Hey, not every prediction about the future is right, right? In my visits around the nation to different companies and mortgage banking groups, I continue to hear very positive things about volume and profits. And sure enough, the MBA has come out with a "new and improved" volume scenario for 2012, including raising refi volume predictions to $870 billion up from the $400 billion estimate last summer. (Now, if only companies could focus on margins instead of volumes.)  (Read: MBA Hikes 2012 Origination Forecast by $200 Billion)

And several firms are looking to capture their share of the market by adding staff:

I have been retained by an established, independent retail mortgage banker based in Northern California is looking to fill a senior finance position. The candidate would be well versed in all aspects of mortgage banking accounting including servicing, financial analysis, and cash modeling. Several years of experience in the industry, a B.S. in accounting, along with strong team player skills are highly recommended. The company is originating $2 billion per year with a footprint west of the Rockies. If you know someone who might be interested in this opportunity with a good company, please have them contact me at rchrisman@robchrisman .com.

Informative Research is looking to fill two sales positions. One of the opportunities will be in Southern California and the other will concentrate on national strategic accounts, and the ideal candidates will have extensive contacts in the industry and who can make an immediate impact. "The genuine team culture and underlying family company values make Informative Research a great place to work." The company has been in business for 66 years, providing settlement services and risk solutions to brokers, bankers, and servicers nationwide: informativeresearch .com. Resumes should be sent to John LaBriola, EVP of Sales, at johnl@informativeresearch .com.

And on the other side of the nation, PRMG has immediate openings for operations, underwriting and sales people to serve the New England territory after announcing the expansion of its wholesale operations into the Northeastern United States region. PRMG's new Regional Manager, Brian Burke will be responsible for recruiting and developing a strong presence in the New England territory, while overseeing a full service fulfillment operations center that will be underwriting and funding locally, including generating business in the states of Maine, Connecticut, Vermont, Massachusetts, Delaware, New Hampshire, and Rhode Island. Since 2001, "Built by originators for originators", PRMG (www.prmg.net) has been ranked as the #1 independently owned FHA lender by the Santa Ana, CA HOC center. Please send resumes to Brian Burke at bburke@PRMG .NET.

Remember when S&P downgraded the United States - did our stock market plunge, or borrowing costs skyrocket? The traditional question is, "Do rating agencies move the market, or reflect news that the markets already know?" Bloomberg notes the diminishing impact that rating agencies have with investors, and as we know in the mortgage business, Moody's, S&P's, and Fitch's miss-rating of residential MBS's helped contribute to investor's nervousness.

That being said, newer rating agencies have emerged with "new and improved" business models. For example, the "corporate investigation agency" Kroll Bond Rating is expanding its reach through affiliations, investments, and acquisitions. The agency's priority at present is to develop its overseas operations, with plans to rate European banks and asset-backed deals by the end of 2013. And a few years back Kroll acquired Lace Financial, one of very few credit-rating firms registered with the SEC, which makes it easier for issuers and investors to use a firm's ratings. Kroll now holds more than 8.7% of the market share for US commercial-mortgaged backed deals.

What is new with QM rules (not to be confused with QRM!)? Law firm Ballard Spahr points out that a few politicians are circulating a draft of a letter on the Hill which urges the CFPB to "craft a safe harbor [in the Ability to Repay/QM rule] that strikes the right balance between protecting consumers from poorly underwritten mortgages while ensuring they have access to safe and affordable mortgage products." The letter expresses the concern that, without the safe harbor and the legal certainty that the safe harbor arguably would provide, there is little incentive for lenders to make "qualified mortgages" which may restrict the availability of credit for some borrowers. Under Dodd-Frank Section 1412, a loan that meets the definition of a "qualified mortgage" (QM) is presumed to meet the ability to repay requirements of the rule. In May, 2011, the Fed proposed two possible standards for a QM. The critical difference between the two standards is that, under one alternative, the origination of a QM would create a safe harbor that the lender has complied with the ability to repay requirements and, under the other alternative, it would create a rebuttable presumption of compliance. "The Ability to Repay/QM regulation is among the most anxiously awaited final rules to be issued by the CFPB and is expected to be issued this summer." Read the congressional draft letter.

The CFPB proposed procedures for asserting its supervisory authority over nonbanks engaged in conduct that could potential pose risk to consumers. Under the Dodd-Frank Act, the CFPB has authority to supervise a nonbank, regardless of its size, that the CFPB has reasonable cause to determine "is engaging, or has engaged, in conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services." This includes related services like payday loans, credit cards, or private education loans.

Organizations are doing what they can to educate their members. For example, in New Jersey, the NJPMO is having a conference to discuss the "CFPB Flat Fee Proposals on Mortgage Originator Compensation" on June 5th in Iselin, New Jersey. (For information contact Brian@NJPMO .org.)

