Sometimes I just want to head out of the country and head to some place like Key West or San Francisco. Seriously, how many Americans have a passport, and does it vary by state? The quick answer is that yes, sadly enough, most Americans do not have a passport and therefore cannot travel out of the United States. The number of Americans who have a valid passport, according to the most recent statistics issued by the State Department in January of 2013, is about 39% of the population. (This excludes passport cards that only allow sea and overland entry to the U.S. from Canada, Mexico, and parts of the Caribbean.) Here you go, including a nifty map showing passport holders by state. (Why would anyone in Mississippi or West Virginia want to leave?)

In the legal arena, the industry took note this week that JPMorgan Chase & Co. reached a settlement with the United States Attorney's Office for the Southern District of New York, the Federal Housing Administration (FHA), the United States Department of Housing and Urban Development (HUD) and the United States Department of Veterans Affairs (VA) resolving claims relating to the Firm's participation in federal mortgage insurance programs overseen by FHA, HUD and VA. "The settlement represents another significant step in the Firm's efforts to put historical mortgage-related issues behind it. Under the settlement, JPMorgan Chase will pay $614 million in cash and agree to enhance its quality control program for loans that are submitted in the future to FHA's Direct Endorsement Lender program. This settlement also releases the Firm from False Claims Act, FIRREA and other civil and administrative liability for FHA and VA insurance claims that have been paid to JPMorgan Chase since 2002 through the date of the settlement. The company believes it is fully reserved for the settlement, and any financial impact related to exposure on future claims is not expected to be significant."

By the way, yesterday the commentary had some news on the MI front. In a separate issue, we should keep in mind that Fannie Mae's announcement from the 4th, describing (below) how it is suspending certain MI affiliates, (Radian, MGIC and Genworth) was misunderstood by many in the industry as meaning these MIs were completely suspended. The MIs are still approved, but these unique affiliates are no longer approved. Fannie's LL-2014-01 noted, "Fannie Mae has taken the following actions with regard to Fannie Mae-approved mortgage insurance providers: Fannie Mae has approved the acquisition of CMG Mortgage Insurance Company (CMG) and its affiliates by Arch U.S. MI Holdings, Inc. CMG will be a wholly-owned direct subsidiary of Arch U.S. MI Holdings, Inc...Fannie Mae has suspended the approval of the following affiliates of existing approved mortgage insurers: MGIC Indemnity Corporation (MIC), Radian Mortgage Assurance Inc. (RMAI), and Genworth Residential Mortgage Assurance Corporation (GRMAC).

"These entities were approved by Fannie Mae to provide mortgage insurance in a limited number of states only through December 31, 2013, but either never issued any insurance policies or have ceased issuing new insurance policies in connection with loans to be delivered to Fannie Mae. Fannie Mae approvals of these entities automatically expired by their terms and they are being removed from the list of Fannie Mae-approved mortgage insurers. These suspensions are not due to any concerns related to their claims-paying ability. These entities are no longer necessary to allow each mortgage insurer to write new insurance nationwide. The flagship entities (specifically, Mortgage Guaranty Insurance Corporation, Radian Guaranty Inc., and Genworth Mortgage Insurance Corporation) continue to retain Fannie Mae approval.

To the casual observer, there is something not quite right in the residential mortgage banking business, and I am fortunate to have spent a lot of time with originators recently and now here in Orlando at the Secondary Marketing conference with investors. Something may be out of equilibrium, and I'll simplify it here. In the primary markets, hope springs eternal. There are hundreds and hundreds of lenders (brokers, mortgage bankers, and banks) who are out there trying to help borrowers refinance or buy a home. Many of the "bad eggs" have left the business, fortunately, although their crimes continue to be brought to light in lawsuits and in the press. But overcapacity is a huge issue - with originations going from roughly $1.8 trillion down to $1.2 trillion, or perhaps $1 trillion in 2014, not every LO and not every company is going to survive. (Mortgage originations hit a peak of $4 trillion in the wild & wooly days of 2003, but for most of the 1990's the market ranged from $500 billion to $1.5 billion.)

Enter the CFPB, out to rightly protect the consumer. We're all consumers, and we'd all like to be protected. But is the Bureau out of control, or beyond control, as critics claim? And are the Bureau's efforts going to stifle the economy, as this article in Yahoo suggests. Industry veterans all agree that some degree of regulation was overdue, and that the lenders brought many of the issues upon themselves, but has the regulatory pendulum swung too far? We will see, and fortunately the CFPB is moving toward eliminating some of the confusion out there regarding what lenders are allowed to do. It is not the CFPB's intention to bring lending, or the economy, to a grinding halt.

In the secondary markets, hope springs eternal. There are hundreds and hundreds of investors (big banks, servicers, REITs, money managers, etc.) who are out there trying to buy mortgages. Or at least originate them, and then put them into their portfolios. And many of them are talking about jumbo, non-agency, or non-QM loans. (Maybe agency products are too boring?) That's a problem, since historically speaking non-agency production accounts for 5-10% of production. But let's pad the numbers and say it will be 15%, which means that 2014 will see about $150 billion, or $12 billion a month. And how much of that is going straight into bank's (Wells, Chase, BofA, US Bank, Citi, Flagstar, BB&T, SunTrust, Fifth Third, and so on) portfolios? That probably doesn't leave much for players like Redwood Trust, Quicken, Penny Mac, Nationstar, CSFB, Nomura, Barclays, or the myriad of REITs backed by the myriad of funds looking for yields. There is a lot of capital out there and are truly a lot of institutions chasing yield, and that is not always a good thing. Stay tuned!

