Mortgage News and Market Snapshot provided by:Global Home Finance Inc.: Monday Map

http://globalhomefinance.com

I know it is already Wednesday, but here is something labeled "The Monday

Map

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlVBHPhBgV0JM0NaitSjES1kbG0E874fSuyN

0GeYUio4MlC_G8hbzijEHRCT1MJhPW5lkUNYRy3LbpfIMRDpuoOWi7VOamiV8Wnk6-NaaeliC8P9

ByVClv4yWK8iFF_EAd6KSlOfafYzTC5AEp7XSKFRmAHsIJA7HDsELwuUnW7p3Q==]"

which shows some interesting trends in personal incomes among the states -

where the people with incomes are going. For example, Californians into

Nevada is an easy one to spot. As Rob B. from MIAC observed, "When are

politicians going to realize, that, like electricity, money will flow to the

place of least resistance." Speaking of money, today we learned that some is

flowing back into the mortgage market: the Mortgage Bankers Association

reported that apps were up 1.3% last week. Refis were up 2.4% and are

sitting at 61% of total apps; purchase apps were down slightly.

In Southern California, well established and capitalized Kinecta Federal

Credit Union is searching for a VP of Secondary Marketing. The VP is

responsible for administering all secondary market duties that aid in

pricing , hedging, selling and purchasing residential mortgage loans

including managing investor relationships and ensuring compliance with

applicable lending policies, regulatory and investor requirements, modeling

of mortgage pipeline risk and hedging analytics, monitoring the market and

determining best execution for salable loans, developing and optimizing

investor relations, for carrying out trades to hedge the mortgage pipeline,

executing trades to sell loans to investors, and so on. Potential candidates

for this position must meet several requirements, including a Bachelor's

degree in business, accounting, legal or equivalent experience, minimum of

five years proven progressive residential mortgage experience required

including compliance, processing, closing, servicing and basic underwriting

or equivalent, and experience in mortgage pipeline modeling, hedge modeling,

and carrying out hedge transactions. For a full job description, or to send

resumes, contact Maria Japardi, VP, Human Resources, at MJapardi@kinecta.org

[mailto:MJapardi@kinecta.org].

ValueQuest Appraisal Management Company, located in Avon, CT, has seen a

400% growth over the past year and is actively seeking new lenders who would

like to partner with one of the leading AMC's on the East Coast. "Since its

founding, ValueQuest has distinguished itself in the industry as a premier

AMC and has since become licensed in 10 states throughout the East Coast.

ValueQuest still maintains 6-7 day turn times and some of the most

dependable customer service one will find from an appraisal management

company. Its current software offers a user-friendly interface with

automatic status updates, and 24/7 access to information. These benefits

have helped grow the success of the company and its ability to attract east

coast appraisers that have a strong knowledge of their market area. The

appraisers on its elite panel are paid higher than industry standards." For

questions and more information, contact Jayne Guarino, ValueQuest's Account

Executive, at jayne@valuequestamc.com [mailto:jayne@valuequestamc.com]; for

information on the company one can visit ValueQuest

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlXOFrfIjA4aA0_lbUafPUVlxPGfiOZ-2wpU

7neqgUbFpLcMkki7008i2SpB6P9kCget1ybK6oowKLVLel0GJUY_r4Rk92Dyx_NO7arA9p3lIlp-

JBUSnJsS].

Here's one person that won't need any appraisals for a while: Darryl Layne

Woods.

He is the former chairman of Mainstreet Bank ($59mm, MO), and he pled guilty

to siphoning off $381k of the $1mm his bank received under TARP. He used the

money to buy a waterfront vacation condo in FL for himself. Under a plea

agreement, he is banned from any further involvement in banking and will

spend up to a year in prison.

Regulators and the public continue to see stories like the one above, and

they continue to see stories about how well real estate is doing. It is hard

to argue that areas of the nation are doing well. The latest comes from

CoreLogic who reported that home prices, including distressed sales,

increased 12.4% nationwide in July 2013 compared to July 2012, which is the

17th consecutive monthly year-over-year increase in home prices. Overall,

home prices remain 17.6% below the April 2006 peak, but have increased

22.8% from the post-crisis low in February 2012. The top five performers on

the month were Chicago (48.7%), Phoenix (30.5%), Las Vegas (29.3%), Los

Angeles (23.9%), and Boston (23.2%). The recent performance in Chicago is

notable, as the area has historically had high levels of distress, low

investor participation and has greatly lagged the national recovery.

