November 18: Citi to dial back FHA/VA biz; where will market price HARP 2.0 loans? A plethora of investor & MI changes

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If you changed residences between 2010 and 2010, congratulations: less than

12% of the U.S. population moved during that time, the lowest recorded rate

since the Current Population Survey began collecting statistics on the

movement of people in the United States in 1948. The recent peak was in 1985

(20%). If folks move more than 500 miles, the majority do it for

employment-related issues, and if folks move less than 50 miles, the

majority do it for housing-related reasons ("My mudda-in-law was driving me

crazy!"). Per the survey, of the 45 million people who lived in a different

house within the United States, almost 7 million lived in a different

state, with the top being CA to TX, NY to FL, FL to GA, CA to AZ, NJ to PA,

NY to NJ, CA to WA, TX to CA, GA to FL, and CA to NV.

The Fed continues to buy roughly $1 billion a day of MBS's with proceeds

from prepaying pools of loans. Do originators really think that the New &

Improved HARP loans will carry the same rates as a brand-new, 80% purchase

loan? Or, asked another way, where will the new securities trade since they

could be filled with loans having greater than a 125% LTV? Jungle drums say

+/- 3 points worse than current MBS's, based on risk and illiquidity. As one

astute reader wrote, "If you convert three points to yield and bump a

borrower's refi rate by 75 basis points, that definitely cuts into the

refinance potential for the outstanding loans." But investors may want the

new pools, given that the prepayment expectations should be very slow.

And while we're on securitizing, Freddie announced that it would take

previously delinquent loans that it was required by contract to repurchase

from its Mortgage Participation Certificate (PC) pools and return them to

the secondary market. The Freddie loans from those repurchased pools which

are now current and have been performing for four months will be securitized

and sold. Coming to a trading desk near you, they will be identified with a

new "R" prefix ("R"eperforming). The program is expected to begin this

month with the first group of loans selected from among those that have been

performing for at least 12 months at the time of securitization.

Freddie Mac said that these PCs may back new Freddie Mac Real Estate

Mortgage Investment Conduits (REMIC) and Giant securities in the future.

And HARP 2.0 chatter continues. Brian B. with Two River Mortgage writes,

"HARP 2.0 failed to address three of what I view as the most critical

aspects of the recovery.

First, it completely ignored all the HELOCs in existence. It is my

understanding that the banks had written of somewhere over 80% of all

HELOCs. If the FRB increases the interest rates by 1% the defaults will rise

dramatically. Second, at the height Fannie & Freddie retained about 14% of

all the mortgages. Since '07 we know where they have risen. A large number

of F&F loans qualify for F&F, yet were never sold to F&F. These are the

folks on the fringe. If they walk it will just further devalue the F&F owned

homes. It is my understanding there are a significant number of homes in

this position. Third, F&F both capped the ARM refi's at 105% LTV. Why, when

these are arguably the homes in the most distress when rates begin to rise.

They were also the borrowers who are at the greatest risk of default."

In recent months the mortgage biz has seen its share of company news, such

as Bank of America cutting its wholesale and then correspondent channels,

MetLife being up for sale, and major lenders ending their reverse mortgage

programs. What would happen if a Top 5 investor stopped doing a conventional

or government program entirely or only offered it to selected clients? For

example, rumors, apparently true, swept the biz yesterday that Citi is

suspending government delegation for many - but not all -of its clients

today. The decision is driven by defect rates: perhaps the FHA/VA business

that Citi was seeing showed a marked difference to that of the conventional

business and it took it upon itself to act. The move is not meant to be

permanent, and Citi will be working with its clients to improve quality - a

good goal.

Other jungle drums are saying that Google will be shutting down its current

Lead Source model. The goal might be to be able to provide lender service

levels and title company costs, etc. in addition to best rate. They will

open the new model for the states of Alaska, CA, AL, PA and Washington DC,

having a huge impact on internet lenders.

