January 26: Mortgage jobs continue; forecast on FHA compare ratios; MetLife chatter; the importance of contingency plans for lenders

Wanna save money? Let our professionals show you the benefits of refinancing today! Apply http://globalhomefinance.com/apply.php !

I was speaking to my 88-year old dad the other day on the way to Costco for

a hot dog lunch. (No, this is not elder-abuse - he actually likes them.) I

told him, "Dad, I am helping a company with a HUD license" and he replied,

"How could a whole company have head lice?" Ah, to be 88...

PERL Mortgage, already a nationwide lender, is expanding - particularly in

Illinois and the Midwest. Currently licensed in 14 states (including AZ, CA,

CT, FL, MA, and MI), PERL is seeking individuals, and/or teams of

professionals, "who have the desire to excel and be the best at what they

do." PERL Mortgage has been around for 18 years, and has 140 employees

including a sales team of over 60 Mortgage Advisors who consistently

originate greater than 1 billion dollars in mortgages annually.

  The company has recently brought on 25-year veteran Mark Daly as

SVP/National Sales Manager. Inquiries pertaining to PERL Mortgage, its sales

team, or expansion can be emailed to mdaly@perlmortgage.com

[mailto:mdaly@perlmortgage.com] and for  more information visit

www.perlmortgage.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109147985061&s=8721&e=001A8b6nV

xJhlusUMbbDR3nSqkdM5-lsAuYCcaziDqtfgVRUpWDIJ332hol2eWelvFUDOE9G5o7GV6JSt9J4V

RALFUmX_eYw9N0YdPX7N8b0HoZcC7rOR_Fxg==].

Out west, Intercap Lending is expanding both its wholesale and retail

channels.

The lender, headquartered in Irvine, CA, is a FNMA and FHLMC seller/servicer

as well as a GNMA issuer that services its own loans.  The wholesale channel

is seeking experienced inside and outside wholesale AE's to call on brokers

in California, Texas and Washington. The retail channel is recruiting

experienced LO's for its Irvine office.  "Both channels have ability to go

direct to FNMA, FHLMC and GNMA, which insures the highest capture rate for

our Mortgage Bankers and the ability to go outside the normal conduit box

(no bank overlays), and the company's fully  matured hedging process

provides the sales force with the best pricing available."

 Interested parties should contact Jim Storm at jstorm@intercaplending.com

[mailto:jstorm@intercaplending.com]

Obviously PERL and Intercap are on the upswing, while MetLife is...not. I

have received several e-mails asking if they are "collapsing" (would that

surprise anyone) and  wondering if anyone is going to be around much longer

to handle clean-up issues.

Here is some chatter

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109147985061&s=8721&e=001A8b6nV

xJhlvUfzURY5QXqUPSl-sqgVqHOU2Bm3uGWYTOxYjrtrND83rURypc2vB2Dy_6kGEpoHASyjE2km

7E4TbnWvOSHm0q3yub2FBi7xcp6ADY2XouXk0cm3S6av5De967PH6Y7N2Pz8pWAiWf6ev7OgbVDl

Uc_8LYzzfcja35nw2mC2_vZQuVKz0bjcYMxYU8PdpaF7ic_3FAXjhN1yer8x9aQrytT8U6yLAv9u

7KssWO7hBa4D7U4I03wW_QfA4RrYRRUcmTxqwdBohGEZhnpbDTfWTm4m0YC1Y-UWge10WQKvuwVJ

3kc3JQBj-f].

I receive my fair share of grumbling about various companies all the time

(especially those that seem to blatantly disregard the LO comp rules), but

the murmurs about  MetLife are steadily growing in significant numbers.

"Nobody is selling loans to them currently - that would be foolish. And on

the back end, they are not fulfilling their obligation to us and funding

loans in a timely manner.  MetLife is exiting  the industry with disgrace.

They had some of the best rates but now they are not funding and they are

setting up clients loans incorrectly.  All of our contacts have changed and

they are unable to tell us any updates.  We are receiving findings from

loans closed in January and they are not focusing on the loans from

December.

It is a mess." And another note: "Have you heard anything on what is

happening at MetLife?  They appear not to be funding loans, and when they

are it is after asking for things they don't need.  We still have loans from

December that are not being funded.  Our warehouse bank is backed up with

all of their clients that have MetLife

loans as well...   They are beyond acceptable timelines and we can get no

answers...

