Tomorrow is college football day. For you college football fans out there:

And yes, it is staying dark later in the morning, and the sun is going down earlier here in the northern hemisphere. But we don't change the clocks until November 6th.

Likes sands through the hourglass so are the days of our lives... the U.S. Senate voted yesterday to restore higher loan limits, approving, 60-38, an amendment to a federal spending bill that would raise the maximum size of loans that can be guaranteed by government-controlled mortgage companies Fannie Mae (FNMA) Freddie Mac (FMCC) and the Federal Housing Administration. The amendment was sponsored by Sen. Robert Menendez (D., N.J.), but things don't look so good for it in the Republican-controlled House, as many argue that the current reduced loan limits help scale back government support of the mortgage market. Why didn't they think of scaling back government interference 10 years ago when "they" told Fannie & Freddie to increase home ownership?

If you're an appraiser, I hope that San Diego AMC AppraiserLoft doesn't owe you any money. Appraisers who worked for it are owed more than $3 million. Someone wrote to me and said that a real estate settlement firm, SettlementOne, unfortunately yet another company whose name is two words stuck together, is in discussions with AppraiserLoft to acquire certain assets of the company, but not its liabilities, and to help its customers. If you're an appraiser, you'll probably want to contact the lender directly.

When does residential mortgage lending conflict with drilling for natural gas in one's backyard? How about "always."

I think that, since U.S. citizens feel that Congress is doing such a wonderful job managing our debt and handling Fannie & Freddie, that Senators legislate residential mortgage loan underwriting guidelines. How 'bout it!? Sens. Michael Bennet, D-Colo., and Johnny Isakson, R-Ga., have unveiled the Sensible Accounting to Value Energy (SAVE) Act, which aims to "encourage investments in energy efficient home building, enable better mortgage underwriting and potentially create more than 80,000 construction jobs. Under the bill, federal mortgage agencies would consider a borrower's expected energy costs when determining loan repayment ability." Once again, good intentions...

The government can't seem to take itself out of the mortgage biz. But as it was pointed out to me, one presidential candidate - Ron Paul - is a free market supporter. His economic plan would close 5 federal agencies, including HUD - quite the opposite of the approach!

It would seem that Freddie & Fannie are "turning up the heat," "playing hardball," "taking no prisoners," whatever you'd like to politely call it. It is already a well-known, unstated fact that the entire buyback process is handled differently when "small pockets" originators are involved instead of "deep pockets" lenders. But it seems that Fannie Mae and Freddie Mac are becoming more aggressive in their quest for refunds as bad home loans spread to more recent years:

The banter about the servicing options continues. "On the FHFA paper's 2nd option: Everyone I've talked to is touting this as the best option. What isn't discussed is that it is assumed that a new, deep, liquid market for excess IO will suddenly appear. When cold water is thrown on that idea, the next response is that the TBA market will move to quarter coupons, so there isn't a separate IO market - it's embedded in your Best Ex decision." Another noted, "Without commenting on the efficacy of any of the approaches, I think FHFA et al are fooling themselves if they think these market changes will happen rapidly or happen at all, with the future of Fannie & Freddie still unknown. I continue to believe that if there are any changes, they will be minimal, and any major overhauls will be tabled until the future of housing finance is decided. And based on the pace of reform in Washington, that's currently scheduled to take place the day before hell freezes over."

As California goes, so goes the nation? "The California Department of Real Estate adopted rules that expand the enforceable duties and responsibilities of supervising mortgage brokers. In addition, the rules also clarify the specific bases for imposition of discipline and further explain the immediate prohibition against real estate business activities triggered by a person's receipt of a notice of intent." Per a note from AllRegs.

What we need is a new index, although it is not so new. BuildFax unveiled its BuildFax Remodeling Index (BFRI) for August 2011 which showed that remodeling activity reached a record high during the month. BuildFax found that, based on its national footprint of permit data, an estimate of over 3.3 million residential remodeling projects will be permitted in 2011. This figure is up from the estimated 3.1 million residential remodeling projects that were permitted in 2010, an almost 9.5 percent increase. August became the month with the highest level of remodeling activity since the Index was introduced in 2004 and represented the 22nd consecutive month of increases. "As mortgage rates hit record lows, it is apparent that millions of Americans are refinancing their homes and using some of their new monthly savings to reinvest in their homes with remodeling projects," said Joe Emison, VP of research and development at BuildFax.

I can't post every local mortgage organization's events, but let's just say that local organizations are alive and well. In Glenwood Springs, the Colorado Mortgage Lenders Association is having a lunch & continuing education session in a few weeks. More information can be found at (The fellow in the photo bears a passing resemblance to Michael Milken.)

