Household debt increased 0.4% in the fourth quarter, according to the NY Fed. Student loan and auto loan financing are growing the most, while mortgage and HELOC numbers are steady or falling. Credit quality for mortgage debt remains strong, but you can see the increase in low-FICO auto loans (the new subprime). Research by Black Knight Financial Services finds 42% of mortgage refinances last fall saw borrowers taking cash out of their homes (the highest percentage since 2008). The average cash out amount was $60,000, but even after that the LTV post refinancing was still 67% (the lowest level on record). And TransUnion reports the number of people taking out unsecured personal loans has climbed 30% since 2013. Many have used the proceeds to pay down more expensive credit card debt or boost savings accounts. Something to keep in the back of your mind...

Bonuses are critical in the securities biz. SIFMA's annual industry benchmark on projected Merit Budgets for 2016 and the actual sizes of Merit Budgets for 2015, for exempt and non-exempt employees at participating firms, is now available. This report also shows how bonuses for 2015 business will change relative to last year, and how Employee Benefit and Health Insurance costs are expected to change in 2016. This year's report includes data from 25 SIFMA member firms that collectively employ over 57,000 individuals.

Although it needs to be put before the full House of Representatives, the House Financial Services Committee unanimously approved one of the industry's top priorities (especially independent mortgage banks): H.R. 2121, the SAFE Transitional Licensing Act. The bill garnered bipartisan praise from both Chairman Jeb Hensarling and Ranking Member Maxine Waters said it would help loan officers switching jobs without weakening important consumer protections. The bill grants loan officers who move from a bank to a non-bank lender "transitional authority" to originate mortgages while they work to meet the SAFE Act's licensing requirements.

Zillow recently analyzed home values and rents in urban and suburban areas. Historically, suburban homes have been worth more than homes in urban areas. Starting in November of 2004, the value of the average urban home was greater than a suburban home in many parts of the country. At the end of 2015, the typical U.S home in an urban area was worth $269,036, about 2 percent more than the average value of a suburban home worth $263,987. Since 2012, homes in urban areas have also been appreciating at a faster pace YoY than suburban homes. The average urban home value has increased 28.4 percent over the past five years, compared to 21.1 percent for suburban homes. While this past year alone, the home value for urban homes have grown 7.5 percent as opposed to 5.9 percent for suburban homes. Zooming in on particular metro areas, urban home values in Boston surpassed home values in Boston suburbs in December 2014, following the national trend. While some metro areas do not follow the national standard, such as the Los Angeles metro area, the average suburban home value in L.A. is worth $706,925, greater than homes in urban areas worth $604,006. On a national level, rents in urban areas ($1,640/month) are generally lower than rents in suburban areas ($1,695/month).

Quicken Loans releases a monthly "Home Price Perception Index" (HPPI) and "Home Value Index" (HVI). With the fabled "spring buying season" barreling down on us, it is interesting to see the trends since early last summer in what appraisers think of values versus what homeowners think of values. It doesn't take a rocket scientist to know that there are differences, but it is still interesting to see the numbers. If you ever want to insult someone, tell them that their opinion doesn't matter - especially an appraiser!

The Home Price Perception Index (HPPI) for May reported that the difference between appraiser and homeowner perceptions increased for the fourth consecutive month. Appraiser opinions of home values were 1.15 percent lower than homeowner estimates, which is the first time in 22 months where appraisal opinions were lower than homeowner estimates by at least 1 percent. Last month, appraiser opinions were 0.69 percent lower than homeowner estimates. Home values were higher in May according to the Home Value Index (HVI), with a 0.24 percent increase in the national index compared to the previous month. Annual growth suggests a 4.64 percent gain. The smaller monthly increases and a decline in the annual growth will benefit first time homebuyers and create a more sustainable housing market.

In June the HPPI indicated that appraiser opinions of home values were 1.4 percent lower than homeowner estimates in June, which is the fifth consecutive month appraiser opinions were less than homeowner opinions. The HVI reached 0.74 percent which is the third month home values have increased. Yearly growth reached 4.38 percent and the South was the only region to post a monthly decrease in home values, dropping by 0.09 percent. For more information click here.

The next month appraiser opinions of home values were 2.33 percent lower than homeowner estimates in July, according to the HPPI. In June, appraiser opinions were 1.40 percent less than homeowners' estimates, indicating that homeowners are increasingly overvaluing their homes. July marked the sixth consecutive month for homeowners to value their homes higher than appraisers. The HVI suggested that national home values declined 0.27 percent from June to July but home values have seen an increase of 3.89 since last July. The annual rate of home appreciation was the greatest in the West and lowest in the Northeast.

Quicken Loans released its August findings: appraiser opinions were 2.65 percent lower than homeowner estimates in August, which is the largest gap to date last year. The Home Value index slightly dropped with a 0.05 decrease but still increased 3.24 percent compared to August 2014. The Northeast region was also the only region that had home values decline in August.

In September appraiser opinions of home values last month were 2 percent lower than homeowner's opinions. (As noted above, in August the gap was 2.65 percent.) Home values increased 0.05 percent, according to the HVI, rebounding from the 0.05 percent loss in home values in August. The annual increase in home values is up 3.11 percent from last year. The West experienced the largest gains in home values experiencing a 0.72 percent monthly increase and 6.02 percent annual increase, whereas the Northeast and Midwest both had monthly and annual home value losses.

