Do you live in a small town? Many in the real estate and mortgage business do live in rural communities (FNC, for example, with the slogan "Know Your Collateral" has its headquarters in Oxford, Mississippi, and Franklin American's is in Franklin, Tennessee) and here is the latest "Best Small Town" rankings.

Banks-that-own-mortgage-company earnings continue, the latest being Wintrust Financial (parent of Wintrust Mortgage: www.wintrustmortgage.com/) which reported a net income applicable to common shares of $21.96 million for the first quarter, compared to $15.37 million last year, better than expected. Revenue was also higher, as was net interest income. During the first quarter Wintrust completed and announced four separate transactions, including completing its seventh FDIC-assisted transaction in February (Charter National Bank & Trust). Mortgage banking revenues from Wintrust Mortgage also increased $510,000 when compared to the fourth quarter of 2011 and increased $6.9 million when compared to the first quarter of 2011. Much of this was due to "an increase in gains on sales of loans, which was driven by higher origination volumes in the current quarter due to a favorable mortgage interest rate environment."

As opposed to Wintrust, which is expanding, Bank of America's workforce seems to be shrinking.

Yes, the CFPB's realm apparently includes ECOA. The bureau released a statement regarding their intention to aggressively enforce the Equal Credit Opportunity Act. The CFPB has stated that it is giving "fair notice" that it intends to pursue violations of ECOA as part of its examination and enforcement work with lenders since it is illegal and poses a threat to economic stability and access to affordable housing.  A link to the full text of the notice may be found here. Given that most things in our world involve consumers or money, the CFPB's potential reach and powers concern many.

QRM (which basically required originators and/or securitizers - it was never really clear - to hold 5% of production in cash) has taken a back seat, if not being put in the trunk, to QM news. Qualified Mortgage proposals, which focus on the lender making sure that the borrower can repay their debt, are alive and well. Thirty-three housing related organizations, including NAR, the MBA, American Bankers Association, and various consumer groups, have signed on to a letter advocating that a broadly defined definition of a Qualified Mortgage (QM) be attached to the forthcoming Ability to Pay regulation being formulated by the CFPB. The letter urged the Bureau to avoid an unnecessarily narrow definition of QM that will cover only a "modest proportion loan products and underwriting standards and serve only a small proportion of borrowers."  This, the letter states, would undermine prospects for a housing recovery and threaten the redevelopment of a sound mortgage market.

The letter said that while the groups hold different views about whether the QM should be designed as a safe harbor or a rebuttable presumption they are united in urging the CFPB to construct a broadly defined QM using clear standards to help the economy and to ensure that the broadest universe of credit-worthy borrowers are able to obtain safe loan products for all housing types. Defining QM too narrowly would throw many of today's loans and borrowers into the non-QM markets, putting lenders and investors at a high risk of an Ability to Pay violation and even a steering violation.  As a result, these loans are unlikely to be made and if they are they will be far costlier, burdening those families least able to bear the expense.  In addition, these higher priced loans would not be exempt from including important protections against the very practices and loan features that drove the highest failures in the mortgage boom, features that are embedded in the QM

And the Volcker Rule, which effectively could eliminate banks using MBS's to hedge borrower's rate locks, impacts many other financial services. Here is the Securities Industry and Financial Markets Association )'s opinion.

Appraisal-based repurchase demands have plenty of issues that appear to be grounds for argument. Here is a link to one site (Bilzen Sumberg) that might be of use to anyone dealing with them.

The Mortgage Banking Group at Ballard Spahr reminds us that "FinCEN Starts E-Filing of New CTR and SAR Forms - Mandatory Use of New Forms Soon to Follow." "The Financial Crimes Enforcement Network (FinCEN) announced on March 29, 2012, that it is now accepting the new Currency Transaction Report (CTR) and Suspicious Activity Report (SAR) forms for filing on the BSA E-Filing System. Financial institutions may continue to use existing forms until July 1, 2012, at which point all CTR and SAR reports must be filed electronically. Though the newly released CTR and SAR forms contain new and expanded lists of data elements, FinCEN emphasized that the new forms do not change existing statutory and regulatory obligations. New features and data elements in the recently released CTR and SAR forms include: Fields related to the subject's Internet presence, such as 'e-mail address' and 'website (URL) address,' a more limited number of characters to create a SAR Narrative, though this is somewhat offset by the added ability to attach spreadsheets that the institution believes would be useful to law enforcement, a North American Industry Classification System (NAICS) code field, and an 'auto-populate' feature that allows an institution to avoid the time of re-entering duplicative information."