Earlier this week United Guaranty has expanded its underwriting requirements

"to allow greater eligibility for broker TPO loans, using its risk-based

Performance Premium pricing." Reference guides and documents can be found at

www.ugcorp.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108664509681&s=8721&e=001EzlwOO

3fNyEc4tsUaTPSgksJ5Dg7BgtRlAv-ViXuHPw8y06or7iD3EZdAzFwKFpY9uUck2KxYfIR6m39h1

sj-hJ--_WxO4osLfrVG4kDf25mMsjPcK1tIA==].

Mountain West Financial "will now accept a purchasing spouse with 'no FICO

score,'

as long as the remaining purchasing spouse has the minimum FICO score for

the program requested and an approval through DU and the borrower without

the FICO has a valid social security number. (I am no underwriter, but

usually VA looks at the non-borrowing spouse as if she was a borrower,

whereas FHA has no issue.) No manual underwriting is allowed. MWF also

addressed the USDA situation: "Rural Development is currently operating

under a Continuing Resolution (CR) which expires on November 18, 2011.

If the Fiscal Year 2012 budget is not passed by that date then a new

Continuing

Resolution may be issued. During this time Mountain West Financial (MWF)

will

accept locks only on loans that have received a full Conditional

Commitment."

Wells Fargo wholesale sent the word out to brokers that "registrations for

purchase transactions for the Guaranteed Rural Housing (RD) program will

again be accepted.

Note that refinance transactions are NOT being accepted at this time. The

new fee and policy changes impact the upfront guarantee fee and new annual

fee changes.

A two-month escrow of the annual fee will be required. This is an

APR-sensitive fee and will be included in the high-cost tests when

applicable."

No one can accuse Freddie Mac and Fannie Mae of not giving us enough warning

as both recently sent out advanced notice on new ULDD data requirements for

delivery in November 2012. Per Dodd-Frank requirements, one of the

requirements is to disclose the identity of the entity funding the

applicable loan, as recorded on the note, so the GSE's will require lenders

to deliver the following new ULDD data points beginning November 2012:

PartyRoleType="NotePayTo", and FullName, enter the name of the entity

funding the applicable loan, as recorded on the note.

SunTrust enhanced guidelines for the Key Loan Program, and announced that a

reference on the Portfolio Affordable Housing Mortgage Program was removed

and that the FHA has no annual MIP on certain loans.

GMAC let correspondent clients know that it GMACB will require the

successful submission of UAD compliant appraisals to both Fannie Mae and

Freddie Mac through the joint UCDP for all conventional conforming loan

applications dated on or after December 1. (Fannie Mae's DU Refi Plus loans

need only be submitted to Fannie Mae through the UCDP.) Appraisals that

were successfully uploaded will receive a Submission Summary Report (SSR)

along with a Document File Identifier (Doc File ID). These documents must

be uploaded to Image Central along with the appraisal prior to purchase.

"If using GMACB's VEROS Appraisal Management System exclusively, no further

action by you is necessary." In addition, GMAC addressed the changes in VA

Funding Fee Rates starting with loans closed today, and the revised

appraisal requirements for VA Interest Rate Reduction Refinance (IRRRL)

loans.

Fifth Third is "updating our fee structure for Fannie Mae DU Refi plus

adjustments and Freddie Mac Open Access adjustments on our rate sheets...for

all locks effective November 18, 2011. Relocks on existing loans in the

pipeline are not currently eligible for the updated pricing grids. The

primary impact of the changes is on loans with an LTV> 80% is significantly

improved. This is a pricing update only, product guideline changes are not

effective November 18, 2011."

Flagstar announced, starting Monday, will be making changes on jumbo

products, updated the FHA funding requests deadline, and updated its

disaster memos (updated information regarding re-inspection requirements)

for areas affected by Hurricane Irene, Tropical Storm Lee, and the Texas

wildfires.

RMIC told clients that it fully supports the new HARP enhancements and "will

participate in the new program when it becomes effective on December 1st.

