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and women record things in their diaries......
I thought my husband was acting weird. We had made plans to meet at a nice
restaurant for dinner.
shopping with my friends all day long, so I thought he was upset at the fact
that I was a bit late, but he made no comment on it. Conversation wasn't
flowing, so I suggested that we go somewhere quiet so we could talk. He agreed,
but he didn't say much.
him what was wrong; He replied, "Nothing..." I asked him if it was my
fault that he was upset. He said he wasn't upset, that it had nothing to do
with me, and not to worry about it. On the way home, I told him that I loved
him. He smiled slightly, and kept driving. I can't explain his behavior. I don't
know why he didn't say, "I love you, too."
got home, I felt as if I had lost him completely, as if he wanted nothing to do
with me anymore.
sat there quietly, and watched TV. He continued to seem distant and absent.
Finally, with silence all around us, I decided to go to bed. About 15 minutes
later, he came to bed. But I still felt that he was distracted, and his
thoughts were somewhere else. He fell asleep; I cried. I don't know what to do.
almost sure that his thoughts are with someone else. My life is a disaster.
two-foot putt..........who the hell misses a two-foot putt?
Monday is a federal holiday, and there will be no commentary.) Here's a note I
received from the owner of an independent mortgage bank with a libertarian
streak. "A long time ago, at a university far away, I was taught that the
elixir for growth in any free economy was cheap energy and cheap money. We have
both in spades, and yet, there is no growth. Could something be counteracting
the elixir of growth? Like, perhaps, dare I say it? High taxes and high
government regulation?" As I mentioned yesterday rates have some LOs
licking their chops over refis whereas most investors are dreading having their
MBS portfolio potentially prepay. We will be finding out if the "hassle
cost" of obtaining a new loan outweighs the actual cost of doing so for
many borrowers above 4%.
Stanley is $3.2 billion poorer - although the company had already set
aside the money - to set up yet another huge mortgage-related settlement. "Morgan
Stanley relied on a few subprime mortgage originators, especially New Century,
to feed its bond pipeline...Morgan Stanley employees frequently tried to
increase the 'pull-through rate' of New Century loans getting into securities,
even when the loans were lower quality than expected...In thousands of cases,
Morgan Stanley included loans that were worth more than the value of the
underlying property - something it had told investors it would not do..."
what I am sure will be a long-running legal morass Flint, Michigan is
providing a terrible case study in water, how important it is, and how fragile
the system is. (Just think of the panic if Manhattan or Chicago's water supply
went bad.) To no one's surprise mortgage lenders are "now demanding"
that prospective home-buyers prove that a property is free of
contamination in order to receive a loan, according to The Wall Street
Journal. "The demand could further bring down home prices across the
economically depressed city." Really? The mortgage industry is going to be
blamed for this? Anyone who understands lending knows that lenders have always
required that municipalities and properties don't have issues such as this.
Law Offices of Peter N. Brewer highlight a recent case where HOA rules were upheld once again. A small group of property
owners challenged regulations and fees adopted by the Oak Shores Community
Association. These owners rent their homes to short-term vacation renters and
challenged a revision that states the minimum rental period is seven days, with
is an annual fee of $325 to those who rent their homes, along with other
miscellaneous fees. The rule also limits the number of cars, boats and other
watercraft that renters can bring to the community. The HOA argued that the
rules were supported due to expert witness testimony describing the
disadvantage to the HOA of having guests and the added costs sustained by the
HOA due to these guests. The trial court ruled in favor of the HOA and they
were awarded their attorney fees in excess of $1.1 million.
to recent data from CoreLogic, foreclosures fell 21.8 percent in the inventory
for November 2015, compared to a year earlier when foreclosures fell by 18.8
percent. Florida, Michigan, Texas, California and Georgia had the highest rates
of completed foreclosures compared to Washington DC, North Dakota, Wyoming,
West Virginia and Hawaii, which all had the lowest rates of foreclosure. The
National Association of Home Builders has supported the overturn of the EPA's
"Waters of the US" rule, which would have resulted in a rise
in project costs and fees. The Houston housing market ended 2015 on a
near-record high, with single-family home sales and sales of all property types
reaching the second highest level, trailing behind the levels seen in 2014. The
Houston housing market may remain cool for an extended period of time due to
the drop in oil prices and the slight slowdown in sales allowed for inventory
to grow from a 2.5 month supply to 3.2 months.
