Super Bowl XLVII, between the Baltimore Ravens and the San Francisco 49ers, will be played Feb. 3 at the Superdome, which will be the 10th time the Super Bowl has been played in New Orleans. From a Realtor & lender's perspective, how do the cities stack up? SF is the 14^th most populous city in the US (812,000) whereas Baltimore is 24^th (619,000). In SF, 52% of the folks 25 years or older have at least a bachelor's degree, and 86% graduated from high school. Per the Census Bureau, 28% of the folks 25 years or older have at least a bachelor's degree in Baltimore, and 86% graduated from high school. The national average for people 5 and old who spoke a language at home other than English is 21% - SF is 46% and Baltimore is 8%. The median income (half above, half below) of SF is $70k versus Baltimore's $39k. Lastly, the median home value of owner-occupied homes in San Francisco is $720k versus Baltimore's $154k. The national median is $174k. (If you want to throw New Orleans into the mix, it was way back at 51^st in population, 32% had bachelor's degrees, and the median home value is $185k.)

PHH Mortgage is recruiting for Vice President roles in the areas of Pipeline & Capacity Management, Governance & Exams, Escalations & Quality, Reporting & Analytics, Documents & Imaging, and Closing & Post Closing. PHH, one of the top retail originators of residential mortgages in the United States is seeking industry leaders as it grows its business. PHH offers a competitive compensation package which includes a base salary along with short & long term incentives in addition to full benefits. Relocation assistance is provided for these roles.  Interested candidates can view more details and submit a job application at phhjobs.com. Qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin or any other characteristic protected by law. 

Spurs Capital, a mortgage investor and fund manager headquartered in Manhattan (with additional offices in South East Florida and Denver), is currently hiring a Sr. Processor/ Jr. Underwriter to join its expanding conduit business. "We are looking for someone who has an extensive loan processing or underwriting background, is self-motivated, and possesses exceptional communication skills." Spurs Capital purchases a wide range of mortgages ranging from new agency origination all the way down to non-performing. We have a particular specialization in applying a triage approach to near miss residential mortgage loans to aid our clients in maximizing their best execution. If you or someone you know may be interested, please forward resume to loans@spurscapital .com

A correction to yesterday's listing from PMAC for a Correspondent Lending Manager, who could be located anywhere in the United States. I mistakenly wrote "PMCA" instead of "PMAC" - my apologies. (Those interested can still contact Shelley Tam, VP of Human Resources at shelleytam@pmac .com.)

It's about time a compensation plan rewarded loan officers for quality. Hey, if they can do it, why can't you?

How about we all get caught up on some recent bank merger news over the last 3 weeks? There are too many names to put them all in bold! The FDIC reported 50 bank failures in 2012 vs. 92 in 2011. (There were 157 in 2010 and 140 in 2009.) There are plenty of reasons for mortgage companies, banks, and other financial institutions to merge or be bought or sold - not the least of which is a bank or lender that is strong in one area, for example loan production, to pair up with another that is strong in another, like compliance. SNL Financial reports 2012 saw 236 M&A deals among banks and thrifts vs. 178 in 2011, an increase of 33%.

Old National Bancorp ($9.2B, IN) will buy 24 branches in IN and MI ($779mm in deposits) from Bank of America for a 2.94% premium. (The same BofA that recently announced it is intent on growing the mortgage business and so will ramp up to sell more through its 5,000 branches. The bank also plans to increase its wallet share by selling more products to existing customers and offer lower rates to clients that do more business with them.) MidFirst Bank ($9.9B, OK) will buy specialty lender Presidential Financial for an undisclosed sum. Presidential provides working capital lines of credit to commercial clients.

Citing an anonymous source, Bloomberg reports Virginia Commerce Bancorp Inc. ($3B, VA) has hired an investment banking firm to explore a sale. Bloomberg also reports Japan's largest bank, Mitsubishi UFJ Financial Group, has compiled a list of potential acquisition targets in the U.S. and is beginning to talk to CEOs on the list. Mitsubishi already owns Union Bank ($87B, CA) here, but has said it actively wants to expand its U.S. footprint.

Continuing, Liberty Bank ($3.6B, CT) has entered into an agreement to buy The Bank of Southern Connecticut ($122mm, CT) for $11mm or about 1x book. Eagle Bancshares Inc. ($68mm, WI) will buy Eagle State Bank ($16mm, NE) for an undisclosed sum. The president of Eagle Bancshares said he and other investors also own Brunswick State Bank ($82mm, NE) and Tri Valley Bank ($34mm, NE). Royal Business Bank ($627mm, CA) will acquire Los Angeles National Bank ($199mm, CA) for an undisclosed cash sum. The transaction is the 3rd for Royal since Nov. 2008. Rio Grande Credit Union (NM) has acquired New Mexico Central Credit Union (NM) for an undisclosed sum. Wintrust Financial ($17.2B, IL) will buy First Lansing Bancorp ($371mm, IL) for $38.5mm (60% stock and 40% cash). Bank of the Ozarks ($3.8B, AR) will buy First National Bank of Shelby ($883mm, NC) for about $68mm in stock. Bell State Bank & Trust ($2.4B, ND) will buy The Business Bank ($229mm, MN) for an undisclosed sum. Bell adds the bank, a mortgage origination unit and one branch. Investar Bank ($342mm, LA) will buy First Community Bank ($110mm, LA) for an undisclosed sum. Holy smokes!