Any RMIC-insured loan that is eligible under Fannie Mae or Freddie Mac's

enhanced HARP guidelines will be eligible under RMIC's HARP guidelines.

RMIC offers HARP Same Servicer and New Servicer Programs. In conjunction

with the HARP enhancements, RMIC is announcing

a major redesign and expansion of our New Servicer Program. The

redesigned New

Servicer Program will be very similar to the Same Servicer Program. (??) For

both programs RMIC will simply modify the existing MI certificate,

eliminating the need for any further analysis as long as the new loan

improves the borrower's ability to repay the loan, has sustainable terms,

and meets Fannie Mae's or Freddie Mac's HARP program requirements." "While

RMIC is not currently writing new mortgage insurance coverage, our

affiliated companies continue to support our customers and provide

non-insurance products and solutions. We continue to offer Contract

Underwriting, Credit Reporting Services, Valuation Products, Customer

Relationship Management Technology, Training, Pre-Home Ownership Counseling,

and other services important to our customers."

Effective immediately, HSOA no longer requires the Mortgage Broker Fee

Agreement

(MBFA) on wholesale loans.

MSI announced a clarification for MERS 123 Members, the elimination of MSI

lending in Clark County, Nevada, underwriting chapter clarifications, and

AIR requirements for FHA/VA and USDA loans.

It seems like half the e-mails I received Thursday afternoon were from

lenders improving their rates. Europe resumed being on the center stage - it

is a problem that is just not going to go away any time soon. So investors

moved money into "riskless"

U.S. Treasuries: 10-yr T-note prices improved .625 which dropped the yield

to 1.96%.

MBS tagged along for part of the ride improving by perhaps .250 on current

coupons.

(Reuters reports that for the four-day week ending November 16, the Fed

bought $5.55 billion in agency MBS, or $1.4 billion per day on average,

compared to $5.4 billion in mortgage banker supply over this period.)

The only news today from the U.S. is Leading Economic Indicators. In the

very early going rates have slid higher with the 10-yr at 2.01 and MBS

prices worse by .125-.250.

A husband read an article to his wife about how many words women use a

day...

30,000 to a man's 15,000.

The wife replied, "The reason has to be because we have to repeat everything

to men."

The husband then turned to his wife and asked, "What?"

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 takes a look at the impact of HARP 2.0 and the

differences in the agency's programs. 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

Market Snapshot 11/18/2011

We can all use a little extra cash this time of year, and with mortgage rates being this low there is no better time to refinance your home! Apply today @http://globalhomefinance.com/apply.php and let us see what we can do for YOU!

Interest rates started a little higher this morning but are holding well after the 10 yr closed at 1.97% yesterday. Early this morning the 10 yr traded at 2.03% at 7:30, but by 9:00 it fell back to 1.99%. Mortgage prices a little lower in line with the 10 yr price decline; stock indexes were pointing to a better open at 9:30 (at 9:30 the DJIA opened +40). There was no economic data today until 10:00 when Oct leading economic indicators, expected up 0.6%, increased 0.9%; Sept revised to +0.1% frm 0.2%. The LEI suggests the economy is holding and improving a little. There was no noticeable reaction to the better report. At 10:05 the 10- yr at 2.00% +3 bp and mortgage prices -.12 bp. Although LEI is better the outlook for employment still is dismal.

In Europe the ECB was in again buying Italian and Spanish bonds keeping their rates under what is considered a key rate at 7.00%. A rate over 7.00% for Italian bonds is being considered as the level that has to hold if Italy and Spain have any chance of avoiding defaults because the austerity cuts at higher rates would be impossible to achieve.  European officials may start talks with the International Monetary Fund on a mechanism for the ECB to lend to the IMF for sovereign bailouts in the region, Dow Jones Newswires reported. Agreement on the proposal between ECB and IMF may result in an announcement at a European Union summit on Dec. 9, Dow Jones said, citing two unidentified people with direct knowledge of the matter. Sounds nice but we won't hold our breath that a workable plan will emerge; it hasn't happened in the last 2 yrs.

