According to the U.S. Census Bureau fewer domestic households have debt, but those who do, have more of it. It's research team writes, "The percentage of U.S. households holding some form of debt declined from 74 percent to 69 percent between 2000 and 2011.....At the same time, the median amount of household debt increased over this period from $50,971 to $70,000 (in 2011 constant dollars)". According to the report the largest increase in median debt was experienced in households ages 35 to 44 (up to $108,000), 45 to 54 (to $86,500) and 55 to 64 (to $70,000). The report notes that the largest percentage increase in debt belonged to householders 55 to 64 years old, and 65 years and older; a disconcerting side-note is at these age brackets there is a higher propensity to hold debt, 44%, where the exact opposite is observed in the lower age brackets. I wonder if they exclude accumulated debt by children who have convinced their parents to re-convert the sewing room back into their old bedrooms? (By the way, between the years of 2007 and 2011, lots of people between the ages of 25 to 34 moved back home, an increase of 1.2 million to 15.8 million.

The correspondent division of Affiliated Mortgage is expanding, and is adding clients and correspondent reps. Jason Beene, President of Affiliated Mortgage Company's Correspondent Division, states, "The Company is focused on strategic growth as it expands its servicing platform across the continental United States. Currently servicing conventional loans in 28 states with new states being added monthly and government loan servicing slated to be included later this year, AMC's personalized customer service remains a constant." Affiliated Mortgage Company is based in Monroe, Louisiana and is a wholly owned subsidiary of Benchmark Bank, Plano, Texas. Please contact Hazel Bailey at for more information or visit its website at


American Financial Network, Inc. ("AFN") has a unique opportunity for the right person as it seeks a strong Director of Retail Sales.  AFN also seeks retail and wholesale Regional Managers for each state, along with retail Branch Managers interested in opening corporate branches in the following states: AL, AZ, CA, CO, FL, ID, MT, NV, NJ, NM, OR, TN, TX, UT, WA, and WI.  Finally, AFN is looking for qualified Sales and Operations staff for the corporate location in Chino Hills, California.  Please send resumes and cover letter to  "AFN is one of the fastest growing retail and wholesale mortgage lenders in the Western United States."  Please visit, and for more information. 

Secondary marketing folks the land-over have their own business cycles, indicated by contact with loan officers and brokers. Basically, these consist of three phases: pleas for renegotiations, pleas for extensions, and waiting for either of those two. I received this note: "What's up with my Capital Markets gal - she won't budge on lowering rates on my locks across the board! Rates have dropped, and I am going to lose half my borrowers if I don't come down in rate and price. And she hedges - doesn't that help to give me some room?"

So, continuing on with renegotiations, what you're asking is not simple, and each company has a different policy when it comes to renegotiations and extensions. And hedging (by this I assume you mean selling loans on a mandatory basis) certainly helps, but remember that it involves selling mortgage-backed securities to Wall Street broker dealers, and those broker dealers don't renegotiate on security hedges.

With the recent unemployment data showing weakness, rates have come down. (Sure folks can refinance into a lower rate, but will they have a job to qualify for current guidelines?) I heard chatter that on Friday morning LOs were not even waiting for rate sheets; they were already asking for price concessions for existing locks - even those locked earlier in the week. Breaking locks is a problem, but from a secondary marketing point of view, unless a loan has moved along well through the pipeline (like, about to draw docs), changing the rate and price that the LO and borrower have agreed to is a real problem. One Capital Markets person noted, "LOs seem to forget that it is a real economic cost to the company. After all, the company has guaranteed to stand by its lock - shouldn't the borrower? And shouldn't the LO remind the borrower of this?" Purchases take precedence over refi's; loans about to go to docs over loans that haven't even been underwritten yet.

LOs need to remember that on the other side of the equation, investor prices are typically capped. Renegotiations are often negotiated on a case by case basis (and if it makes sense because the investor price is capped), the secondary marketing department will re-price a loan for an LO where the borrower is the only one benefiting. Sometimes the LO's price will be adjusted downward by a fee that is a small part of the revenue the company lost to keep the borrower. Senior management often thinks that seems fair, even to the LO, since the entire company serves the consumer at the end of the day.  If a LO does not think that is fair, one secondary executive said, "I ask them if they would like to cover my margin call on a 2 point rally."

