A Japanese couple is having an argument
over ways of performing highly erotic sex:
Husband: Sukitaki.
Wife replies: Kowanini!
Husband says: Toka a anji rodi roumi yakoo!
Wife on her knees literally begging: Mimi
nakoundinda tinkouji!
Husband replies angrily: Na miaou kina tim
kouji!.
Wife says:Watakushi Wa Anata Sukhi Deshu
I can't believe you sat and read this as if
you understand Japanese!
You are unbelievable!
I always knew you would read anything as
long as it is about SEX...
The BLS reports 5 of the 10 fastest growing jobs pay less than
$25k per year. I wonder what percentage of real estate agents earn that?
Realtors have a huge influence of a borrower's lender decision, according to a Freddie Mac survey. The biggest factors are
ease of doing business, reputation, and the strength of their relationship with
the agent. "Eighty-four percent of real estate professionals have a select
group of lenders to which they generally refer their clients. Of these, 73
percent have 1-3 lenders in their network and 24 percent work with 4-6 lenders.
More than three-quarters (76 percent) say their clients always or often use
their recommended lender referrals. This figure climbs to 87 percent among
those who sell more than 20 properties per year."
The second book in a series for mortgage
professionals is now available and will prove useful for new people to the industry as well as
seasoned veterans. "Becoming the Successful Mortgage Broker"
by Jason C. Myers offers in depth information for someone getting started and
proven successful sales tips for more experienced loan officers. The format of
the book allows you to look at tips you can use to better your business as well
as commentary on the current market and useful information for mortgage
consultants. The book can be found on Amazon.
In terms of legal and compliance services for lenders, Michael Celenza
with Buckley Advisors writes, "We see potential risk is
hiding in plain sight. Segregation of Duties (SOD) has been around for a
long time but believe it or not, it's not a regulation, it's a 'Best Practice'
and is a primary question found in the Interagency Fair Lending Examination
manual. Mortgage Bankers have used this for years but it's less common with
Community Banks and Credit Unions in the residential mortgage space, they ask
their staff to wear multiple hats, not realizing the potential risk. An
example of this is having Loan Officers process and underwrite their own
originations. The theory is to properly serve their community, loan
officers and their manager must be empowered to make underwriting exceptions to
accommodate the customer. Given the increased focus on anti-money laundering
(AML), governance, risk and compliance (GRC) and threats of cyber-attack,
ransom ware, email scams to fund terrorist organization and mortgage fraud made
easier by technology. Taking preventative measures is critical and segregation
of duties is a key part of those measures. Buckley Advisors can perform
operational analysis, create policies and procedures, and provide guidance in
this and many other areas."
In a distantly related matter, PHH Corp. will pay a $28 million fine after examiners uncovered
"persistent shortcomings" in its mortgage origination and servicing
practices. Under a consent order with the New York State Department of
Financial Services, the company's PHH Mortgage Corp unit and its PHH Home Loans
LLC affiliate will also employ an outside auditor for one year, to help
identify and make refunds to borrowers who were overcharged on closing costs.
PHH was accused of mishandling foreclosures, including by failing to provide
relief to qualified borrowers, and letting employees sign foreclosure-related
documents after "perfunctory" reviews. PHH was also accused of
imposing larger-than-expected fees on unwary borrowers, and using a
compensation plan that would reward employees for steering borrowers into risky
or unnecessarily costly loans.
In a statement, PHH said it settled to avoid the cost and
distraction of litigation, and has made "substantial strides" in
improving its servicing operations. It previously said it had set aside money
for the accord in this year's third quarter. For those playing along at home,
remember that PHH Home Loans is a joint venture between PHH and Realogy
Holdings Corp.
And plenty of lenders lie awake at night wondering whether
cities (in this case, Miami) can sue banks under the Fair Housing Act even
though the law gives standing specifically to "aggrieved persons."
During arguments this week, the justices seemed to split 4-4 on the question,
an outcome that would be a win for Miami and bad news for banks. And thus we
have the Supreme Court of the United States (SCOTUS) revisiting 2008's housing
collapse with banking test cases. At issue are two cases testing whether Miami can sue Wells Fargo and
Bank of America under the Fair Housing Act for alleged racial
discrimination in mortgage terms and foreclosures.
Suffolk University Law School Professor Kathleen Engel believes that expanding municipalities'
authority to curtail predatory lending that can destroy neighborhoods is
sensible policy. Likewise, it is critical to permit cities to recover for the
blight that exploitative loans can leave in their wake. Engel published the
article "Local Governments and Risky Home Loans," which
addresses the issue. The abstract summarizes the problem: "Municipalities
from the Central Valley in California to Upstate New York bear the legacy of reckless
mortgage lending. Foreclosed homes and toxic titles have caused blight and cost
communities billions of dollars. Many cities tried to halt the risky loans by
calling on state and federal legislators and regulators to intervene. Some even
passed ordinances aimed at curtailing the high-cost loans that were destroying
their neighborhoods. Their pleas were dismissed and their ordinances
overturned...."