we're talking about the importance of water, and water-related lending issues,
there are plenty of fancy places on the water around the nation. As home prices
have been on the rise, home value growth for luxury houses have declined the
second half of 2015, while homes in entry-level and mid-market areas have
continued to rise. The median home value in mid-market ZIP codes and
entry-level ZIP codes increased 5 percent and 4.7 percent respectively, last
year. Homes in luxury ZIP codes increased 3.3 percent, which is lower than the
national home value growth. The decline in luxury home values can be attributed
to a variety of reasons including a decline of foreign buyers due to strong
U.S. dollar appreciation and financial turmoil overseas, normalization in home
value growth, and continued pressure on entry-level home values due to high
demand and low supply. Although, the perception of what luxury homes versus
entry to mid-level market homes are depends on the market. For example, the
median luxury home price in Orlando, Florida ranges from $277,200 to $388,000,
while the range for luxury homes in Los Angeles, California is $1,055,900 to
to the capital markets, since activity there determines mortgage rates &
prices, Fannie Mae announced that it selected the winning bidders in its latest sale of non-performing loans
($1.32 billion with unpaid principal balances of about 6,500 loans). The
winning bidder for two of those pools, representing 2,068 loans that carry an
unpaid principal balance of $418,414,683, was MTGLQ Investors, L.P., 99%
of which is owned by Goldman Sachs.
How did that sit with Democrats? Not so good.
Senator Elizabeth Warren and Representative Mike Capuano have
criticized the government's practice of selling non-performing
loans to private investors. And other activists are saying that nonperforming
loans should be sold to housing agencies and non-profit groups.
Speaking at a conference, the CEO of BB&T said
he sees no basis for all the "gloom and doom" and that while soft
energy prices are a problem, nothing has really changed much in the past few
months. He called his loan pipeline "good," said lending market price
competition is "more reasonable," and indicated he does not see any
"big change in the credit cycle is about to happen." Meanwhile, the
CFO at Wells Fargo said at the same conference that they are not seeing any
change in loan demand despite market turmoil and that the loan pipeline is
"not much different from where it was back in Jan."
The Federal Reserve's first interest-rate increase
in nine years isn't the reason markets are volatile, says Janet Yellen, head of
the central bank. The increase had little effect on markets because investors
expected it, she told the Senate banking committee. Oil prices and the value of
China's currency are driving the turmoil, Yellen said.
Thursday bills, notes, bonds, and other
fixed-income securities rallied sharply (rates dropped) in the early going and then
sagged throughout the day. Treasuries have reached extremely overbought levels
in the short run and it would come as a surprise to see some
consolidation. Fed Chair Janet Yellen testified before the Senate Banking
Committee, saying that the Fed had been surprised by the degree of the drop in
energy prices and the U.S. dollar.
Japan 10-year bond yields are negative as a result of negative interest rates
having been recently introduced in an effort to further weaken the yen. But it
hasn't worked, and the yen is at a 16 month high versus the dollar. Investors
Japan looks relatively safe compared to most other countries. And looking at
this country, as ThomsonReuters put it, "The idea of negative short-term
rates stimulating demand only seems to be creating a more challenging
environment for banks which are supposed to be the medium through which the
excess liquidity from the central bank is supposed to flow. Turns out, it might
be crushing them."
we've had a fair amount of scheduled news that could, in theory, move rates -
but what is moving rates now are oil prices and global stock markets. We had
the January Export Prices ex-ag. and Import Prices ex-oil (import -1.1%), and
January Retail Sales and Retail Sales ex-auto (+.2%, higher than expected, +.6%
also better than expected). Coming up are some inventory numbers as well as the
February Michigan Sentiment number.
the new 10-year note ended over .5 better in price and closed at 1.64%. Agency
MBS prices finished about .125 better. Today we're at 1.69% and worse .125-.250.
Don't forget that President's Day comes early this year - there will be no bond
market (or commentary) Monday.
