Appraiser Numbers Dwindling;One security for Fannie & Freddie? Jumbo Loans Booming; ICE & MERS?

http://globalhomefinance.com

Let's start the first full week of August with something totally un-mortgage related, but something that might make you say "Wow!" Besides being celebrities, what do the following four people have in common: Mick Jagger (70 years old), Julie Andrews (78), Whoopi Goldberg (58), and Martin Sheen (73)? (Answer below, between actual useful mortgage news.)

 

Are you an appraiser? Maybe you should be honored: there are fewer and fewer of you every year, and your ranks are down to 80,500 nationwide. There are fewer now than at the start of the year, but the pace of decline is slowing.

 Sometimes real estate agents representing the buyer and seller in a transaction work for the same broker. Be careful about dual agency!!!

Last week the commentary discussed Libor, and the possibility that the Intercontinental Exchange (ICE) may charge a licensing fee for the use of the index. It turns out that ICE, known for energy trading and its control of the New York Stock Exchange, is engaged in negotiations to form a partnership with Mortgage Electronic Registration Systems Inc., (MERS) which documents the ownership and resale of about half of U.S. home loans. As the industry knows, MERS is still under a consent order with the U.S. government that it's operated under since 2011, the result of alleged failures to properly manage its business. "MERS, a unit of closely held Merscorp Holdings Inc. based in Reston, Virginia, began operating in 1997 in order to speed up real estate paperwork -- especially changes in ownership and servicing rights for loans.

 

Speaking of ICE, I received this from JF on the West Coast: "Bloomberg subscribers now have to pay an $11/month fee to ICE to get real time LIBOR as of July 1. Otherwise, 28 hour delayed LIBOR data remains 'free.'  'Free' is if you don't count the $2,000/month cost of a Bloomberg terminal. Also, I noticed recently that the WSJ suddenly stopped providing the Libor Swap Curve both in the paper and online version. Maybe the Fed should charge folks if they want to know what the FOMC target rate is..." 

We're in a new environment when it comes to vendors, protecting borrower information, and counterparty risk. On the vendor side of things, Secure Settlements announced that vetted agents are now eligible for enhanced mortgage settlement insurance covering the lender's exposures to borrower's identity information theft. "Additional Coverage offered through Certain Underwriters at Lloyds of London designed to address Lender Risk regarding Data Privacy and Security at the Closing Table. The MSI Policy, which launched in April 2014, was designed to protect retail mortgage lenders that utilize SSI's ClosingGuard closing agent vetting product against losses arising at the closing table from such perils as fraud, theft and documentation error.  Coverage extended to warehouse banks and secondary market investors including GSEs, and certain consumer losses at the closing table.   

Also on the new product side - Vantage Retail Sites are the latest addition to Vantage Integrated Production. Turnkey and ready to launch, Vantage Retail Sites are fully branded websites specifically designed to drive Internet sales while increasing lender control over origination compliance. Vantage Retail Sites allow lenders and individual loan originators to build their brand, and effectively promote themselves and their products, while providing a great consumer buying and support experience. Borrowers benefit from relevant, timely news and information, can complete a short or long 1003 mortgage application, and check on their application status online.  Vantage Sites are beautifully rendered on any device-desktop, laptop, tablet, or smartphone. And, all content - once approved -- is archived and auditable from the corporate office to individual MLO pages for consistency and compliance.

 Regardless of the vendor, they typically deal with conforming and nonconforming loans, agency or jumbo, fixed or adjustable. Focusing on jumbo loans, apparently business is booming - further highlighting the difference between the haves and the have-nots. Bloomberg reports that, "Banks are handing out mortgages of as much as $10 million to the wealthy in record numbers while first-time homebuyers struggle to get loans. Americans from San Francisco to Boston are taking out a record number of mortgages in excess of $1 million while stiff lending standards crimp total loan volume. The number of loans from $1 million to $10 million to buy single-family homes in the 100 largest metropolitan areas surged to more than 15,000 in the second quarter, the highest ever, according to property data firm CoreLogic. (But) In June, about 28 percent of total existing-home sales involved new buyers compared with an average of 35 percent since October 2008, according to the National Association of Realtors. 

By the way, for folks who care about historical loan performance, especially the loan performance from brokered loans, Fannie and Freddie have some nifty reports. 

Answer to the first paragraph: all four of them are great-grandparents! In fact, according to People Magazine, which is the gospel, Julie Andrews actually has 3 great grandkids! 

Let's keep playing catch-up with some lender and agency specific news:  

Donna Beinfeld, President of compliance firm Donnashi, contributes, "Training on Desktop Underwriter Version 9.1 August update is available and is considered 'Open Registration.' 'DU Version 9.1 August Update Live Web Seminars: Join Fannie Mae for a live web seminar to learn more about the Desktop Underwriter® (DU®) Version 9.1 Update, scheduled for release the weekend of Aug. 16, 2014. The webinar will review the updates being made to DU, including foreclosure message updates, deed-in-lieu of foreclosure and preforeclosure sale message updates, the addition of a charge-off policy message, 2014 Area Median Income limits, a special feature code retirement, and updates to align with the Selling Guide.'" 

Plaza Home Mortgage Wholesale weekly updates include the following: Elite Jumbo Program maximum LTV/CLTV for cash-out refinance transactions has been increased by 5% points.

Clarifications regarding loan modifications that result in debt forgiveness are not allowed. Clarification that mortgage ratings must be provided through the month of the closing date of the new loan. Addition of the requirement to provide evidence of payment of tax liability if an extension is filed and Added the requirement for commercial lease agreements when the property is reflected on Part 1, Schedule E, of the borrower's individual tax returns. To review product updates visit: Elite Jumbo. Additionally, Due to system issues, Plaza's Fee-in pricing functionality has been temporarily removed from PULSE. If you wish to include your administrative fee-in price, you must enter your request in the Comments section of the Price screen, or you may contact the Plaza Lock Desk directly and they will apply the price adjustment to your lock. For any questions, please contact your Plaza Account Executive.

Weslend Wholesale's newest updates include changes to Direct Jumbo and WesLend Direct ARMs. If subordinate financing is present on the loan, the CLTV must be used to calculate the Loan Level Price Adjustment (LLPA). The daily rate sheet and Broker Connection have been modified to reflect that the Loan Level Price Adjustments are based on the LTV and/or CLTV on the loan. Regarding Pre-locks on WesLend Direct Jumbo and WesLend Direct ARM's, after careful consideration, Weslend has decided to allow forward locks for a trial period with limitations. Additionally, the LP Super Conforming pricing adjustments from the Standard Agency Jumbo Program have increased as follows: LP Super Conforming 30 year adjustment has increased from 0.875% to 1.00%. LP Super Conforming 15 year adjustment has increased from 0.25% to 0.875%. Changes are effective immediately; contact your account executive for details. 