  Are we watching a TBW event unfold?  Are they out of capital?"

That being said, a memo sent out by a regional MetLife sales executive

noted, "Great News!!! I was just informed by our management that we will be

at 15 days or less  for loan reviews by next week - January 31st. We now

have 44 underwriters with more coming on board and we should be working thru

your pipeline very quickly. You should be seeing a daily incremental pick up

in reviews as we get caught up over  the next 7 days. Hopefully we'll have

minimal pends at time of review and can fund your loans immediately. However

if we pend a loan, please expedite return of those requested items so we can

fund the loan without any additional delays. I will keep working with your

shipping departments until all loans have been addressed and your pipelines

are clear."

It must be tough for lenders who only sold to MetLife, which reminds us that

it is good to have a back-up plan. When was the last time you checked those

batteries in your flashlight? (Yeah, same with me.) But having backup plans

is very important to any mortgage company, and I received this note from Len

Tichy, a principal at

 STRATMOR: "Rob, a number of our clients are asking for help and advice in

setting up contingency plans -- being able to continue doing business if

something goes wrong is a big concern for management. Not just disruption

caused by your 'garden variety' disaster like fire, flood, or earthquake,

but from unusual events you might not normally think about. For example,

last August's outage of pricing engines froze many lenders -- they couldn't

generate rate sheets or take locks. They don't want that to happen again,

and wonder what vendor or internal system might be next. Whether it's a

multi-day catastrophe or a 30 minute power outage, it doesn't matter.

Companies need to understand the most critical risks of failure inherent in

their key systems and the best path, or 'roadmap', to mitigating those that

have the greatest potential to disrupt operations -- in underwriting,

pricing, secondary marketing, servicing, whatever -- and in the Company's

other dependent business units. This is especially true for lenders who have

been growing and who intend to grow more. They may have made earlier

disaster recovery planning choices that need to be re-visited but have been

too busy or inappropriately staffed to do justice to the problem." I know

that Len's had a lot of experience setting these up - if you're interested

shoot him an e-mail at len.tichy@stratmorgroup.com

[mailto:len.tichy@stratmorgroup.com].

Analysts continue to ruminate on President Obama's announcement that he will

send Congress a plan that will allow responsible homeowners who are current

on their payments to save $3,000 a year on their mortgage by refinancing. If

this plan requires Congressional approval, it will probably have a very low

likelihood of succeeding in 2012. And investors wonder if this plan impacts

mortgages securitized in the agency MBS market (FN/FH/GN MBS), mortgages

securitized in the non-agency MBS market, or mortgages on bank balance

sheets in unsecuritized form. Changes to help underwater borrowers refinance

that could be made without Congressional approval, however, such as further

easing of HARP, further streamlining, eliminating LLPA's, or further

reducing buyback risk were seen as having a better chance.

Not that what anyone says in the mortgage industry matters anymore in

Washington, but the FHFA director is likely to argue against a mass refi

program of agency mortgages considering that such a program could actually

hurts the retained portfolios of the GSE's by up to $30-$35 billion. But

what if the government cuts the GSE's preferred dividend payment to make up

for some of it? Still, existing investors won't be in favor of it. And what

if, in some miracle, the government used some of the $25 billion-or-so in

the proposed settlement between the bank and the state AG's to fund a plan?

Stay tuned - maybe the government will just use that money to help fund the

temporary  payroll tax cut extension a few more months.

The FOMC spoke. "The Committee decided today to keep the target range for

the federal funds rate at 0 to 1/4 percent and currently anticipates that

economic conditions--including low rates of resource utilization and a

subdued outlook for inflation over the medium run--are likely to warrant

exceptionally low levels for the federal funds rate at least through late

2014. The Committee also decided to continue its program to extend the

average maturity of its holdings of securities as announced in September.

The Committee is maintaining its existing policies of reinvesting principal

payments  from its holdings of agency debt and agency mortgage-backed

securities in agency mortgage-backed securities and of rolling over maturing

Treasury securities at auction.

The Committee will regularly review the size and composition of its

securities holdings and is prepared to adjust those holdings as appropriate

to promote a stronger economic recovery in a context of price stability."

