In the bulletin Bank of America also tweaked its FHA Streamline Refinance underwriting: “At time of application, at least 12 full months must have passed since the first payment due date of the mortgage being refinanced.” It is indicative of an apparent trend in the industry to question the long-term viability of the program, to wonder what future class-action lawsuits might be ahead for companies that specialize in them, and to think out loud about FHA claim denials and the FHA in general: http://www.thestreet.com/story/11265399/1/mortgage-mess-next-shoe-to-drop-is-fha-analyst.html?cm_venGOOGLEN.

One reader wrote, "We haven't been able to do much with FHA streamlines since the 5% change. The .90 and 1.15 change just made it nearly impossible. People in FHA loans only put down 3 or 3.5 percent, we know values are dropping and they wonder why FHA loans have higher default ratios. Conventionally you have the HARP program but just as they moved the end date from 6-2011 to 7-2012 they need to move the purchase date for Fannie or Freddie to everyone can take advantage of the program or at least from 5-2009 to 5-2010. These things seem so easy to figure out. We see the problem but we aren't taking the necessary steps to solve it. With rates this low something needs to be done immediately to help people refinance. Let's not wait until rates begin to go back up. People being able to refinance and save money will allow for more spending which is what the economy needs."

All real estate is local. In Manhattan, "The East Village one-bedroom, one-and-a-half-bathroom condo that he bought for $859,000 was a 'tremendous value' that he couldn’t pass up, he said." Value? I am sure that any buyers would qualify for an FHA loan. Actually I don't know that, but once again the FHA is the target of conjecture and theories about its business plan and long-term prospects. On the 19th, "Due to our commitment to focus on application volume that we can acceptably process and close on-time, Bank of America is temporarily suspending New Applications on selected Government Programs, Property types, and Products" for retail sales, centralized sales, and fulfillment channels. BofA told its agents, “The following FHA and VA Programs are being suspended: All "Off-Us" Refinances (Rate and Term, Cash-out and Streamline) All Cash-out Refinances, loans on the following property types are being suspended for FHA and VA Purchases and Refinances: Manufactured Housing Unique Property Types (Log Homes, Earth Homes and Earth Berm Homes).”

HUD reiterated the current status of, and possible future changes to, its HECM program. "FHA is currently in the process of revisiting its regulations to propose and ultimately adopt changes that are necessary to make the HECM program even more successful." http://portal.hud.gov/hudportal/documents/huddoc?idFHACG_05OCT11_FINAL.PDF

For next week’s Chicago conference Bill from Provident writes, "I can’t wait to attend the paperless technology meeting when less than 5 investors / lenders I know will accept electronic signatures. Wasn’t it Bill Clinton that signed into law the acceptance of paperless? Or was it Calvin Coolidge?"

I mentioned the Chicago MBA conference. John from Wells Fargo reminds us that the Chicago Marathon is Sunday (sponsored by BofA!), and that many roads are actually closed. The gall - didn't they know the MBA was coming to town?

http://www.chicagomarathon.com/cms400min/chicago_marathon/spectators_volunteers/index.aspx?idQ2#Spectator_Guide

MERS has something to be pleased about: an Arizona federal judge dismissed 72 lawsuits against it, with the judge relying on a September appellate court decision and rejecting the argument by plaintiffs in the consolidated litigation that naming MERS as a beneficiary on deeds of trust means they're unsecured and the properties can't be foreclosed. He said, "This court does not find legal support for the proposition that the MERS system of securitization is so inherently defective so as to render every MERS deed of trust completely unenforceable and unassignable," Teilborg wrote in his order dismissing the claims. Of course Valerie Edwards, co-lead plaintiffs' counsel, said plaintiffs plan to appeal, because that is what attorneys do.

"Rob, even though the NMLS does not allow a LO to take the same CE course 2 years in a row, that does NOT mean they cannot use the same provider for their CE education.  They just have to make sure the provider gets a different course approved each year.  Mortgage Training Today will be doing one course each year, so they can use us over and over again!" So noted Barbara Werth with Mortgage Training Today. (If you have questions send her a telegram at barb@MTToday.co.)

As of 9/30, new or existing MLOs have completed over 462,739 hours of PE (pre-licensure) in 2011, equating to approximately 23,136 MLOs.  Approximately 321,427 hours of CE has been completed equating to approximately 40,178 MLOs or about 47% of the estimated 85,000 MLOs who are expected to complete CE in 2011. 

