Congratulations - from here on out we'll see more daylight in the Northern Hemisphere every day. And for readers living in Anchorage, Alaska, where today's sunrise is at 10:14AM and the sunset is at 3:41PM, here's some Winter solstice trivia.

Judging from the e-mails I received last week, lenders received letters from JP Morgan Chase regarding early pay-off monies (EPO) allegedly owed. Monies owed amount to hundreds of thousands for some mortgage companies; some lenders merely received a form e-mail while others received a phone call to go along with it. This e-mail to me summed things up: "Rob, Chase hit a bunch of their correspondents, including us, with large legacy EPO bills going back to early last year. We had never received notice that the loans paid off early, so this is new news to us. It was pretty deflating to get an 'out of the blue' notification that we owe a 6 digit number to a 'valued' partner. This was just the icing on the cake when it comes to the ongoing TRID fiasco. I'm curious if anyone else has mentioned this..."

Yes they have, but as always it is best to deal directly with Chase, or any other investor, that does something like this. Certainly the operational issues sellers have seen with Chase purchases loans are well documented and can be seen in the "PITA" pricing hit lenders give Chase at the advantage of other investors. From anecdotal stories it seems some of the early pay-offs are over two years old and many are over a year old. The form letter goes something like, "Chase audit has found an error in our prior EPO billings that I wanted to make you aware of as soon as possible. When we changed the early payoff contract language in June of 2013 from 90 to 180 days, there were some systems issues, which caused some bills to go out under calculated. Early payoffs billings for EPOs between 90-180 days did not include SRPs as they should have and early payoffs bills for loans between 61 and 90 days did not include over par pricing....If there is a need for a flexible arrangement for this, I'm sure that we can offer a solution." Can you imagine going back to a consumer a year or two later saying you calculated their price incorrectly and asking for money?

As a very quick primer, when an investor buys a fixed-income security they expect it will be "on their books" for a certain period of time. Why would anyone pay 105 (5 points over par) for a loan that is going to pay off in 3 months at which point they only receive 100 (par). And so most contracts, unless the clause is renegotiated usually by paying/receiving a lower initial price, will have an EPO period. So if the loan pays off prior to this the seller (lender) has to pony up some shekels. But the details can quickly become sticky: does the EPO time period start when the loan funds or is purchased? What if the investor, or some other lender, is the one that refinances the borrower? Do principal curtailments trigger and EPO claim? Like I said, this is a lender-investor issue, and it is best to contact the investor if you have questions or concerns.

"The crops we grew last summer weren't enough to pay the loans,
Couldn't buy the seed to plant this spring and the Farmers Bank foreclosed!
Called my old friend Schepman up to auction off the land,
He said 'John it's just my job and I hope you understand.'
'Hey calling it your job ol' hoss sure don't make it right
But if you want me to I'll say a prayer for your soul tonight.'"

So sang John Cougar Mellencamp over 30 years ago! Commodity prices have hit the farmers hard in 2015, and there have been noteworthy changes in the USDA rural housing program.

Tom Davis with Finance of America wrote to me saying, "The USDA is now offering access to GUS to non-approved brokers and lenders, whereas in the past only approved correspondents had access to GUS. Going forward approved lenders can have their brokers create level one e-Auth ID's, provide those to the approved USDA GUS lender, and the Security Administrator can assign the broker access to GUS as a 'Lender Agent.' Users assigned as a GUS 'Lender Agent' will be able to establish applications, order new credit reports and request preliminary underwriting recommendations on behalf of the approved lender. Approved lenders will remain responsible for uploading docs & requesting final submissions in GUS. The USDA is working on additional materials to distribute through GovDelivery.  If you have not signed up for GovDelivery you can do so online. And for USDA Rural Housing updates your readers should visit the USDA Guaranteed Rural Housing Network."

Mike Perry put out an article on his website: : "And those $0 down (home) loans? They are primarily drawn from the U.S. Department of Agriculture's Rural Development Guaranteed Loan program. Unlike mortgages guaranteed by the Federal Housing Administration, or those from most private lenders, the USDA offers 100% financing..."

Fannie Mae updated it seller guide, updates include the eligibility for loans on properties with age-related resale restrictions to permit all occupancy types, and Lenders may now deliver loans secured by manufactured housing under the Rural Development-Guaranteed Section 502 program without a variance or any special negotiated terms.  For a summary of key updates in view the executive perspectives video presented by Jude Landis, Vice President, Credit Policy, and/or the executive overview provided by Carlos Perez, Chief Credit Officer for Single-Family.

Endeavor America Loan Services has enhanced their USDA Division with a hands-on approach that focuses on their client's growth. Endeavor America now offers a service to their clients who would like to expand their current USDA business or to learn the product through weekly webinars and on-site training available throughout the United States. In addition they have a USDA help desk that is there to answers scenarios and pre-qualifications 12 hours a day including weekends. The enhanced division is overseen by Margo Cox, AVP of USDA Lending and Tracy Csoka, USDA Underwriting Manager. If you would like to find out more and take advantage of their expertise and outstanding customer service please email: USDA@EAloans. com.

Harkening back a couple months, "Per the Fiscal Year 2016 Commitment Notice released September 24, 2015, funding for the USDA Rural Housing Loan Program will not be available for a short period of time at the beginning of Fiscal Year 2016. PennyMac will continue to purchase USDA Rural Housing loans with Conditional Commitments subject to the availability of commitment authority. Read the full announcement here." That changed, of course.