Even though GSE reform (basically Fannie Mae and Freddie Mac, for the purposes of this article) is pretty much dead until at least 2015 in Congress, that has not stopped those in the business from moving ahead with changes. The FHFA, MBA, NAR, home builders, and banks are all pushing agendas with regard to changes that could and should be made. The message to Congress: lead, follow, or get out of the way. One area of reform that is receiving a lot of publicity lately focuses on the secondary markets. Namely, why do we need two different securities for conventional conforming loans? Historically, there are differences between a loan underwritten to Fannie's guidelines (through DU) and Freddie's (LP). Each has programs that the other does not have. And there are certain guideline nuances exist, typically known to LOs and underwriters. But these have been gradually disappearing as the FHFA has overseen both agencies, and tend to issue bulletins where both Fannie & Freddie announce changes to policies and procedures. 

Yes, we're definitely heading toward one security for Fannie & Freddie loans. The Federal Housing Finance Agency wants to see Fannie Mae and Freddie Mac issue one set of home-loan bonds and FHFA likely will be issuing a report on the matter next month, sources say. The issuance of separate bonds by the two mortgage giants has divided trading, thereby has reduced liquidity. FHFA Director Mel Watt expected the effort to "improve liquidity in the housing finance markets," and "reduce costs to the enterprises, particularly Freddie Mac, since Freddie's securities have historically traded at a disadvantage." Hey, while we're at it, let's make the process and structure so that we can throw in FHA, VA, USDA, and jumbos! But the question will remain: what to do with the trillions of dollars of existing Freddie and Fannie securities? Will those continue to trade using old methodologies? Old remittance cycles? Old reps and warrants? These questions, and a myriad of others, are being answered by the FHFA in expectations of a proposal that will be great interest to the marketplace. 

I head to Albuquerque this morning, thus the early commentary. But for economic news this week... well, there just isn't much: Factory Orders tomorrow, some trade figures on Wednesday, Jobless Claims Thursday, and then on Friday we wrap up with the always rip-roaring Nonfarm Productivity, Unit Labor Costs, and wholesale trade numbers. And when there isn't much news in the U.S., stock and bond prices can easily be influenced by overseas events. But for now, things are pretty quiet. The yield on the 10-yr T-note Friday afternoon was 2.50% and in the early going today it is nearly unchanged at 2.49% and agency MBS prices are a shade better.

 

Daily Market Analysis: 

 The stock market started better this morning following the improvement in Europe’s stock markets as the uncertainty about a stock market correction continues. Although the equity market have experienced recent selling, at this point if there is going to be a setback it has only just begun and it isn’t set in cement that it will happen; that said all of our technicals are presently bearish for stocks. Why should we care? Because if there is real sustained selling it will support interest rates as investors look to balance portfolios into treasuries and help mortgages. Early this morning (8:30) the 10 yr traded +3/32 (9 bp) at 2.49% -1 bp; 30 yr MBS prices +3 bps frm Friday’s close. .

This week, after last week’s full economic calendar, there isn’t much on the plate. Markets continue to digest the July employment report last Friday, non-farm job growth was less than expected in July but revisions in June and May made up the difference. The unemployment rate increased to 6.2% but markets are not completely convinced the unemployment rate is an accurate reflection of the job market. The labor participation rate edged fractionally higher, frm 62.8% to 62.9%, a slight negative for employment as more have dropped out of the labor market. In that regard though, it is still uncertain whether its baby boomers retiring or that people are so discouraged many are no longer seeking a job. Average hourly earnings dipped to +0.1%, a penny; not a big deal unless it is viewed frm an inflation perspective. In the employment report it was evident that there was a minor increase in higher wage jobs. All in all there was something for everyone in the data. .

Other releases last week provided more mixed reactions, The Chicago purchasing mgrs. index fell hard to 52.6 frm 62.6 in June, the national ISM manufacturing index increased to 57.1 frm 55.3. The Q2 employment cost ndex increased 0.7% against 0.5% expected (a negative for the inflation outlook) but the June PCE increased 1.6% yr/yr after increasing 2.0% in May (a positive for inflation outlook). June construction spending declined 1.8% against estimates of an increase of 0.5%. Q2 preliminary GDP report was a lot stronger than thought, +4.0% against forecasts of +3.1% and Q1 was revised frm -2.9% to -2.1%..

Those data points last week should continue the volatility in the stock markets and feed through to the interest rate markets most of the this week. There are three reports this week that will get attention; the ISM July services sector index, Q2 productivity and Q2 unit labor costs; the rest of the data is less interesting. (see calendar below).

At 9:30 when most lenders send out their price sheets; the DJIA opened +20, NASDAQ +11, S&P +4; 10 yr note rate 2.49% -1 bp, 30 yr MBS price +3 bps frm Friday’s closes.

Global issues; the potential banking crisis in Portugal has been cooled with the Portugal central bank taking control of Espirito Santo bank. Spain’s 10-year yield fell seven basis points to 2.49% today and Italy’s decreased seven basis points to 2.69% Benchmark German bonds were little changed, with the 10-year yield at 1.14% after dropping to 1.109% on July 29, the lowest on record. Israel held its fire in parts of the Gaza Strip to allow for humanitarian relief while continuing to strike elsewhere in the Hamas-run territory, as rockets fired by militants slammed into southern Israel. Ukrainian forces were seeing mixed results in their battle against pro-Russian separatists in the east of the country on Monday, reporting they had moved closer to cutting off the separatist stronghold of Donetsk even as a number of Ukrainian troops surrendered overnight across the Russian border. In Moscow, an ally of President Vladimir Putin said Russia's business elite won't put pressure on the president to soften his line on Ukraine despite worsening Western sanctions. (Bloomberg News).

There has been no mass exodus of US treasuries so far; a lot of volatility as the chart above clearly shows. The US economy is slowly improving, all but the housing sector, the argument remains the same as it has been for weeks now; when will the Fed begin to increase interest rates. The Fed last week at the FOMC meeting continued with its statement that when is data dependent, but went on to refrain the comment that rates will continue to stay low for a lot longer, Yellen reiterated she is concerned that the employment sector still is underutilized, and worries as we do, that quality isn’t as sound as quantity in job growth.