The average home appraisal in October was 1.98 percent lower than what homeowners expected, which is the second consecutive month where the gap has narrowed and the ninth consecutive month where homeowners' estimates of value was greater than appraised value. Average home values rose 1.07 percent last month according to the HVI, with the Northeast region experiencing the greatest gains at 1.94 percent and the West with the lowest gain at 0.49.

November? According to the HPPI, the average appraisal was 1.87 percent lower than homeowners' opinions. This difference inched slightly lower from October but November is still the tenth consecutive month where appraisers' home value was less than homeowners' expectations. Appraisal values increased an average of 1.08 percent since October and have increased 4.84 percent YoY. Home values are still increasing and on a national level, home values grew 1.08 percent from October to November. The South experienced the greatest growth during that time period, but the West is still ahead in overall yearly increases in value.

Quicken Loans released December's Home Price Perception Index (HPPI), revealing that last month's appraised values were 1.8 percent lower than homeowners' opinions. December marks the 11th consecutive month where homeowners' value of their homes was lower than appraisers', but December was also the 4th straight month where the gap in home values has narrowed. The national Home Value Index (HVI) has risen, as appraised values rose 0.18 percent in November but have grown 5.81 percent since December 2014 and 3.8 percent at the beginning of 2015.

And in January, per Quicken Loan's study, on average appraised values were 1.75 percent less than what homeowners estimated according to the HPPI. The gap between the appraisal and estimates narrowed slightly since the previous month when appraiser opinions were 1.8 percent lower than homeowner expectations. Home values fell 0.42 percent from December to January, according to the national HVI, and increased 3.375 percent compared to the previous January. (Click here to see supporting graphs.)

Switching gears to capital markets, since in large measure it is the price that investors are willing to pay for a mortgage that determines the borrower's rate, a new online community is now available for mortgage finance pros.  Head over to to discuss topics including secondary marketing, mortgage products, compliance, TRID, MSR hedging, and everything in between. Browse as a guest or create a free account to join in the discussion.

Major US bond funds have issued "key principles" to improve transparency of mortgage securities without government backing. The move is intended to revive the market, which has faced challenges since the financial crisis. (I mentioned this to my cat Myrtle, but she seemed to know that big banks are perfectly happy sitting on their non-agency loans and see little need to spend the money to securitize them.)

Rates are still great - perhaps artificially so. Brent Nyitray put the current 10-year yield (1.85%) in perspective. "When the Fed hiked rates last December, the yield was 2.3%...the fact that interest rates are falling globally will prevent Treasuries from falling too much. Note the German 10 year Bund is close to the sub 10 basis point lows of last spring, and currently yields 18 basis points. The Japanese Government 10 year bond yield is negative 5 basis points. Global investors look at Treasuries yielding more than Italian, Spanish, and Irish bonds and see relative attractiveness, especially since the US is about the only country not trying to devalue its currency. That should help keep a lid on rates."

We had some potentially market moving news Wednesday but by the time the dust settled things hadn't changed that much. The ADP employment report showed that the U.S. labor market performed better than expected in February, adding 214K jobs. The Fed's Beige Book showed modest gains in economic activity. San Francisco Fed President Williams, who does not vote on the FOMC this year, continues to beat the drum for gradual rate hikes despite the financial market turmoil of early 2016 - he must be seeing what many others do not.

Today we've already had the February Challenger Job Cuts (U.S.-based companies announced 61,599 job cuts last month, down 18 percent from January), Initial Jobless Claims for the week ending 2/27 (+6k to 278k), and Q4 Productivity and Unit Labor Costs (-2.2%, +3.3%). Ahead are January Factory Orders and February ISM Services. As noted above we closed the 10-year at 1.85% and in the early going it is 1.84% with agency MBS prices nearly unchanged.

Jobs and Announcements

Private Mortgage Insurance company Genworth Financial is seeking a new Account Executive in Austin or San Antonio as an addition to our team due to significant growth. Candidates should have exceptional customer interaction, sales execution, and leadership skills. The person hired will be expected to provide the highest level of internal and external customer service, manage customer relationships, and develop growth strategies for assigned accounts. The successful candidate will be responsible for developing calling plans to cover all assigned accounts, monitor branch volume and calling activity, and take necessary actions to achieve account volume goals. They will execute and lead implementation of Genworth products and initiatives, and identify and communicate new opportunities to provide solutions to customer needs. The ideal candidate will have 4+ years of experience in a sales role, and have a college degree or equivalent industry/sales experience. They will need to have strong presentation and communication skills, and have the ability to work flexible hours with occasional overnight travel. Interested Candidates should send their resume to Senior Recruitment Client Manager Kristin Miller.

A mortgage technology firm is hiring Account Executives to support and grow the relationships with its mortgage lending customers. In this role the AE will develop and expand the relationships with senior management of mortgage lenders to provide direction on product usage and to increase adoption from sales and marketing.  Previous experience in mortgage origination or selling products/services directly to mortgage lenders is required, as well as good presentation skills either in person or electronically and a desire to grow your account. Compensation includes base salary and commissions based on successful expansion of your assigned accounts' revenue. Any interested parties can contact me.

On the flip side Bank of America is expected to reduce capital-markets and investment-banking staff more than 5% as it joins competitors in cutting costs. The move follows a significant drop in first-quarter investment-banking revenue and year-over-year market revenue. The announcement could come as early as next week.