SunTrust Bank and Guns

It is with great amazement that I share this story. A good friend who had a great relationship with this bank had his 7 Figure account frozen because he did the crazy thing of exercising his 2nd amendment rights in the purchase of a gun. The bank actually told him he would receive his funds within 30 days. After hearing such news he contacted the General Counsel of the bank who promised he would get back with him by day's end. A lie!! For any of you lovers of the constitution (which we all should be) this should greatly alarm you. This bank is definitely off of my choice of financial institutions.

FOMC Statement

Release Date: March 15, 2011

For immediate release
Information received since the Federal Open Market Committee met in January suggests that the economic recovery is on a firmer footing, and overall conditions in the labor market appear to be improving gradually. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Commodity prices have risen significantly since the summer, and concerns about global supplies of crude oil have contributed to a sharp run-up in oil prices in recent weeks. Nonetheless, longer-term inflation expectations have remained stable, and measures of underlying inflation have been subdued.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate remains elevated, and measures of underlying inflation continue to be somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. The recent increases in the prices of energy and other commodities are currently putting upward pressure on inflation. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. The Committee continues to anticipate a gradual return to higher levels of resource utilization in a context of price stability.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.

2011 Monetary Policy Releases

Funny

What is the public hearing and seeing regarding the April Fool's Day changes? "Starting April 1, under a new compensation rule from the Federal Reserve, borrowers who get their mortgages through brokers will most likely pay less for their services and must be offered the lowest possible interest rate and fees for which they qualify. The new rule also affects those dealing with small banks and credit unions, which typically do not fund loans from their own resources. But most banks and other direct lenders, including the few mortgage companies that function like banks, are exempt." SOUNDS MISLEADING!

Details of the latest Redwood Trust March 1st deal are emerging. The $290 million residential MBS are backed by 303 loans, roughly 2/3 from First Republic Bank and the rest by PHH Mortgage. The average loan size is $977,000, according to the filing, with over 50% being from California. The deal holds an aggregate principal balance of $296.3 million with the underlying loans a mix of 30-year fixed-rate mortgages and 10-year hybrid loans. The master servicer will be Wells Fargo with Citigroup acting as the trustee.

What investor is going to buy any of the deal without a rating? Apparently Redwood began working with more than one rating agency. Fitch gave the deal its highest grade, but the other two rating agencies (Moody's and Standard & Poors) offered unsolicited opinions that raised doubts about Fitch's assessment including questions about the risks attributable to the geographic concentration of the mortgage loans.

Last week we learned that in the Great State of Texas, Vista Bank will be purchasing Founders Bank. At the other end of the deal spectrum, however, the FDIC announced that in Georgia (unofficial slogan: "Without Atlanta, We're Alabama")  Habersham Bank was closed and its depositors moved to SCBT National Association (SC), and Citizens Bank of Effingham was absorbed by HeritageBank of the South. Out in California (unofficial slogan: ""By 30, Our Women Have More Plastic Than Your Honda") Bank of Marin assumed all the deposits of Charter Oak Bank, and First California Bank assumed all the deposits of San Luis Trust Bank.

Provident Funding released details of its compensation plan. "Provident Funding will require a Broker Fee Agreement (between the broker and the borrower) to be uploaded for each transaction at Initial Registration beginning on March 1, 2011. You may use your own Broker Fee Agreement forms, provided all of the following requirements have been met: Must be signed and dated by the interviewer and all borrowers, must specify all broker fees to be charged in the transaction, regardless of who will be paying them, and the total for all broker fees reflected on the Broker Fee Agreement must match the GFE (i.e. Block 1 minus Lender Fees). When the GFE fees are input into the system: the Broker Origination Fee can be either a flat fee or percentage of the loan amount, and a Broker Processing Fee and up to 3 additional miscellaneous broker fees can be input. These must always be flat fees and cannot be based on a percentage of the loan amount; otherwise the GFE will be rejected."

Provident's bulletin goes on to note, "Where state law permits the broker origination fee to be based on a percentage of the loan amount, but the Broker Fee Agreement does not have a designated space for broker compensation to be specified as such (i.e. only as a dollar amount), one of the following is required: The agreed upon percentage of loan amount for broker compensation can be handwritten or typed in, as long as it is initialed by the borrowers, or an addendum signed by the borrowers and specifying that the broker compensation is based on a percentage of the loan amount can be provided. If neither of the above is provided, all broker compensation is presumed to be a flat fee."

Recently at Bank of America, its correspondents learned that it is now adding "loan-level suspensions to loans where state licensing requirements appear not to be met." Correspondent clients, by now, should have sent BofA copies of all current state licenses. Bank of America, by the way, has discontinued its Conforming Home Possible program line.