This Week’s Economic Calendar:.

Tuesday,.

10:00 am June factory orders (+0.6%).

-July ISM service sector ndex (56.5 frm 56.0 in June).

Wednesday,.

7:00 am weekly MBA mortgage applications (we expect apps will be better).

8:30 am June trade balance (-$45.0B).

Thursday,.

8:30 am weekly jobless claims (+3K to 305K).

3:00 pm June consumer credit (+$18.3B, +$19.6B in May).

Friday,.

8:30 am Q2 productivity (+1.4%).

-Q2 unit labor costs (+1.6%).

10:00 am June wholesale inventories (+0.7%) .

We have mentioned recently that we are not quite as concerned about the technical analysis recently as the bond market (10 yr note) is well contained in a range frm 2.60% and 2.44%, the range began in mid-May and hasn’t moved out of it. Our short term technicals move frm bullish to bearish as the 10 rotates. MBSs are in the same state and will only move in a trending direction when the 10 yr leads the way. Looking at the weekly chart (longer term view) the 10 yr has yet to break below its 100 week average on its rate, but is under its 20 and 40 week averages.

http://globalhomefinance.blogspot.com

What higher rates mean for banks; Recent state-level Changes;A fee to use Libor?

http://globalhomefinance.com

People need to use their heads once in a while. Circulating in the e-mail world is a claim: "This is the only time in your life you will see this phenomenon: August, this year, will have 5 Fridays, 5 Saturdays and 5 Sundays. This happens only once every 823 years." Snort. Anyone who can read and has a calendar, and a little common sense, knows that this is incorrect, as every time a month with 31 days (January, March, May, July, August, October, December) has the 1st day of the month on a Friday, this happens. So stay tuned for May 2015 when it will happen again. Speaking of things that are subject to skepticism, even if they're in writing, Al W. forwarded this along about how LOs are #3 on a list of jobs that make a person happy and rich. 

Speaking of using your noggin, the GDP of Argentina is about the same as that of Virginia, about $400-500 billion. Traders could use Argentina's missing a debt payment as an excuse to buy US bonds. But instead of a flight to quality which would push our rates lower, the "market" in its infinite wisdom, decided to concentrate on economic data that sparked concern the Federal Reserve could raise interest rates sooner than some have expected. So yes, rates have moved higher, but are still within the range we've been in since before Easter. And we once again have proof that stocks and bonds don't always move in the opposite direction, since bond prices and stock prices have fallen this week. Lots of smarter minds than mine see this as an over-reaction and a buying opportunity for both. 

Many banks are preparing for an eventual increase in interest rates (take your pick: a stronger economy or the Fed scaling back security purchases). And so many banks are adding floating rate loans in order to have an increasing income stream when rates do rise. This is probably a good idea given that typical community bank funding structures are positioned for a rising interest rate environment. As bankers know, floating rate loans are typically priced at a spread pegged to a benchmark. Over the years, though, many banks have been shifting from Prime to Libor as they seek to better match funding sources (large banks typically use Libor to price deposits). 

I remember when it was correctly called LIBOR (London Interbank Offered Rate) but I guess it is easier to type Libor. It is a global floating interest rate that initially acted primarily as a benchmark for transactions between banks, and especially for commercial loans. Possible manipulation and lawsuits aside, or actually because of them, a new Libor administrator took over from the British Bankers Association (BBA) called the Intercontinental Exchange (ICE). But on July 1 of this year the ICE introduced new licensing arrangements for the use of the index! A usage license is required for any party that uses Libor rates in valuation and pricing activities, including collateral calculations, interest rate fixing, pricing curves, etc., plus any party that uses Libor rates as a reference rate in transactions which could include swaps, mortgages and loans. 

This is shocking in its broad reach and seems to require a license for practically every bank, mortgage company, credit union, core provider and servicer in the U.S. ICE indicates licenses cost $16,000 per year - can the local mortgage company or credit union afford that? That may change, however, as Pacific Coast Bankers Bancshares reports that currently the ABA and the ICBA are actively communicating with ICE to help it achieve a better understanding of how U.S. institutions use the index and to have this fee eliminated.  

Banks use their deposits to make loans, but US banks are steeling themselves for the possibility of losing as much as $1 trillion in deposits as the Federal Reserve reverses its emergency economic policies and raises interest rates. JPMorgan Chase, the biggest US bank by deposits, has estimated that money funds may withdraw $100 billion in deposits when the Fed stops influencing supply and demand. And you know all those recently minted MBAs in the ranks of Wells, Citi, Bank of America, Bank of New York Mellon and PNC Financial Services are crunching numbers trying to gauge the potential effect of the Fed's exit on institutional or retail depositors who might choose to switch to higher interest accounts or investments. Of course banks love paying roughly 0% on deposits and loaning the money out, thus earning the spread. An outflow of deposits would be a reversal of a five-year trend that has seen significant amounts of extra cash poured into banks thanks to the Fed flooding the financial system with liquidity. Banks might have to pay higher rates on deposits to retain customers - potentially hitting their profits and sparking a price war for client funds.

 

What have a few states been up to recently with regard to lending changes?

 

Pennsylvania recently modified provisions regarding powers of attorney in House Bill 1429. The bill requires a power of attorney to be dated, as well as signed by the principal or by another individual on behalf of and at the direction of the principal if the principal is unable to sign. The signature must be acknowledged before a notary public who is not the agent designated in the power of attorney and witnessed by two individuals, each of whom is 18 years of age or older. 

Florida recently passed House Bill 413, which enacts provisions regarding consumer collection practices. HB 413 states, "a person may not engage in business in Florida as a consumer collection agency without first registering in accordance with the law, and thereafter maintaining a valid registration." The Financial Services Commission may also adopt rules requiring electronic submission of forms, documents and required fees as well as establish time periods during which a consumer collection agency is barred from registration due to prior criminal convictions of, or guilty or no contest pleas by, an applicant's control persons, regardless of adjudication. 

California amended provisions regarding mortgage loan originator education requirements in Senate Bill No. 1459. Under the law, an applicant for a mortgage loan originator license is required to complete at least 20 hours of approved pre-licensing education. Pre-licensing education courses must be reviewed and approved by the NMLSR. Education may be offered either in a classroom, online or by any other approved means. Education requirements approved by the NMLSR for any state other than California are accepted as credit toward completion of pre-licensing education requirements in California. 