The ECB is continuing to buy Italian and Spanish debt, how that is being justified is unsure since the EU treaty precludes the central bank from buying individual country bonds. Nevertheless it is doing it and it seems the only actual activity in the region. With the EU teetering on the edge of potential breakup all the rules are subject to change. Germany continues to resist the intervention by the ECB, and Germany is at increasing odds with France over how to deal with the debt crisis. The longer the crisis drags on the more EU countries will turn inward toward their own interests above those of the EU as a group. Germany is already thinking outside the box of the EU.

A little better to start today in the equity markets but no assurance the key indexes can improve. A stronger equity market today would work against the rate markets; not something new though, that has been the trade fro months----higher indexes equals lower prices in rate markets.

Yesterday the 10 yr closed under 2.00% and increased the bullish technical outlook. The 10 remains slightly below 2.00% this morning, the longer it holds the better the outlook fro mortgage rates. The relative strength in the bond market is increasing and more of our studies are turning more positive. That said, even with Europe and safe haven moves, if US equity markets rally it will take a toll on rates.

Market Snapshot 11/17/2011

Before the 8:30 data this morning the 10 yr note traded at 1.97%, after the 8:30 economic reports the 10 yr back to 2.03% at 9:00 am. Weekly jobless claims were down 5K to 388K last week, estimates were for an increase of 5K to 10K. Weekly claims last week were revised to 393K frm 390K originally reported. The claims lowest since April 2nd 2011. Continuing claims fell to 3.608 mil frm 3.665 mil. Oct housing starts and permits also at 8:30; starts were expected to be down 8.0% as reported -0.3% at 628K. Sept starts revised lower to +7.7% frm +15.0%. Single family starts up 3.9% while multi-family starts -8.3%. Permits up 10.9% to 653K the best since March 2010. The two reports turned stock indexes frm weaker to better, at 9:00 the DJIA +40 after being off 50.

In Europe more talk but nothing of substance in terms of progress. Now France and Germany squabbling;  Germany's Angela Merkel rejected French calls to deploy the European Central Bank as a crisis backstop, defying global leaders and investors calling for more urgent action to halt the turmoil. ECB itself has also resisted calls to provide more support. Mario Draghi, the Italian who took over as president of the central bank this month, said Nov. 3 that backstopping government borrowing lies outside the ECB’s responsibility. The spread between French and German 10-year yields widened to as much as 204 basis points today as France sold 6.98 billion euros ($9.38 billion) of notes. Spanish bonds sank, driving 10- year yields to the highest since the euro was introduced in 1999, as borrowing costs climbed to the most in at least seven years at an auction of securities. The ECB said to be buying more Italian debt today after buying yesterday; the Italian 10 yr traded above 7.00% early this morning triggering some safe haven buying in US treasuries, now at 6.95% and the US 10 yr back over 2.00%.

At 9:30 the DJIA opened -13, 10 yr 2.02% +2 bp and mortgage prices -3/32 (.09 bp) frm yesterday's close.

At 10:00 a few minutes ago the key Nov Philadelphia Fed business index, expected at 9.0 frm 8.7 in Oct, earlier this week the index was expected at 6.8. As released the index was weaker at 3.6, prices pd component 22.8 frm 20.0, new orders 1.3 frm 7.8, employment component 12.0 frm 1.4. Employment better but new orders and the overall index weaker than expected. There isn't much initial reaction to the report. An index above zero is considered expansion, below zero, contraction.

The 10 yr and mortgage markets continue to trade in very tight ranges, two weeks with little change. Early today the 10 traded at 1.97%, at 10:00 back to 2.00%. Two factors for US rates; Europe and the US equity markets. Stock indexes turned up at 10:05 this morning and immediately the mtg market slipped a little. We still have somewhat positive technicals but overall the recent activity is neural with little changes.