Other "discontinuations" include M&T cutting its FHA 30-yr fixed buydown, 203k rehabilitation buydown and VA 30-yr fixed buydown products, MSI discontinuing its USDA Rural Housing 2/1 Buydown program, and Affiliated Mortgage cutting its FHA and VA 30 Year Buydown products. 

Conversely, Flagstar Bank announced that the temporary suspension of "to be determined" (TBD) properties has been lifted. But like practically every other investor, Flagstar Bank is suspending all products that include a temporary interest rate buydown. Starting yesterday Flagstar is allowing "all approved FHA Sponsored Originators (formerly known as FHA TPO and FHA Sponsored Loan Correspondents) to order their FHA Case Number Assignments via Loantrac," and also told clients that "new construction attached PUDs located in Florida are eligible properties, provided the project or subdivision has a 50% pre-sale ratio. Flagstar continues to prohibit FHA and VA financing of new construction attached PUDs located in Arizona."

Fifth Third correspondent clients learned that next Tuesday, since Freddie Mac is revising their policy to require funds to close to be verified on refinance transactions (LP will not reflect the amount of funds required to be verified to close), neither will it.

CitiMortgage Correspondent's channel announced a re-org. Starting March 1st CitiMortgage will support your Correspondent relationship with a newly assigned Correspondent Account Executive.  Our sales coverage model offers multiple benefits, including: a seasoned, consultative Sales Account Executive that has the experience and knowledge to deliver on our commitment to you, a dedicated Client Services Consultant who will provide proactive communication and tailored support, etc. The reorganization resulted in lay-offs, as one would expect.

Mortgage Services III (MSI) posted several changes that are now on its website. Changes include revisions to refinance guidelines & verification of funds, and a revised MSI Document Preparation Form & updated procedures.

PHH told its clients that starting next Tuesday, users of its "Fastrieve" system will notice that the "PreSubmission" option will no longer be available In order to simplify the document submission process. (Users will now choose between the two remaining Package Status options, "Final" or "Conditions" and plan accordingly for existing documents.) Late last week PHH followed changes in agency guidelines, specifically with LP scored and manually underwritten loans for refinancing purchase money transactions. ("for no cash out loans scored through LP or Manually Underwritten, the mortgage being refinanced must have a Note Date of at least 120 days prior to the Note Date of the No Cash Out refinance transaction") and the verification of all assets stated on the loan app. PHH also reminded clients that "the borrower must explain in writing all inquiries shown on the credit report within 120 days prior to the date of the credit report for all LP and manually underwritten loans. Loans scored through DU are required to provide explanations for credit inquiries within the previous 90 days prior to the date of the credit report. Previously it was 90 days for all loans." Check the bulletin for exact details.

At least pricing in some areas is improving. For example, late last month Wells Fargo Funding rate sheet (for correspondent clients) pricing began reflecting an uncapped base rate sheet price (although its maximum "all-in" base price cap of 102.75 on all Best Effort Correspondent Loans remained unchanged). "For Conventional and Government Best Effort Loans, the final price, excluding SRP, may not exceed 102.750, the final base price paid to the Seller will be capped at 102.75 after adjusters have been applied, even if the "pre-adjuster" price exceeds the cap, and Servicing Released Premiums, including the non-escrow waiver, are not included in this calculation, and are applied after the all-in base price is calculated."

Remember, it's already Tuesday! I lose track of all the housing indices that come out, but today we have the Case-Shiller 20-city Index, along with Consumer Confidence. Tomorrow is not much aside from Existing Home Sales and weekly mortgage app numbers from the MBA, which, as expected for 2011, have not been setting the world a 'fire lately. Thursday we can look forward to Jobless Claims, Durable Goods, another housing price index, and New Home Sales. On Friday we'll have our second look at the GDP from the 4th quarter (old news?) and a Michigan Sentiment number. In addition to the average news week, there will be Treasury auctions today, tomorrow, and Thursday, and which always have the potential of moving Treasury and mortgage rates one way or another.

Fill up those gas tanks! For news, the focus is on continued geopolitical unrest in the Middle East and Libya, the earthquake in New Zealand, and a possible downgrade for Japan by Moody's. Oil and gold are on the rise, early indications point to a "down stock market" but the 10-yr Treasury is better by about .5 in price (and down in yield to 3.52%) and MBS prices are better by roughly .250.

Marriage is sharing.

The old man placed an order for one hamburger, French fries and a drink.

He unwrapped the plain hamburger and carefully cut it in half, placing one half in front of his wife.

He then carefully counted out the French fries, dividing them into two piles and neatly placed one pile in front of his wife.