Rhode Island's Governor, Lincoln Chafee, signed HB 7997 in July, which extends the state's licensing requirements to include companies servicing a loan, directly or indirectly, as a third-party loan servicer. As Buckley Sandler write, "the new law expands the definitions for servicing and third-party loan servicers, establishes for such servicers a $1,100 annual licensing fee, and requires licensed servicers to: (i) maintain at least $100,000 capital; (ii) obtain a bond; (iii) maintain segregated borrower accounts; and (iv) maintain certain records." HB 7997 also establishes prohibited acts and practices for third-party servicers, including, among others: (i) knowingly misapplying loan payments to the outstanding balance of a loan or to escrow accounts; (ii) requiring unnecessary forced placement of insurance; (iii) failing to provide loan payoff information as required; (iv) collecting private mortgage insurance beyond the date required; (v) failing to timely respond to consumer complaints; and (vi) charging excessive or unreasonable fees to provide loan payoff information. The new rules and requirements take effect July 1, 2015. 

Connecticut's legislature has passed House Bill 5514 providing for an alternate method of foreclosure. The new bill establishes an additional method of foreclosure that will support the Connecticut real estate market by selling residential properties at market prices, encourage potential purchasers eligible for first-time homebuyer and other special lending programs or who wish to perform due diligence concerning a purchase to purchase a residence in foreclosure, provide a measure of dignity to residential borrowers faced with the prospect of foreclosure, reduce deficiencies by providing a procedure for a market sale instead of a forced auction sale or lender possession of property prior to sale and provide a speedy method of concluding a foreclosure when the borrower and first mortgage lender agree on a sale.  

New York has adopted regulations concerning shared appreciation mortgage modification as Title 3 NYCRR Part 83. It permits banks and mortgage servicers to reduce the amount of principal outstanding on a borrower's mortgage in exchange for a share of the future increase in the value of the home. The option is limited to borrowers who are 60 or more days past due on their loan or whose loan is the subject of an active foreclosure action and who are not eligible for existing federal and private foreclosure prevention programs.  

And a few somewhat recent lender updates to give us a flavor for the trends out there...

 

The Federal Home Loan Bank of Des Moines and the Federal Home Loan Bank of Seattle announced that they are discussing a potential merger of the two Banks. A merger would require approval from the Federal Housing Finance Agency, as well as member-owners of FHLB Des Moines and FHLB Seattle. The combined institution would provide funding solutions for more than 1,500 member financial institutions in 13 states, as well as the U.S. territories of American Samoa and Guam and the Commonwealth of the Northern Mariana Islands. 

US Bank Mortgage posted its bulletin 14-045 regarding agency conventional overlays.

Due to an improved lending environment and the agencies providing better clarity regarding their expectations, U.S. Bank Home Mortgage will be eliminating all conventional agency credit overlays. "USBHM continues to provide clarity when agencies are silent on a topic or when USBHM chooses to use an alternative process to expedite loan approval." These changes are effective immediately for all new conventional agency loans and current loans in your pipeline. Agency guidelines must be followed. 

Kinecta Federal Credit Union reminded clients that it offers a 90% LTV Jumbo Arm program for loan amounts up to $250,000 above agency high-balance limits, min 720 FICO and discounted MI. Conversely, if the borrower wants to avoid MI, we also offer 1st and 2nd combos up to a combined loan amount of $1 million. Also min FICO is 720. 

Banc of California now offers Non-Warrantable Condos, Condotels & HomeStyle Renovation loans in all 50 states to its correspondent clients; Non-Warrantable Condos: Fixed Rate and ARMs; Loan amounts to $2.5M, 65LTV; 80LTV to $1.5M. 

M&T Bank Correspondent's 2014-20 bulletin included information regarding Homeownership Counseling disclosure forms audit requirement on loan files submitted for purchase with application dates on or after 7/10/14 to ensure compliance with the Dodd-Frank requirement. SONYMA Conventional Plus income limits have changed with most of the State seeing a decrease. VA appraisal fees have been revised applicable to all VA appraisals ordered on or after July 2; Flood insurance minimum deductibles, for new or renewing policies are in effect. 

Turning back to the markets, take your pick (Ukraine, Argentina, Israel, Libya, the possibility of the Fed raising rates in the first half of 2015 instead of the second half), volatility has increased. MBS prices got whacked Wednesday and Thursday, and yesterday the 10-yr closed at a yield of 2.56% - still on the low side of the range we've been in since MLK Day. 

Today we've seen the Personal Income and Consumption data, along with payroll and unemployment data. Nonfarm Payrolls were +209k for July, slightly lower than expected but the prior month revised higher to 298k, and the unemployment rate inched up to 6.2%; average hourly earnings and workweek were both unchanged as expected. We still have the July final University of Michigan survey coming, as well as July's ISM Manufacturing results - but on a summer Friday, they are unlikely to move rates. In early trading we're down to 2.54% and agency MBS prices are better by about .125. 

July unemployment rate at 6.2% up from 6.1% in June (expectations were for 6.1%); non-farm jobs up 209K against estimates of 230K, private jobs +198K against estimates of 233K. Average hourly earnings up 0.1%, less than _+0.2% expected; the labor participating rate 62.9% from 62.8% in June. May and June non-farm jobs were revised up by a total of 15K more than originally reported. The report had something for everyone; not excessively strong, that took some of the pressure off stocks and bonds; not weak either, keeping the longer outlook questionable and uncertain. There will discussions all day, as was the case yesterday, whether the Fed will increase rates sooner than what has been thought. Construction companies added 22,000 workers and factory employment climbed 28,000 last month, led by a 14,600 gain in payrolls at auto plants that was the biggest since April 2013. Employment at private service providers increased 140,000 in July, the smallest gain in six months.