Tuesday I wrote about appraisals, and confusion on some of the rankings, and received this note: "I’m looking for  someone knowledgeable with the new appraisal regs – in particular these new C-4, C-5 and C-6 rankings -- and how investors are going to interpret them, who might be interested in coming to New Orleans to speak at my managers meeting next week. Do you happen to have any thoughts on the subject?" If that perks your interest, write to Paulina McGrath, the president of Republic State Mortgage at psm@rsmc.net.

Fannie has new policies for loans that become delinquent after 10/1 "to streamline and simplify servicing processes, help servicers to contact delinquent borrowers more effectively, determine eligibility and offer foreclosure prevention alternatives to struggling homeowners." Your servicing group had better know them! https://www.efanniemae.com/sf/servicing/pdf/alignedrequirementsfaqs.pdf

And while you're at it, on 10/12 Fannie's “Property Maintenance and Management: Property Preservation Matrix and Reference Guide" will become effective. https://www.efanniemae.com/sf/guides/ssg/relatedservicinginfo/pdf/ppmatrix.pdf

The FDIC is very good about posting the banks examined for CRA compliance: http://www.fdic.gov/regulations/community/monthly/index.html

Investors such as GMAC, PHH, and Home Savings of America reminded clients that Monday is a legal public holiday and it may not be counted in the three and seven day waiting periods or the three day right of rescission, nor will funds be wired, nor will banks or post offices be open. “HSOA (and GMACB) offices will be open that day and the lock desk will be open normal hours.”

“Effective immediately, Home Savings of America is temporarily suspending our offering of the 203K program.”

GMAC Bank’s correspondent clients will see a new rate sheet on 10/11. Anyone with spreadsheets tied to it had better get to work!

PHH told clients that, "USDA Rural Development issued an announcement indicating that funding for the Single Family Housing Guaranteed Loan Program will not be available for a short period of time at the beginning of fiscal year 2012, which began on October 1st, 2011. During the temporary lapse of funding, Rural Development will issue Conditional Commitments “subject to the availability of commitment authority” for purchase and refinance transactions. PHH will continue to close/fund loans with Conditional Commitments issued “subject to the availability of commitment authority”.

Citi came out with its usual list that no one wants to find themselves on: ineligible originators. “This list shows brokers, correspondents or other loan originators whose loan originations (or who have any role in the origination) are not acceptable to Citi for purchase.” The Citi Ineligible Originator list (along with ineligible appraisers) is posted on the Citi Correspondent website: https://correspondent.citimortgage.com/Correspondent/login.jsp.

Chase is revising the list of approved Appraisal Management Companies (AMCs) for Non-Agency loans. The list of Chase-approved AMCs for Non-Agency loans has been reduced to two AMCs: LSI and Equifax. “A Chase-approved AMC must be used to order the appraisal for any Non-Agency loan sold to Chase. Appraisals for other products may be ordered by the Correspondent directly or through an AMC of the Correspondent’s choice.”

How long will our stock and bond markets go through the yo-yo caused by what happens in Europe? A long time, apparently. "Treasury prices lost ground yesterday after reports surfaced that EU was working on a plan to support imperiled European banks. This reoccurring story removed the luster from the flight to quality bid and sent treasury yields higher. Prices are continuing to edge lower this morning as investors wait for the actual details of the rumored plan." They have a plan, then they don't have a plan, they have one, and then they don't... So yesterday treasuries sold off (the 10-yr worsened more than a point and closed with a yield of 1.90%) while equities gained. MBS prices were marked lower by about .375.

Today we had weekly Initial Jobless Claims for last week: the previous week’s was revised from 391k to 395k, and last week’s rose 6k to 401k. No big deal. At 8AM PST  the Treasury announces details of next week's auctions of 3- and 10-year notes and 30-year bonds - estimated unchanged at $66 billion. Stay tuned for tomorrow’s unemployment data, but for now the 10-yr’s yield is up slightly at 1.94% and MBS prices are worse by .125.

(Parental discretion advised.)

Grandma and Grandpa were visiting the kids and grandkids overnight.
When Grandpa found a bottle of “enhancement pills”in his son's medicine cabinet, he asked about using one of the pills.
The son said, "At your age I don't think you should take one Dad; they're very strong and very expensive."
"How much?"

"$10 a pill," answered the son.
After they left the next morning, the son found $110 on their bed.  He called his father’s cell phone. "Dad, I told you each pill was $10, not $110.”
"I know. The hundred is from your mother."