He took a sip of the drink, his wife took a sip and then set the cup down between them. As he began to eat his few bites of hamburger, the people around them were looking over and whispering.

Obviously they were thinking, "That poor old couple - all they can afford is one meal for the two of them."

As the man began to eat his fries a young man came to the table and politely offered to buy another meal for the old couple. The old man said, they were just fine - they were used to sharing everything.

People closer to the table noticed the little old lady hadn't eaten a bite. She sat there watching her husband eat and occasionally taking turns sipping the drink.

Again, the young man came over and begged them to let him buy another meal for them. This time the old woman said "No, thank you, we are used to sharing everything."

Finally, as the old man finished and was wiping his face neatly with the napkin, the young man again came over to the little old lady who had yet to eat a single bite of food and asked "What is it you are waiting for?"
She answered:

'THE TEETH'

Missle Defense Statement from the State Dept

We shall hold them accountable if this is not true:

BUREAU OF ARMS CONTROL, VERIFICATION AND COMPLIANCE
Fact Sheet
December 1, 2010
There are no “secret deals” with Russia on missile defense.
The Administration has repeatedly communicated to the Russian Government at the highest levels that the United States will not agree to any limitations or constraints on U.S. ballistic missile defenses, and that the United States intends to continue improving and deploying BMD systems to defend the U.S. against limited missile launches, and to defend our deployed forces, allies, and partners against regional threats.
The Administration has repeatedly made clear that it is pursuing missile defense cooperation with Russia. As one example, at a June 17 hearing of the Senate Armed Services Committee, Secretary Gates stated: “Separately from the treaty, we are discussing missile defense cooperation with Russia, which we believe is in the interests of both nations. But such talks have nothing to do with imposing any limitations on our programs or deployment plans.”
The Obama Administration believes that missile defense cooperation with the Russian Federation is in the national security interests of the United States, as did the Bush Administration. Restrictions or limitations on U.S. missile defense capabilities are not under discussion in any forum.
At Lisbon, NATO and Russia agreed to resume theater missile defense exercises and discuss ways where they could potentially cooperate on territorial missile defense in the future.
U.S.-Russia and NATO-Russia cooperation on missile defense is intended to help improve our defensive capabilities, strengthen transparency, and reduce Russia’s concerns about the United States’ missile defense efforts by providing it with further insight into the nature of and motivations for U.S. and NATO ballistic missile defense plans and programs.
In 2004, under the Bush Administration, the United States began seeking a Defense Technical Cooperation Agreement (DTCA) with Russia. The DTCA is a broad agreement that, once concluded, would address the Parties’ responsibilities and rights with respect to a broad range of defense-related cooperative research and development activities, including missile defense. The last DTCA discussions with Russia were held in 2008.
The Administration decided to propose a more limited form of the DTCA that would only address missile defense cooperation issues - a Ballistic Missile Defense Cooperation Agreement (BMDCA). The proposed BMDCA would establish a framework to allow for bilateral BMD cooperation, including: transparency and confidence building measures; BMD exercises; data sharing; research and development; and technology sharing. Details about how to cooperate would need to be negotiated subsequent to the BMDCA.
As with the DTCA, the proposed BMDCA does not specify any missile defense cooperation measure in particular; instead, it would serve as an umbrella agreement under which future individual technology agreements could be considered.
The U.S.-proposed BMDCA specifically stated, “This agreement shall not constrain or limit the Parties’ respective BMD plans and capabilities numerically, qualitatively, operationally, geographically, or in any other way.”
Last spring, the Russian Government indicated that it did not wish to negotiate a BMDCA at that time.
The United States intends to resume discussions with Russia on a possible DTCA in the near future.
The United States will continue to discuss possible missile defense cooperation with Russia and will not accept any limits or constraints on our ability to effectively defend the United States, our deployed forces, and our allies and friends from the ballistic missile threat.

Fed Policy

Federal Reserve policies focused
Posted: 23 Nov 2010 01:59 PM PST
This blog posting was originally an article in the Sunday, November 21, edition of the Atlanta Journal-Constitution. The article was written by Atlanta Fed Senior Vice President and Research Director David Altig.

On Nov. 3, the Federal Open Market Committee (FOMC)—the group within the Federal Reserve charged with formulating monetary policy for the United States—announced its plans to purchase, over the course of the next eight months, up to $600 billion worth of longer-term Treasury securities.

In many circles (maybe including yours), this decision has generated some controversy. A good deal of the controversy revolves around the view that this monetary policy decision is aimed at buying up government debt for the purpose of making it easier for the country to continue on the path of deficit spending. This view is inaccurate.