Yesterday a wave of stock and bond market selling on belief inflation is gaining and the economy is accelerating more rapidly than the Fed has been saying. In the policy statement from the FOMC meeting the group, following Yellen’s take, said there is significant underutilization in the labor markets. Today’s report does imply the Fed has it right; that will not change the deeper thinking that the Fed is behind in its plan to increase rates.

http://globalhomefinance.blogspot.com

JD Powers report on servicing; Non-vanilla securitization market heating up

http://globalhomefinance.com

The Office of the Comptroller of the Currency tells us that 13 out of every 14 mortgages (93.1%) in the United States were "current and performing" at the end of the 1st quarter 2014 compared with 9 out of 10 (90.2%) at the end of the 1st quarter 2013. Why doesn't the press ever pick up on stats like that? Or remind the industry of the product mix of well-known lenders? For example, Mark Mozilo writes, "Although Countrywide was a leader in the subprime business, subprime only accounted for 10% of its overall production. 90% of Countrywide's production was prime loans with an average FICO of 700+. Countrywide began its business in 1969 as a FHA/VA & Conventional lender, later moving into jumbo loans, and the last business it moved into was subprime. Since it had such an efficient machine, any product that you 'fed' the machine would immediately produce enormous volumes quickly! Subprime makes headlines, 'boring' prime loans don't!" And yesterday the lender was in the news regarding the latest settlement north of a billion dollars.

Why are banks and lenders merging? Leave it to the ABA to give us a graphic reminder. By the way, the FDIC reports that over the past 10 years about 67% of the time a community bank is acquired, the acquiring bank is another community bank. In the last week we learned that Peoples Bank ($1.2B, NY) will acquire Madison Square Federal Savings Bank ($144mm, MD) for approximately $14.4mm in cash. Columbia State Bank ($7.2B, WA) will acquire Panhandle State Bank ($908mm, ID) for approximately $121.5mm in cash and in stock. Business First Bank ($690mm, LA) will acquire American Gateway Bank ($377mm, LA) for an undisclosed sum. In Minnesota (home of a state fair where people make realistic sculptures entirely out of butter) Bremer Financial ($8.9B) will acquire Eastwood Bank ($670mm) and Grand Rapids State Bank ($230mm) will acquire Crow River State Bank ($84mm). But last Friday, in Illinois (home of "Honest Abe" who is so deeply revered he was elected Lieutenant Governor in 1998), regulators closed Green Choice Bank and sold it to Providence Bank under a purchase and assumption agreement.

For you servicers out there, J.D. Power released the results of the 2014 Primary Mortgage Servicer Study. (Yes, they do more than cars.) Here's a link to last year's release and rankings. But why settle for last year's when this year's is out? Congrats to Quicken!

 "The study measures satisfaction in four factors of the mortgage servicing experience: billing and payment process; escrow account administration; website; and phone contact. Mortgage servicers are making substantial progress in improving the overall customer borrowing experience-specifically for "at-risk" customers-with technology helping to simplify and streamline the experience... Overall satisfaction averages 754 (on a 1,000-point scale) in 2014, up from 733 in 2013. Improvements in satisfaction are even more pronounced among at-risk customers-those who are currently behind with mortgage payments or concerned about keeping current with their payments during the next year-increasing by 42 points year over year to 703 in 2014.

Traditionally most lenders' monthly production is more than 5-10% of jumbo loans. But that doesn't stop the constant chatter about non-agency MBS, and the fabled private money coming back into the market. So it was of great interest that the Wall Street Journal had a piece titled, "Is the Private Mortgage Bond Market Dead or Dormant?"  But let's face it: plenty of jumbo loans are being originated, and plenty of them are heading into bank portfolios. 

But the non-agency MBS market is truly heating up, and I have had trouble over the last week or two keeping up on the news. We continue to hear the names that have become popular over the last year or so, with some of them branching out into pooling different types of loans. And once again people in the industry are bickering about the benefits of securitization (adding liquidity, the transfer of capital, satisfying investor appetites) versus the drawbacks (confusing pools of mortgages, reliance on rating agencies, dubious transfer of risk). 

For example, last week Heather Perlberg and John Gittelsohn of Bloomberg wrote, "Blackstone Group LP, the largest U.S. landlord of single-family homes, is working with Deutsche Bank AG to sell about $700 million of securities tied to mortgages on rental properties, its third such deal...The offering would be the sixth of bonds backed by rental homes, the largest of which was a $993 million sale in May, also by New York-based Blackstone. Wall Street has issued $3 billion of securities backed by houses owned by Blackstone, Colony American Homes Inc. and American Homes 4 Rent since last year. Blackstone, which has amassed 45,000 houses since early 2012 through its Invitation Homes LP unit, became the first to tap the securitization market in November by selling $479.1 million of debt." Colony American Homes is no slouch: it owns more than 17,000 houses. 

What kind of loans are in the pool? "Loan to BPO values" of 79% are in the offering, vs. 65% for Silver Bay deal in market (noted below), 70% for second Colony American Homes issuance, or 75% for first 2014 deal by Blackstone's Invitation Homes deal, according to ratings-firm presale reports. We have a new buzzword: Class G. Kroll notes that the issuer indicated principal-only Class G is included in structure to comply with European Banking Authority risk-retention regulations, according to Kroll, and Moody's said the sponsor agreed to hold the Class G certificates (about 5% of the loan amount) for the life of transaction. "While risk retention can be viewed as a credit positive," Kroll opined, "it does not believe it mitigates the impact of increased leverage, as the entire loan proceeds will need to be refinanced at maturity." 

But there are twists! In one deal Deutsche Bank, the lender, isn't responsible for remedying material document defects in latest deal backed by single-family rental properties managed by Invitation Homes, a switch from last offering by Blackstone affiliate, according to Moody's presale report. The report notes that, "Instead, the responsibility falls on the sponsor, Invitation Homes, and its affiliated depositor, neither of which is as financially strong as Deutsche Bank and may not have as strong an incentive to find and cure errors." [Danger Will Robinson!] The write up went on: with last deal, "the put-back risk provided a strong incentive to the lender to make sure all documents were in order and, if necessary, to get the borrower to correct defects." The latest Blackstone deal includes the highest LTVs yet due to inclusion of Class G certificates to meet risk-retention regulations, according to Kroll. 

There has been news of Two Harbors marketing a $255m jumbo RMBS. And this month Silver Bay Realty Trust and the Blackstone Group were in the market with single-family rental (SFR) bonds, the first offering juicier yields than its predecessors and the latter inching up leverage from its prior issues. Silver Bay's US$312.667m debut was titled "SBY 2014-1". But the pricing was initially viewed as worse (therefore the market demanded higher yields) than the last deal that priced in June for Colony American Homes since it was smaller and in fewer markets versus the last deal. 

