A favorite topic at water coolers and trade desks is "How sports and entertainment stars, making millions every year, go bankrupt - can't they save anything?" Well, here's another story to shake your head over.

The small are becoming larger, and the larger are merging or buying. (Even the small are merging - too many reasons to do so, not the least of which are combining and leveraging legal and compliance staffs.) Yesterday Ocwen announced that it will acquire Homeward Residential Holdings (formerly known as American Home) including its servicing and origination subsidiaries for $588 million cash and $162 million in Ocwen convertible preferred stock. Ocwen (Newco spelled backward) has been rapidly expanding its servicing portfolio over the past few years through acquisitions of HomEq, Saxon, and Litton. It also made a bid for Aurora servicing rights which were ultimately sold to NationStar. The most recent addition of the Homeward mortgage servicing portfolio will make Ocwen one of the largest servicers in the subprime and Alt-A sectors. Homeward (think Wilbur Ross) services approximately $77 billion (422,000 loans), which will be added to Ocwen's servicing portfolio of $128 billion residential assets (811,000 loans). Analysts point out that the servicing practices of the two institutions are similar in many respects, although Ocwen tends to be more aggressive about its modification practices while American Home has shorter liquidation timelines.

Oceanside Mortgage Company, a direct lender based out of Forked River, NJ is looking for FHA DE Underwriters to add to its existing staff. Oceanside is a 100% retail lender, licensed in 16 states and based in NJ funding approximately $40 million per month of FHA loans. (The company's website is www.yourfha .com.) The company has been in business since 1997 and focuses on FHA loans. Local candidates are preferred, but remote candidates will be considered. Please contact Steven Stone at sstone@yourfha .com for more information.

And on the other side of the country, Kinecta Federal Credit Union continues to grow its business and is holding a Job Fair Open House at their El Segundo, California Operations Center on Saturday, October 6 from 10:00 am - 2:00 pm.  Managers will be on site to interview qualified candidates for a variety of mortgage sales and operations positions, including Mortgage Loan Consultants, Account Managers, a Mortgage Loan Operations Manager, Sr. Underwriters, Underwriting Assistants, Sr. Funders and Document Drawer Administrators. They will also be interviewing for open positions in other departments for Consumer Loan Officer, Telephone Service Representatives, Member Service Representatives for Kinecta and Customer Service Representatives for their Nix Financial Services organization.  Go to www.kinecta.org homepage and click on the link for the Kinecta Open House Job Fair for address and details.  Also from the kinecta.org home page, click on the Careers tab to view all open positions with descriptions. Qualified candidates can apply online if they are not able to make the Saturday Open House Job Fair.

No, the government just can't stay away from housing. In the debate last night, Romney actually brought up the QM question! Apparently this was a direct result of a visit with Stearns Lending a few weeks ago in Southern California: well done! Here is a write up of housing in the debate.

Yes, the government has teeth. Yesterday we learned of some multi-million dollar fines. Remember that recently the FDIC and the CFPB announced a joint public enforcement action with an order requiring Discover Bank to refund approximately $200 million to more than 3.5 million consumers and pay a $14 million civil money penalty.  This action results from an investigation started by the FDIC, which the CFPB joined last year.  The joint investigation concerned deceptive telemarketing and sales tactics used by Discover to mislead consumers into paying for various credit card "add-on products" - payment protection, credit score tracking, identity theft protection, and wallet protection. Any company, large or small, that thinks they're above being fines is dead wrong.

Which leads us to another story on size. Too big to fail? Hah! The FDIC Summary of Deposits report finds institutions with $10B or more in assets now control 74.4% of all deposits (as of Jun 30) vs. 72.4% a year prior. And you can bet those big banks are earning big bucks, thanks in large part to the government helping with refinance programs and in keeping rates low. Here you go.

Investment banker Keefe, Bruyette & Woods has been monitoring the dividend activity of banks. "In 3Q12, bank dividend actions continued to favor increases, with 44 banks raising, initiating or reinstating their dividend versus 5 banks cutting, omitting or suspending their dividend. Of these 44 banks, 25 were TARP recipients that fully repaid their TARP investment. Since 2011, 147 banks engaged in 264 dividend increases (inclusive of initiations and reinstatements)."

And with those earnings comes a note from a broker. "It's laughable that the CFPB finds it necessary to 'control' compensation for originators while CEO's and upper management rake in millions and millions.  Do you think the CFPB will address management or corporate compensation next, I mean really?  Surely limiting earning opportunity for the little guy only leaves more for the big guys.  This administration talks about opportunity for the little guy, but their actions (via their legislation) are creating something completely different from what made this country great."

Should George Clooney not be allowed to act because he's too good looking? Michael Phelps be banned from the pool? Should Freddie Mac not be allowed to provide loans to investors that are buying homes in foreclosure to rent them out because, as the FHFA says, Freddie's cheap debt would make it difficult for banks to compete for the growing number of buyers of foreclosed homes? What am I missing here? Wouldn't anything like this help the housing market? Why should A-paper borrowers have lower interest rates than subprime borrowers? Should the interest rate Coca Cola pays on its debt be the same as Chrisman Screen Door Company? The FHFA also worries Freddie's involvement would deepen the government's involvement in housing. The question comes up, of course, whether or not the rate incentives exceed what is allowed by current regulations. Remember when builders would put a Porsche in the garage for new homebuyers?