November 17: More mortgage jobs; rating agency fees going up; HARP 2.0 dissected & dissected further

One week until Thanksgiving - time flies. What's in a name? Plenty. For

example,  the name of the Athletic Director at the University of Texas is

DeLoss Dodds. (That first name would be tough to overcome.) And occasionally

I am asked, "Where did the name 'OCWEN' come from?" OCWEN is New Co. spelled

backwards. Newt Gingrich has a pretty odd name also, but that didn't stop

him from reportedly earning $1.6 million from Freddie Mac, and in fact

probably helped.

The F&M Bank & Trust Company is searching for LO's in the Central Region

(Tulsa,  Oklahoma City, and Dallas) and a Sales Manager for its Dallas

Branch. And in case you haven't heard of it, F&M Bank & Trust has been in

business for 65 years, and  is a "locally owned" $2 billion bank founded in

Tulsa in 1946 (www.fmbanktulsa.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108647610758&s=8721&e=001MjWdKZ

NHh6majF5ZntnkDGY2PVPHUhQcw8BdV9se0-3GA9oPDk9H962znlv7ASYgd_pzP-wtlZQvOXy75m

F-AYHJtNYV9oXeaxxu7I_LJjyWLJ5Yv7sMnQ==]).

The bank itself has been primarily a commercial bank but its growing

mortgage operation has offices in both Oklahoma and Texas. It is a

correspondent lender selling 100% of its production, and "prides itself on

professionalism, high touch service, creative solutions and competitive

pricing. We avoided the sub-prime mess and stayed more  main stream with our

product offering." If you know someone who might be interested, they should

contact the president Mark Revard at MRevard@fmbanktulsa.com

[mailto:MRevard@fmbanktulsa.com].

In addition, earlier this week I noted that Southern California's Carrington

Mortgage Services, a retail and wholesale lender in 37 states, is looking to

staff up. The contact e-mail address is indeed RobCresponce@carringtonms.com

[mailto:RobCresponce@carringtonms.com].

Just to clarify, the MBS Live product mentioned yesterday (MBSSignUp

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108647610758&s=8721&e=001MjWdKZ

NHh6m0eSc0_FQmITWyhDtDIYQ2Uj_yNOzCxiqqArDnBHm9Lw_rn_-_5fNj6uv-qXHYTwwp7JRTWI

Pb7hDgyqNhNM__eA_RFZPtXS67up5pK2WycA==])

is designed for loan originators.  For secondary marketing managers who are

looking for real-time back month TBA levels from Tradeweb along with

in-depth analytics,  ThomsonReuters Eikon is the preferred platform.

Contact Michael Ehrlich for more information on that at

Michael.ehrlich@thomsonReuters.com

[mailto:Michael.ehrlich@thomsonReuters.com].

Many believe that, as of yet, the rating agencies have been pretty much left

out  of the blame game for the financial crisis in the mortgage sector.

("Why did they rate those lousy bonds AAA, who paid them to do it, and did

they continue tracking the performance after they were issued?") But their

fees seem to be increasing:

PricierRatings

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108647610758&s=8721&e=001MjWdKZ

NHh6kbcy3YxAbDuZZOt_Q4pQSH42mt3a6R53idfPQqQ59rM5SA37qLXmVIyJgVm3qapFSy-N4ye5

tFeAAq_sdSzgFTrMipQfjpJbvIo_hBGJrf0aNkAzhIOXMC8e1y8by9LRZAoROtU0JH_42Po_0rcY

3uUISNKS-stMral3D-q0fApu_ux45EZ3zdCyjy_-fUwQNt7jo121vrD3wLBb1WKcY9X-aTIxmY7G

VBwrzRwqsaTg==].