On the recent FHA MIP change, last week the commentary noted, "Currently if a borrower has a loan with a term greater than 15 years and the loan to value is greater than 78%, then they will have MIP for 5 years and must pay the loan down to 78% LTV based on the original sales price (unlike a conventional loan which will use current market value to determine LTV)." Pat Carmody observed, "This comment is not fully true since when a conventional PMI loan is paid down by principal, not by an appraisal not market value, if the customer is current with their payments, the lender must cancel the MI.  Check this information out under the Home Owners Protection Act. Here is the link to the Federal Reserve Board acrobat fileNote the info starts on page 2 and continues at the top of the second column.  It specifically states that the 'value' of the home does not affect the dropping of the PMI. This is all in a disclosure required under RESPA that must be given to the borrower and also sent on an annual basis by the servicer." Pat, thank you, and for those of you interested in his training program, visit

In January 2011, the OCC's Office of Minority and Women Inclusion (OMWI) was formed to meet the requirements of the Dodd-Frank Wall Street Reform Act. Why do I mention this? In the upcoming weeks, each OMWI office will publish standards for minority and women owned businesses (MWOB) within financial services industry - a guideline for uniform compliance goals. The first step is assessment - finding out the levels of MWOB inclusion/utilization for entities regulated by the respective agencies. The second step is to report back to Congress, and third step is enforcement. There is significant pressure from ranking members of congress for immediate action from OMWI offices. It would be very interesting to see which companies decide to take a deeper look and to perform a 3rd party diversity assessment.

Put another way, it's been over two years since Dodd-Frank Sec. 342 required federal agencies to establish an OMWI which, besides promoting and increasing workforce diversity within regulated entities, is tasked to increase the participation of minority and women-owned businesses within the financial services industry. Entrepreneurs are creating companies with this in mind. For example, Pantheon National Title, a minority-owned national title services company, was formed to help lenders struggling to comply with Dodd-Frank. Jay Patel, a founding member of Pantheon National, positions the company "as a win-win choice thanks in part to fulfillment partner Boston National.  Lenders can flow orders to Pantheon knowing they¹ll get top-notch service while increasing their diversity compliance rate to boot." For more information, you can contact Jay Patel at j.patel@pantheonnational .com. (And no, this was not a paid ad.)

Struggling borrowers may soon be clear of pricey homeowners insurance arranged by banks, if one regulator has its way. The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, filed a notice March 26th outlawing fees and commissions that insurers pay to banks on what is known as "force-placed insurance." These policies are often enforced on homeowners whose standard property coverage has lapsed, typically because the homeowner has stopped making payments, according to the FHFA. They write, "The absence of coverage triggers notifications to borrowers advising them of the need to provide proof of adequate coverage and warning that, in the absence of this proof, insurance will be forced placed, possibly at higher rates and with diminished coverage. If the FHFA is successful, the ban would apply to all Fannie and Freddie-backed mortgages," the notice says. For more information visit our nation's blog.

What are some of the best and brightest saying about our economy? Wells Fargo's economic team believes, "Growth in 2013 is expected to come in at 2 percent-plus, which is remarkably close to the average gain over the prior three years. Yet, this sustained moderate growth view will sometimes lose its punch with the volatility in growth estimates in the past quarter of 2012 and the first quarter of this year. This week's data reinforce the view that growth remains positive but modest- neither the recession story of the initial estimate of the fourth quarter nor the boom story now appearing from some analysts."

And BofA Merrill Lynch research notes, "The economy only added 88,000 jobs in March, significantly below consensus expectations of 190,000. The unemployment rate fell to 7.6%, not because of stronger job growth, but because of fewer people searching for work. We believe this report likely kicks off a series of weaker data to come. We expect job growth to remain below 100K for the next two months as the sequester kicks in. This is consistent with our forecast for GDP growth to slow from above 3.0% in Q1 to 1.3% in Q2 and for the Fed to keep policy extremely accommodative."

For economic news, obviously the big news was last Friday with the unemployment data. But this week we have several big data points scheduled late in the week, including Thursday's Initial Jobless Claims & International Trade numbers, Friday's Retail Sales data and the Producer Price Index (PPI).

I am heading off to Oklahoma this morning, and thus the early commentary. It is too early to put a definitive spin on the market, although stock markets rallied overnight overseas. That appears to have little impact on yields here, but after last week's rally one would not be surprised with a bit of a pull back. The risk-free U.S. 10-yr T-note closed Friday with a yield of 1.69%, and this morning it is nearly unchanged at 1.70%.

MENLO PARK (The Borowitz Report)-Before a rapt audience at Facebook headquarters Thursday, Facebook C.E.O. Mark Zuckerberg unveiled new software that he promised "will totally change the way you are wasting your life."

Explaining the development of Facebook's new phone software, Home, Mr. Zuckerberg said, "Our research showed that Facebook users still had a few hours a day when they were leading somewhat healthy and productive lives. Our new software will change all of that."

Mr. Zuckerberg said his developers had worked for months developing Home, "which seizes control of your phone and makes it good for little other than Facebook-much like many Facebook users themselves."

By bombarding the user with status updates on a twenty-four-hour basis, he boasted, "Home transforms Facebook from just a social network into something akin to a neurological disorder."

As the audience applauded that pronouncement, Mr. Zuckerberg added, "At Facebook, we want to be a million voices inside your head."

When one member of the audience worried whether Home would give Facebook even more access to private information about one's life, Mr. Zuckerberg reassured the questioner, "After using Home for several weeks, you will have no life."

While clearly proud of his latest product, Mr. Zuckerberg gave notice that he did not intend to rest on his laurels: "At Facebook, we will never stop striving to replace real experience with something soulless and empty."