Overland Park-based CapWest Mortgage, a division of Farmers Bank & Trust, announced it is adding fixed second mortgages and home equity lines of credit (HELOC) to its loan product offering for all third party origination (TPO) clients. "We've seen a large influx of home equity interest on the retail side of our mortgage business," said Monte Robbins, President & CEO of CapWest Mortgage. "As remodeling activity is expected to grow even more in 2014, the timing is right to equip our TPO partners with this high-demand product for their customers." (In addition to stand-alone fixed second mortgages, CapWest will also offer a simultaneous fixed second up to 90 percent CLTV in conjunction with a purchase transaction as long as the TPO client delivers the first mortgage to CapWest. A piggyback HELOC and first mortgage product will also be available to CapWest's TPO clients.) CapWest reminded clients that it offers bank referral, wholesale and correspondent services, which include on-site sales and operations training in addition to marketing consultation. To inquire about any of these programs, please visit or contact Jake Stadler, Account Executive for CapWest Mortgage, at

Freedom Mortgage has launched a new division that provides end-to-end mortgage outsourcing for credit unions and regional and community banks. Freedom Mortgage's Financial Institutions Partner Group was designed to provide complete outsourced mortgage service specifically to small and midsize financial institutions. The new division will handle "all aspects of the mortgage transaction, from the initial client call to closing and servicing of the loan, on behalf of its financial institution clients," according to Freedom Mortgage.

Compliance folks everywhere are talking about HUD's release of Mortgagee Letter (ML 2014-03) announcing that FHA will accept electronic signatures (e-signatures) on documents requiring signatures included in the case binder for mortgage insurance, servicing and loss mitigation documentation; FHA insurance claim documentation; and on HUD's Real Estate Owned (REO) Sales Contract and related addenda unless otherwise prohibited by law. These changes are effective immediately. MBA has strongly advocated for this policy for several years and MBA and its members have worked closely with HUD throughout the policy development process. At this time, the use of e-signatures is voluntary, but mortgagees who choose to use e-signatures must comply with FHA's standards. FHA's existing policy allowing electronic signatures on third party documents for forward mortgages and HECMs pursuant to Mortgagee Letter 2010-14 remains in effect and is unchanged by this ML.

REMN Wholesale will have a major presence at industry events across the country during the next few months. On the West Coast, the REMN Wholesale team will be at the CAMP Sales & Marketing conference in Newport Beach on February 6 & 7. Next month, Carl Markman, director of national sales, along with the newly promoted Tina Lewandowski and other associates, will be at the Regional Conference of MBA's in Atlantic City from March 9-13. As a part of their year-long 25th anniversary celebration, REMN Wholesale will be hosting a party during the conference at Revel in Atlantic City on March 12.

While we're talking about upcoming events, let's take a random sample of upcoming events.

Out in California, the Silicon Valley Chapter of the California Association of Mortgage Professionals is hosting a panel on the current state of the mortgage industry that will feature speakers from the CFPB, law firm Medlin & Hargrave, and the NAMB Board of Directors.  Register here.

The Michigan Mortgage Lenders Association will be holding its annual Sales Symposium on March 6th in Novi, MMI.  There are several tiers of sponsorship available, with options ranging from having your company's name on the breakfast buffet or registration table to being featured as an exhibitor.  Register here.

The MBA's Mid-Winter Housing Finance Conference will be held in Avon, CO from March 12th-15thRegister here.

This year's Mortgage Servicing Conference will be held in Dallas, TX from April 23rd-25th.  The focus will be on the impact of the January 10th New Mortgage Servicing rules, with speakers from prominent law firm Ballard Spahr and RoundPoint Mortgage Servicing Corp.  Register here.

Few people in the chain of command at a mortgage bank, or even a bank, enjoy volatility. So this time of relative quiet has been good, although prices worsened yesterday. Given not too much else to blame it on, "experts" cited "nervousness" ahead of Friday's employment numbers. Or perhaps it was just some profit taking, leading to selling bonds. (Friday's numbers are expected to come in around +175k and 6.7% for nonfarm payrolls and the unemployment rate.) Thomson Reuters observed that, "supply from mortgage bankers was on track for another $1+ billion day, which was easily manageable by the Fed." By the end of Wednesday the 10-year T-note note was down/worse about .375 (2.67%) as were agency MBS prices.

For thrills and chills today we'll have Initial Jobless Claims, expected lower to +335k from +348k; International Trade (Dec), projected at -$36.1 billion from -$34.3 billion; and preliminary Q4 Productivity and Unit Labor Costs, which are predicted at +2.5 and -0.5, respectively. In the very early going the 10-yr is at 2.68% and MBS prices are roughly unchanged.