However, July marks the 4th consecutive month where Chicago HPA has exceeded

the national average on both the total index and non-distressed index. The

home price growth in Phoenix, Las Vegas and Los Angeles, all previously

bubble markets, continues the trend of relative outperformance that has been

seen throughout the year.

Huh? Ellie Mae up for sale? Lots of companies that have recently gone

through an agonizing LOS conversion may be interested in this story

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlXrmCWM5nmkUjKuKo5pHrZeoZNLJhdmzMrP

iUjlztpkxOT_9EirnIZQyf8HmkV77pLZPPIsfDWAqcdfJxyTU8g0cACeLNu5j4JuAs8vu7-BwSJG

l2yT8l7jvViSap-5NXWuYd7_KKOgE0TepeNAp1ezPCEe2CpUFQbe4nwbqiou8AS5O58LAR0BFrOR

YATC5-Q=].

I have received several questions along the lines of, "We're a mortgage

broker doing about $20 million a month - do we have to keep 5% of our

production in cash due to QRM?" The question revolves around what does a

"sponsor" mean when it comes to QRM? First, remember that we have a couple

months of public comment, but the concern is "...a proposed rule requiring

sponsors of securitization transactions to retain risk in those

transactions..." - FDIC

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlUnhM84ZDn9oIt8uXfUrdxtZfCCnhzKUBG4

swWee6nY-b-FNuPkFdWaesCKEcX9acQLIQurlq82-JnwZyrvk79RwmsORphYowFDvpAT0arRxZR6

4J5RZDTmB_Z0AeyDIWiNhn5QV_RUYGnoaWO2SpRv6X76e6c5pwc=].

As discussed in the original proposal, the agencies proposed that a

"sponsor," as defined in a manner consistent with the definition of that

term in the Commission's Regulation AB, would be a "securitizer" for the

purposes of section 15G. My opinion is that a broker isn't concerned, but

that mortgage bankers might be - the site to comment is below.

The SEC writes, "A sponsor typically initiates a securitization transaction

by selling or pledging to a specially created issuing entity a group of

financial assets that the sponsor either has originated itself or has

purchased in the secondary market.46 Sponsors of asset-backed securities

often include banks, mortgage companies, finance companies, investment banks

and other entities that originate or acquire and package financial assets

for resale as ABS. In some instances, the transfer of assets is a two-step

process: the financial assets are transferred by the sponsor first to an

intermediate entity, often a limited purpose entity created by the sponsor

for a securitization program and commonly called a depositor, and then the

depositor will transfer the assets to the issuing entity for the particular

asset-backed transaction. The issuing entity, most often a trust with an

independent trustee, then issues asset-backed securities to investors that

are either backed by or represent interests in the assets transferred to it.

The proceeds of the sale of the asset-backed securities are used to pay for

the assets that were transferred to the trust. Because the issuing entity is

designed to be a passive entity, one or more "servicers,"

often affiliated with the sponsor, are generally necessary to collect

payments from obligors of the pool assets, carry out the other important

functions involved in administering the assets and to calculate and pay the

amounts net of fees due to the investors that hold the asset-backed

securities to the trustee, which actually makes the payments to investors."

Don't take my word for it: SEC

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlXHWlIHTFS7_dXiS0IkWr8dlCQNvimTFOPh

PtigjOlIrhcawj7UoHgjh3G59QvQ1YsJexcbleV8AyZxXpm01bzhpI4HoqOgl8chpOgW3pRScTXH

ZhHwy_bXohiVClunB7Obdw-gmMS1Wg==].

So while "sponsor" is a commonly used term for the entity that initiates the

asset-backed securities transaction, the terms "seller" or "originator" also

are often used in the market. However, as noted in the text, in some

instances the sponsor is not the originator of the financial assets but has

purchased them in the secondary market.