On the good news side of the ledger, Moody's Investors
Service has affirmed the servicer quality (SQ) assessments for Ocwen Loan
Servicing, LLC at SQ3- as a primary servicer of prime, subprime, second
lien and special servicer of residential mortgage loans. Moody's also affirmed
Ocwen's master servicer assessment of SQ3. Moody's writes, "As of 30 June
2016, Ocwen's servicing portfolio totaled approximately 1.47 million loans for
an unpaid principal balance of approximately $219.5 billion. The portfolio has
declined from the prior review in part to the company's decision to sell a
significant portion of government sponsored enterprise (GSE) mortgage servicing
rights (MSRs).
"Additionally, the company is currently unable to
acquire new mortgage servicing as part of its agreements with the New York
Department of Financial Services and California Department of Business
Oversight. Ongoing inquiries by the Securities and Exchange Commission and
CFPB remain along with continued oversight by multiple regulatory monitors.
During the review period, Ocwen improved its risk management, quality control
and compliance processes by enhancing its oversight and monitoring procedures
and increasing staff in these areas. The company has continued to
demonstrate above average performance metrics across its operational areas
including collections, loss mitigation and timelines. The SQ assessments
reflect Ocwen's above average collections for subprime and second lien loans,
and average collections for prime loans. The company's loss mitigation
abilities, as well as foreclosure and REO timeline management, are assessed
above average while the company's loan administration function is assessed as
average. We view the company's servicing stability as below average, a view
that incorporates the company's corporate family rating of B3 on negative
outlook."
Keeping on with positive news, in the "good
news" category in capital markets news, holdings of the top 25 banks was
released and provided insight into the demand for MBS. In Q3 of 2016, banks
added $49 billion of Agency MBS, a significant increase from Q2. The data also
confirmed bank's appetite for purchasing more U.S. Treasuries, which posted the
fastest growth since 2014, and reported a net sale of Ginnie Mae securities,
citing the overall rich valuations from overseas investors.
Also, regarding the election, conventional wisdom
suggested that the odds of a December interest-rate rise from the Federal
Reserve would fall because the prospect of a Trump presidency represented a new
source of significant uncertainty. The market-implied odds did fall, but
negligibly, per data from the federal funds futures market. The Wall Street
Journal reported that Trump would not be seeking Federal Reserve Chairwoman
Janet Yellen's resignation. But neither would he appoint her to a second
term when her current term ends in February 2018. And who knows what will
happen between now and then?
Trump said he would also boost infrastructure and defense
spending, cut taxes, and deregulate - all of that will both stimulate the
economy and be inflationary, thereby steepening the yield curve. And the president-elect
has said he would call for a moratorium on new financial regulations and has
often spoken of "dismantling" the Dodd-Frank financial reform law
that created the CFPB.
But on the bad news side of things, the 10-year Treasury
yield saw its biggest jump in three years today, and yields went back to where
they were in January, as investors prepared for a President Trump and a
supportive Congress to sharply increase U.S. government borrowing. Wait a minute...
isn't that more of a Democratic thing? Trump will not even be inaugurated until
late January, much less have his plan passed by then, but his campaign
proposals were radical enough that traders sold. Blame some of President-Elect
Trump's proposed polices regarding tax cuts, fiscal stimulus, and
infrastructure spending. In addition, the stock market staged quite a
turnaround. Go figure.
Treasuries initially rallied on the massive risk-off trade
with the 10-year note hitting a low of 1.72%, versus the 1.86% close, before
ripping higher hitting a high yield of 2.09% just after the sloppy 10-year
auction, for an intra-day range of 37 basis points - larger than even the 30 bp
range in the post-Brexit trade. Our benchmark 10-year price sank over 1.75, 5-year
Treasury securities sold off .625, and agency MBS prices followed but not as
badly.
Looking at the big picture, remember this verbiage from
the FOMC's meeting last week? "The Committee is maintaining its existing
policy of reinvesting principal payments from its holdings of agency
debt and agency mortgage-backed securities in agency mortgage-backed securities
and of rolling over maturing Treasury securities at auction, and it anticipates
doing so until normalization of the level of the federal funds rate is well
under way." But what if principal payments go down? With the higher
rates comes less chance of the Fed receiving money from rate & term refis
and thus early payoffs to purchase more agency MBS. That's a bit of a
double whammy (higher rates lead to fewer refinances, fewer refinances lead to
less Fed purchases, less Fed purchases lead to higher rates), although with
many areas appreciating cash-outs are picking up. And there are borrowers
selling their homes and moving up.
Tomorrow the markets are closed, as are many lenders. Does
today's news make much difference? Probably not, but we had weekly jobless
claims for the week ending November 5: (-6k to 254k). This morning, on the last
bond trading day of the week in the U.S., we find the 10-year starting off
at 2.10% with agency MBS prices worse .250.
No comments:
Post a Comment