Jody Shenn with Bloomberg wrote, "Though Silver Bay was the first public REIT set up in the wake of the financial crisis to buy distressed homes to fix up as rentals, it has been slower coming to market as it acquired fewer homes and at a slower pace than other big institutional buyers. The deal is backed by rentals from nearly half of the 5,800 homes the REIT owns in eight states as of April 30...Its maiden SFR deal is also the smallest of the seven bonds that have emerged in the sector since Blackstone priced the first deal of its kind in November last year. (The latest US$720m deal from Blackstone, the biggest issuer in the sector, is backed by 3,750 homes out of its much larger 44,000 property portfolio.) Analysts also focused on other differences between the two Silver Bay and Blackstone trades. Silver Bay has no employees of its own, unlike Blackstone, Colony and American Homes 4 Rent. Instead, the REIT is externally managed by affiliates Pine River Capital Management and Provident Real Estate Partners, which handle day-to-day operations, investment criteria, acquisitions and asset management of the properties, according to Kroll." 

But the good times keep rolling, and Bloomberg's Jody Shenn and Christopher DeReza scribe regarding a deal backed by 526 prime residential mortgage loans: "CSMC Trust 2014-IVR3." It has a total principal balance $363 million of loans acquired by DLJ Mortgage Capital. [What? DLJ is still around?] The originators are Quicken Loans (33%), Fifth Third (13%), First Republic Bank (11%), Caliber (6%), Sierra Pacific (5%), and several others, and the loans will be serviced by Select Portfolio Servicing (69%), Fifth Third (13%), FRB (11%), PHH (5%), New Penn doing business as Shellpoint Mortgage Servicing (2%).   

How about the news yesterday!? The big surprise over the past week was the GDP report at +4.0%: good news for the economy but bad news for rates. (In theory an improving economy leads to a higher demand for credit, and possible inflation.) The stronger-than-expected growth revealed in the GDP data was good news for the economy, but it caused mortgage rates to shoot higher and the 10-yr T-note closed at 2.55%. 

But arguable of equal importance was the Fed's announcement. "In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions" the FOMC has announced a further $5 billion per month reduction in MBS purchases. This brings the monthly MBS purchase rate to $10 billion, or about $500 million per business day. It also reduced Treasury purchases by $5 billion/month. And lenders found themselves selling (hedging) pipelines - will locked loan pull through go above 80%? Take your pick of the coupons being sold, but overall 30-yr agency MBS ended the day worse between .375 and .625 - back to where we were a month ago.

 

Today we had Argentina's default (does anyone care?), Jobless Claims (+279k last, were +302k this week) and the second quarter's Employment Cost Index (+0.3% previous, this time +.7% - much higher than forecast). As of this writing we can look forward to the non-market moving July Chicago PMI which left off at 62.6 last time around. But more emphasis will be put on tomorrow's employment report. (The consensus forecast is that the economy added 220K jobs in July.) After the Jobless Claims & ECI numbers we're up to 2.59% and agency MBS prices are worse .250.

 

 Executive Rate Market Report:

 

The bond and mortgage markets started this morning where they left off yesterday, interest rates are increasing and mortgage rates going higher. Yesterday’s surprise 4.0% Q2 GDP, Q1 revised from -2.9% to -2.1% and the Q2 deflator at 2.0% took all of the bullishness out of the rate markets. Geopolitical situations are also being pushed back as increasing belief that Ukraine/Russia and Israel/Hamas are more regional and won’t escalate to wider perspectives. The US stock market, the European stock markets are under pressure and likely will sell off more as economic reports increase the outlook that the Fed will increase interest rates sooner than expected. In the policy statement yesterday the Fed said it will keep the FF rate at current levels for an extended period. The Fed concerns that the employment gains show significant underutilization in the labor markets (low paying and part time jobs) went nowhere in the minds of traders in stocks and bonds. Under the headlines there is more dissention within the FOMC on when to increase the FF rate; we get the sense that more members are leaning toward an earlier increase than what was stated in the policy statement. That is what markets are also thinking.

 

Weekly jobless claims were in line with estimates; claims increased 23K back above 300K to 302K, we were looking for an increase of 21K. As noted yesterday this time of year the claims data is volatile because of the auto industry model year change over with workers being laid off for re-tooling. The four-week average of jobless claims, considered a less volatile measure than the weekly figure, dropped to 297,250, the lowest since April 2006, from 300,750 the prior week.

Q2 employment cost index was expected up 0.4%, as reported costs ncreased 0.7% the highest level since Q3 2007; more fuel for the sooner than later increase in the FF rate.

 

At 9:30 the DJIA opened -102, NASDAQ -43, S&P -15. 10 yr note 2.59% +3 bps and 30 yr MBS prices -13 to -17 bps. Earlier this morning the 10 traded at 2.61% at its 100 day average, MBS prices at 9:00 -24 bps.

 

9:45 July Chicago purchasing mgrs. index, expected at 63.2 from 62.6 in June, declined to 52.6, the lowest level since June 2013. Tomorrow the national ISM manufacturing index will be reported.

 

With all of the activity yesterday morning on the Q2 GDP report the weekly MBA mortgage applications slipped through our minds. The composite index declined 2.2%; the purchase component increased 0.2%, the refinance component fell 4.0%. 53% of the apps were for re-finance down from 54% the previous week.

 

Stocks are being tagged hard this morning, beside the changing sentiment about when the Fed will begin increasing rates, Argentina defaulted on its debt and the Ukraine/Russia sanctions are seen as a drag on Europe’s economy. Although there isn’t any new news in the region, Russia continues to fuel the separatists with weapons and Putin has shown he doesn’t care about sanctions and what they will do to the Russian economy.

 

Tomorrow the July BLS employment report, the July ISM manufacturing index, June construction spending and the month end U. of Michigan consumer index are all out. The employment report of course is the elephant. Non-farm jobs expected up 230K, private jobs +233K, the unemployment rate unchanged at 6.1%. The labor participation rate will garner a lot of attention as will where the job growth is coming from; most of the gains in employment are in the service sector.

 

Early this morning the 10 tested its 100 day average at 2.61%, since then the rate has declined back to 2.59% +3 bps from yesterday’s 10 basis point increase in the rate. All technicals are bearish; possibly a new wider trading range is unfolding, between 2.44% the resistance that was tested six times and now 2.66%. Today will not likely see any improvements but equally we don’t expect rate will increase much with employment tomorrow.

 

http://globalhomefinance.blogspot.com

RESPA-TILA update; HMDA changes in the wind; New IM system for Banks?

http://globalhomefinance.com

How is it that this is the last week of July already? Lots of lenders seem to have seen decent Julys - but perhaps not as strong as some of their Junes - and certainly for many the upward sloping trend of lending activity and profits seen from March through June has tended to level off - it is a tough job for most to keep that kind of increase going. HR folks' jobs are sometimes pretty tough - and can  be the opposite of boring - and in a note that will make HR folks take notes, are laws & restrictions on running criminal background checks in the near future? "The law prevents criminal background checks in the private sector until after employers and hiring managers pursue the interview process with potential applicants."