And so we use the term "sponsor." The credit unions' organization has

certainly weighed in with its opinion

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlWY0B9wcx4eUMW9jAMiyibgYYOdWv67Dx9Z

_85VVmE-O73G0ukoYIuNgdP0avefO-Wr__k5_fw8epMEys6QZtNgCTAIGtSx-y0vbwLRpTAapXt2

O9Dmrl95YjsZWg3GJ64VNUYJnpO40grkC43tioXe9wFPmI__Z5q9syBq4BZzsAsi0NIVKO3g-YZm

-nFQl2IrSGgPt6HMGA==].

And for the "sponsors" that must keep 5% in the form of risk retention, 5%

of what?

And for how long? All in all, the proposed rule would significantly increase

the degree of flexibility that sponsors would have in meeting the risk

retention requirements of section 15G. For example, the proposed rule would

permit a sponsor to satisfy its obligation by retaining any combination of

an "eligible vertical interest"

and an "eligible horizontal residual interest" to meet the 5 percent minimum

requirement.

The agencies are also proposing that horizontal risk retention be measured

by fair value, reflecting market practice, and are proposing a more flexible

treatment for payments to a horizontal risk retention interest than that

provided in the original proposal. In combination with these changes, the

agencies propose to remove the PCCRA requirement. The agencies have

incorporated proposed standards for the expiration of the hedging and

transfer restrictions and proposed new exemptions from risk retention for

certain resecuritizations, seasoned loans, and certain types of

securitization transactions with low credit risk. In addition, the agencies

propose a new risk retention option for CLOs that is similar to the

allocation to originator concept proposed for sponsors generally.

Yes, it is complicated, and mortgage bank and bank owners should read the

proposal.

The agencies invite comment on all aspects of the proposed rule, including

comment on whether any aspects of the original proposal should be adopted in

the final rule.

Please provide data and explanations supporting any positions offered or

changes suggested. You can submit your comments online or by e-mail. Go to

http://www.regulations.gov

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlWvVbSD5iRxfWkcPpKQKhO5Pgwe2YL5UhL6

sQALqYM6P6Z_lWXxR2BKpqqyl0Qkr7w--E_Agtw2gZjNwWhLRfOvsvgYoMG_PAKj8ADbbnwIFzkc

HzoBXnp6].

Enter

"Docket ID OCC-2013-0010"

in the search box and click "Search." Results can be filtered using the

filtering tools on the left side. Click on "Comment Now" to submit public

comments. Or one can always e-mail the government through

regs.comments@occ.treas.gov [mailto:regs.comments@occ.treas.gov].

And one can read more at QRM

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlWBSzLp7rtQ4LsEMK1teasHVdp_DoxTNhbz

Zow-zKGJwltlcuuECTB85hTYxchWkHnF6U1AC42I-hGmdcrDMDNYr9QU8B1WlBsrX3WncQ5qU31l

YqwZfusHBz0MOvP3PstczpGxJhL1hNVUjBQpGWTh3ajsO9jOfQjZBayEqHo6zAliEeP1mW5xaL3X

3MM5tB0OIPgTQmpAPQ==].

Those involved in the secondary markets (working with investors rather than

borrowers) might be interested in the latest risk-sharing efforts from the

agencies. Freddie had a deal 3-4 weeks ago, and Fannie is publicizing its

approach through its lead placement agent and book runner Bank of America

Merrill Lynch. BAML spread the word that today Fannie Mae is hosting an

investor call (today, 12:30-2PM EDT) to present an overview of its approach

to single-family risk. "Join Fannie Mae executives for a discussion of their

approach to managing credit risk over the mortgage loan lifecycle.

They will share how Fannie Mae's ongoing commitment to risk management

strengthens loan performance and reduces losses, in anticipation of

providing financial institutions with the opportunity to invest in Fannie

Mae's single-family book of business through credit risk sharing

transactions." Go to https://fanniemae.webex.com

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlVYJLQUnYuEeotmt5mcrSg-1vNmDwFZiFFY

7OIYy2JC4gaMaQHbZH1QQ6prI8pBe4NL_C80rREyzk4HpD7C6m5z43o7Om-EnJ-MHDKXUIq6YAUK

VneMu5HM],

Event Number: 595 704 387.

