I was recently walking in a large city, on my way to do a warehouse field exam, when a young man on a skateboard passed me going the other direction. He was wearing a green t-shirt that said, "Quit Your Day Job." That's a bold statement for a Tuesday afternoon, I thought. Wells Fargo writes, "The labor force participation rate in the United States has fallen from 66 percent prior to the Great Recession to less than 63 percent at present, and our calculations show that roughly one-half of this decline is attributable to demographic factors." According to Wells' Economics group, older age cohorts tend to have lower rates of labor force participation than their younger counterparts, and the aging of the workforce in recent years has played an important role in depressing the overall rate of labor force participation in the United States. Other advanced economies have also aged in recent years, putting downward pressure on their respective labor force participation rates. "What is unique to the United States, however, is the drop in labor force participation among prime-age workers that is attributable to cyclical and non-demographic structural factors." I wonder if it's too late to learn how to skateboard?

Every lender has seen their cost of compliance skyrocket. Although these costs are passed on to consumers, lenders still need to set up compliance management systems, so this blurb from AllRegs was timely.

Let's check in on some recent state-level changes, since it is not enough for lenders to track what the CFPB, HUD, the FHFA, aggregators, the State of New York, etc., are making them do!

Recently, Colorado enacted legislation that requires servicers of residential loans, including lenders and other parties that offer a borrower a loss mitigation option or seek to enforce the power to foreclose and sell the residential real estate that secures a delinquent loan, to establish a single point of contact with a borrower. Starting in January, the bill obligates the single point of contact to inform the borrower about loss mitigation options, the status of the borrower's loan, circumstances that may result in foreclosure, and procedures to submit a notice of error or information request. Further, the bill prohibits the servicer from initiating foreclosure proceedings unless the borrower has not qualified for, accepted, or complied with the terms of a loss mitigation option. The bill provides that if a servicer is engaging in prohibited "dual tracking," the public trustee must follow certain procedures, including continuance of the foreclosure sale and withdrawal of the notice of election and demand, provided the borrower is complying with all applicable terms of a loss mitigation option. In addition, the bill requires a foreclosing lender to disclose that it is illegal for a foreclosure consultant to require a deposit or charge fees in advance for providing services, and requires that the posted notice include a statement regarding the borrower's ability to file a complaint with state and federal authorities if the borrower believes the lender or servicer has violated certain provisions of the bill.

Louisiana will be requiring mortgage loan servicers to obtain a license. On May 29, Louisiana Governor Bobby Jindal signed HB 807, which requires companies that service mortgage loans in the state to obtain a state license. The bill amends the state's Residential Mortgage Lender Law to require a company to obtain a state license by June 30, 2015 if it collects or remits payment for another, or if it holds the right to collect or remit payments for another, of principal, interest, tax, insurance, or other payment under a mortgage loan. The bill subjects mortgage loan servicers to existing licensure requirements and establishes the process to be used to determine the amount of the surety bond mortgage loan servicers must obtain. Finally, the bill requires any individual who services mortgage loans (which, according to the Louisiana Office of Financial Institutions, includes individuals who modify mortgage loans) to register as a mortgage loan originator through the NMLS. The Louisiana Office of Financial Institutions is expected to issue guidance on the new law later this year.

About 1,400 miles away, Connecticut established an alternative foreclosure method. On June 3, Connecticut Governor Dannel Malloy signed HB 5514, which establishes an alternative to the state's current foreclosure methods. Under the new law, which takes effect October 1, 2014, a court will be permitted to approve a foreclosure sale on the open market provided the lender requests such a sale and the borrower consents. The new method is available only for a first mortgage on a one-to-four family residential property that is the borrower's principal residence. The bill establishes industry procedures for such sales (including requirements for the foreclosure notice, property appraisal, listing agreement, and purchase and sale contract, and requires foreclosure notices to advise borrowers of the market sale option), as well as judicial procedures. The new law prohibits a borrower who consents to foreclosure by market sale from participating in the state's foreclosure mediation program, but grants such a borrower the right to petition the court to participate under certain circumstances.

Speaking of foreclosures, South Carolina established a new expedited procedure for mortgage foreclosures on abandoned properties. Governor Nikki Haley signed SB 1007, which allows a mortgagee or its successor to petition a court for an expedited judgment of foreclosure if the property is not occupied and meets at least two of several conditions-e.g. windows or entrances are boarded or otherwise closed, doors are smashed or continually unlocked, utility services have been terminated-and provided the property does not fall within certain exceptions-e.g. it is seasonally occupied or the owner is deceased and the heirs can be identified.

They say all Marines are rifleman, and all Navy Sailors are firefighters; when I speak to mortgage originators I like to say "everyone works in compliance." It's with that in mind that I mention Buckley Sandler's upcoming FinCrimes Webinar: Design and Maintenance of a Financial Crimes Compliance Program. The webinar will be of particular interest to in-house legal, compliance, and risk management personnel at banks and other financial services providers. Key topics will be: expectations for structuring and implementing a financial crimes compliance program, key issues and concerns regulators are looking at now, common missteps, and observations about the evolving global regulatory environment based on guidance from multi-lateral bodies such as the FATF and Wolfsburg Group. The meeting is scheduled for tomorrow, June 26, from 12-1PM EST, and pre-registration is required.

