A friend who was in the mortgage business wrote to me and said, "I figured at some point I may want a real job. So I spoke with a recruiter who posed a question that I wasn't sure how to answer, or was able to see the relevancy. 'Do you have a Facebook page?' 

It's come down to that, huh? Ten years of professional work experience, BA/MA in economics, studying for CFA, good references, and strong professional vocabulary - but somehow they knowing that I still keep in contact with my elementary school friends is a requisite somehow. What is the world coming to?" It turns out, for prospective employees, apparently this is standard procedure. Employers check because they like seeing what others say about you, and so many recruiters may-as-well do it ahead of time.

My apologies to those who attempted to contact David Fleig at FinancialAnalysis Partners. (A company that, among other things, helps mortgage banks analyze the cash flows and the decision to retain or release servicing, licensing, etc. - all the rage these days.) His e-mail address was off by a letter. David can be reached at dfleig@financialanalysispartners.com or go to www.financialanalysispartners.com.

Does one business channel take valuable resources away from other channels of origination? You bet it does - just ask Bank of America, who exited wholesale yesterday. And by "resources" I mean much more than the head of correspondent complaining about the head of wholesale not replacing the spent toner cartridge in the copier. About 1,000 employees will be affected, with some jobs lost but many offered other jobs (correspondent, warehouse, retail, etc.).  It seems that in 2009 BofA captured 22% of the retail mortgage market, compared with 8% of the wholesale channel which came from Countrywide. Note that BofA will continue to buy broker loans (TPO) from correspondents - remember economies of scale, and who keeps the reps and warrants.  FULL STORY

Adam Quinones writes on MND, "BofA still buys loans through the correspondent conduit, as underwriting delegation is important. The wholesale lending market is competitive with or without BofA in it. Were they offering any niche underwriting agency products (or exceptions/variances)? Nope. Is anyone offering credit exceptions? Nope."

I was in Los Angeles giving a speech to mortgage originators when the news came out yesterday, and most of them greeted it with a shrug - "BofA is just not that much of a force in wholesale". The BofA news was quickly followed by a story from the Wall Street Journal about whether or not home buyers even need brokers. HERE IT IS

This leaves Wells as the only major bank still offering this channel. Often, like we have seen in the MI arena, no one wants to be the last one offering something. But Wells Fargo's wholesale group quickly followed the news with a bulletin. "In a rapidly changing regulatory and business environment, we want to let you know that we remain steadfastly committed to you, your borrowers and the Wholesale business. For more than 15 consecutive years, we've worked with brokers, and we remain committed to this origination channel. We believe that the broker community plays an important role in the lending industry. You bring competition to the marketplace and offer choices to borrowers."

Speaking of people job hunting, not only did Bank of America exit their wholesale (broker, TPO) channel yesterday, but it is rumored to be cutting about a third of its propriety trading jobs to comply with new regulations on banks. "The overhaul of U.S. financial regulations signed into law in July limits proprietary trading in which a bank trades on its own accounts for its own profit." The "Volcker Rule" dictates that deal making and investment banking should be left to firms that taxpayers wouldn't have to bail out, and that banks should stick with managing their assets and liabilities. READ MORE

Let's hope all your 401(k) is not tied up in Lender Processing Services stock. LPS's share price is down about 15-20% in 3 sessions, based on its role in foreclosure paperwork, and is facing potential class action suits. Damage control is in place. 

Anyone looking for a good article on foreclosures can read THIS ONE

Are lawyers and "defaulters" really the ones who will most benefit from the foreclosure & robo-signer issue? Probably - there are huge legal proceedings in the offing, and anyone who is not paying their mortgage can stay in their houses that much longer. As someone wrote, "The one true loser, is the law-abiding, conscientious, tax and mortgage paying middle class American, who is now preparing for TARP 2 as the banks will all almost definitely need to run to the bailout through because of this catastrophe."

Yesterday's comment about a plan to help stabilize the real estate markets (by allowing certain qualified borrowers who lost their homes to foreclosure in the beginning of the crisis to get back into the market sooner by reducing the time they have to wait to get an agency loan after foreclosure. I would add they should be well qualified buyers with good reserves, jobs, credit histories -other than the foreclosure, etc.") received some other views....