Nationstar spread the word that "funding for USDA Rural Housing programs is now available for fiscal year (FY) 2016. Requests that received a Conditional Commitment contingent upon the availability of an appropriation will be obligated over the next 2-3 business days.  An updated Conditional Commitment will be electronically generated by the agency to remove the "contingent upon" language and must be provided to Nationstar Mortgage in order to purchase the loan."

If you're in Nebraska this might be of interest: the top USDA lenders in that state. (Who says I ignore the big trends out there?)

Lastly reporter Brian Collins noted that, "An agency within the Department of Agriculture that promotes housing in rural areas is revamping its loan guarantee program to make it more attractive to lenders. Originating loans through the Rural Housing service has traditionally been a time-consuming process, and many lenders tend to focus on other products that make up a larger piece of their portfolios. In fiscal year 2014, RHS guaranteed 139,000 loans totaling $19 billion. But the agency is trying to increase that number. The service is upgrading its technology to expedite loan processing to save lenders time and money. And under regulations that went into effect Dec. 1, lenders can charge a higher interest rate on RHS-guaranteed loans, and more banks can participate. Now, any federally regulated depository institution can be an RHS-approved lender.

"The agency has also introduced a program to promote 'construction-to-permanent' loans - which provide financing for borrowers both to build and reside in a home - that is designed to spur new construction in rural areas where the current housing stock is old. The new regulation allows lenders to charge an interest rate based on the Fannie Mae 90-day delivery rate plus 100 basis points rounded up to the highest quarter. The previous cap was 60 basis points. For example, the interest rate for a typical RHS loan on Dec. 5 - with the 100 basis points built in - was 4.75%."

Certainly there are a fair number of lenders making some decent margins on the product. LOs that originate it know that there is a 2% upfront guarantee fee and 0.5% annual guarantee fee on RHS loans. The upfront fee can be rolled in to the loan amount, increasing the loan-to-value ratio to 102%.

Rates? They continue to be just fine as we enter a couple weeks of questionable liquidity. Friday bond prices rallied/rates dropped while stocks got kicked in the groin. The folks thinking that the higher short term rates may actually dampen the economy and lead to lower rates continues - including me. Certainly the economy has improved since five years ago - unemployment has gone down and there are over 10 million new jobs - there is significant progress.

For economic news this week we have quite a bit stuffing our stockings. Today is some forgettable Chicago Fed data. Tomorrow is Q3 GDP and GDP Deflator (the third time we've seen this number), the FHFA Housing Price Index, and November's Existing Home Sales. Wednesday we'll see the MBA's apps figures, November Durable Goods Orders and Durable Goods Orders ex-transportation, November Personal Income, Personal Spending, and PCE Prices, December Michigan Sentiment, and November New Home Sales. On Christmas Eve we'll see Initial Jobless Claims. Friday saw the 10-year close at 2.20% and this morning it is hovering, as are agency MBS prices, around unchanged from the end of last week.

Jobs and Announcements

In expansion news Centennial Lending Group, LLC was named one of the fastest growing private companies by Inc 500 Magazine. Centennial Lending Group is located in Horsham PA and looking for dynamic, experienced loan originators, processors, underwriters, and Branch Managers to join its team. "With processing, underwriting and closing all under one roof, they make the loan process easy for the loan officer and client. Here is a great opportunity in the mortgage industry as CLG knows their employees are their number one asset so they offer a positive environment different from the rest. With fantastic compensation packages, top notch benefits, extraordinary marketing and sales support, flexible work schedules, as well as true benefits not offered by others, Centennial Lending strives to have employees for life. CLG prides itself on helping loan officers close more loans than the competition. Visit Centennial to learn more and schedule your confidential interview today. Or email resumes to: careers@clg-llc. com.

And Peoples Bank (KS), an FDIC community bank with 2015 mortgage production on pace to hit $1.8 billion, is seeking LOs and branches in Texas. Peoples Bank is Fannie and Freddie approved, servicing its own loans, has both Retail and Direct-to-Consumer Call Center Sales channels, and has been in business for over 30 years. Besides a solid book of business, origination candidates need strong collaboration and team-building skills. Parties who would like to hear what a depository bank can offer should contact Jim Lind for a confidential discussion.

BOK Financial Correspondent Mortgage Services, aside from having a really long name, named Zachry Parrott as its Correspondent Operations Leader. Parrott will lead the day-to-day operations for the correspondent lending channel. Additional responsibilities will include continuous process improvement while maintaining loan quality. Mr. Parrott's resume include Chase, Bank of America.

In other bank news TowneBank in Suffolk, Va., has agreed to buy Monarch Financial Holdings in Chesapeake, Va. Both Monarch and TowneBank originated more than $1 billion in mortgages, and the $6.2 billion-asset TowneBank will pay $220.6 million, or $18.57 a share, in stock for the $1.1 billion-asset Monarch. The deal, which is expected to close in the second quarter, values Monarch at 192% of its tangible book value. The company will have $5.8 billion in deposits and $5.4 billion in loans. TowneBank said it plans to close 13 branches.

On the flip side, in Kansas Blue Valley Bank spread the word that it was exiting the residential lending business. And Jefferies trading revenue fell 36% as fixed-income trading tumbled. There has definitely been a drain of talent and numbers from the investment banks, and the MBS trading staffs. And this may accelerate as we near the midpoint of 2016 given some of the upcoming capital requirements versus the dwindling margins in that business.