Day is Sunday, and in the world of romance, one single rule applies: make the
woman happy. Do something she likes and you get points. Do something she
dislikes and points are subtracted. You don't get any points for doing
something she expects. Sorry, that's the way the game is played. Here is the
last part of a guide to the points system:
she wants to talk about a problem:
listen, displaying a concerned expression...... 0
listen, for over 30 minutes....................+5
listen for more than 30 minutes without looking at the
realizes this is because you have fallen asleep....-200
develop a noticeable pot belly.............-15
develop a noticeable pot belly & exercise to get rid of
develop a noticeable pot belly and resort to loose jeans and baggy Hawaiian
say, "It doesn't matter, you have one too."......-800
this? Fifty five thousand residents in one mile-high building?
Doesn't Tokyo have earthquakes? Let's hope not everyone wants hot water at the
makes mistakes, right? The issue is admitting them. The CFPB who caught some
folks' attention yesterday with this announcement: "Today we published a
notice in the Federal Register to correct a typo regarding tolerances for
property taxes and certain other property-related costs that was found in
the "Supplementary Information" to the TILA-RESPA Integrated Disclosure rule. Learn more
to banking news, the Financial Stability Board (FSB) is based in Basel and its
global regulators quietly set the tone for the biggest banks in the world. It
has been toiling away on new guidelines on how to prevent banks from becoming
"too big to fail." Each designated country generates its own
implementation process, but the result looks a lot like what the gatekeepers in
Basel had recommended. FSB regulators still want the largest banks to raise $1.19
trillion by 2022 in debt instruments. These banks should maintain sizable
cushions able to absorb losses when a financial crisis is looming on the
horizon. Regulators remember too vividly what happened in 2008, when taxpayers
were obliged by their government to bail out banks. In the future, the cost of
the banks' failure would be supported by its investors, not the general public.
U.S. banks are affected by the new guidelines: JPMorgan, Wells Fargo, Bank of
America, Citigroup, Goldman Sachs, Morgan Stanley, BNY Mellon, and State
Street. These banks will all have to issue debt that could be used to defray
losses in times of crisis. These debt instruments will cover losses when a
bank's equity is wiped out and regulators will avoid a potential panic caused
by a domino effect. So-called Total Loss Absorbing Capital (TLAC) of the banks
will need to equal 16% of their assets in 2019 and 18% by 2022. The FSB
recommendations are designed to make the banking industry safer.
will it affect the dynamics of lending for every institution? Sure it will. New
types of debts will command higher interest rates - let's hope those don't
include agency MBS. Banks will find them more expensive, so they will be
inclined to lend less. Anyone working in a bank knows that banks today have
better cushions in reserve and more commercial loans outstanding than they had
before the financial crisis. Consider that the avalanche of debt coming from
the big 8 may reduce the money available for community banks who are also
trying to raise capital. This could create high transaction costs although the
new standards are designed to make sure the largest banks have enough capital
to absorb losses if the bank fails in order to protect against further
contagion in the broader financial system.
continue to merge and/or acquire other banks - they want to be big for
regulatory and efficiency reasons, but not so big they fall under the purview
of the CFPB or are thought of as "too big to fail." Just in the last
week it was announced that Horizon Bank ($2.6B, IN) will acquire Farmers State
Bank ($148mm, IN) for about $22.5mm in cash and stock. In the Volunteer State
Commercial Bank ($839mm) will acquire the bankrupt holding company of National
Bank of Tennessee for $5.1mm. And South Dakota's TCF National Bank ($20.7B)
will close 33 branches inside Jewel-Osco stores in and around Chicago and
replace those offices with enhanced ATMs.
FDIC released its "Bank Data Guide" - a quick reference tool for
many of the structural, financial and economic products that are available on
the FDIC's web site.
know plenty about the OCC. Are you uncertain about how much due diligence you
should be doing as a part of vendor management? Worried you're not
doing enough, or perhaps too much? A few years ago the OCC issued guidelines on
exactly that: OCC Bulletin 2013-29 Third-Party Relationships.