This FOMC announcement turned some heads, especially if overnight rates stay

low  for 2-3 more years. (Remember - overnight rates are set by the Fed,

longer terms rates like mortgages are set by supply and demand.) Banks must

continue to survive in a low rate, low margin environment for an even longer

haul - healthy banks will have to learn to subsist off lower earnings and a

sub-optimal return on capital.

 Watch for them to continue to cut expenses and move business units around,

especially with the specter of Basel III hanging over the industry. And the

consumer can certainly expect to earn near 0% on, or even pay for, their

checking accounts.

The announcement that overnight rates will stay low through 2014 certainly

moved  the fixed-income markets. The 10-yr T-note shot up by 1.25 in price,

but then only ended the day better by about .5 at a yield of 2.01%. MBS

prices were marked higher by nearly 3/8s of a point on 30-year 3.5s, while

5.5s and 6s were basically unchanged on the day. On the housing front we

received mixed signals Wednesday with NAR's Pending Home Sales Index

dropping more than expected (still having contract failures) but the FHFA

reported home prices unexpectedly rose 1% in November (on Fannie & Freddie

loans).

This morning we've had Durable Goods for December +3.0%, stronger than

expected,  and Jobless Claims +21 from 356k to 377k. Later we have Leading

Economic Indicators and a $29 billion 7-yr note auction. In the early going

the 10-yr is at 1.95%, and MBS prices are better by .125-.250.

The room was full of pregnant women with their partners. The class was in

full swing.

The instructor was teaching the women how to breathe and was telling the men

how  to give the necessary help and assurance to their partners at this

stage of the  pregnancy.

She said, "Ladies, remember that exercise is good for you. Walking is

especially  beneficial. It strengthens the pelvic muscles and will make

delivery that much easier." Just pace yourself, make plenty of stops and try

to stay on a soft surface like grass or a path."

She looked at the men in the room, "Gentlemen, remember -- you're in this

together.

It wouldn't hurt you to go walking with her. In fact, that shared experience

would be good for you both."

The room suddenly got very quiet as the men absorbed this information.

After a few moments, a man named Larry at the back of the room slowly raised

his  hand.

"Yes," said the Instructor.

"I was just wondering if it would be all right if she carries a golf bag

while we walk?"

If you're interested, visit my twice-a-month blog at the STRATMOR Group web

site  located at www.stratmorgroup.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106435366068&s=4179&e=001SVt-lj

bp53436QjxD9vbwURtIPPjV05jEcEKyBN3SjS2forXe0C_foO8RjEV-Uye0N7Z_Sh1il0SRXPx6P

jQauayNXQjni-Hc9Sseu-hhZcR1ujeZyAEpw==]

. The current blog discusses residential lending and mortgage programs

around the world. 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.

Rob

(Check out

http://www.mortgagenewsdaily.com/channels/pipelinepress/default.aspx

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=ffj5f4iab.0.epg7qedab.zy6u9cdab.8

721&ts=S0720&p=http%3A%2F%2Fwww.mortgagenewsdaily.com%2Fchannels%2Fpipelinep

ress%2Fdefault.aspx]

or www.TheBasisPoint.com/category/daily-basis

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=ffj5f4iab.0.v7uif6dab.zy6u9cdab.8

721&ts=S0720&p=http%3A%2F%2Fwww.thebasispoint.com%2Fcategory%2Fdaily-basis].

For archived commentaries, go to www.robchrisman.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=ffj5f4iab.0.fpg7qedab.zy6u9cdab.8

721&ts=S0720&p=http%3A%2F%2Fwww.robchrisman.com%2F].

Copyright 2012 Rob Chrisman.  All rights reserved. Occasional paid notices

do appear.

This report or any portion hereof may not be reprinted, sold or

redistributed without the written consent of Rob Chrisman.)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~~

Join My Mailing List

[http://visitor.r20.constantcontact.com/email.jsp?m=1102827910937]

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~~

Forward email

http://ui.constantcontact.com/sa/fwtf.jsp?llr=zy6u9cdab&m=1102827910937&ea=b

cahoone@globalhomefinance.com&a=1109147985061

This email was sent to bcahoone@globalhomefinance.com by

rchrisman@robchrisman.com.