Let's take a quick look at the overall market. Who says that the housing market is not doing well? We can't pick up a newspaper or see the news without seeing some study about prices, foreclosures dropping, or recovering markets, or some combination thereof. It seems to have become a national hobby...

Compass Point Research and Trading LLC reports on the banks' mortgage origination and servicing numbers for the second quarter. "Origination volumes are up roughly 25%, in-line with prevailing estimates from Fannie Mae and MBA. Gain on sale margins were up 7% on average, while correspondent lenders saw slightly more pressure than retail-heavy originators. Mortgage servicing rights (MSR) marked down 2% on average. This would indicate the non-bank mortgage originators likely will see slight pressure on margin due to the material amount of originations from the correspondent channel, while fair value marks will hit GAAP earnings. On a positive note, we have seen gain on sale margins move meaningful higher through the first few weeks of the third quarter as stable mortgage rates combined with lower agency MBS have caused spreads to widen. If this continues, the third quarter could be setting up to be a decent quarter. 

Compass Point's excellent piece went into more detail. "The spike in margins through the first weeks of the quarter...is due to a quick move down in agency MBS yields while mortgage rates have not fallen as the same pace. Typically, this is a temporary phenomenon until we see some stabilization in MBS yields. Mortgage origination volumes are up 25%, while margins are up 7% on average. Mortgage servicing income was a mixed bag. MSR amortization was more elevated than expected and we generally saw 2-5% markdowns for most servicers. We did see some hedging gains support servicing margins, but this likely won't translate for the non-banks that are reporting in the next couple of weeks." 

Lastly is an opinion on affordability. "Over the past several quarters, we have made the argument that the mortgage and housing markets have the capacity to handle higher rates given affordability index has been well above the long-term average. However, with the most recent move higher in prices during the spring selling season, the affordability index is approaching its long-term average. Meanwhile, the price-to-income ratio has pushed above the long-term average, indicating it will be difficult for the housing market to handle a significant move higher in rates without income levels going along with it. We continue to believe housing remains affordable for well-qualified borrowers, but are increasingly concerned the market can handle an increase in rates." 

Compliance is about a year away, but a mention of RESPA-TILA reform bears repeating, since it impacts every loan application. "RESPA-TILA is a huge rule and will impact your business from the time a borrower walks through the door to closing, and your business is going to need to make deep operational changes to comply. To help the mortgage industry get ready, MBA is on the road this summer with top-level legal, compliance and technology experts - including a CFPB representative. So far they have brought together hundreds of industry professionals in two states. There are just two workshops remaining - Atlanta on July 31st and Washington, D.C. on August 7th. The cost for this one-day intensive workshop is low, but space is limited." 

Yup, accurate HMDA reporting is an executive level oversight these days; the downside is too great for it not to be a concern. "With heightened regulatory and media focus on HMDA data, more lenders will find themselves the subject of fair lending exams," according to Mortgage TrueView, a provider of data-driven business intelligence services. With their new independent study, the company concluded that many lenders are leaving themselves vulnerable to fair lending exams and significant penalties by not properly monitoring and managing HMDA reporting. "Mortgage companies and banks are not taking full advantage of the insights offered in HMDA data," said Mortgage TrueView President and CEO David Moffat. Additionally, Moffat said their 2013 HMDA survey showed that many lenders are submitting their data with formatting errors, which could lead to non-compliance issues with regulators.Among the findings, include: 2013 regulatory risk indicators show a 13% year-over-year increase in loan denial rates, denial rates for white applicants increased from 17% to 21%, while denial rates for non-white applicants increased from 23% to 28%, denial rates for Hispanics increased from 25% to 30%, denial rates for non-Hispanics increased from 18% to 21%, and denial rates for female applicants increased from 21% to 26%, as opposed to males where it increased from 17% to 21%. 

And CliftonLarsonAllen's Anna DeSimone reports on the CFPB's latest thoughts on simplifying the HMDA reporting for financial institutions. (Under the proposal, financial institutions that make 25 or more closed-end loans or reverse mortgages in a year would be required to report HMDA data.) Even in this era of computers we still don't have the 2013 numbers yet, but "in 2012, 7,400 financial institutions reported information about approximately 18.7 million mortgage applications and loans. While the HMDA dataset is the leading source of information about the mortgage market, it has not kept pace with the market's evolution. For example, the HMDA data do not provide adequate information about certain loan features that helped contribute to the mortgage crisis, such as adjustable-rate mortgages and non-amortizing loans.  

"The July 24 announcement... is proposing to improve the quality and type of HMDA data as required by the Dodd-Frank Act. The Bureau is also looking at ways to make submission of data easier for lenders and to improve the user experience in accessing the public data. The proposed changes include improving market information. In the Dodd-Frank Act, Congress directed the Bureau to update HMDA regulations by having lenders report specific new information that could help identify potential discriminatory lending practices and other issues in the marketplace. This new information includes, for example: the property value; term of the loan; total points and fees; the duration of any teaser or introductory interest rates; and the applicant's or borrower's age and credit score. The CFPB is proposing that financial institutions provide more information about underwriting and pricing, such as an applicant's debt-to-income ratio, the interest rate of the loan, and the total discount points charged for the loan, which all fall under monitoring access to credit. This information would help regulators determine how the Ability-to-Repay rule is impacting the market, and would also help the Bureau monitor developments in specific markets such as multi-family housing, affordable housing, and manufactured housing. The proposed rule would also require that covered lenders report, with some exceptions, all loans related to dwellings, including reverse mortgages and open-end lines of credit. 

It is quite an undertaking, and to see all the information and form your own opinion in order to comment by October 22, see the CFPB's press release on HMDA.

Freedom Mortgage Corporation, a privately held, full-service mortgage lender licensed in all 50 states, let everyone know that it funded over $2 billion in residential mortgages in the month of June 2014...Two years ago, in July 2012, the company achieved monthly volume of $1 billion in funded loans for the first time. This dramatic increase in volume over the past two years is the result of leadership's vision and strategic growth plans. Roughly half of the $2 billion volume was funded by its Structured Products Group, the company's correspondent lending division."

