The Wall Street Journal reports
banks are beefing up cybersecurity defenses by taking actions that
include banning employees from using USB drives, not allowing employees to use
work emails for personal use, warning employees not to post out-of-office
replies on email, to be careful what they post on social media, and not to click
on links in questionable emails from unknown sources. And a survey by The
Economist on cyber incident readiness by businesses finds the top things
executives think would assist their company to be better prepared for a cyber
incident are: better understanding the potential threats, raising awareness of
existing preparations across the company, and testing existing preparations for
an incident.
In response to lender feedback,
Fannie Mae will implement expanded whole loan committing grids on
Monday, February 1, 2016, providing greater transparency and enhanced certainty
of execution for 15-year and 30-year commitments. This change will give our
whole loan sellers the transparency of the specified market that has
historically been available through an MBS execution. View the infographic to
learn more.
Sun West has
updated its Conventional high-balance product guidelines with the new LTV
matrix to coincide with Fannie Mae's aligned Loan-to-Value (LTV) eligibility
requirements for high-balance conventional mortgages with LTV eligibility
requirements for standard conventional mortgages.
Stearns has
expanded Fannie Mae guideline options as of December 12th. Visit
Stearns website for details.
Peoples Bank is
only offering Fannie Mae's HomeReady product for Purchase Transactions.
The new loan product became available effective 12/21/2015.
Citi
Correspondent is providing Best Practices of the scope of additional
information needed with an appraisal in order to make informed decisions
regarding the eligibility, or ineligibility of un-permitted additions as
guidance from both Fannie Mae and Freddie Mac is slightly vague and may not
provide as much detail as needed for the complete review of un-permitted
additions.
Fifth
Third has updated its guidelines per Fannie Mae's expanded policy for
age restricted properties which now permit all occupancy types for purchase or
refinance transactions. Eligible Property Types (including eligible condo
projects and PUDs) 1 or 2-Unit Primary Residence or Investment Property 1-Unit
Second Homes. Occupant aged 55 and older may be a non-borrower or a tenant.
Refer to Fifth Third's Correspondent Underwriting Guidelines for additional
information.
Per Freddie Mac's
retirement asset updates, Fifth Third Mortgage removed the limitation that no
more than 70% of the retirement account's value may be used. 100% of the vested
balance or percentage vested may be used as reserves and will no longer require
evidence of liquidation for down payment or closing cost if the combined value
is at least 20% more than the amount needed. Note: Proof of liquidation
remains a requirement if required to complete transaction and required excess
percentage.
Investment properties
were removed from Kinecta FCU's Super-Conforming ARM product.
Any news or studies on
those Millennials that the entire industry is intrigued about? Sure
there is! And by the way, interest in this age group is not confined to
lending: retiring workers are increasing in nearly every occupation and industries
are wondering how they're going to "lure" younger workers to fill
their spaces. When was the last time you saw a 20-something welder or plumber?
How long will everyone
take to realize that Millennials - per our Census Bureau those born between
1982 and 2000 - are in no hurry to marry, have kids, or save up enough money
and then finance a house? It will happen eventually. Still it doesn't stop the
fascination with their every move but the ones that I talk to aren't too
excited about constantly being under the microscope.
"The millennial
generation is moving out of the basement of their parents' homes," says
Steve Rick, chief economist of CUNA Mutual Group, which sells insurance and
investments to credit union members. Yes, and Fannie
Mae Says Millennials Are Finally Leaving Their Parents' Basements. Homeownership
has been delayed but not forgotten. According to the ACS (Census Bureau's
American Community Survey), the number of homeowners aged 25-34 fell by more
than 250,000 in each year between 2007 and 2012, but has declined by less than
100,000 annually since then," Fannie Mae said. "In fact, the decline
between 2013 and 2014 was statistically insignificant, the first indication of
stability in the number of young homeowners since the onset of the Great Recession."
So while the number of homeowners in that age range is still on the decline,
the trend looks poised for a reversal, and Fannie Mae said it won't take much
to see positive growth in millennial homeownership in the near future.