The recent HARP 2.0 announcement was largely in line with expectations,

though perhaps the biggest surprise was Freddie's maintaining of reps and

warrants on the original loan file for <80% LTV loans. But the press has

been pointing out issues with the overall program

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108647610758&s=8721&e=001MjWdKZ

NHh6lluOxL31YpXVBUtwfh07Wyyc4H2mqY8yr2A-SzMDT4aMuKEoO_E_-bl_SCmUExv7IXV5OW0s

ncGaF68mVW4JnNY6k_kni5-OjaWDSGBtwFWxU1GyYdm5uWEwv8Gc8Nrm7nJKXguBOSSJdb0oht97

IvffjrnISPLAj2cAPZ2usaZzQ77z3W-enti8GcZOIek19JnbA0S4T5dQ==].

Common to both Fannie and Freddie are several elements. It eliminates the

125% LTV cap for HARP - this increases the universe by 3%, and 10-15% for

high coupon 2006-08 vintages. It extends HARP through December 31, 2013 -

this should make servicers  more willing to invest in HARP because it is no

longer simply a one-year program.

Both programs will become effective on December 1 (although LP won't be

ready until early next year, and many companies are running into problems

not being able to manually underwrite conventional conforming loans - see

notes below). It allows up to one delinquency in the prior 12 months, as

long as it was not within the last six months - this increases the number of

borrowers eligible for Freddie HARP by  3-5%, no change for Fannie. HARP 2.0

caps LLPAs on >80 LTV 30-year fixed rates at 75bp (previously, high LTV

mortgages were capped at 2 points) - this reduces costs for high LTV

borrowers, though they were already deep-in-the-money. For low LTV 30-year

mortgages, the cap will continue to be at 2 points - this is unchanged.

And it eased rep and warrant language, although this is still Fannie and

Freddie  specific.

There is apparently Fannie Mae specific language. For example, for DU Refi

Plus (Fannie's desktop underwriting system, used mainly for cross-servicer

refis) the  lender is not held responsible for any of the reps on the

original loan. HARP 2.0 clarified exactly which reps remain on the old loan

file under Refi Plus (the more streamlined approach, used mainly for

same-servicer refis), the lender must rep to basic standard reps on the

original loan such as: 1) it doesn't violate Fannie's charter (e.g. it's not

a condo hotel which would be a commercial property); 2) it doesn't violate

the law; and 3) there is no collusion among borrowers to commit fraud.

Solicitation may be done on >80% LTV loans as long as it is done across both

Fannie and Freddie, and cannot target only loans that the lender doesn't

own. Pooling for the highest LTV loans (>125%) will be in a new CV prefix

beginning June 2012.

These will be non-TBA eligible. And it is expected that the AVM coverage for

Fannie Mae will go from about 30% currently to as high as 80% to match

Freddie, though this is not specifically outlined in Fannie's announcement.

There is also still Freddie Mac specific policy. For loans >80% LTV, Freddie

will no longer hold the lender responsible for the original loan file. For

loans <80%  LTV, the lender will actually still hold the original reps and

warrants. (This won't help refinancing low LTV Freddie pools.) Lastly, if

the borrower is under 80% LTV on the first lien, there is a cap on the total

first plus second lien of  105% LTV.

As always, it is best to consult the actual announcements from Fannie &

Freddie,  as it is with other investors!

What impact is this expected to have on existing pools - something near and

dear  to MBS investors? Servicers may have an incentive for Fannie MBS and

for high LTV

(>80%) Freddie loans to refi into the easier reps relative to the old loan.

Second, a greater AVM coverage by Fannie will allow servicers to target more

than twice as many borrowers as before. Third, HARP 2.0, in combination with

more AVMs, will give servicers the confidence to refi high LTV borrowers,

since there is no fear  of accidentally exceeding a 125% LTV cap. And to

encourage high LTV refinancing, the GSE's are lifting existing restrictions

on borrower solicitation for >80% LTV loans which should increase volumes.