Earlier this week I notified you that CAMP is having its Lender Fair in Newport Beach January 30^th - February 1^st. I recently learned that there will be a "Boot Camp" there on February 1^st. Guy writes, "If I were going to learn martial arts I would want to learn from Bruce Lee. If I wanted to be a Loan Agent I would want to learn from Sensei/Master Drill Instructor Guy Schwartz, CMC. Guy normally teaches to PhD level loan officers. This is a rare opportunity for any newbie's to sit at the feet of the master and absorb his wisdom and knowledge. You may even hear him recite one of his pithy lines such as. 'If a man dwells on the past, then he robs the present; but if a man ignores the past, he may rob the future. The seeds of our destiny are nurtured by the roots of our past.' Or May the Schwartz be with you!" If you have questions write to Guy Schwartz GSchwartz@cmgfi .com.

This morning the industry learned what lock desks everywhere already knew: apps fell last week. Purchases were down almost 2%, refi's down almost 10%, and overall applications fell 8%. It doesn't help that rates/prices for home loans are back to September levels.

Everyone has watched rates creep up. And these just aren't mortgage-related rates, but rates in general. If we throw some more gfee hikes or mortgage insurance increases into the mix, watch out! But what is going on out there? The Fed doesn't set rates for home loans - the market does - but higher interest rates are intended to curb future inflationary concerns, which are a side effect of a growing money supply. If the value of money is expected to drop, those who lend it will require a higher rate of return (interest rate) to ensure they don't lose out on the transaction over time. Inflation hasn't been much of a concern yet, but if prices are projected to rise, the Fed will eventually need to reign in its recent easy money policies. The Fed has done plenty to spark growth by slashing key interest rates, but their policy could change with recent positive news like home prices increasing 6% last year with existing home sales rising nearly 10% combined with decreasing unemployment.

We also know that the Fed, through its purchases of MBS, has been holding rates artificially low. Assuming the Fed eventually halts purchasing MBS, prices of MBS will drop as demand cools, and the corresponding yields would need to rise; translating to a higher mortgage rate for the consumer in order to maintain a healthy primary-secondary spread. The takeaway is that rates will probably display little movement this year, even if they do in fact rise somewhat. The Fed clearly doesn't want all their hard work to disappear overnight. And rates are still historically good - just not good versus the last few months.

One quick thing to keep in mind regarding the recent housing news on New Home Sales and Existing Home Sales: the two home "sales" reports measure different activity. The New Home sales report measures contracts, the existing home sales report measures closings, and neither is a perfect gauge of the housing market. Indeed, according to the Census-HUD joint release, the new home sales report is "estimated from sampling survey ... subject to sampling variability as well as non-sampling error including bias and variance from response, non-reporting and under-coverage." And the Pending Home Sales number showed a decline for the month, but year-over-year it was up - the 20^th straight month of increase. NAR's chief economist Lawrence Yun said the uptrend in home sales is uneven: "Buyer interest remains solid, as evidenced by a separate Realtor survey which shows that buyer foot traffic is easily outpacing seller traffic." And even with its two-month lag, the S&P/Case Shiller Home Price Indices posted another set of strong and broad-based annual increases in November 2012.

So we've seen prices head lower as investors continue to shift investing dollars into riskier assets, such as stocks and commodities, and out of the safe haven of the bond markets. Have we avoided the worst case scenarios, especially in Europe? Recent news like Durable Goods (+4.6% for December!) continues to show strength. The yield on the 10-yr has moved above 2% - psychologically not a good move - for the first time since April. And current-coupon MBS prices are along for the ride.

Today we have the end of the Federal Open Market Committee meeting. Minutes of the Fed's December meeting unexpectedly highlighted growing discomfort with the bond buying, running at $85 billion a month, although analysts do not expect any change to be announced after the meeting ends. Any hint of pushing up expectations of when the end of quantitative easing will be bearish for bonds. As the economy strengthens, the Fed must begin to end its expansionary monetary policy, starting with halting its purchases of $85 billion/month in Treasuries and mortgage-backed-securities. Second, it will stop reinvesting interest and principal on its holdings. Third, it will start raising overnight interest rates and lastly it will slowly liquidate its vast holdings of long-term debt. "This process will take years" as economist Elliot Eisenberg points out.

As mentioned above, we've had the MBA's weekly application numbers show a drop. And this morning we've had the ADP numbers show +192k, topping forecasts for private employment in spite of a small back-month revision. We've also had GDP - a big surprise at negative .1% (versus expectations of +1.1%) for the 1^st look at the 4^th quarter. The last time we saw a contraction was in 2009 - most of the decline was due to defense spending decreasing.

There is a lot of news coming out. Tomorrow here in the US we'll see the Challenger Job Cuts, Employment Cost Index, Personal Income, Personal Spending, PCE Deflator, PCE Core, Initial Jobless Claims, Continuing Claims, NAPM Milwaukee, and the Chicago Purchasing Manager survey. And on Friday the 1^st we have the Change in Nonfarm payrolls, Change in Private Payrolls, Unemployment Rate, Average Hourly Earnings, Weekly Hours, the U of Michigan Confidence, Construction Spending MoM, ISM Manufacturing, and ISM Price Paid!

After the surprisingly weak GDP news, the 10-yr is sitting nearly unchanged at 1.99%, as are MBS prices.

Famous Last Words (Part 1 of 2)

These are the good kind of mushrooms.

I'll hold it and you light the fuse.

Let it down slowly.

Rat poison only kills rats.

It's strong enough for both of us.

This doesn't taste right.

I can make this light before it changes.

Nice doggie.

I can do that with my eyes closed.

I've done this before.

Well, we've made it this far.

That's odd.

You wouldn't hit a guy with glasses on, would you?

Don't be so superstitious.

Hold my beer and watch this!