"Affordability remains a hotly debated topic, especially when considering both rent affordability and mortgage affordability," or so says Zillow. Mortgage rates may very well be on a slow ride northward, and Zillow may very well be correct that affordability has the potential to become a serious problem in some areas of the nation, especially if income cannot keep pace with inflation (which is hasn't). So Zillow, which isn't short of analysts judging by the content they churn out, has comprised a rent and mortgage affordability study; in it, you will find rent and mortgage affordability stats, as well as a mortgage affordability forecast for 289 metropolitan areas for the first quarter of the year. Comparing Mortgage and Rent Affordability in 2014.

Both Realtors and lenders took note of Freddie Mac's mid-year assessment of the market. To no one's surprise, it showed that single-family housing remains weaker than projected at the start of the year. Home prices, meanwhile, are likely to continue their above-inflation growth for the remainder of the year due to low for-sale inventory, while rents are likely to gain as vacancies decline. "The important question is how much further will prices and rents have to rise to give incentives for more existing owners to list their property for sale and developers bring more supply to the market," noted Frank Nothaft, Freddie Mac vice president and chief economist.

Easier credit conditions and more confidence in the labor market are more likely what is needed. Ellie Mae reported in its Origination Insight Report for May that FICOs on FHA purchase loans that closed averaged 684 versus 685 in April and versus an average of 695 last year; LTVs for these same timeframes were all 95%. FICOs and LTVs for purchase loans that were denied averaged 669 and 95. For conventional loan purchases that closed, FICOs averaged 755, unchanged from last month and only slightly lower from 2013's average of 759; LTVs averaged 80% over these periods as well. FICOs and LTVs on loans that were denied averaged 726 and 82. Purchases made up 66% of closed loans, said Ellie, compared to 63% in April and  an average of 47% for 2013. Refis, meanwhile, were down to 33% from a 53% average last year. 22% of closed loans were FHA and 64% were conventionals.

Meanwhile, the CFPB is coming under increasing scrutiny by the government and special interest groups, and going through defending its actions. "In addition to intolerance, discrimination and retaliation, CFPB whistle blower Ali Naraghi said he found "gross mismanagement" at CFPB. He said the agency hired many inexperienced managers and that supervisors pressured examiners like Naraghi to go on "fishing expeditions" where there was no apparent wrongdoing at a bank or at a financial institution. They would be pressured by CFPB managers to re-examine the records if they found no problems during their initial examination.

Indeed, the House Financial Services Committee's Oversight and Investigations Subcommittee held a third hearing in its series of hearings addressing alleged discrimination at the CFPB. The Subcommittee heard testimony from current and former CFPB employees who described their experiences with discrimination and retaliation at the CFPB. The witnesses testified that Director Cordray's reluctance to fire managers who had been accused of discrimination and retaliation "emboldened and empowered" other managers to continue to act badly. In addition to testifying about their own experiences, the witnesses also testified about other CFPB shortcomings. Kevin Williams, a former Quality Monitor in the Office of Consumer Response, testified about the consumer response call center, where he claimed there were "abnormal" numbers of breaches of consumers' personally identifiable information. He stated that there should have been security measures in place to prevent this from happening. A statement that the CFPB had changed some of its employment practices since the last hearing led Rep. McHenry to comment that it was clear the CFPB was responding to the committee's continued scrutiny of this issue, stating, "Apparently the agency is listening."

Turning to banks, hey, if Europe delays implementing Basel III, can the United States do the same? Maybe.

But for some good news, the Federal Home Loan Bank of Atlanta announced that it has awarded $24.5 million to assist in the funding of 60 affordable housing projects in 13 states and the District of Columbia as part of its 2014 Affordable Housing Program (AHP). The projects represent more than $450 million in total housing development. For every $1 dollar in AHP funding, another $18 dollars of development was leveraged under the FHLBank Atlanta 2014 AHP. "Local for-profit and nonprofit developers, in partnership with FHLBank Atlanta member financial institutions, will use $21.3 million of the AHP funds to assist in the acquisition, new construction, rehabilitation, or preservation of 3,156 affordable rental and homeownership housing units in Alabama, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and the District of Columbia. Developers with projects in states outside of the Bank's district, including Arkansas, Louisiana, Massachusetts, New Jersey, Pennsylvania, and Texas, will receive AHP funds totaling $2.8 million to develop 397 housing units."

The Federal Home Loan Banks have certainly been in the news lately. A few days ago Bloomberg's Jody Shenn wrote that, "The Federal Home Loan Banks jointly agreed to a three-month moratorium on admitting captive insurers which are being used by mortgage investors to access the government-chartered system...The 12 FHLBs offered the move voluntarily in a letter to their regulator, the Federal Housing Finance Agency, which has voiced concern that the trend is adding risk to the system, said the people, who asked not to be named because the talks are private. Captive insurers largely serve the needs of their parents. Lightly regulated investment firms and lenders that lack customer deposits, known as shadow banks, are flocking to FHLBs for dependable funding that often offers better terms than traditional banks or debt markets. The new memberships are drawing scrutiny from the FHFA because they may affect the safety of a system that operates with $786 billion of debt seen by investors and credit raters as being backed by taxpayers. The freeze may slow a boom in admissions after Redwood Trust Inc. last week said its captive insurer obtained membership in the Chicago FHLB. Redwood became the fourth real- estate investment trust focused on mortgage investments to join the network of regional lending cooperatives since October." Annaly Capital Management Inc., Invesco Mortgage Capital Inc. and Two Harbors Investment Corp. also have insurance units that have become members.