Even if you're not a bank, there's some good stuff in there.
of vendors, let us take a random stroll through what some of them have been up
while back we learned that all Calyx Point users can now access products
and pricing sheets for Mid America programs, regardless of whether they have
registered to broker loans with Mid America. Calyx said that its subsidiary,
LoanScoreCard, provided the product and pricing engine that enabled the
integration and the new search capabilities. "This integration is a
win/win for Calyx customers and Mid America," said Dennis Boggs, VP of
Business Development. "It gives our customers access to Mid America's
expansive and highly competitive loan programs while at the same time exposing
Mid America's products and pricing to Calyx's extensive user base."
Mae launched itsEllie Mae Pro
consulting partner program
designed to accelerate the adoption of Ellie Mae's
Encompass all-in-one mortgage management solution. The Ellie Mae Pro Consulting Partners program offers
consulting firms the opportunity to provide a broad range of high-quality
services by partnering with Ellie Mae and their customers on Encompass
implementations. Through Ellie Mae Pro, with 3 levels to choose from,
consulting partners will be offered training and certification opportunities,
along with deeper access to Ellie Mae resources, all designed to ensure
customers receive exceptional consulting services.
Eyes Inc., provider of income verifications for
lenders and background checks for employers worldwide, formed a strategic
partnership with FormFree Holdings
Corporation, the leading provider
of automated asset verifications in the mortgage industry. Private Eyes will be
a reseller of FormFree's AccountChek automated asset verification solution, the
first and only patented verification of deposits and assets (VODA) solution
accepted by the government-sponsored enterprises (GSEs). When borrowers apply
for loans, AccountChek verifies the borrower's financial statements
electronically with the borrower's banks, without anyone having to produce
paper copies of bank statements.
of a one-stop, bundled, home equity and mortgage-settlement solution to credit
unions in the U.S., MemberClose, in conjunction with LoanLogics, have created an automated portfolio review
service designed to meet the needs of credit unions. "The aim of this
partnership is to ensure that credit unions have the technology they need to
serve their members and comply with regulations. In addition, it means that
credit unions of any size have access to the same technology as the largest
mortgage lenders which levels the playing field," said Brian K.
Fitzpatrick, president and CEO of LoanLogics. "Increasingly, credit unions
are recognizing that they need to proactively monitor their mortgage loan
to capital markets news, owners and CEOs of successful lenders know that capital
markets' staffs don't take undue risks. Last week the FDIC issued FIL-10-2016 announcing the release of updated
videos on interest rate risk. The new videos are intended to provide
directors, management, and staff of financial institutions with a better
understanding of interest rate risk and how to manage it. The FDIC previously
released an interest rate video made specifically for directors, and a series
of more technical videos tailored to management and staff responsible for
interest rate risk management. The FDIC's updated videos (i) reflect recent
industry data and expand on relevant topics; (ii) emphasize the FDIC's
expectation that institutions prudently manage interest rate risk; and (iii)
address industry trends, board and management responsibilities, types of
interest rate risk, various risk measurement systems, key modeling assumptions,
internal controls, and independent review.
to the bond market, since some LOs are licking their chops over refis whereas
most investors are dreading having their MBS portfolio potentially prepay, the
long end of the yield curve, which includes 30- and 15-year mortgages, rallied
a little on Wednesday. In fact the 30-year Treasury bond yield touched a fresh
nine-month low of 2.52%. Capital market's staffs are dealing with margin calls
due to the huge rally in MBS and on the flip side holding their pipelines while
originators trying to renegotiate loans. Yes, at some point recent borrowers
overcome the hassle cost of refinancing and investors see an increase in early
big news, although it wasn't, was Fed Chair Janet Yellen's testimony before the
House Financial Services Committee. She said that "financial conditions in
the United States have recently become less supportive of growth, with declines
in broad measures of equity prices, higher borrowing rates for riskier borrowers,
and a further appreciation of the dollar. These developments, if they prove
persistent, could weigh on the outlook for economic activity and the labor
market, although declines in longer-term interest rates and oil prices provide
morning the drama continues. We have negative central bank rates and bad bank
headlines coming into this morning as the Riksbank dropped its rate further
into negative territory and SocGen put up bad earnings/guidance. The
combination of those two events, coupled w/very fragile sentiment, extreme risk
aversion, and Yellen's testimony (which, as noted above, wasn't sufficiently
dovish or concerned about financial market volatility) are weighing very hard
on equities today and helping fixed-income securities.