I understand the concerns that are triggered when the Fed announces a significant Treasury purchase program at a time when the fiscal situation is so challenging and unsettled. Be it the hyperinflations of Germany's Weimar Republic in the period between the two world wars; Hungary after World War II; or the more recent case of Zimbabwe, most of us have heard or read of extreme examples of countries that ended up creating big problems trying to finance government by printing money.

Generating government revenues via the printing press is a policy that is often referred to as "monetizing the debt." I think the emphasis in that sentence should be on the word policy. A policy is really a sort of rule—sometimes explicit, sometimes only implicit—that lays out a decision maker's objectives and how they are going to be attained. The objective of a policy of monetizing the debt is to create inflation as a means of lowering the burden of government debt by lowering the value of the debt and interest the government must repay in inflation-adjusted terms.

Monetizing debt is decidedly not the current policy of the Federal Reserve, at least not according to Federal Reserve Chairman Ben Bernanke. Speaking at a recent conference hosted by the Federal Reserve Bank of Atlanta, Chairman Bernanke was unequivocal: "We are not in the business of trying to create inflation."

So what business is the Fed in?

In short, the Fed's so-called dual mandate charges the FOMC with promoting sustainable growth and low and stable inflation. Though the economy is moving forward, it is doing so at a pace that is only slowly yielding job growth. This forward momentum has not yet proved robust or sustained enough to dent the unemployment rate.

More important, the economic landscape at the end of the summer was colored by the continuation of a declining inflation trend that was bleeding into expectations about the probability of deflation. In a still-recovering economy with very low interest rates, the emergence of deflation expectations would be a most unwelcome development that could seriously impede the prospect for continued recovery.

As Atlanta Fed President Dennis Lockhart has said, stabilizing inflation expectations is a key to policy success, and "managing inflation expectations requires following through with policy actions consistent with stated objectives—in this case ensuring that inflation trends remain in a desired zone. The FOMC's November decision should be seen in that light."

The policy represented by the November decision appears to be working. As markets came to expect the November announcement, price expectations that had been declining all summer began to stabilize and have now returned to pre-summer levels.

Could the policy be too successful? That is, there a risk that the policy will overshoot and replace declining inflation rates with too-high inflation rates?

There are, of course, always risks to action and inaction. Now that the FOMC's action has apparently mitigated the risk of a recovery-threatening disinflationary spiral, at some point it will be appropriate to turn attention to inflation risks. As President Lockhart recently commented, we at the Atlanta Fed are confident these decisions will be made independent of fiscal considerations.

The current focus is on rising commodity prices, and the Federal Reserve, including the Atlanta Fed, is watching those developments too.

As one of the 12 Federal Reserve Banks charged with bringing a real-time sense of the economy to the monetary policy process, the Atlanta Fed queries hundreds of contacts every month. In general, our contacts, while acknowledging some rising cost pressures, do not indicate they are likely to respond with price hikes of their own.

But we will keep asking, watching for signs that things are changing, and preparing in the event that a change in course is warranted.

And this vigilance is precisely the point. Intentions do matter, and President Lockhart has made his very clear: "Rest assured, should inflation begin to move above desired levels, I am confident the FOMC will work hard to keep it from getting away from us."

By Dave Altig, senior vice president and research director at the Atlanta Fed

 

Funny

A gas station owner in Mississippi was trying to increase his sales. So he put up a sign that read, "Free Sex with Fill-Up."

Soon a local citizen pulled in, filled his tank and asked for his free sex.

The owner told him to pick a number from 1 to 10. If he guessed correctly he would get his free sex.

The citizen, some would say redneck, guessed 8, and the proprietor said, "You were close.  The number was 7. Sorry.  No sex this time."

A week later, the same redneck, along with his brother, Bubba, pulled in for another fill-up.

Again he asked for his free sex.

The proprietor again gave him the same story, and asked him to guess the correct number.

The redneck guessed 2 this time.

The proprietor said, "Sorry, it was 3. You were close, but no free sex this time."

As they were driving away, the redneck said to his brother, "I think that game is rigged, and he doesn't really give away free sex."

Bubba replied, "No it ain't, Billy Ray. It ain't rigged. My wife won twice last week."

Funny

A man goes to see the Rabbi.  "Rabbi, something terrible is happening and I have to talk to you about it."

The Rabbi asked, "What's wrong?"

The man replied, "My wife is poisoning me."

The Rabbi, very surprised by this, asks, "How can that be?"

The man pleads, "I'm telling you, I'm certain she's poisoning me - what should I do?"

The Rabbi then offers, "Tell you what.  Let me talk to her, I'll see what I can find out and I'll let you know."

A week later the Rabbi calls the man and says, "I spoke to her on the phone for three hours. You want my advice?"

The man said yes and the Rabbi replied, "Take the poison."