For "new stuff" on the lender side of things, Total Mortgage Services announced that it is expanding its Condo and Co-op product offerings.  "Condos and co-ops present unique funding and underwriting challenges, and we believe that our expanded product offerings and our growing team of in-house experts will allow us to provide even better service to our borrowers as well as our broker partners," said John Walsh, President of Total Mortgage. In addition to making representations and warranties on conforming Agency Limited and Full review condominium projects, TMS will be able to approve non-conforming Jumbo coops in the NYC Metro-area, new condo projects, process waivers direct with agencies for non-warrantable projects, and certify expired FHA approved projects. Anyone interested should contact credit manager Chuck Zadravec.

And AmeriHome Mortgage Correspondent has expanded its Tier 1 and Tier 2 program guidelines. Loans delivered into either program, on or after June 2nd will be subject to guideline changes. Changes include mortgage and/or rental history requirements; occupant borrower(s) must have a complete, most recent, 24 months rental and/or mortgage payment history documented in file. A Collateral Desktop Analysis appraisal review must be ordered from Clear Capital for loan transactions that meet specific characteristics.

Veterans eligible for the benefit have taken advantage of the VA option. There is also a concern that the negative press regarding VA of late could negatively affect the perception of the VA option.  As mentioned previously in this column, iServe Residential Lending is sponsoring a National VA Financing Webinar on June 24 at 10AM PST.  I will be making the opening remarks.  Also speaking will be Keith Pedigo, former Director of Loan Guaranty Services and Deputy Undersecretary for Policy at the Department of Veterans Affairs.  Presenting for iServe will be industry Veteran and Director of Government Lending, John McDade.  The purpose of the free call will be to enlighten and encourage real estate and financial industry professionals to better embrace the VA financing option.

Hey, if you're in Northern California next week, the CAMP Silicon Valley Chapter Officers Installation event is June 26th, and features California State BRE Commissioner Wayne Bell officiating the installation of Sonia Huang as its next president as well as the incoming board members. And the venue is very cool: the Mountain Winery located in the hills above the city of Saratoga.

MBA Education is providing MISMO Implementation Framework Case Study Part 1: Tuesday, June 24 - Friday, June 27 with live webinar components each day from 1-3PM EST. The MISMO Implementation Framework course includes four webinars, lasting two hours each, conducted over four consecutive days, as well as a case study. Visit MBA Education.

Rates are stuck in the same general area as they've been for months. We did, however, have some news yesterday: jobless claims fell 6,000 to 312,000 in the week ended June 14.   The four-week average of claims, a less-volatile measure than the weekly figure, declined to 311,750 from 315,500 the week before.  And the Conference Board's Leading Economic Indicators rose 0.5% in May, the fourth straight monthly increase, and following a 0.3% gain in April. "Housing permits held the index back slightly but the LEI still points to an expanding economy and its pace may even pick up in the second half of the year."

There is no scheduled news today, which leaves the market to be directed by equities and other overnight headlines - and there were none. For numbers, the 10-yr T-note closed Thursday at 2.62% and is sitting at 2.64% with agency MBS prices slightly worse.

Those zany advertisers are pretty good at making fun of themselves, as seen in this short video.


The Bank of San Francisco is searching for a Senior Loan Processor/Assistant with at least a two year proven track record of supporting a high producer/team. The candidate must be NMLS registered or become NMLS registered within 30 days of hire. The Bank is also looking for a Residential Lending consultant (RLC)/Loan originator who has a proven track record in generating purchase business, and ideally has successfully cross-sold depository products and services at a banking institution. "May have experience with TIC/Co-op financing or is interested in learning and providing an exclusive/highly competitive product to the SF real estate market; highly competitive salary, commission/bonus, and benefits for both positions." Please contact Dilan Desai to submit resumes or for more information.

A few thousand miles away, private mortgage insurance company Genworth Financial is seeking an Account Executive in its Michigan territory. Candidates need to reside somewhat centrally located on the eastern or western side of the state and should have exceptional customer interaction skills as well as a proven track record of sales execution and leadership. "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, develop calling plans to cover all assigned accounts, monitor branch volume and calling activity and take necessary actions to achieve account volume goals, execute and lead implementation of Genworth products and initiatives, identify and communicate new opportunities to provide solutions to customer needs." Candidates should contact Kristin Miller at for confidential inquiries or more information.

In other company/personnel news, BlueMountain Capital Management, LLC, a private investment firm with over $20 billion in capital under management, announced that Bob Thomas and Jeff Picron have joined the firm's mortgage group. Co-Chief Investment Officer Derek Smith said, "We view mortgages as an asset class with incredible growth potential and attractive risk-adjusted returns. This is a key strategic priority for our firm." Mr. Thomas headed the mortgage trading strategy effort at Goldman Sachs, while Mr. Picron has previously worked as an independent quantitative consultant.

And the National Association of Hispanic Real Estate Professionals (NAHREP) has released its 2014 report on the top 250 Latino real estate agents in the United States.  The latest report, published annually, is available for download and is being distributed in association with Zillow, Inc.  NAHREP is the leading trade association among Hispanics in the housing industry and is comprised of 21,000 members in 40 chapters around the United States. "The Hispanic real estate market is large and is growing rapidly," says Jason Madiedo, NAHREP's 2014 president.  "Since 2010, Latinos have accounted for 56 percent of the total net growth in U.S. owner households, with purchasing power of approximately $1.5 trillion projected next year.  These top agents are achieving tremendous success representing buyers and sellers from markets across America, and NAHREP is honored to salute them with this report," says Madiedo.