Instant removal with SafeUnsubscribe(TM)

http://visitor.constantcontact.com/do?p=un&mse=001gYuebWlSSZMa7X7_YCXY1pkylq

TmggCt&t=001I0ePumysrUaHgx7YIK0axg%3D%3D&llr=zy6u9cdab

Privacy Policy:

http://ui.constantcontact.com/roving/CCPrivacyPolicy.jsp

Online Marketing by

Constant Contact(R)

www.constantcontact.com

Chrisman Inc. | 326 Mission Ave. | 326 Mission Ave. | San Rafael | CA |

94901

Market Snapshot 1/26/2012

Wanna save money? Let our professionals show you the benefits of refinancing today! Apply http://globalhomefinance.com/apply.php !

ADVICE:  For loans being locked for 15 - 30 days, we suggest…(more)

The bond and mortgage markets opened better this morning, still reacting to the Fed’s surprise yesterday saying the FF rate would stay at 0.00% to 0.25% clear out to the end of 2014. Prior to yesterday the Fed was saying mid-2013.  The motivation from the Fed is that the central bank has lowered its forecasts for US growth this year and next. Bernanke apparently is more concerned about growth that he was six weeks ago. The recovery seen so far he considers anemic with unemployment to remain high for another two years, the housing sector showing little in the way of stabilizing let alone improving much, and he is very likely believing Europe will decline into another recession and that there will be defaults on a lot of the debt piled up.

The reaction to yesterday’s FOMC statement and Bernanke’s press conference was swift; US treasuries that were looking weak rallied taking the 120 yr note to 2.00% -6 bp yesterday on the close, but at 1.92% on the initial reaction. MBS prices spiked initially then backed off but still a very nice close, +16/32 (.50 bp). This morning treasuries are better as are MBS prices; at 9:00 the 10 yr note at 1.98% -2 bp and MBS prices +8/32 (.25 bp). US stock indexes at 9:00, DJIA +65; all major equity markets in Europe rallying on the Fed’s rate surprise. At 9:30 the DJIA opened +44, the 10 yr +12/32 to 1.96% -4 bp and MBSs +10/32 (.31 bp).

At 8:30 weekly jobless claims were in line with forecasts, +21K to 377K; continuing claims +88K to 3.554 mil. Dec durable goods orders were much stronger than estimates, expectations were for an increase of 2.2%, as reported up 3.0%. The more significant ex transportation orders were expected up 0.7%, as reported up 2.1%. Nov orders were revised higher, frm 3.8% to +4.3%, ex transportation frm 0.3% to +05%. The two reports added a little more strength to the stock indexes in the futures markets.

More data at 10:00; Dec new home sales were expected to increase 1.5% to 320K annualized units, as released sales declined 2.2% to 307K; based on sales there is a 6.1 month supply, for all of 2011 sales were down 6.2%. Dec leading economic indicators were expected to be up 0.7%, as reported +0.4%, Nov revised to +0.2% frm +0.5%. No immediate reaction to the data.

This afternoon at 1:00 Treasury will complete its auctions with $29B of 7 yr notes; yesterday’ 5 yr auction met with solid demand.

The slightly bearish bias in the bond and MBS markets turned quickly yesterday on the Fed’s announcement. Prior to the Fed we were thinking the 10 yr would climb to 2.15% but go no further, the highest it got was 2.09% on Tuesday. Now the obvious question we are tackling is, how low will the 10 yr yield go based primarily on the Fed holding the FF rate at current lows until the end of 2014; and how low will mortgage rates go now? It is unlikely US interest rates will decline to new lows, at this point we expect the wider trading range will continue with the possible low on the 10 at 1.80% and mortgage rates tied to a 25 basis point range in rates. The Fed is worried about the US recovery and that Europe will continue to decline with eventual debt defaults in Greece and other EU countries. Until there is another Europe shock it is unlikely that US rates will push to new low rates. It will take a few days for traders and investors to assess the message sent yesterday from the Fed when the Committee made such an unusual move.

anuary 24: Mortgage hiring; the latest on on-line lending; what principal forgiveness will cost; how HUD's changes will impact gov't lenders

Wanna save money? Let our professionals show you the benefits of refinancing today! Apply http://globalhomefinance.com/apply.php !