What is the Homeownership Preservation Foundation (HPF)? It is an independent national nonprofit dedicated to helping distressed homeowners navigate financial challenges and avoid mortgage foreclosure through its Homeowner's HOPE Hotline (888-995-HOPE). The HPF announced that reported mortgage foreclosure scams have surged nearly 60% this year - just what the industry needs..."Most of these scams involve individuals supposedly offering mortgage foreclosure avoidance assistance that trained HPF counselors provide at no cost.  Sadly, with most scams, no meaningful services are ever provided." For the complete write up, visit this link.

Let's not forget the Golden Rule, which some folks say is, "He who has the gold makes the rules." This seems to be important in the disposition of assets (read: houses) by Freddie & Fannie. Big investors are buying foreclosed homes by the thousands after prices have dropped by about 1/3 or more in many areas. As an example of this phenomenon, just one firm, Waypoint Real Estate Group, armed with over $400 million in cash from a Silicon Valley private equity firm, plans to buy another 10-15,000 homes just this year. Pennies on the dollar and with hundreds of thousands of these coming on the market every month, something on a grand scale might be the way to go. Along those lines, foreclosure filings were reported on 198,853 U.S. properties in March, a 4% decrease from February and a 17% decrease from March 2011. Per RealtyTrac, March's total was the lowest monthly total since July 2007, and also the first monthly total below 200,000 since July 2007.

The markets are certainly ticking along. I love it when economists and "experts" talk about uncertainty. Isn't everything in the future, to one degree or another, uncertain? From my limited vantage point, the economy is doing "ok", which is certainly better than sinking. But some are quick to point to rising layoffs, falling home sales and slowing manufacturing activity as indicators that the economic recovery is headed for a springtime stall for the third year in a row. But as we all know, recent signals have been mixed, with worrisome indicators following positive ones-such as consumer confidence and auto sales-that suggest the recovery remains on track. Economists generally believe total economic output in the first three months of the year grew at a rate a bit above 2%-slower than at the end of 2011 but significantly stronger than the same period a year ago. As one story noted, "It's been the weakest recovery in the post-World War II period, and that hasn't changed," said David Rosenberg, chief economist for investment firm Gluskin Sheff.

Anyway, with mortgage origination volumes running about average on Thursday, and buying interest from the usual suspects solid, mortgage prices did pretty well on Thursday. MBS prices closed higher by 6 "ticks" (almost .250 in price) on 30-year, current coupon mortgages, and Treasuries retained their flight to safety bid on a combination of continued worries over Europe and the weak Initial Claims report with the 10-year T-note improving by .250 and dropping to a yield of 1.95%. (Wax on, wax off, risk on, risk off, as news from Europe has regained some prominence.) There is no news today, and the 10-yr is sitting around 1.99% and MBS prices worse by about .125.

Sunday is Earth Day, which involves a lot more than ex-hippies dancing on mountain tops in Marin County or around lakes in Vermont. So instead of a joke, today we'll have some stats on...housing, care of the Census Bureau. In 2010 there were an estimated 2.2 million occupied housing units heated by wood (less than 2% of all homes) versus 57 million homes heated by gas - about half. The average time, on average, spent traveling to work was 25 minutes, with Maryland being the worst at 32 minutes and North Dakota being the best with 16 minutes (commuting to Washington DC versus...?). Lastly, the average size of a single-family house built in 2010 was about 2,400 square feet (they're still building single family homes?) with an average sales price of $272,900, up slightly from 2009 but down markedly from 2007's $313,600.