A Washington hot dog vendor is selling a two foot wiener that tastes bitter, is hard to swallow, and is very expensive. It is named "The Dodd Frank." Speaking of Dodd Frank and its impact, intentional or otherwise...

The dancing Snoopy stationary has struck again. "MetLife Home Loans has decided to exit the business of originating reverse mortgage loans and will no longer accept Reverse Mortgage registrations as follows: Wholesale: No new registrations after 11:59 PM ET Thursday, April 26, 2012. Correspondent: No new registrations after 11:59 PM ET Thursday, April 26, 2012. The last day to close (wholesale) or purchase (correspondent) a reverse mortgage loan is as follows: Wholesale: All loans must be closed by close of business June 1, 2012. Correspondent: All loans must be purchased by close of business June 1, 2012."

The "reg-plosion" of the industry continues, as do unintended consequences. As it turns out, MetLife has sold its reverse mortgage unit to Nationstar Mortgage, backed by Fortress Financial, and per the Financial Times did it to "exit non-insurance businesses and escape strict government oversight of its use of capital." "The group aims to end its designation as a 'systemically important financial institution' under the Dodd-Frank Act, which applies to bank holding companies with more than $50 billion in assets. Such institutions must receive Federal Reserve approval to deploy capital." MetLife said, "A bank holding company structure was no longer appropriate." Exiting origination, selling the reverse biz to Nationstar, and the warehouse finance biz to EverBank certainly help in that effort.

A billion here, and a billion there, and pretty soon you're talking about real money. I'm nowhere near the required 62 years old yet, but data released by the National Reverse Mortgage Lenders Association (NRMLA) shows senior home equity increased by $30 billion in the fourth quarter of 2011.  Seniors have $3.22 trillion in home equity available according to the most recent NRMLA/Risk Span Reverse Mortgage Market Index (RMMI) report. The potential market may continue to grow, but tapping it may prove problematic, and I received a few e-mails yesterday asking who is still buying these loans. There are no monthly payments under HECM's - funds are advanced to the borrower and interest accrues, but the outstanding balance is not due until the last borrower leaves the home, sells or passes away. Borrowers may draw down funds as a lump sum at loan origination, establish a line of credit or request fixed monthly payments for as long as they continue to live in the home.  For more information, visit reversemortgage.org.

Ally came out with earnings: net income of $310 million for the first quarter of 2012, compared to a net loss of $206 million in the prior quarter and net income of $146 million for the first quarter of 2011. "Results were also driven by more favorable MSR (mortgage servicing rights) activity in Mortgage Operations and the benefit of the strategic decision to increase activity in the consumer lending channel as we began to decrease activity in the correspondent lending operation...Origination and Servicing results during the quarter improved on a year-over-year basis due to a positive net servicing asset valuation, an increase in consumer lending volume related to government sponsored refinancing programs, improved margins and lower overall noninterest expense...Total mortgage loan production from the Origination and Servicing segment in the first quarter of 2012 was $8.6 billion consisting primarily of prime conforming loans, compared to $16.5 billion in the fourth quarter of 2011 and $11.8 billion in the first quarter of 2011.  The decline in loan production was largely driven by the company's reduced presence in the correspondent lending channel.

Sightings of "young" folks in mortgage banking aren't as rare as unicorns, and as it turns out from the e-mails received after Wednesday's commentary on the lack of youth in mortgage banking, it is all relative.

Randy W. wrote, "There are plenty of young folks in the business, they just can't afford to go to conventions! In small, community bank-ville, we are having bake sales to raise money so we can go to an Encompass users' conference!"

Joe S. wrote, "Contrary to your piece, I would deduct that there are more young people entering the business.... According to the NMLS application, there's a section for physical descriptions height, weight, race; but when it gets to hair color the list is expanded, i.e.: black, white, brown...blue, green, orange, purple, etc....I don't see too many 40-somethings with green hair, so it has to be the younger generations. I did notice that there wasn't a choice for "bald" though.....Do you think the CFPB will accept my complaint?"

Frank F. noted, "After the last year's conference I heard that the 'Thinning of the herd' was replaced with the 'Graying of the herd.'"

Aaron C. observed, "Rob, I can't imagine a young person wanting to break into this industry. It has become a nightmare career for successful veterans of the industry; a rookie LO wouldn't stand a chance. With all the pitfalls and potholes to navigate, you have to be a processor, underwriter and LO. Otherwise you will waste time on files that cannot close. I honestly cannot think of one good reason for a person to start doing this... We used to at least make money."

