READ MORE SEE CHARTS


Men Are Just Happier People - what do you expect from such simple creatures? Your last name stays put. The garage is all yours. Wedding plans take care of themselves. Chocolate is just another snack.  You can never be pregnant. You can wear a white T-shirt to a water park. You can wear NO shirt to a water park. The world is your urinal. You never have to drive to another gas station restroom because this one is just too icky. You don't have to stop and think of which way to turn a nut on a bolt. Same work, more pay. Wrinkles add character. Wedding dress $5000. Tux rental $100. People never stare at your chest when you're talking to them. New shoes don't cut, blister, or mangle your feet. One mood all the time. Phone  conversations are over in 30 seconds flat. You know stuff about tanks. A five-day vacation requires only one suitcase.  You can open all your own jars. You get extra credit for the slightest act of thoughtfulness. If someone forgets to invite you, he or she can still be your friend. Your underwear is $8.95 for a three-pack. Three pairs of shoes are more than enough. You almost never have strap problems in public. You are unable to see wrinkles in your clothes. Everything on your face stays its original color. The same hairstyle lasts for years, maybe decades. You only have to shave your face and neck. You can play with toys all your life. One wallet and one pair of shoes - one color for all seasons. You can wear shorts no matter how your legs look. You can 'do' your nails with a pocket knife. You have freedom of choice concerning growing a mustache. You can do Christmas shopping for 25 relatives on December 24 in 25 minutes. Car mechanics tell you the truth.