As red-blooded American males prepare for the advertising onslaught of

Valentine's Day (2/14), we are reminded that the media is indeed powerful -

just ask Sarah Palin.

(Hey, whatever happened to her?) All this month the public has seen the OCC

foreclosure ads. Supports Independent Foreclosure Review Program with Public

Service Ads. On  January 4, the Office of the Comptroller of the Currency

(OCC) announced that it placed print and radio public service advertisements

to inform mortgage borrowers of the Independent Foreclosure Review (IFR)

program launched by the OCC in November 2011. The print feature explains

that borrowers foreclosed upon between January 1, 2009 and December 31, 2010

are eligible to have their foreclosures independently reviewed to determine

if the borrowers suffered financial injury as a result of any errors by

certain large, federally regulated mortgage servicers. The ads will run in

Spanish and English in 7,000 small newspapers and on 6,500 small radio

stations.

For a copy of the OCC announcement with links to the ads, please see

OCCInYourEar

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109130718033&s=8721&e=001MnLPLk

Rwzam1ZLLopyMubKOm_XX9BPamX_fBXgt0eOIB68U79eR0e_6UZO3C-RSY2cbNIqP9yyL5DttioZ

sPo1i3iXIi5kcFBAHO55o83VBCWfjFoav-ncXBHRQrVjIAzwJ8enIqVFDtU5-QH_FimFbWKr42jg

rKxPsr44MpJVjP1IRlesbLuQ==].

Hiring across the country continues for some companies. SecurityNational

Mortgage's Crown Group is hiring retail loan consultants, retail producing

managers, and branch managers for its Retail origination team, and wholesale

AE's who can build their  territory through wholesale, correspondent and

retail branch originations. The company is staffing up in the following

territories - Texas (DFW), Florida (Dade, Broward, Palm Beach and Duval

counties), Missouri, Oklahoma, New Mexico, Arkansas and Colorado.  (SNMC is

also hiring underwriters and processors in the Dallas area.)

"SecurityNational Mortgage is a nationwide lender offering Conventional,

FHA, VA  and USDA loans thru its Retail, Wholesale and Correspondent

business channels."

  If you know anyone interested, please send inquiries/resumes to

CrownGroup@Securitynational.com [mailto:CrownGroup@Securitynational.com]."

The other day someone told me that there were actually things on the

internet other than dirty pictures. I was stunned. Seriously, although the

article is a little slanted, here is some chatter on on-line lending

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109130718033&s=8721&e=001MnLPLk

Rwzakd_JE_O6nYpnJXOVFeq-o9AK5u9bw8zXOmbuqIIILgI_bO3wJxyMPdBsOmi4wRVDMhWTMYI0

LFqSRJZJkyVnK6JBssehQ8OPpSmZfnGc0KNUPTiNlNvFfIGrd96rj6ZcIZ9pLq2nQGoMPQdZB0Ti

CGSPT-9sFMycWXzsMOJLssWCBwjMuMGby79x7zYlAa7R-uQQE1w4xX4w==].

The average LO probably doesn't care too much about the proposed settlement

between the states and the servicers. But the large servicers, which are

pretty much the  large banks, care, and probably really want to "move on"

from this, which in turn would help return the flow of business. At this

point, supposedly state AG negotiators have reached the final terms on a

settlement deal w/the country's biggest banks,  and the preliminary pact is

now being circulated among the 50 AGs. The price tag for the servicers is

around $25 billion, depending on how many states sign on (California and NY

remain on the fence). The tentative agreement still must be approved by all

50 state attorneys-general, and the states will be asked either to agree to

proposals or decline to participate with Bank of America, JPMorgan Chase,

Wells Fargo, Citigroup and Ally Financial. Other banks, such as US Bancorp

and PNC Financial Services, have set aside reserves for such an outcome.

Stay tuned...and remember that the money has to come from somewhere...