In Northern California comes news that Mechanics Bank and RPM Mortgage, Inc. have announced an agreement for RPM to originate mortgage loans for Mechanics Bank customers. 

Within the last month Mountain West Financial Wholesale announced that, per the California Housing Finance Agency changes to the term of the CHDAP reservation, MWF will lock the CHDAP reservation for only 30 days. It is recommended that you not request a CHDAP reservation until the loan is ready for underwriting submission. As a reminder, CalHFA' s Bulletin 2014-08 stated that for all new CHDAP reservations subordinate to any first mortgage made on or after June 2, 2014, the first mortgage maximum allowable fees charged by a lender may not exceed the greater of 2% of the first mortgage loan amount, or $3,000.

Darned we have a lot of scheduled economic news this week here in the U.S.! Today is Pending Home Sales, tomorrow is the S&P/Case-Shiller house price numbers with their two-month lag, along with Consumer Confidence. Wednesday we have the MBA application numbers, along with the ADP employment change numbers, GDP, and an FOMC rate decision. On Thursday the 31^st we'll have the Employment Cost Index, Initial Jobless Claims, and the Chicago Purchasing Manager's Survey. And then on Friday, drum roll please, we can look forward to all the unemployment data, along with Personal Income and Consumption, the University of Michigan Consumer Confidence survey and Construction Spending. 

Looking at the traditional benchmark 10-yr T-note yield, it has been in the 2.44%-2.80% range since January. We're at the lower end of that now due to unrest overseas and the fact that the U.S. economy is not expanding very rapidly. Friday it closed at 2.47%, and this morning we're sitting at roughly the same level, and agency MBS prices are also unchanged.

Executive Rate Market Report:

Last Friday the MBS prices were +18 bps and the 10 yr note rate declined 4 bps to 2.47%. For the week there was no change in MBS prices and the 10 yr slipped just one basis point, from 2.48% to 2.47%. Early this morning ahead of a big week for markets the 10 at 2.48% +1 bp and MBS prices started down 10 basis points. The only report out today in a very significant week; NAR released June pending home sales at 10:00, expected to have increased 0.3% after increasing 6.1% in May, as reported sales declined 1.1%, more nasty data on the housing sector; yr/yr though the expectation was a decline of 5.0%, as reported -4.5%.

The US stock indexes opened slightly weaker taking the 10 yr and MBS prices off their early morning lows. The DJIA started -11, NASDAQ +1, S&P -1; 10 yr unchanged at 2.47% and 30 yr MBS prices +11 bps from 9:30 Friday morning and generally unchanged from Friday’s close.

This week has a plethora of releases and events; Treasury will auction $93B of notes beginning tomorrow with $29B of 2s, usually our end of the yield curve doesn’t pay a lot of attention to the 2 yr; Wednesday $35B of 5s, a little more interesting, then Thursday $29B of 7 yr notes that will get attention from bond and MBS investors. The 7 yr will take place one day after the FOMC policy statement adding additional focus on the demand. The FOMC meeting begins tomorrow and concludes on Wednesday afternoon with the policy statement (there will be no Yellen press conference after this meeting)

Wednesday the advance Q2 GDP will be reported, the current expectations are for GDP to have increased 3.1% in the quarter after declining 2.9% in Q1. The advance report is usually revised from the advance to the preliminary that will be reported one month from now, some of the third month of the quarter data isn’t complete on the advance report. Also Wednesday the July ADP private jobs report is expected to show an increase of 235K jobs; in June ADP said 281K private jobs were created and its data was the same from the BLS official employment data. Friday the BLS will report that unemployment was unchanged from June at 6.1%; non-farm jobs 233K,  private jobs are also expected at 233K. Also this week two reports on consumer attitudes, the Chicago PM July index, the national ISM manufacturing index, June personal income and spending, construction spending. The calendar is loaded (see below).

Ukraine/Russia and Israel/Hamas; both situations are status quo this morning. Israel and Hamas tried a few hours of cease fire then went back to the rocket lobbing’s back and forth. Ukraine tensions haven’t changed; the US claims Russia is supplying heavy weapons to the separatists, Russia denies it. Overall at the moment the two situations have been pushed back off the table and buying of treasuries as a safety move has waned in the last week. Both still are being monitored closely but with the US not adding sanctions after a lot of strong talk and Europe with little interest in doing much, presently we can say the Ukraine/Russia and Israel/Hamas issues are considered regional with little geopolitical consequences. Stay tuned though.

Richard Fisher, Dallas Fed, saying he is becoming increasingly concerned that the Fed is slipping behind the curve in delaying increasing rates. He said the economy is much better than the Fed is thinking and is concerned that the present lower rates are forcing increasing risk-taking in the stock market. Fisher at one point was a regular banker and has managed hedge funds in the past, maybe a little credibility there in his remarks.

This Week’s Calendar:
          Monday,
             10:00 am June pending home sales (+0.3% from +1.6% in May; as reported
         Tuesday,
             9:00 am May Case/Shiller 20 city index (+9.9% annual)
            10:00 am July consumer confidence (85.5 from 85.2 in June)
                          FOMC meeting begins
             1:00 pm $29B 2 yr note auction
        Wednesday,
            7:00 am weekly MBA mortgage applications
            8:15 am July ADP private jobs report (+235K from 281K in June)
            8:30 am Q2 advance GDP (+3.1%, Q1 -2.9%, deflator +2.0%)
            1:00 pm $35B 5 yr note auction
            2:00 pm FOMC policy statement
       Thursday,
           8:30 am weekly jobless claims (+21K to 305K)
                        Q2 employment cost index (+0.5%)
          9:45 am July Chicago PM index (63.2 from 62.6 in June)
          1:00 pm $29B 7 yr note auction
      Friday,
         8:30 am July employment data (unemployed 6.1% inch, non-farm jobs +233K, private jobs +233K, hourly earnings +0.2%)
                      June personal income and spending (income +0.4%, spending +0.4%; PCE core +0.1%)
        9:55 am U. of Michigan consumer sentiment index (81.5 from 81.3)
       10:00 am July ISM manufacturing index (56.0 from 55.3 in June)
                     June construction spending (+0.5%, +0.1% in May)\
       2:00 pm July auto and truck sales (16.7 mil from 13.4 mil in June)

AM Tracking Quote:

FNMA 4.0% 105.52 now -5 bps: 09:31 -5  Open 105.57

Should you Lock or Float? Contact me for Lock Advice!

Have a great day!

http://globalhomefinance.blogspot.com