Here we are on the 68th anniversary of Pearl Harbor Day, with the mortgage banking business facing unprecedented new regulatory reforms, and what are the folks in the trenches saying?

"Does anyone get the feeling mortgage banking is a ghost ship, to sail the seas endlessly, with a crew of the damned? Didn't Disney make a movie with that plot, or am I once again in front of the curve?"

"Things are going really well for us. Right now we run a best effort shop and thinking about making a slow transition into hedging. We've been hiring on many new brokers and new loan offers so we're expanding and hiring like crazy!"

"Things in the lending industry continue to be challenging, but isn't that why we're still here? 'Cause we LOVE our jobs: daily rate & guideline changes, irrational clients, irrational realtors, tightening industry standards, increased blood pressure, etc. etc."

The AmTrust announcement speaks for itself: "AmTrust Bank was acquired (Friday) by New York Community Bancorp. Due to the nature of this acquisition and the steps required to effect a proper and orderly transition, it is necessary to immediately suspend all registration and rate-lock activity for a period of time in order to permit us to properly address all of the related requirements. We expect to complete this process as quickly as possible. Although we will not be accepting new registrations or rate-locks during the transition period, AmTrust Mortgage Banking will continue to process and fund all rate-locked registrations that are in-process at the time of this notice, in the normal course of business." AmTrust was, nationwide, in the top 5 for wholesalers buying loans from brokers.

Freddie Mac came out with a bulletin which includes changes to their credit requirements, a confirmation of their 2010 maximum loan limits, and information to assist sellers in delivering new loan-level origination data. Freddie removed their "Relief Refinance Mortgages - Same Servicer" from the list of mortgages that are ineligible for delivery as higher-priced mortgage loans (HPMLs). However, Sellers must ensure the Regulation Z requirements for HPMLs are met, even though these are not typically requirements for this product. Freddie went on to specify rental income requirements for conversions, documentation requirements for verbal verifications of employment ("verbal VOE's for employed borrowers not more than 10 business days prior to the note date rather than 10 calendar days"), revise requirements for self-employed borrower income, determining net rental income for certain investment properties, and verifying and documenting reserves. And don't forget those signed 4506-T's on both the application date and the note date.

SunTrust told clients that they will adhere to the January 1 date for RESPA changes, so that any GFE provided on or after 1/1 should be on the new form, and the new HUD-1 Settlement Statement which has been modified to cross reference line items on the HUD-1 to the same line item on the GFE, and provide a side-by-side comparison by itemizing charges into three groups. SunTrust needs to receive the final HUD-1 on each loan file, or else the seller will find the loan in the "pend' classification, and reminds clients that they rely "upon the Correspondent client's representations and warranties that the loans are enforceable in accordance with the terms of the Correspondent Loan Purchase Agreement and comply with all applicable laws. Correspondents are responsible for adhering to all state, federal and/or regulatory lending guidelines, as well as licensing requirements."

SunTrust updated their "Portfolio Affordable Housing & Key Loan" products, and Franklin American adjusted their FHA product lines.

Mortgage rates slid a little higher last week, but few in the business believe that interest rates are the reason that loans are still difficult to do. But last week strong economic & housing data, an improved economic outlook from the Fed, and headline-grabbing unemployment data increased concerns about future inflationary pressures and thus higher rates. The US continues to lose jobs in manufacturing and construction, and add them in the service sector. Temporary employment has risen by 113,000 over the last three months, a good portion of it within the mortgage banking industry. Even though the unemployment rate fell to 10%, things are still grim on the unemployment front. The U-6 measure of unemployment, which is the broadest measure around, is still above 17%. What was missed by the unemployment rate was the pick-up in the duration of unemployment: the median duration of unemployment is over 20 weeks, and a record 38.3% of workers have been unemployed for at least six months.

Wall Street traders saw an increased level of origination selling last week, suggesting that lock desks were busy. Interestingly, and a key reason why I could never be a day trader, the stock market improved dramatically early in the morning, but then lost all of its gains and came back to nearly unchanged for the day. The 10-yr note was down (worse) almost a point, the price of gold fell, the dollar rallied, and crude oil moved higher with the view the economy is recovering more rapidly than what was thought. Suddenly the stock market is concerned that a better economy will lead to higher rates, which will in turn depress the economy. Is that how it works?

 After a full week of economic news, this week promises to be light. We do have the sizeable auctions ($74 billion), but in terms of scheduled releases today, tomorrow, and Wednesday we have nothing of substance, Thursday we have the Trade figures and Jobless Claims, and on Friday we have Retail Sales and the Imports/Exports data. With no news, the 10-yr is at 3.46% and mortgage prices are a shade better than Friday afternoon.
David Letterman's Top Ten Reasons Why Golf Is Better Than Sex...

#10... A below par performance is considered damn good.
#9... You can stop in the middle and have a cheeseburger and a couple of beers.
#8... It's much easier to find the sweet spot.
#7... Foursomes are encouraged.
#6... You can still make money doing it as a senior.
#5... Three times a day is possible.
#4... Your partner doesn't hire a lawyer if you play with someone else.
#3... If you live in Florida, you can do it almost every day.
#2... You don't have to cuddle with your partner when you're finished.
And the NUMBER ONE reason why golf is better than sex...
#1... When your equipment gets old you can replace it!