Speaking of which, the FHFA noted that forgiving mortgage debt on Fannie Mae

and  Freddie Mac loans would cost F&F almost $100 billion. Freddie & Fannie

guarantee nearly 3 million mortgages on single- family homes that are

underwater, but almost 80% of these borrowers are still current. Principal

forgiveness would increase the size of the government's bailout of the

companies, which have cost taxpayers more than $153 billion since they were

taken under government control in 2008. One can almost hear Mr. DeMarco

thinking, "First you made us raise our g-fees, and now this...don't complain

when we lose more money..." For the letter go to: TaxPayerDeepPockets

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109130718033&s=8721&e=001MnLPLk

RwzambhxVBt6bXTAvlW_JDYw1KU5VmmxRv4I3B6W7zMCfRajhlPJdSOA3LN7V8MUVgQCRn9MFwy_

fBhtSXOtVkYjMX3b8-mQiwjWwb-GrD_M2gu5tSqcuEXvogDoYEiEcU-ocoIXbIjUCH8rPeHJpmlD

4qE-k9pq4aWejIqaoa-2FVEw==].

And for more on government mortgage agencies, late last week HUD released

its final rule to improve and expand the risk management activities of the

FHA. It was pretty much as expected but a few things should be noted. First,

HUD will seek to force  indemnification for "serious and material"

violations of FHA origination requirements.

For those cases not involving fraud or misrepresentation, HUD will require

indemnification within five years from the date of the mortgage insurance

endorsement. Second, the proposed rule will also require delegated FHA

lenders to continually maintain an  acceptable claim and default rate, both

to gain special lender status as well as to preserve it. HUD will require

that the claim and default rate for a lender be  at or below 150% of the

average rate of all of the states in which it does business.

Specifically for indemnifications, HUD says that lenders may need to buyback

loans if they failed to verify and analyze the creditworthiness, income,

and/or employment of the borrower, verify the source of assets brought by

the borrower for payment  of the required down payment and/or closing costs,

address property deficiencies identified in the appraisal affecting the

health and safety of the occupants or the structural integrity of the

property, or ensure that the property appraisal satisfies FHA appraisal

requirements. HUD may seek indemnification irrespective of whether the

violation caused the mortgage default. Clearly, the rule change should

result in more putbacks to lenders going forward.

What does this mean? Since HUD will be requiring a buyback only if the loan

has seasoned less than 5-years (unless there is fraud), similar to GSE

loans, this may lead to a reluctance from lenders to refinance existing FHA

loans due to the fear of resetting the seasoning on the loan. Further, this

impact is not restricted to loans that are seasoned more than 5-years as the

seasoning is reset on all loans.

Although this change points towards a general tightening in underwriting and

a potential slowdown in prepays, experts are uncertain how putbacks will be

implemented for loans that go through FHA streamline refinancings. For these

loans, FHA does not  require an appraisal or income/asset verification and

hence it is not clear what criteria will be used for the putback. That said,

most believe that lenders will  be more careful in refinancing borrowers

once this rule goes into effect. Since  lenders will be assessed on the

credit performance of their overall FHA book, this should also lead to lower

delinquencies and defaults on newly originated FHA loans going forward.

And put another way, the FHA's rule makes it tougher to qualify for loans

insured by the agency. To qualify for mortgage insurance, lenders must offer

up evidence  that their seriously delinquent and claim rates remain at or

below 150 percent of aggregate rates in home states. And the rule authorizes

more extensive examination for lenders in order to ensure that they are able

to meet the FHA's new qualifications.

It requires that certain lenders indemnify HUD in claims over loans. And

let's not forget that many believe the FHA fund is insolvent - perhaps this

will help.

The government has trouble not interfering with home lending in the U.S.,

and in  fact HUD has come out saying it would like to see FHA lenders relax

their credit score minimums allowing more borrowers to qualify for FHA

loans.  But lenders are telling HUD officials the agency must first change

FHA's lender/monitoring system ("Neighborhood Watch") so they aren't

stigmatized for making loans to borrowers with lower credit scores.

Neighborhood Watch ratios are used by everyone to measure performance in

relation to other lenders in a certain geography, and a high default and

claim rate can trigger audits by FHA or the HUD Inspector Generals, and

these audits often lead to indemnification demands for actual and future

losses. Because of the Neighborhood Watch "triggers", many lenders are only

comfortable originating high credit score FHA loans. Other lenders are

interested in venturing a little down the credit quality curve, and will

often bring in outside help in making sure their originations, operations

and quality control procedures can withstand the scrutiny of the HUD's

Quality Assurance Division, Mortgagee Review Board and the  Office of the

Inspector General. The Collingwood Group LLC has been partnering with

lenders in navigating these issues to unlock this valuable product

development opportunity in ways that are responsible and defensible.