And for other miscellaneous observations that I have read...for loans being

processed through Refi plus (manual underwriting), the lender will represent

and warrant that the original loan being refinanced by a Refi Plus mortgage

loan was not originated or sold pursuant to any scheme or pattern of fraud

that involved two or more mortgages and two or more perpetrators acting in

common effort with respect to such mortgages.

Also, the lender must represent that the loan being refinanced was eligible

for sale in accordance with Fannie Mae's charter. Apart from loan size

restrictions that may vary based on the units in a home, this restriction

can potentially apply to loans that were falsely reported to have an LTV

less than 80%. Per the charter, these loans would have required MI. The

Fannie Mae release made no mention of automated appraisals. However, it did

state that the lender is responsible for reps and warrants on the new loan

if an appraisal is obtained. Aside from the reps and warrants relief due to

the likely increase in the usage of automated appraisals, the release did

not provide any reps and warrants relief on appraisals. According to one

analyst, about 80% of Freddie HARP refinancings are already using automated

appraisal whereas the number is only 30% of Fannie HARP refinancings. The

general market perception was that as HARP 2.0 is rolled out, Fannie Mae

will allow lenders to use automated appraisals on a much larger percentage

of HARP loans. Since the automated appraisal is provided by the GSEs, this

would reduce the appraisal related reps and warrants risk on the new loan.

But Fannie Mae will only allow automated appraisal for DU Refi Plus. For

Refi plus

(manual) - which is much more common for same servicer refinancings since

the loan does not need to be re-underwritten - the lender can either use the

original appraisal (if they can represent and warrant that the property

value is not less than the original appraised value) or use a new appraisal

or exterior-only inspection. In  other words, automated appraisals cannot be

used for Refi plus (manual). This would mean that originators would need to

use DU Refi plus but in this case they would  need to re-underwrite the loan

by gathering the income/liabilities/asset information.

Through this all mortgage rates continue to be relatively stable, and in

fact seem to be trending down slightly. Wednesday MBS prices were up/better

by .125-.250, and the 10-yr T-note closed at 2.02%. Homebuilder confidence,

as represented by the NAHB Housing Market Index, unexpectedly rose in

October by 3 points to 20 and is at its highest level since May 2010. The

markets will be moved by European news and scheduled & unexpected economic

news - as usual. This morning we've had Initial Jobless Claims. Expected to

remain below 400k, it dropped to 388k from a revised  393k. Housing Starts

for October were -.3%, and Building Permits were +10.9% at  653k. After the

news rates are nearly unchanged with the 10-yr at 1.99% and MBS  prices

perhaps better by .125.

Part 2 of Men Teaching Classes for Women at THE ADULT LEARNING CENTER

REGISTRATION MUST BE COMPLETED By Sun, April 30, 2012 (Part 1 yesterday)

NOTE: DUE TO THE COMPLEXITY AND DIFFICULTY LEVEL OF THEIR CONTENTS, CLASS

SIZES WILL BE LIMITED TO 8 PARTICIPANTS MAXIMUM.

Class 7

Can a Bath Be Taken Without 14 Different Kinds of Soaps and Shampoos?

Open Forum...

Monday at 8:00 PM, 2 hours.

Class 8

Health Watch--They Make Medicine for PMS - USE IT!

Three nights; Monday, Wednesday, Friday at 7:00 PM for 2 hours.

Class 9

I Was Wrong and He Was Right!--Real Life Testimonials.

Tuesdays at 6:00 PM Location to be determined.

Class 10

How to Parallel Park in Less Than 20 Minutes Without an Insurance Claim.

Driving Simulations.

4 weeks, Saturday's noon, 2 hours.

Class 11

Learning to Live--How to Apply Brakes Without Throwing Passengers Through

the Windshield.

Tuesdays at 7:00 PM, location to be determined Class 12 How to Shop by

Yourself.

Meets 4 weeks, Tuesday and Thursday for 2 hours beginning at 7:00 PM.

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 takes a look at the impact of HARP 2.0 and the

differences in  the agency's programs. 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