The Census Bureau
projects there are 75 million Millennials, 66 million Gen X, and 75 million
Boomers in the US today. But that is changing. Nielsen projects the US
population will be about
322mm next year with a median
age of 38 years old (and a median household income of $55,551). By age, the
population next year should be: 65Y+ (15%), 45-64Y (26%), 35-44Y (13%), 18-34Y
(23%), <17Y (23%). In the next 10 years millennials will be 75% of the
workforce. And according to the Census Bureau, the number of people age 65Ys+
will triple over the next 25 years and reach about 80 million.
94%
of young renters eventually want to buy a home,
according to the NAR. If wage inflation returns, 2016 could be the year that
this pent-up demand for housing begins to be felt in the industry.
Research by UBS
finds millennials will go to the following sources most frequently when seeking
financial advice: spouse/partner (62%); parents (41%); friends (26%); other
family members (15%); a financial advisor (14%).
A Deloitte survey of
millennials (I wonder if they are growing weary of being asked questions) finds
73% believe businesses have a positive impact on wider society. Further, when
asked what businesses should try to achieve, millennials flagged "job
creation" and "profit generation" right alongside
"improving society." The survey also found that when asked to
identify the personality traits of true leaders, millennials most often cited:
strategic thinking (39%), being inspirational (37%), having strong
interpersonal skills (34%), vision (31%), passion and enthusiasm (30%) and
being decisive (30%). That doesn't sound very different from other generations
at the same age in business and is in line with how many in other generations
still think.
On the good news front
for community banks, the Deloitte survey also found that millennials in
developed markets prefer to work for large well-known businesses (35%) almost
as much as they want to work for medium-sized less well-known businesses (32%).
Differentiating your bank in this area could draw in more millennials over time
perhaps. Also of interesting note though, only 11% wanted to own their own
start-up business and the same percentage wanted to work for a small start-up.
Consulting firm CEB found
millennials are very competitive with 59% saying competition is what gets them
up in the morning and 58% compare their performance against peers. Both of
these percentages are 8 to 10 percentage points higher than the respective
levels for boomers, so that too is a good sign of hunger and drive among
millennials. Finally, we look at that social thing and a need for constant
contact with others and kudos from bosses. Yes, this group is highly connected,
but that doesn't mean they believe everything they read or see. In fact, the
CEB survey found 37% of millennials don't trust peer input at work vs. 26% for
other generations. Further, 41% of millennials say employees should do what
their manager tells them vs. 30% of boomers.
Switching gears to legal
matters, JPMorgan Chase will pay
an additional $48 million to settle remaining issues stemming from
missteps in its handling of mortgage servicing accounts.
And the Washington,
D.C.-based watchdog organization Campaign for Accountability "has called
on the Department of Justice to investigate three
former members of the Obama administration for revolving door
practices related to the future of Fannie Mae and Freddie Mac. In a Dec. 15
letter to the Justice Department, CFA Executive Director Anne Weismann asked
for an investigation into the post-government activities of Mortgage Bankers
Association President/CEO David Stevens, the former Assistant Secretary of
Housing and Federal Housing Commissioner at HUD; Michael Berman, the former
advisor to HUD Secretary Shaun Donovan; and Jim Parrott, the former adviser to
Secretary Donovan."
There was nothing to move
bonds, and thus rates, on Tuesday, or any really intriguing capital markets
tales, so I won't waste your time. In fact we closed the bond markets pretty
much where they were at the end of Monday. Today is a different story, however.
We've already had the MBA's weekly mortgage applications figures. To no
surprise to lock desks, the MBA reported that applications fell 27% even when
adjusted for the holidays. Refis were down 37% during the last two weeks and
purchases were down 15% (but are still higher than a year ago by 22%).
Coming up is the December
ADP report, at 7:15AM CST, is expected to show job gains of 210k vs. 217k previously.
The November trade deficit, at 7:30AM CST, is expected to improve slightly to
$43.0bn vs. $43.9bn previously. The December Markit Services PMI (final) and
ISM Non-manufacturing PMI, mid-morning, are expected to be mixed vs. prior
reports at 53.9 and 56.0, respectively. November factory orders, at 10:00am, is
expected to decline 0.4% vs. rising 1.5% in October. In the afternoon will be
the minutes from December's FOMC meeting. And as mentioned above we saw 2.25%
on the 10-year at the end of Tuesday, exactly where we were Monday afternoon.
But in the very early going this morning we're down to 2.18% and agency MBS
prices are better by .250-.375.
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