Cory H. wrote, "Being a rare young executive myself, I got into the business at the best time right out of college on July 9th 2007 at the dawn of what would be dubbed 'The Great Recession.' At the time I was recruited out of a top U-Grad B-School with the allure of $, management training program and basically a 10 year leg up on those who are entering the correspondent mortgage banking business cold turkey. Roughly 5 years later, in my mid 20's I help manage a profitable, growing mortgage banker in California. Without my bear market experiences out of college, I wouldn't be where I am today. I believe timing is everything and with the barriers to entry in our business at all-time highs, only the great/motivated can survive. For me, I don't know what a great/boom market is. I was brought up in the world of investor overlays, repurchases, MI recessions, layoffs, consolidation and overregulation...as Bill Gross would say, this is my new normal."

He continued, "Also, the feasibility to attract young, hungry subprime reps/AE's making 500k by barely breathing is over. Today, the Producer must be licensed (bank LO's not having to be blows my mind), have a Realtor referral network and must be an expert in guiding the client to the best possible mortgage option. All of what I listed above takes experience in the business....which is always a point against hiring young talent. For those looking to attract Gen Y talent, it is more than just $ in the bank....you must excite them, keep them engaged with challenging tasks, have a plan for growth, always demand excellence and above all make them part of your corporate decision making process. The young talent is there, you must find it and when you find do...make sure to do whatever you can to keep it."

John L. wrote, "Really liked you point on how "old" mortgage professionals are.  On that point, I thought you might find an article that John Walsh, President of Total Mortgage recently wrote for the April 2012 issue of The Scotsman Guide - titled 'Why should new recruits be interested in a career in loan origination?'"

(More letters tomorrow or Monday.)

This morning we had GDP (Gross Domestic Product - a measure of the economic heath and ranking for countries) for the U.S. - but how about some context? The U.S. has the top GDP of any country, representing almost a quarter of global GDP (23.4%), but slips to 2nd place when the European Union (EU) is lumped in (at 25.9%). Rounding out the rest of the top 5 we have China (9.3%), Japan (8.7%) and Germany (5.2%). The U.S. produces more economic growth than China, Japan and German combined. Within our country, California is at the top with 13.2% of the U.S. GDP, followed in order by TX (8.2%); NY (7.9%); FL (5.1%) and IL (4.4%). All told, these five states account for almost 40% of total U.S. economic activity and the top 10 (which includes PA, NJ, OH, VA and NC) pushes things to 55%. On an individual basis, if CA were a country it would fall into the #9 slot, just behind Italy and just ahead of India.

Taking a quick glance back at yesterday's market, low volumes and weak economic news (namely Jobless Claims) contributed to a nice little rally, and the 10-yr closed at 1.96%. Our friend the Fed continues to buy about 70% of originator agency supply - what would we do without them? (Many wish we should find out...)

Our day started with Standard & Poor's downgrade of Spain's credit rating (is this new news, or merely reflecting old news?), and then news that the U.S. GDP for the 1st quarter was +2.2%, lower than expected, and a noticeable drop from the 4th quarter's +3.0%. Later we have some noise from a Michigan Sentiment reading of consumer confidence. Early on we have the 10-yr. nearly unchanged at 1.95% and MBS prices are about the same as Thursday's close.

Geography Lesson
Geography of a Woman
Between 18 and 22, a woman is like Africa. Half discovered, half wild, fertile and naturally beautiful!
Between 23 and 30, a woman is like Europe. Well developed and open to trade, especially for someone of real value.
Between 31 and 35, a woman is like Spain, very hot, relaxed and convinced of her own beauty.
Between 36 and 40, a woman is like Greece, gently aging but still a warm and desirable place to visit.
Between 41 and 50, a woman is like Great Britain, with a glorious and all conquering past.
Between 51 and 60, a woman is like Israel, has been through war, doesn't make the same mistakes twice, takes care of business.
Between 61 and 70, a woman is like Canada, self-preserving, but open to meeting new people.
After 70, she becomes Tibet. Wildly beautiful, with a mysterious past and the wisdom of the ages. An adventurous spirit and a thirst for spiritual knowledge.
Between 1 and 80, a man is like Iran, ruled by nuts.