But properties must be disposed of, and the FHFA announced that the Cogsville Group, LLC is the second successful bidder in the agency's owned real estate (REO) pilot initiative.  The group has purchased 94 properties held by Fannie Mae in Chicago.  According to FHFA all properties were sold near or above market value. Nearly a month ago it came to light that the first investor group to purchase through the program was Pacifica Companies, LLC which bought 699 Fannie Mae properties in Florida.  At that time FHFA said that 541 properties in Atlanta were not awarded and will be evaluated for disposition through Fannie Mae's retail sales operation or through future structured transactions.

And a story in today's Wall Street Journal notes that "Blackstone Group has become the biggest U.S. investor in single-family rental homes by spending more than $1 billion since the start of 2012 to acquire more than 6,500 foreclosed houses in eight metropolitan areas, and the firm also is finalizing a loan for at least $300 million from Deutsche Bank to support this business. People involved in the market estimate that private-equity firms and other investors have raised $6 billion to $8 billion to invest in the sector, as they try to take advantage of prices that have fallen nationwide on average by more than a third. That could buy 40,000 to 80,000 properties, according to a recent report from Keefe Bruyette & Woods. Of course, success is by no means assured for private-equity firms, especially given their high targets for investment returns in general and their lack of experience with this type of real estate."

Things are alive and well in the REIT biz. JAVELIN Mortgage Investment Corporation (JMI) announced plans to raise $150 million in its IPO and concurrent private placement. The company has priced its initial public offering of 7,250,000 shares of common stock at $20.00 per share, raising $145 million in gross proceeds. "The Company intends to use the proceeds from the offering and concurrent private placement to acquire its target assets, which consist of residential mortgage-backed securities issued or guaranteed by U.S. Government-sponsored entities, residential mortgage-backed securities that are not issued or guaranteed by U.S. Government-sponsored entities and other mortgage-related investments." New York Mortgage Trust, Inc. recently announced an underwritten public offering of 13.5 million shares to increase its liquidity. "New York Mortgage expects to utilize the proceeds to acquire certain assets of the company including agency residential mortgage-backed securities (RMBS) and certain commercial mortgage-backed securities collateralized by multi-family loans." Western Asset Mortgage Capital Corporation announced that it closed a public offering of 13,800,000 shares of its common stock, including 1,800,000 shares pursuant to an option that was fully exercised by the underwriters, at a public offering price of $22.20 per share, for total net proceeds of approximately $301 million after deduction of underwriting discounts and commissions and estimated expenses. "The Company intends to use the net proceeds of the offering primarily to purchase Agency RMBS (residential mortgage-backed securities for which the principal and interest payments are guaranteed by a U.S. Government agency or sponsored entity) and may, at opportunistic times, also purchase its potential target assets."

Rates go up a little, down a little. Yup - hard to move much higher with the Fed buying twice the daily production. But early on Wednesday 3% securities (pretty much what rate sheets are tied to) were worse versus Treasuries due to heavy originator supply. Huh? The Federal Government will buy it! Traders reported that early on that they had seen "very little buying outside of the Federal Reserve in 3.0s." Investors were spooked by the high refinance numbers and prepayments - all they have to do is call an originator, who will tell them that they are refinancing the same borrower they refinanced six months ago! Of course prepayments are going to be high.

Tradeweb reported that originator selling was 136% of the 30-day moving average for the dealers they track. By the end of the day prices on 3s through 4s were down 4-6 ticks, or about .125, and the 10-yr closed nearly unchanged at 1.62%.

But that was yesterday - what about today and tomorrow? We have Jobless Claims, which are expected to increase to 370k from 359k. At 10AM EST are Factory Orders for August, projected at -5.8% from +2.4%, at 11AM next week's Treasury auction amounts are announced, and then, at 2PM EST the FOMC minutes hit. Eyes will be focused on what happens on 1/1/13 when Twist ends - will the Fed announce more asset purchases to keep the monthly total at the present $85B pace? And what are the key "trigger points" at which QE3 will be adjusted - is there a specific unemployment rate Fed officials are coalescing around (i.e. under 7% or above 9%)? In the early going rates are nearly unchanged from Wednesday afternoon, which were pretty close to Tuesday afternoon...

On the outskirts of a small town, there was a big, old pecan tree just inside the cemetery fence.  One day, two boys filled up a bucketful of nuts and sat down by the tree, out of sight, and began dividing the nuts.
"One for you, one for me, one for you, one for me," said one boy.  Several dropped and rolled down toward the fence.
Another boy came riding along the road on his bicycle.  As he passed, he thought he heard voices from inside the cemetery.  He slowed down to investigate.  Sure enough, he heard, "One for you, one for me, one for you, one for me..."
He just knew what it was.  He jumped back on his bike and rode off.  Just around the bend he met an old man with a cane, hobbling along.
"Come here quick," said the boy, "You won't believe what I heard!  Satan and the Lord are down at the cemetery dividing up the souls!"
The man said, "Beat it kid, can't you see it's hard for me to walk."  When the boy insisted though, the man hobbled slowly to the cemetery.
Standing by the fence they heard, "One for you, one for me.  One for you, one for me."
The old man whispered, "Boy, you've been tellin' me the truth.  Let's see if we can see the Lord...?"
Shaking with fear, they peered through the fence, yet were still unable to see anything.  The old man and the boy gripped the wrought iron bars of the fence tighter and tighter as they tried to get a glimpse of the Lord.
At last they heard, "One for you, one for me. That's all. Now let's go get those nuts by the fence and we'll be done."
They say the old man had the lead for a good half-mile before the kid on the bike passed him.