Trading On The Phone, And Who Has The Safest MBS?

(Rated PG)

A Russian woman married an Australian gentleman and they lived happily ever after in Murray Bridge. The poor lady was not very proficient in English, but did manage to communicate with her husband. The real problem arose whenever she had to shop for groceries.

One day, she went to the butcher and wanted to buy chicken legs. She didn't know how to put forward her request, so, in desperation, clucked like a chicken and lifted up her skirt to show her thighs. Her butcher got the message and gave her the chicken legs.

Next day she needed to get chicken breasts, again she didn't know how to say it. So she clucked like a chicken and unbuttoned her blouse to show the butcher her chest. The butcher understood again and gave her some chicken breasts.

On the 3rd day, the poor lady needed to buy sausages. Unable to find a way to communicate this, she brought her husband to the store...

(Please scroll down.)

 

What were you thinking?

Her husband speaks English....Hellooo!

I worry about you sometimes!

 

The mortgage industry has certainly taken its lumps in the last eight years. Things are turning around, and Jason Frazier from California's Mason McDuffie Mortgage writes in, "Here's a story on what we are doing to help some Nuns who face eviction in SF. This is about the industry coming together to help a group of ladies who sacrifice in order to feed the homeless of San Francisco. You can read the HousingWire article here. Perhaps others in the industry could check out the GoFundMe page so that we can get more donations to help these people out. In a time where our industry seems to always be the whipping boy of politicians and view negatively by the public at large, it would be great to show them that we actually do care about the communities we live in."

As the residential lending industry becomes more highly skilled every month, there are plenty of opportunities to learn! They run the gamut of national events, regional assemblies, or individual companies offering training for the industry, some free and some paid, covering a wide range of topics. Regardless, it is fun to watch the increase in ways that our education is increasing.

 For something different from the production side, "originators, is your current company introducing you to the people who actually do real-estate? We're not talking about purchased leads; we're talking about actual face to face introductions. If the answer is no, maybe it is time to talk to someone who can, FortuneBuilders Inc.! We'll be in Houston at the Crown Plaza February 17^th -21^st for a real-estate event, come meet a qualified national network of investors that buy and sell hundreds and thousands of real-estate deals a year who are looking for professional mortgage bankers to finance and educate them on their next deal. Think about where your production is going to come from this year." Contact Jon Mekeal to set up a meeting for this event.

 Lenders One, the largest mortgage banking cooperative, is hosting its annual Winter Conference in New Orleans March 6-9 for Members and Partners.  More than 500 attendees will come together to share best practices, learn from top industry experts, and help to shape the future of the industry. In today's increasingly complex market, it's never been more important to partner with the best in class to build winning strategies. That's why the conference will focus on the power of collaborating to increase profitability. If you're interested in networking with top industry peers and growing your business, reach out to Susan Malpocker about attending this year's conference.

 Understanding Fannie Mae and Freddie Mac's Rep & Warrant Policy changes is a must for lenders. Assessing the business impact of the recent changes, including on credit decisions and reserve calculations will be covered in MBA's webinar on February 18^th.

 Sun West February webinar trainings are available for registration. Webinar topics include TRID, Sunsoft application training, USDA, FHA guidelines, case number and appraisals.

 K&L Gates' group of seasoned Financial Institutions and Services Litigation attorneys are providing a webinar. On February 24^th, the team will be addressing hot litigation topics concerning residential mortgages: loan origination, then navigating through loan servicing, and ending with foreclosure and loan termination. The webinar will wrap up with thoughts on anticipated litigation trends and time for Q&A. 

 The CMBA is providing a live, in-person opportunity to hear from and discuss the latest topics and trends with the industry's top experts in its free Compliance Workshop on March 16^th.

 On February 29, WMBA is hosting a workshop featuring Kerry Walls with The Coaching Collaborative, "Executing your 2016 Playbook."  Kerry is a proven business coach and this will be an event you will not want to miss.  Referral partners are welcome to attend with you.

 Elliot Eisenberg, PhD, will speak at the WMBA dinner meeting on February 23rd.  He was a Senior Economist with the National Association of Home Builders in Washington, D.C, and is a syndicated columnist and writes a daily blog.

