Paul Muolo

THIS JUST IN: Bank of America is contemplating ending its warehouse unit's "early purchase program" by yearend, according to one source familiar with the matter. If so, that means nonbanks that originate mortgages in the primary market with B of A warehouse money and then sell that production to its correspondent group (through a captive arrangement) could be out of luck.

Morgan Stanley & Co. this week took bids on its residential servicing division, Saxon Mortgage, Ft. Worth, Texas, which holds $28 billion of contracts on its books, according to M&A officials.

It's bit too early to declare one topic the "biggest mortgage story of the year" but the front runner is Bank of America's downsizing in residential finance. I don't mean to pick on the bank, but never before in the history of the business has a number one ranked company in both production and servicing fallen so hard, so fast.

Although President Obama Thursday night made a slight reference to a government-backed refi plan for troubled mortgagors, the effort appears to be temporarily stalled over concerns about what effect it would have on both MBS investors and the megabanks, according to advisors and trade group sources who claim to have knowledge of the program.

Chris George, CEO of CMG Mortgage, San Ramon, Calif., is one of 13 businessmen picked by the Republican Party to offer a rebuttal of sorts to tonight's job creation speech being given by President Obama.

GNMA president Ted Tozer has a problem and it goes like this: over the past 18 months the agency has approved 60 new firms to issue government-backed mortgage securities, but few are actually issuing. He'd like to change that.

First the good news: the White House later this month will release its plan to refinance billions of dollars of outstanding mortgages. (We might get a taste tonight when the president makes his speech.) Now the bad news: no one is certain exactly what it will look like and who will be eligible.

Nationstar Mortgage, Lewisville, Texas, is contemplating making a bid for Bank of America's correspondent lending division, or at least parts of it, according to industry advisors who claim to have knowledge of the matter.

The Collingwood Group Wednesday announced that it has hired industry veteran Tom Cronin as a managing director of the firm.

The new MBA application survey is out and the news is a bit perplexing: despite the lowest rates in 50 years application volume fell by 5% for the week ending Sept. 2. What's going on here?

Although mortgage rates continue to test new all-time lows, applications took a tumble last week, a sign that consumers continue to be spooked by uncertainty in the overall economy.

When the Federal Housing Finance Agency late Friday unveiled its $200 billion lawsuit against investment banking firms that sold faulty MBS to Fannie Mae and Freddie Mac, it also targeted executives who signed the original shelf registration documents on the securities in question.

When it comes to mortgage banking, Bank of America is heading for the turnstiles. Over the past 12 months it has exited wholesale and reverse lending, announced plans to downsize its servicing portfolio in a major way, and put its correspondent division on the auction block.

The yield on the benchmark 10-year Treasury bond fell to another all time low early Tuesday morning – 1.92% -- as stocks sold off in Europe and American equities plunged by almost 300 points at the opening bell.

Stephen L. Ledbetter, senior vice president of mortgage backed securities for the Government National Mortgage Association, is leaving the agency for a senior position at the Federal Deposit Insurance Corp., according to officials familiar with the matter.

Caliber Funding, Dallas, hopes to hire dozens of new loan officers over the next few months, especially in California, according to chief executive officer Brian Simon.

I'm not one to spout out Pollyanna hope to readers when there is none. Friday's job figures from Uncle Sam was a blow to the gut, the only good news being that it could've been worse. Here's one ray of hope: the mortgage brokerage segment added jobs for the first time since October 2010.

MountainView Capital Holdings, Denver, said one of its investment funds was the winning bidder on a $282 million pool of residential loans auctioned off by the Federal Deposit Insurance Corp.

On Friday morning the yield on the 10-year Treasury fell to 2.06% compared to a record low set two weeks ago of 1.98%. The reason for Friday's rate tumble: a still ugly labor market.

Although Bank of America – for now – is committed to staying in warehouse finance, it may exit that business as well.