And HUD announced changes "to manage risk associated with the Federal

Housing Administration's

(FHA) reverse mortgage or Home Equity Conversion Mortgage (HECM) Program."

Here you go: Reverse

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlWTTznCFXP_v8UhKxZDZ9Rq3YSN-XQZCkUg

VeAId_r5uTq47Ih81MbUWGpvLtGJmuVGX6TxRw63TzgyVNnXEYju7J5sRQp3fcC9SBNsjqk0tchl

iX7qk4lHUjg1PhELMXj5G6SVieS85k6lhATTJwIKfItkjJP_tCnGoHyygCWUVUuPxxwV5sTdTCE7

hQc6N0YQsPYL0qB3q5zWOijrgOT_mGL0t8sCYGg=].

"Provident Funding will discontinue all interest only loan programs

effective 9/15/2013.

Interest only loan files locked prior to 9/15/2013 must be Prescreen

Complete no later than 10/15/2013. Interest only loans will not be eligible

to fund after 12/15/2013."

Today, as it does eight times a year, the Federal Reserve will issue the

Beige Book, a snapshot of business conditions in each of the Fed's 12

regional bank districts.

The findings are all anecdotal; there are no numbers, and are compiled about

a week before it is published and thus is very current. The Beige Book

(formal title: "Summary of Commentary on Current Economic Conditions by

Federal Reserve District") is updated two weeks before each meeting of the

Fed's policymaking meeting in Washington. Staffers at each of the 12

regional banks compile the information by contacting businesses, economists

and other financial experts by phone, through questionnaires and e-mail.

The businesses range from retailers and home builders to hotels and

restaurant owners.

The idea is to detect trends in consumer spending, manufacturing and real

estate, among other areas. Consumer spending is particularly important

because it accounts for about 70 percent of gross domestic product. GDP is

the value of all goods and services produced in the United States. The

staffers also conduct separate monthly surveys of manufacturers in each

region, paying particular attention to that region's major industries. The

regional staffs compile the responses into 12 regional reports, each of

which appears in the Beige Book. The writing of the introduction is rotated

among the 12 regional banks, and the report becomes part of the information

discussed by the Federal Open Market Committee. There you have it!

But looking back to yesterday's news, if one only looks at the scheduled

numbers the economy seems to be moving along. The ISM Manufacture's Index

came in at 55.7 versus 54 expected. (New orders are at their highest since

April 2011.) Construction spending in August was up 0.6%, also higher than

expected. Even prior to those numbers bond prices were lower, and rates

higher, after the US took no military action against Syria over the weekend.

By the end of the day, depending on coupon and maturity, prices were worse

.250-.625 for mortgage-backed securities.

We've had some trade figures out for July. Expected lower to -$37.7B vs.

-$34.2 billion prior, the deficit actually came out at -$39.1 billion. And

as noted above in detail, at 2PM EDT the Fed releases its Beige Book. The

10-yr closed at a yield of 2.85% and is now 2.86% - don't look for much

change in agency MBS prices.

A guy took his blonde girlfriend to her first football game. They had great

seats right behind their team's bench. After the game, he asked her how she

liked it.

"Oh, I really liked it," she replied, "especially the tight pants and all

the big muscles, but I just couldn't understand why they were killing each

other over 25 cents."

Dumbfounded, her boyfriend asked, "What do you mean?"

"Well, they flipped a coin, one team got it and then for the rest of the

game, all they kept screaming was, 'Get the quarterback! Get the

quarterback!' I'm like...Helloooooo?

It's only 25 cents!!!!"

If you're interested, visit my twice-a-month blog at the STRATMOR Group web

site located at www.stratmorgroup.com

[http://r20.rs6.net/tn.jsp?e=001pTxjS6o0HlXiWVCiDWGCbGt0YbTEDxPG7Y-8nlcKDnpc

vWYcYUbFzFK1clV5AKdVsbJRufN4eyoWHaz1kOun06ZU0ryvv9Xy2In2aoLE_EkTkfu6H9p5KOEZ

xO9qfZj5].

The current blog is, "A Little Primer on Reverse Mortgages"." If you have

both the time and inclination, make a comment on what I have written, or on

other comments so that folks can learn what's going on out there from the

Wednesday, September 4, 2013

Monday Map

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