 And the WMBA Income Property Lunch on March 4^th features Andy Olsen, VP of Columbia Hospitality.  Andy is a well-known and respected leader in the hospitality industry, please register here.

 CMLA's Western Chapter, March 17^th luncheon, with guest speaker Marcia Waters is accepting registration now. Ms. Waters has been with the Colorado Division of Real Estate since August 2005 and is the Division Director. She started with the Division as a Criminal Investigator for the Real Estate Commission and was promoted to Chief Investigator in 2006. In 2007, she was promoted to the position of Investigations and Compliance Director. In that capacity, she managed the investigatory and settlement programs for the Division.

 MBA will be producing three webinars on the wave of revisions made to the GSE rep & warrant framework. The goal is to provide you with a detailed perspective on what has been changed since 2013 and how it works together as a cohesive framework. Recently the GSEs announced the availability of an independent dispute resolution process to help resolve disputes over loan-level defects. This announcement was the capstone of a substantial amount of work between the GSEs, FHFA and the industry, with MBA significantly engaged over the past two years.

 It's time once again for Maryland Mortgage Bankers Association's (MMBA) annual conference on May 5^th. Keep building communities, register today.

 Save the date for the 21st Annual Western States Loan Servicing Conferenceand Golf Tournament, August 14 - 16 in San Diego. Regulators and consumers are focused in on improving the consumer's experience. Millennials and multicultural segments will make up the majority of household growth and servicers will need to know to work with the new normal.

 Shifting gears into the capital markets, it is important to know that other countries securitize and offer up their residential mortgage-backed securities. For example, Japan's are arguably much safer than ours.

 Yet supposedly banks are abandoning the government-backed mortgage-bond market because the Federal Reserve's quantitative easing has narrowed profit margins. Basel III capital requirements also are forcing banks to rethink which markets to participate in.

 The Federal Reserve Bank of New York reported that 62% of Treasury securities are traded over the phone, compared with 24% of currencies. This presents a regulatory issue because trade volume and price data are not available instantly, as they are in the equity and futures markets.

 Policymakers are considering proposals to de-risk the Government Sponsored Enterprises (GSEs) through greater reliance on private capital, such as expanded up-front risk sharing using private Mortgage Insurance (MI). Today, MIs are more resilient and reliable counterparties, dedicated to providing access to housing finance credit in good and bad economic times.  The time is right to move forward to expand front end risk sharing with MI, and USMI members are ready to do more. Click here for USMI's latest factsheet - Mortgage Insurance Reliably Transfers Mortgage Credit Risk.

 How about these rates?! Plenty of lenders saw some great lock weeks last week, which I am sure will be reflected in the weekly MBA application data. Friday rates headed (temporarily?) higher given the strong retail sales report and chatter about oil production cuts (which normally would move oil prices higher). The 10-year note yield closed the week at 1.75%, up from 1.64% on Thursday which was its lowest level in over a year.

 What are the smartest guys in the room watching? Continued global growth fears, European bank worries, and oil oversupply, and lowering of Fed rate hike odds. Maybe we're just waiting for more worries about China and its secret accounting systems, Ukraine, North Korea, Greece...

 And meanwhile with rates this low lock volumes shot up last week - we'll find out the numbers tomorrow but all we have to do is ask the folks on the lock desk. The supply picks up, the demand by the Fed keeps up to the tune of over $1 billion a day from early pay-offs. Yes, rumors of the refi business dying away were exaggerated. And any investor who paid up for servicing rights in the last year is fretting that they paid too much for an asset that could disappear in a refinance.

 Darn there's a lot of scheduled news this week crammed into four business days. Will any of it make any difference given tumultuous, rate-moving events overseas? Probably not. But let's list them off anyway. Tomorrow are the MBA's mortgage apps data for last week, Housing Starts & Building Permits, the Producer Price Index for January, and the Industrial Production & Capacity Utilization figures. And also the Fed's Minutes from the late January FOMC Meeting. The cavalcade continues Thursday with the Philadelphia Fed chatter, Initial Jobless Claims, and Leading Economic Indicators. Friday we wrap up with Leading Economic Indicators, the Consumer Price Index.

 Today we've had Empire Manufacturing (-16.6 versus last month's -19). Later is the NAHB Housing Market Index. Rates are currently a shade higher with the 10-year at 1.76% and agency MBS prices worse less than .125.