we are through last year's low in 10-yr yields and at this clip it won't be
long before we break the 2012 low. We've already had Initial Jobless Claims for
the week ending 2/6 (-16k to 269k) - and that's about it for scheduled news -
not that it matters in this environment. We do have a $15 billion 30-year
auction coming up later. We closed the 10-year Wednesday at 1.70% and we're
down to this morning at 1.60%, or lower, with agency MBS prices better by
Day is fast approaching, and in the world of romance, one single rule applies:
Make the woman happy. Do something she likes and you get points. Do something
she dislikes and points are subtracted. You don't get any points for doing
something she expects. Sorry, that's the way the game is played. Here is part 2
(of 4) of a guide to the points system:
take her out to dinner................ 0
take her out to dinner and it's not a sports bar....+1
it is a sports bar..........-2
it's all-you-can-eat night....-3
sports bar, it's all-you-can-eat night, and your face is painted the colors of
your favorite team......-10
OUT WITH THE BOYS
is happily married............+4
drives a Lamborghini...............-10
personalized license plate (GR8 NBED)........-15
you heard the latest statistics joke? Probably." CNN reports the
latest data from the IRS finds the top 10% of Americans make $128,000 in minimum
adjusted gross income versus $429,000 for the top 1.0% and $1.9mm for the top
0.10%. To reach the top 0.01% you would need $9.5 million.
already know that the largest generation in history is sitting on $4 trillion
in equity. On Thursday, February 11 at 2PM EST, National Mortgage
Professional Magazine hosts the "Moving Forward with Reverse"
complimentary webinar presented by American Advisors Group. They'll
introduce you to the NEW reverse mortgage and highlight why it's time to
empower this generation by "Moving Forward with Reverse!" Attendees
will discover how easy it is to get started. The Home Equity Conversion
Mortgage reverse mortgage is more similar to a traditional forward loan than
ever! Did we mention that broker commissions range from $4K to $12K?
Sierra Pacific Mortgage continues their focus of
featuring industry experts on their Market Power webinar,
hosted by Kelli Brookman. Who is the "expert" this month?
Well, it's yours truly - Rob Chrisman. If you are
trying to determine why rates are doing what they are doing and if that is
going to change, how to read the CFPB and their enforcement actions, and what
lender CEOs are concerned about, then join in on the fun February 18th from
11:00 - 12:00 PST (2-3 EST). Sierra Pacific Mortgage believes the key to
success is sharing expert knowledge, so the webinar is open to all.
is gearing up for spring home buying with a variety of webinars,
click a link to register:
Join BakerHosteler, co-sponsored with the Ohio
Bankers League, for its Financial
Services Risk Summit, on
Wednesday, March 3 at The Ritz-Carlton in Cleveland. This daylong seminar will
include high-profile government speakers including Calvin R. Hagins, Deputy
Assistant Director for Originations at the Consumer Financial Protection
Bureau, and Steve Dettelbach, United States Attorney for the Northern District
of Ohio, in addition to other leaders from the financial services industry. The
event will feature discussion on a full spectrum of risks faced by banks,
mortgage lenders, credit unions, loan servicers, and other credit issuers
aiming to stay ahead of high-stakes litigation and rapidly changing regulatory
and compliance issues.
The MBS Boot Camp is
back on March 3rd and 4th with the CFA Society of Los Angeles.This
2-day program is designed to introduce participants to the broad variety of
mortgage and MBS products, explain technical aspects of MBS performance, and
demonstrate why and how different types of MBS structures are created. Run by
industry vet Bill Berliner of Kinecta Federal Credit Union, participants will
explore a wide variety of concepts while gaining experience in modeling cash
flows, market execution and risks.
Speaking of TRID and the CFPB, the
impact of the CFPB's "Know Before You Owe," its 3 day period, and its
workarounds continue to present issues and problems, and there is no doubt that
these are impacting the consumer in ways unforeseen by the CFPB.
