"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.
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
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
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
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.
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."
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
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.