Paul Muolo

We can't yet tell you the name of the trade group that wants to sue the Federal Reserve over its loan officer compensation rule, but if a lawsuit is filed, it will happen this month. The LO compensation rule goes into effect April 1 and it's unclear exactly what it will mean for the nation's remaining 5,000 loan brokerage firms.

On Friday the government will release its new employment numbers for December and we'll see first hand if all this glowing economic optimism we've been hearing about is for real. Meanwhile the yield on the benchmark 10-year Treasury has fallen to a less frightful level (3.3%) and mortgage bankers are hoping (now cross your fingers) that come spring consumers will step up their home buying.

It's all about making a profit and not worrying about the customer because if the customer doesn't like it, he can go across the street where there's no longer a mortgage lender to compete against. Anyway, that's the kind of attitude some mega lenders are supposedly taking these days, and that's why it's taking them 90 to 120 days to close loans, or so I've been told.

Craig Cole and Jim Francis, who head Union Bank's residential division, have a message for all those supposed jumbo conduits that have formed over the past year (but haven't issued any securities): "We're ramping up and don't expect to buy any product from us."

The New York Post is reporting that Bank of America has a $1 billion package of nonperforming mortgages out for bid. But is the deal for real? Investors in the NPL market said some B of A traders were scratching their heads on Monday because they knew nothing about the sizeable auction.

THIS JUST IN: Add the name of Goldman Sachs to the list of firms eyeing the jumbo conduit space. And possibly PIMCO. We've heard the Goldman name before, but more confirmations have come in on that one. (Keep in mind that Goldman owns subservicer Litton Loan Services.)

Warehouse credit has loosened up significantly over the past year with plenty of new lines being written—but mostly for firms that have a liquid capital position north of $2 million.

On December 15 the board of the California Public Employees' Retirement System will hold a meeting to discuss (among other things) the future of its mortgage program. Some mortgage bankers that fund these loans told National Mortgage News that underwriting on the loans has been tightened up and a jumbo option was killed a year ago.