At NAMB, its Board and Government Affairs Committee convened a task force to read and analyze the CFPB's release on "Rules to Simplify Mortgage Points and Fees". "The intent of the new rules that will be proposed this summer and implemented in January 2013, are intended to make it easier for consumers to understand mortgage costs and compare loans so they can choose the best deal." The CFPB is considering proposals that would require an interest-rate reduction when consumers elect to pay discount points, require lenders to offer consumers a no-discount point loan option, ban origination charges that vary with the size of a loan (i.e., flat origination fees), set qualification and screening standards for every person who originates loans, prohibit paying steering incentives to mortgage loan originators, and so on. A full plate!

In Columbia, Maryland, on June 5th, the MMBA is hosting, "Are you Prepared for Upcoming Regulation that will Change the Face of Mortgage Lending?"  "This event will review several key topics, including but not limited to: components of Dodd-Frank and regulation updates, why the changes are happening, regulatory compliance, expectations, risk of non-compliance, and how the changes affect everyone's day-to-day duties, and several other topics. Go to www.mdmba.org to register, and questions should be directed to info@mdmba.org.

Turning to recent Fannie news, Fannie Mae has enhanced and clarified HARP guidelines based on questions received by lenders over the past few months.  The clarifications and enhancements, all of which can be found in the revised Selling Guide, address Responsible Lending Practices, subordinate financing for co-ops, eligibility for modified mortgages, multiple financed properties for the same borrower, significant derogatory credit events, general eligibility requirements and underwriting considerations for DU Refi Plus and Refi Plus, valuations and project standards, escrow account requirements, and resubordination.

The income and employment guidelines in the Selling Guide have been updated as well and now include additional guidelines on the evaluation of variable income, continuity of income, income verification, and income sources with a defined expiration date.  Sections on employment documentation and verification; bonus, commission, overtime, secondary, rental, and seasonal income; income reporting on IRS forms; and assessing and verifying income for Desktop Underwriter® purposes have also been updated.

The July 2012 Release Notes on DU for government loans are now available; as well as FAQs. As of July 21st, DU users can expect updates to VA bankruptcy and foreclosure messaging, a variety of HUD underwriting issues, FHA reserves calculation on 3-4 unit properties, and the FHA TOTAL Mortgage Scorecard.
Desktop Originator and DU users are reminded that the practice cases and documentation have been updated in support of the changes made to the method of assigning Social Security numbers.  The SSNs associated with the test cases have been updated accordingly, and the test credit reports that use the old SSN information will no longer be in use as of June 16th.

And through this, some lenders are continuing to deal with "unsalable" loans while other companies have carved out a niche for themselves dealing with these loans. For example, Right House Capital is a mortgage consulting firm who specializes in assisting banks and mortgage companies liquidate their unsalable loans. RHC has access to all three GSE's and "because these are purchased strictly based on the AUS (and thus no overlays), your agency-eligible loan can price very close to, if not above, par." Of course, not every loan is going to be sold near par, but if you have some loans that you can't sell, it might be worth contacting Craig Beard at craigbeard@righthousecapital .com. (And no, this is not a paid announcement.)

I don't think that this index has ever risen in its history, but yesterday we learned that the Standard & Poor's Case-Shiller National Composite home-price indexes fell 2% in the 1st quarter and 1.9% year-to-year, and prices are down roughly 35% from their peak in the second quarter of 2006. The Case-Shiller index of 10 major metropolitan areas was down 2.8% in March from a year earlier and the 20-city index was off 2.6%. We also found out that the Conference Board's Consumer Confidence index decreased to 64.9 in May from a revised 68.7 in April. But neither really has the strength to move rates like the events in Asia and Europe tend to do.

Traders continue to see a significant pick up in the amount of Fannie 30-yr 3.0's that originators have been selling (containing 3.25-3.625% loans). Fannie and Freddie 3.0's represented <1% of the total flows in the market 3 weeks ago, 2 week ago they represented about 6%, and last week 3.0's represented as much as 15.5% of all hedging activity.

Monday, uh, I mean Tuesday, was pretty quiet rate-wise. Our 10-yr closed around 1.73% and agency MBS prices were a shade worse on below-average volumes. Locks seem to be slowing down, and in fact the MBA's mortgage application index dropped 1.3% last week (purchases were -.6%, refi's were -1.5% but still account for about 77% of all apps). About the only news is at 7AM PST with NAR's Pending Home Sales Index for April - hardly a rate mover. In the early going the 10-yr is down to 1.68% - look for a market improvement in rate sheet pricing!

Puns (Part 2 of 4):
I wondered why the baseball was getting bigger. Then it hit me!
Broken pencils are pointless.
I tried to catch some fog, but I mist.
What do you call a dinosaur with an extensive vocabulary? A thesaurus.
England has no kidney bank, but it does have a Liverpool.
I used to be a banker, but then I lost interest.
I dropped out of communism class because of lousy Marx.
All the toilets in New York's police stations have been stolen. The police have nothing to go on.