And in San Francisco, "In an effort to provide a medium for the broker/banker community to network about concerns, triumphs, and general questions related to the mortgage industry, the San Francisco/Peninsula Chapter of CAMP will commence its first monthly Round Table on Oct 27 at 8:30AM." For questions, please contact Kathy Pan,  The link to register

The SF chapter is also hosting NMLS training for annual license renewal on Nov. 4. For questions, please e-mail

Innovation continues to happen among vendors. Mortgage Cadence, "a leading provider of Enterprise Lending Solutions (ELS), Default Servicing Technology and Document Services for the financial services industry, introduces Mortgage Cadence Symphony Reverse, a reverse mortgage software solution, allowing lenders to get up-and-running quickly utilizing standard, pre-configured workflow. Whether just entering the reverse market or looking to increase productivity, Symphony reverse delivers a cost-effective approach to enterprise lending technology...the ability to quickly implement upcoming changes quickly and efficiently is a growing concern for reverse lenders. Symphony Reverse fills that technology void and addresses those concerns by enabling lenders to eliminate manual processes and increase their productivity and throughput."

Kinecta F.C.U. reminded clients that its policy on the payoff of non-purchase money seconds on agency loan products comes directly from the Fannie Mae seller's guide, and is a reminder of how to underwrite the transaction. "A non-purchase money second is a loan where the 2nd lien did not fund concurrently with the 1st lien, which means the 2nd lien was not used to purchase the property." Its bulletin goes on to describe the differences and Fannie's seller guide information on limited cash-out transactions.

UG spread the word that it is expanding its underwriting requirements to allow greater flexibility on broker-originated loans. "Mortgage insurance applications received after Nov. 13 are eligible using United Guaranty's risk-based Performance Premium pricing. Fixed-rate loans and adjustable-rate mortgages with no rate adjustments during the first five years can be insured by the American International Group subsidiary. Loan amounts in excess of $417,000 are eligible for broker origination, as are two-unit properties, second homes and cash-out refinances."

Home Savings of America got the word out that, "effective immediately, previous September 2011 Broker Bulletin regarding closing restrictions on USDA purchase transactions is rescinded; USDA purchase transactions subject to the 2% initial and 0.30% annual Guarantee Fee may now fund. The current USDA funding authorization expires November 18, 2011.  As that date approaches, we will advise as to any status changes.  In the interim, we will continue to accept USDA purchase transactions for submission, underwriting and funding. For refinances, USDA's funding authority is insufficient to cover all requests in their pipeline.  Any refinance transactions will be handled case-by-case."

Today there is no scheduled economic news, but yesterday was a pretty heavy day. Probably the most relevant to the mortgage & real estate biz is that NAR reported that Existing Home Sales dropped 3% in September from August but are still up about 11% versus a year ago. The median sales price was $165,400, down 3.5% from $171,400 a year earlier. The inventory of previously owned homes listed for sale, meanwhile, fell at the end of September to 3.48 million. That represented an 8.5-month supply at the current sales pace, compared with a healthy level of about six months. Foreclosures and other distressed properties represented about 30% of sales.

Treasuries bounced around higher and lower with 10-year notes ultimately closing down 6/32nds in price to yield 2.18%. MBS prices on 30-year current coupon 3.5s and 4.0s were flat to 1/8 point lower/worse. And this morning things are pretty quiet, with the 10-yr and MBS's roughly unchanged from Thursday afternoonMBS Prices

(You Detroit fans, don't shoot the messenger.)
This happened on a flight getting ready to depart for Detroit. Bob was sitting on the plane when a guy took the seat beside him. The guy was an emotional wreck, pale, hands shaking, moaning in fear.
"What's the matter?" Bob asked.
"I've been transferred to Detroit, there are crazy people there. They've got lots of shootings, gangs, race riots, drugs, poor public schools, and the highest crime rate in the nation."
Jack replied, "I've lived in Detroit all my life. It's not as bad as the media says. Find a nice home, go to work, mind your own business, and enroll your kids in a nice private school. It's as safe a place as anywhere in the world."
The guy relaxed and stopped shaking and said, "Oh, thank you. I've been worried to death. But if you live there and say it's OK, I'll take your word for it. What do you do for a living?"
"I'm a tail gunner on a Budweiser truck."

If you're interested, visit my twice-a-month blog at the STRATMOR Group web site located at The current blog takes a look at Fannie & Freddie & the FHFA, and the changes they have in the hopper. If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what's going on out there from the other readers.