Apparently the difference between littering and not littering, in my neighborhood, comes down to whether or not you scotch taped a "FREE" sign to your 20 year old sofa before you leave it on the corner. Many things in life aren't very clear, however, HUD's wishes regarding reverse mortgage advertising rules and HECM insurance limits isn't not one of them. On the 18th of June the Federal Housing Administration published two Mortgagee Letters on the Home Equity Conversion Mortgage program. HUD announced policy changes that reduce risk to the Mutual Mortgage Insurance (MMI) Fund and support sustainability of the HECM program.  The changes mentioned in the letter address risks associated with certain fixed interest-rate products and remind mortgagees of their responsibilities related to marketing and advertising.

No one that I know of base the future of their business on the projections of "experts" or economists, which is a good thing given how wrong many of them were six months ago when predicting rates would be going up soon. Even recently, analysts are pointing out how well mortgages have performed during the second quarter of 2014. For example, Fannie 3.5s & 4% securities (containing many of the loans being originated now) are up/better by almost two points since the beginning of April despite the Fed continuing to scale back their MBS purchases! Average daily origination has increased during that time period - so someone besides the Fed is buying them!

At some price, someone will pretty much sell anything they own. (Well, maybe not my cat Myrtle, but then again, I have never received an offer.) Purchases of new homes in the U.S. rose in May by the most in years (+up almost 19%), but the housing news was not all unicorns and walks on the beach. The FHFA House Price Index reported no change in US house prices in April versus March (but still up 6% versus a year ago), and the S&P/Case-Shiller Home Price Index (with a two-month lag) showed that the rate of price appreciation had slowed - but it was still up nearly 11% versus a year ago. "Overall, prices are rising month-to-month but at a slower rate...Last year some Sunbelt cities were seeing year-over-year numbers close to 30%, now all are below 20%." Gosh - is that so bad? And if that weren't enough, the Black Knight Financial Services Home Price Report has prices up .9% month-over-month and up 6.4% year-over-year. (The reason for the difference between the reports is that the FHFA's covers only sales with a conforming mortgage, Case-Shiller covers everything, and the Black Knight report uses an algorithm to correct for distressed and short sales.)

(Read More: Home Prices Nearing Pre-Crash Levels)

And not only did the Richmond Fed tell us that manufacturing was picking up in its region, but those consumers are darned optimistic - at least the Conference Board tells us we are. The index hit "85.2" - the highest since early 2008. With all this good news, one would think that rates would move higher on the anticipation of more borrowing for expansion, or the threat of inflation. But nope, rates went down, mostly attributed to a "flight to safety" bid related to Iraq. Both the 10-yr T-note and agency MBS prices improved about .250.

But today is a new day, as they say, and we've already had some news. The MBA reported that applications fell about 1% last week. Also out today will be May Durable Goods, expected flat from +0.6, and the final Q1 GDP reading, projected at -1.7% from a preliminary -1.0% (old news?). The Treasury has two auctions scheduled: $13 billion in reopened 2-year floating rate notes at 11:30AM and $35 billion 5-year notes at 1PM EST. In the early going the 10-yr's yield is down slightly to 2.57% and most agency MBS prices are better by a shade.


Digital Risk, the largest independent mortgage outsourcing provider in America, is seeking a Unit Manager for its loan fulfillment team at its Orlando, FL office.  The ideal candidate will have a demonstrated track record of success leading origination fulfillment teams of 50 - 100 team members, strong pipeline and production management skills, and a strong sense of urgency with an ability to work in a dynamic team environment. "This is a key leadership role located at our headquarters and will be critical to the current and future success of Digital Risk. Relocation assistance is available." For more information or to submit your resume, please contact Ryan Hengehold.

And LDWholesale, a division of LoanDepot LLC, one of the fastest growing private, independent lenders in the country is expanding and looking for outstanding Account Executives to join its team. "Designed to offer mortgage brokers efficient, high-touch boutique-style service, LDWholesale delivers fast-funding loan products at competitive rates with the convenience of both online and direct call experience. Today's mortgage broker plays an important role in the housing market and LDWholesale is dedicated to their success. Built on proprietary mortgage technology, LDWholesale offers a full suite of high quality competitively-priced loan products and is a direct seller/servicer to FNMA, FHLMC, and GNMA."  If you have an interest in managing a large territory, competitive rates and state of the art technology, please contact Jack Obrien regarding the NE corridor and the East Coast or Mike Klotz regarding the Western US.

One of the Dodd-Frank laws deals with companies doing business with companies that are women or minority-owned. "DiversityBusiness.com, the nation's leading multicultural social media site, recently recognized VRM Mortgage Services (VRM) and PCV Murcor (PCV) as two of the nation's "Top Businesses" for 2014. This exclusive award recognizes and honors individuals who have established themselves as a world-class community of entrepreneurs that continue to transform the way we live and advance our economy forward. The award, known as the Div500, represents the most unique class of companies with the distinction of fostering a culture of sustainable growth among the communities they serve. Keith D. Murray, MAI, founder, president and CEO of VRM and PCV, was one of a handful of entrepreneurs to have multiple companies recognized with the award. VRM was ranked 46th on the list of African American-Owned U.S. Businesses." Congrats to VRM!