Inquiries should be directed to Brideen Gallagher at

bgallagher@collingwoodllc.com [mailto:bgallagher@collingwoodllc.com].

(And nope, this is not a paid ad.)

For news moving rates, the two-day FOMC meeting begins today and concludes

with a news conference Wednesday.  It is expected that the Fed will maintain

its rock-bottom policy rate, so the anticipation lies in the new decision to

publish rate forecasts of each district bank out to 2015 to show greater

transparency. Any hint of QE3 from the FOMC tomorrow "will send mortgages

off to the races." And tonight's State of the Union Address has been known

to move markets.

Yesterday MBS prices were nearly unchanged whereas the 10-yr T-note lost

nearly

.375 in price and closed at a yield of 2.07%. Today for excitement we have a

$35  billion 2-yr note auction at 11AM MST. In the early going the 10-yr is

down to 2.04% and MBS prices are a shade better.

(Parental discretion advised.)

A woman asks her husband, "Would you like some bacon and eggs? A slice of

toast and maybe some grapefruit and coffee?" she asks.

He declines. "Thanks for asking, but I'm not hungry right now. It's this

Viagra,"

he says. "It's really taken the edge off my appetite."

At lunchtime she asked if he would like something. "A bowl of soup, homemade

muffins, or a cheese sandwich?"

He declines. "The Viagra," he says, "really trashes my desire for food."

Come dinnertime, she asks if he wants anything to eat. "Would you like a

juicy porterhouse steak and scrumptious apple pie? Or maybe a rotisserie

chicken or tasty stir fry?"

He declines again. "Naw, still not hungry."

"Well," she says, "would you mind letting me up? I'm starving."

If you're interested, visit my twice-a-month blog at the STRATMOR Group web

site  located at www.stratmorgroup.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106435366068&s=4179&e=001SVt-lj

bp53436QjxD9vbwURtIPPjV05jEcEKyBN3SjS2forXe0C_foO8RjEV-Uye0N7Z_Sh1il0SRXPx6P

jQauayNXQjni-Hc9Sseu-hhZcR1ujeZyAEpw==]

. The current blog discusses residential lending and mortgage programs

around the world. 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.

Rob

(Check out

http://www.mortgagenewsdaily.com/channels/pipelinepress/default.aspx

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=r9kpv5iab.0.epg7qedab.zy6u9cdab.8

721&ts=S0720&p=http%3A%2F%2Fwww.mortgagenewsdaily.com%2Fchannels%2Fpipelinep

ress%2Fdefault.aspx]

or www.TheBasisPoint.com/category/daily-basis

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=r9kpv5iab.0.v7uif6dab.zy6u9cdab.8

721&ts=S0720&p=http%3A%2F%2Fwww.thebasispoint.com%2Fcategory%2Fdaily-basis].

For archived commentaries, go to www.robchrisman.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=r9kpv5iab.0.fpg7qedab.zy6u9cdab.8

721&ts=S0720&p=http%3A%2F%2Fwww.robchrisman.com%2F].

Copyright 2012 Rob Chrisman.  All rights reserved. Occasional paid notices

do appear.

This report or any portion hereof may not be reprinted, sold or

redistributed without the written consent of Rob Chrisman.)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~~

Join My Mailing List

[http://visitor.r20.constantcontact.com/email.jsp?m=1102827910937]

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~~

Forward email

http://ui.constantcontact.com/sa/fwtf.jsp?llr=zy6u9cdab&m=1102827910937&ea=b

cahoone@globalhomefinance.com&a=1109130718033

This email was sent to bcahoone@globalhomefinance.com by

rchrisman@robchrisman.com.

Instant removal with SafeUnsubscribe(TM)

http://visitor.constantcontact.com/do?p=un&mse=001gYuebWlSSZMa7X7_YCXY1pkylq

TmggCt&t=001SnULbbynhIgodJftXFo5ow%3D%3D&llr=zy6u9cdab

Privacy Policy:

http://ui.constantcontact.com/roving/CCPrivacyPolicy.jsp

Online Marketing by

Constant Contact(R)

www.constantcontact.com

Chrisman Inc. | 326 Mission Ave. | 326 Mission Ave. | San Rafael | CA |

94901