I was recently walking in a large city, on
my way to do a warehouse field exam, when a young man on a skateboard passed me
going the other direction. He was wearing a green t-shirt that said, "Quit
Your Day Job." That's a bold statement for a Tuesday afternoon, I thought.
Wells
Fargo writes, "The labor force
participation rate in the United States has fallen from 66 percent prior to the
Great Recession to less than 63 percent at present, and our calculations show
that roughly one-half of this decline is attributable to demographic factors." According to Wells'
Economics group, older age cohorts tend to have lower rates of labor force
participation than their younger counterparts, and the aging of the workforce
in recent years has played an important role in depressing the overall rate of
labor force participation in the United States. Other advanced economies have
also aged in recent years, putting downward pressure on their respective labor
force participation rates. "What is unique to the United States,
however, is the drop in labor force participation among prime-age workers that
is attributable to cyclical and non-demographic structural factors." I
wonder if it's too late to learn how to skateboard?
One
of the Dodd-Frank laws deals with companies doing business with companies that are women or
minority-owned. "DiversityBusiness.com, the nation's leading
multicultural social media site, recently recognized VRM Mortgage Services (VRM)
and PCV Murcor (PCV) as two of
the nation's "Top Businesses" for 2014. This exclusive award
recognizes and honors individuals who have established themselves as a
world-class community of entrepreneurs that continue to transform the way we
live and advance our economy forward. The award, known as the Div500,
represents the most unique class of companies with the distinction of fostering
a culture of sustainable growth among the communities they serve. Keith D.
Murray, MAI, founder, president and CEO of VRM and PCV, was one of a handful of
entrepreneurs to have multiple companies recognized with the award. VRM was
ranked 46th on the list of African American-Owned U.S. Businesses."
Congrats to VRM!
Minority
or not, every lender has seen their cost of compliance skyrocket. Although these
costs are passed on to consumers, lenders still need to set up compliance
management systems, so this blurb from AllRegs was
timely.
Let's
check in on some recent state-level changes, since it is not enough for
lenders to track what the CFPB, HUD, the FHFA, aggregators, the State of New
York, etc., are making them do!
Recently,
Colorado enacted legislation that requires
servicers of residential loans, including lenders and other parties that offer
a borrower a loss mitigation option or seek to enforce the power to foreclose
and sell the residential real estate that secures a delinquent loan, to
establish a single point of contact with a borrower. Starting in January, the
bill obligates the single point of contact to inform the borrower about loss
mitigation options, the status of the borrower's loan, circumstances that may
result in foreclosure, and procedures to submit a notice of error or
information request. Further, the bill prohibits the servicer from initiating
foreclosure proceedings unless the borrower has not qualified for, accepted, or
complied with the terms of a loss mitigation option. The bill provides that if
a servicer is engaging in prohibited "dual tracking," the public
trustee must follow certain procedures, including continuance of the
foreclosure sale and withdrawal of the notice of election and demand, provided
the borrower is complying with all applicable terms of a loss mitigation
option. In addition, the bill requires a foreclosing lender to disclose that it
is illegal for a foreclosure consultant to require a deposit or charge fees in
advance for providing services, and requires that the posted notice include a
statement regarding the borrower's ability to file a complaint with state and
federal authorities if the borrower believes the lender or servicer has
violated certain provisions of the bill.
Louisiana will be requiring
mortgage loan servicers to obtain a license. On May 29, Louisiana Governor
Bobby Jindal signed HB 807, which requires
companies that service mortgage loans in the state to obtain a state license.
The bill amends the state's Residential Mortgage Lender Law to require a
company to obtain a state license by June 30, 2015 if it collects or remits
payment for another, or if it holds the right to collect or remit payments for
another, of principal, interest, tax, insurance, or other payment under a
mortgage loan. The bill subjects mortgage loan servicers to existing licensure
requirements and establishes the process to be used to determine the amount of
the surety bond mortgage loan servicers must obtain. Finally, the bill requires
any individual who services mortgage loans (which, according to the Louisiana
Office of Financial Institutions, includes individuals who modify mortgage
loans) to register as a mortgage loan originator through the NMLS. The
Louisiana Office of Financial Institutions is expected to issue guidance on the
new law later this year.
About
1,400 miles away, Connecticut established an alternative foreclosure
method. On June 3, Connecticut Governor Dannel Malloy signed HB 5514, which establishes
an alternative to the state's current foreclosure methods. Under the new law,
which takes effect October 1, 2014, a court will be permitted to approve a
foreclosure sale on the open market provided the lender requests such a sale
and the borrower consents. The new method is available only for a first
mortgage on a one-to-four family residential property that is the borrower's
principal residence. The bill establishes industry procedures for such sales
(including requirements for the foreclosure notice, property appraisal, listing
agreement, and purchase and sale contract, and requires foreclosure notices to advise
borrowers of the market sale option), as well as judicial procedures. The new
law prohibits a borrower who consents to foreclosure by market sale from
participating in the state's foreclosure mediation program, but grants such a
borrower the right to petition the court to participate under certain
circumstances.