Silvera and David Lee Toste from U.S. Mortgage Corporation sent along this note
on another industry, but the policy could impact mortgage banking. "This
article was from Sunday's NY Post. I thought I'd share with you as it's a pretty damning column from Paul Sperry on how the CFPB
went about with their 2013 actions against lenders in the auto-lending
industry. If true, scary stuff indeed."
Nelson, SVP of Ops with outsource provider Altavera, sent me a note titled "TRID in the
Trenches." "Rob, having been an industry participant since before APR
became an inexplicable fact of life and in my role as an ops manager for the
last 25+ years, I have acquired quite the historical perspective of compliance
regulations and implementation of same. I currently manage operations for
an outsource provider where we are shoulder to shoulder with our clients in the
feedback from our processing and closing staff, recent confirmed closing delays
related to TRID along with documented evidence of high TRID compliance fail
rates in closed loans, has compelled me to share some observations and
insights. Our staff is working with companies who are totally buttoned up
but did initially struggle with the changes required of TRID. A variety of
problems were seen at the time the files arrived in closing, but three
factors were common, individually or in combination: Errors and omissions
on the initial LE or subsequent LEs, changes made to LEs without a valid Change
of Circumstance, and initial CDs were sent out before the file was properly
reviewed and reconciled in order to start the three day clock. In some
cases, the initial CD was sent before the file was clear-to-close.
joint efforts were made to remediate the early challenges, lessons were learned
which I would like to share with others who still find they are struggling. First,
any staff member touching an LE or CD needs to thoroughly understand the
details of TRID regulation and access must be strictly controlled. TRID
has brought a level of complexity that makes the very best software and flows,
although absolutely necessary, secondary to the human intelligence needed to
properly analyze, manage and input the data. Expecting templates and
software to do the heavy lifting was found to be inadequate in itself.
"Extreme diligence and care must be taken with the Initial LE. The
level of detail must equal that of the final CD. Sales teams must get on
board with this necessity, and expect to provide terms and fees
accordingly. Shortcuts at this stage can be costly in every way
policies and procedures must be put in place to drive TRID compliance
throughout the entire operation with hard stops which are actually enforced
when necessary, even when it hurts. Our industry can do this!" Thank you
been 4 months since TRID requirements went into effect. And, to find out
whether all the lender apprehensions and dire predictions are coming true, STRATMOR
has just launched "STRATMOR Spotlight" survey entitled "4-Months of TRID - Impact and Experience."
This important survey addresses such questions as: How well did the LOS vendors
meet TRID requirements? What's been the overall experience thus far? What
process changes have lenders implemented? What's worked well? What hasn't?
What's TRID cost and how have these costs been absorbed? STRATMOR Spotlight is
the new name STRATMOR's given to what was formerly known as the STRATMOR
PeerViews Program. The survey is free and lenders pay a modest fee only if and
when they choose to view and download survey results, which are expected to be
available by mid-March. This approach allows you to know how large the survey
response has been before purchasing the survey.
to "Fat Tuesday" - Mardi gras. Once again lenders are brushing off
their renegotiation policies as the 10-year T-note closed at 1.74% yesterday -
its lowest level in over year a year. Agency mortgage-backed security prices,
of course, are lagging due to early pay-off fears - although those in the
business believe that recent mortgage originations are much more
"sticky" due to the hassle cost of refinancing. Do consumers really
want to go through the process again to save $90 a month?
the Treasury market rallied sharply Monday in a curve-flattening trade today as
investors scrambled for safe-haven assets from gold to Bunds amidst worries
about major international banks. Interestingly gold touched its highest level
since June 2015. Global equities sold off as worries about the effects of
negative policy rates about lenders' interest rate margins in the Eurozone and
a flattening yield curve in the U.S. led stock markets to break technical
support levels. And lenders everywhere are facing margin calls from investment
bank's MBS trading desks given the rally.
China closed for the week (New Year's holiday) and no news of importance coming
out of the U.S. today, there isn't much to stem a) the stock markets selling
off, and b) the continued flight into bonds. Too much of a good thing isn't
good, however. We have a $24 billion 3-year note auction later today. In the
very early going we're pretty much unchanged from Monday's closing price