On the minus side of things, "Valued Customers, Aurora Bank has made the decision to close its Residential Lending unit which includes its Correspondent Lending business. Aurora Bank continues to service its current mortgage customers. We are no longer accepting new loan registrations or locks.  We are committed to processing locked applications in the pipeline through to final disposition. Please note that lock extensions will not be granted.  We will continue to be staffed to support your needs and ensure a seamless experience for you and your customers." ("Seamless"? Words are interesting things...)

On the plus side, there are expanding companies. Houston's First Continental Mortgage Company is looking to aggressively grow their retail origination channel by adding seasoned retail originators, branches and company acquisitions. The company has a strong builder presence across the Southeast, Southwest and the state of Texas and is targeting retail expansion across this lending footprint. Founded in 2002, it funded approximately $1 billion in 2011 and has Fannie Mae Seller/Servicer and Ginnie Mae issuer approvals. FCM is financially strong, has significant liquidity and consistently profitable. Visit www.fcmchou.com for more information and contact Paul Peters, CMB at ppeters@fcmchou.com to discuss opportunities.

On the minus side, last week Grand Bank of NJ was rumored to have been placed under some type of written order. Written orders do not help mortgage subsidiaries of banks – in this case ICON Residential Mortgage, so we will see how this plays out.

On the plus side, last month O2 Funding became part of New Penn Financial, which is, in turn, a wholly owned subsidiary of Shellpoint Partners (PA). New Penn is licensed in 41 states and “Its affiliation with Shellpoint Partners will allow New Penn to continue to originate Agency loans while expanding its products to include Non-Agency loans” – so thanks Shellpoint. (If you want more information contact Omar Cantillo at ocantillo@newpennfinancial.com.)

On the minus side, Friday the Georgia Department of Banking & the FDIC shut down Global Commerce Bank – which starting today will be Metro City Bank.

On the plus side, we've become accustomed to the FDIC shuttering banks on Friday afternoons. I can't say that every bank ever shut down was under a written order of some type by regulators leading up to its demise, but it would probably be a safe bet. There are, of course, varying degrees of written orders issued by state and federal bank regulators, but one notable success story is that of HomeStreet Bank’s recent successful IPO. Like many community banks, HomeStreet ran into the 2008 buzz saw as construction lending came to a grinding halt and builder defaults overwhelmed the organization. Shortly thereafter, it was placed under a regulatory order, which is fatal in the vast majority of such situations – but in this case, under some new mortgage leadership, its mortgage division was so profitable (twice the average of its bank peers, which are in turn twice as profitable as independent mortgage banks on average) and well managed that the regulators gave the bank some time to work out their troubled loan portfolio. One industry vet believes that, “The mortgage division kept the parent bank afloat until HomeStreet was able to pull off an IPO two Fridays ago - I believe that it is the only community bank that has been able to recapitalize via the IPO route.” (For more information and the S-1, go to EDGAR, HomeStreet, Inc., symbol HMST, Washington State.  The FWP is dated 2/8/12 and the entire S-1 under registration # 333-173980 and 333-179484 dated 02/14/12. The whole story is contained on the first 16 pages.)

On the interesting side, it seems Wells Fargo has decided to expand globally: http://www.reuters.com/article/2012/03/05/us-wellsfargo-expansion-idUSTRE82402K20120305.

Also on the interesting side is that Banc Investment Daily reports that in California “Kinecta FCU and NuVision FCU announced their Boards had mutually decided to terminate their merger agreement that would have created a $4.4B credit union. The amount of time required to get regulatory approval, integrate the companies and final review were simply too onerous and too disruptive to their members.”

And lastly, I received this note: “I found your recent posts regarding Provident’s decision to no longer accept low-rise condos and limit hi-rise condos to a few specific markets interesting. In particular, I’m referring to the statements that Provident, because it offers such low rates, is looking to lower its costs and improve their execution in the secondary market.  In contrast, InterBank Mortgage, a direct seller who closed over $1 billion in wholesale last month alone, continues to offer condos to its brokers/bankers. (For information on getting approved with InterBank contact Phil Grossfield at pgrossfield@interbankwholesale.com.)

Last week the commentary mentioned issues with UCDP, and I received this note: “The problem with the UCDP, supposedly, is the vendor that FNMA and Freddie contracted with to build the technology and converting .pdf’s to MISMO was counting on a solid revenue stream. It appears, however, that most lenders are working with vendors that are already providing the appraisals in a data format that can easily be piped directly to the UCDP, obviating the necessity to convert .pdfs. The rumor is that the original vendor has lagged in the people and technology to have the UCDP functioning as promised - even the registration process to the portal, which was supposed to be a 2-3 day process, is dragging on for weeks.” (Editor’s note – I have not verified this.)

Regarding the HUD suit against BofA over, among other things, requiring certain information on disability income, Barbara Werth of Mortgage Training Today observes, “I just did a case study on that for my class and the main thing that was in dispute was not that they had to provide proof of the three years, but that B of A required the doctors to state the nature of the disability.  They had to list the actual medical condition and that is what caused the problem.  FNMA guidelines do require that the 3 years be documented, but nowhere in the guidelines does it state that the nature of the disability be disclosed or is required.  B of A had a condition on the loan approval that the actual disability be documented.” For thoughts write to her at Barb@MortgageTrainingToday.com.

There is always plenty of blame to go around, and on the agency’s role, or lack thereof, S.W. from Sovereign writes, "As many of us who work or worked for the agencies know, another interesting note on the GSE situation is that if one looks at the book of business the GSE's own that was originated to their own underwriting standards, it is still performing within expectations (I haven't seen the actual numbers in about 10 months, but the difference was stark at that time).  In order to meet the affordable housing goals that Mike mentioned in your commentary Friday, both agencies began buying private-label subprime pools of loans and MBS that were issued by entities whose underwriting standards and guidelines the GSE's didn't know, didn't understand and couldn't control or influence. I'm not suggesting that the GSE's be let entirely off of the hook, but I am saying that the full picture that illustrates Mike's points isn't revealed until one looks at the performance of the GSE-originated books vs. the performance of the GSE-purchased books. That's when the damage of the government Affordable Housing Initiative mandate really reveals itself."