Speaking
of foreclosures, South Carolina established a new expedited procedure
for mortgage foreclosures on abandoned properties. Governor Nikki Haley signed SB 1007, which allows a
mortgagee or its successor to petition a court for an expedited judgment of
foreclosure if the property is not occupied and meets at least two of several
conditions-e.g. windows or entrances are boarded or otherwise closed, doors are
smashed or continually unlocked, utility services have been terminated-and
provided the property does not fall within certain exceptions-e.g. it is
seasonally occupied or the owner is deceased and the heirs can be identified.
They
say all Marines are rifleman, and all Navy Sailors are firefighters; when I
speak to mortgage originators I like to say "everyone works in
compliance." It's with that in mind that I mention Buckley Sandler's
upcoming FinCrimes Webinar: Design and Maintenance of a Financial Crimes
Compliance Program. The webinar will be of particular interest to in-house
legal, compliance, and risk management personnel at banks and other financial
services providers. Key topics will be: expectations for structuring and
implementing a financial crimes compliance program, key issues and concerns regulators
are looking at now, common missteps, and observations about the evolving global
regulatory environment based on guidance from multi-lateral bodies such as the
FATF and Wolfsburg Group. The meeting is scheduled for tomorrow, June 26, from
12-1PM EST, and pre-registration is required.
Apparently
the difference between littering and not littering, in my neighborhood, comes down
to whether or not you scotch taped a "FREE" sign to your 20 year old
sofa before you leave it on the corner. Many things in life aren't very clear,
however, HUD's wishes regarding reverse mortgage advertising rules and HECM
insurance limits isn't not one of them. On the 18th of June the
Federal Housing Administration published two Mortgagee Letters on the
Home Equity Conversion Mortgage program. HUD announced policy changes that
reduce risk to the Mutual Mortgage Insurance (MMI) Fund and support
sustainability of the HECM program. The changes mentioned in the
letter address risks associated with certain fixed interest-rate products
and remind mortgagees of their responsibilities related to marketing and
advertising.
No
one that I know of base the future of their business on the projections of
"experts" or economists, which is a good thing given how wrong many
of them were six months ago when predicting rates would be going up soon. Even
recently, analysts are pointing out how well mortgages have performed during
the second quarter of 2014. For example, Fannie 3.5s & 4% securities
(containing many of the loans being originated now) are up/better by almost two
points since the beginning of April despite the Fed continuing to scale back
their MBS purchases! Average daily origination has increased during that time
period - so someone besides the Fed is buying them!
At
some price, someone will pretty much sell anything they own. (Well, maybe not
my cat Myrtle, but then again, I have never received an offer.) Purchases of
new homes in the U.S. rose in May by the most in years (+up almost 19%), but
the housing news was not all unicorns and walks on the beach. The FHFA House
Price Index reported no change in US house prices in April versus March (but
still up 6% versus a year ago), and the S&P/Case-Shiller Home Price Index
(with a two-month lag) showed that the rate of price appreciation had slowed
- but it was still up nearly 11% versus a year ago. "Overall, prices
are rising month-to-month but at a slower rate...Last year some Sunbelt cities were
seeing year-over-year numbers close to 30%, now all are below 20%." Gosh -
is that so bad? And if that weren't enough, the Black Knight Financial Services Home
Price Report has prices up .9% month-over-month and up 6.4%
year-over-year. (The reason for the difference between the reports is that the
FHFA's covers only sales with a conforming mortgage, Case-Shiller covers
everything, and the Black Knight report uses an algorithm to correct for
distressed and short sales.)
And not only did the Richmond
Fed tell us that manufacturing was picking up in its region, but those
consumers are darned optimistic - at least the Conference Board tells us we
are. The index hit "85.2" - the highest since early 2008. With all this
good news, one would think that rates would move higher on the anticipation of
more borrowing for expansion, or the threat of inflation. But nope, rates went
down, mostly attributed to a "flight to safety" bid related to Iraq.
Both the 10-yr T-note and agency MBS prices improved about .250.
But today is a new day, as they
say, and we've already had some news. The MBA reported that applications fell
about 1% last week. Also out today will be May Durable Goods, expected flat
from +0.6, and the final Q1 GDP reading, projected at -1.7% from a preliminary
-1.0% (old news?). The Treasury has two auctions scheduled: $13 billion in
reopened 2-year floating rate notes at 11:30AM and $35 billion 5-year notes at
1PM EST. In the early going the 10-yr's yield is down slightly to 2.57% and
most agency MBS prices are better by a shade.
http://globalhomefinance.blogspot.com
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