"This is the most ridiculous suggestion I have heard yet (on how to solve the housing crisis and stimulate the economy).  I speak with borrowers daily who want my advice about if they should walk from a property.  These are mostly folks with great credit and no financial hardship. The threat of not being able to purchase another home for years to come is clearly what is stopping this segment of the population from causing our foreclosure numbers to go even higher. I wonder if the person who made this suggestion is one of those loan agents who made a living on pay option arms and subprime loans a few years back?"
Another wrote, "We need a national law that if the borrower passes 180 days of delinquency without a concerted effort to repay, they lose all rights to the property. None of this 'different procedures in every state'."

Why would any investor extend a lock when the file hasn't even been submitted? They probably wouldn't, no matter how hard an agent or broker tried. And most don't. Kinecta Credit Union recently reminded its brokers of its policies, which seem fairly standard. "All 15 Day Lock requests for Purchase Transactions, to be eligible, must be in a 'Submitted' status with a complete loan file submission (including appraisal) received by Kinecta. All 15 Day Lock requests for Refinance Transactions, to be eligible, must be in a 'Ready for Docs' status with all PTDs signed off. All 30 Day Locks must have a complete loan file submission received by Kinecta or extended by the originator within 10 days of lock date otherwise the lock will be canceled. Extensions will be subject to additional fees and processing time. All 45 Day Locks must have a complete loan file submission received by Kinecta within 20 days of lock date otherwise the lock will be canceled." And so forth.

Wells Fargo wholesale - yes, the channel that still calls on brokers - announced that "Rural Development refinance transactions are now available. RD funds for Rate/Term refinances were made available from the USDA on Oct. 1, 2010. As a reminder, the new guarantee fee for the RD rate/term refinance program is 2.25%." READ MORE

Mountain West Financial wrote, "Effective immediately, on all CalSTRS loans where the sales price of the property is greater than 20% of  the seller's acquisition cost,  CalSTRS financing is no longer available.

Monday was a light news day, but mortgages are doing pretty well as supply can't quite seem to meet the demand. Yesterday the supply picked up a little, hitting $2.5 billion, so originator activity has picked up this. Mortgage security prices finished the day roughly unchanged - a good performance given the headline-grabbing stock market rally. The 10-yr closed at 2.48%, and one might expect to see these levels (or better) for awhile since most believe that the economy is recovering somewhat, inflationary pressures are low, the unemployment rate is high, housing is slow - so what would make rates go higher?

The only news out this morning was the MBAA index, showing a decline of .2%, and some ADP private payroll numbers which showed a decline of 39k - weaker than expected. The weak ADP number has pushed stocks down slightly (and why not, given yesterday's rally), the yield on the 10-yr down to 2.41%, and mortgage prices better by roughly .250.


7. Boxing promoter Dan Duva on Mike Tyson going to prison: "Why would anyone expect him to come out smarter? He went to prison for three years, not Princeton."

8. Stu Grimson, Chicago Blackhawks left wing, explaining why he keeps a color photo of himself above his locker: "That's so when I forget how to spell my name, I can still find my clothes."

9. Lou Duva, veteran boxing trainer, on the Spartan training regime of heavyweight Andrew Golota: "He's a guy who gets up at six o'clock in the morning, regardless of what time it is."

10. Chuck Nevitt, North Carolina State basketball player, explaining to Coach Jim Valvano why he appeared nervous at practice: "My sister's expecting a baby, and I don't know if I'm going to be an uncle or an aunt."

11.  Frank Layden, Utah Jazz president, on a former player: "I told him, 'Son, what is it with you? Is it ignorance or apathy?' He said, 'Coach, I don't know and I don't care.'"

12. Shelby Metcalf, basketball coach at Texas A&M, recounting what he told a player who received four F's and one D: "Son, looks to me like you're spending too much time on one subject."

13.  Amarillo High School and Oiler coach Bum Phillips when asked by Bob Costas why he takes his wife on all the road trips, Phillips responded: "Because she is too damn ugly to kiss good-bye."

14. These are right in the ballpark with Mike Tyson's answer to what he will do when he retires..."I guess I'll just fade into Bolivia."