Although Bismarck, ND is a fine city, it did not make Zillow's Best Places to Buy a Vacation Home list. I read many articles during the course of the week but this one is pretty interesting and managed to capture my attention away from Tetris for a while. Zillow created an index, known as the Second Home Index (SHI) in order to surface U.S. cities near popular vacation destinations that are also good locations to buy a second home for seasonal use. This is an interesting index, one which may have merit, as they identified vacation cities near popular destinations, then ordered those cities according to their investment and rental income potential. Spoiler Alert: homes in a number of prices ranges, within five miles of a golf course, appear to only be located in Florida. Go figure. How about this for the opposite of McMansions in the suburbs?

Will a new HARP ride in and save the refinance business? Probably not, as borrowers seem kind of "tapped out" on the program, but the public relations efforts have been renewed. This week FHFA Director Watt spoke at a town hall meeting in Chicago to publicize the Home Affordable Refinance Program (HARP). The FHFA estimates that as of the end of 2013 there were roughly 676,000 loans still eligible for HARP refinancing. Notably, Director Watt did not use this event to announce an extension of the HARP's current expiration date. Following the event, Director Watt was asked about the extension issue and stated: "It's not even something that I'm looking at right now because we are in 2014 and the existing HARP program doesn't end until the end of December 2015."

As many know, reverse mortgages are available to homeowners 62 years old and older with significant home equity. They are designed to enable retirees to borrow against the equity in their homes without having to make monthly payments as is required with a traditional "forward" mortgage or home equity loan. Under a reverse mortgage, 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. According to the National Reverse Mortgage Lenders Association, senior home equity has reached $3.60 Trillion (its highest level since 1Q'08) and there are currently more than 575,000 senior households using a reverse mortgage to help meet their financial's also estimated that there are at least 575,000 children who may be surprised when the will is eventually read.

Huh? We're being told now that last year Nationstar was restricted by adding Fannie & Freddie servicing? I'm always the last to hear...

So you're in the market for a little servicing, uh? Well here ya go...MIAC has two offerings; the first a $3 Billion FNMA/GNMA mortgage servicing portfolio. The portfolio is being offered by a mortgage company that originates loans with a national geographic concentration. The Seller will be providing full reps and warrants for the package: $170,406 Average Loan Size, 95% fixed and 5% hybrid loans, 14% Fannie A/A, 33% Fannie MBS, 18% GNMA I and, 35.14% GNMA II loans; Weighted average interest rate of 4.254%, 21% retail and 79% wholesale, with bids due by July 14th...the second, a $50 Million per month concurrent flow mortgage servicing offering. The flow servicing is being offered by a "well-capitalized" bank that originates nationally. The seller will be providing full reps and warrants for offering: $245k average loan size, 100% fixed rate loans, GNMA - 53.94%, FNMA A/A - 42.66%, Freddie ARC- 3.40%, 100% retail, national state distribution, and average FICO score of 752, with bids due today.

The only two sure things in life are death and taxes, right? The CFPB issued an interpretive rule to clarify that "when a borrower dies, the name of the borrower's heir generally may be added to the mortgage without triggering the Ability-to-Repay rule. This clarification will help surviving family members who acquire title to a property to take over their loved one's mortgage and to be considered for a loan workout, if necessary, to keep their home.

For some quick investor & agency news...

As a reminder, on June 18th, Freddie introduced the Freddie Mac MyCity Modification, a temporary offering within the city of Detroit, Michigan, to assist struggling homeowners by providing a loan modification option that may offer significant payment relief. The goal is to help provide eligible borrowers with more affordable terms so they can stay in their homes. Only Servicers with loans in the eligible Detroit ZIP codes, or those who may acquire servicing of applicable loans in those ZIP codes in the near future, will be impacted by the requirements described in Guide Bulletin 2014-11, related to the MyCity Modification. These specific ZIP codes are listed in today's Guide Bulletin. Servicers must follow the MyCity Modification guidelines and submit their recommendations for borrowers on and after September 1, 2014. For complete information: Bulletin 2014-11.

Mortgage Master, Inc. announced it has become the first non-depository lender to join the Massachusetts Home Ownership Compact to provide affordable mortgage solutions to lower income first-time home buyers. As a signatory of the Home Ownership Compact, Mortgage Master has committed to make a good faith effort to provide Mass Housing mortgage loans to borrowers below the median household income in 2014.

Cole Taylor Mortgage announced its offering of LPMI High Balance Fixed Products: 30-year fixed, 20-year fixed and 15-year fixed. The current rate sheet reflects the applicable rate adjustment and is effective for all loans locked on or after June 16th.

ABA Community Bank Mortgage LLC has selected First Community Mortgage (FCM) as a secondary market investor. With this selection, ABA Community Bank Mortgage LLC owner banks can sell agency-eligible loans on a servicing-released basis to FCM and access their full line of products.

And it has also selected Five Oaks Investment Corporation as its newest secondary market investor, a move that will allow owner banks to sell non-conforming jumbo loans on a servicing-released or servicing-retained basis to Five Oaks and access their full line of fixed rate and ARM products. Five Oaks is also announcing a private label servicing solution for owner banks. ("Co-owned by the Corporation for American Banking, an ABA subsidiary, and community banks, the ABA Community Bank Mortgage LLC leverages the power of joint ownership for better execution on loans sold into the secondary market.  By aggregating volume, the LLC is able to leverage the quality and total volume of the owner banks' loan production.")

M&T Bank's product bulletin 2014-019 includes expanded FHA 203K debt-to-income ratios, SONYMA income limit changes effective with registrations on 6/18/14 and Agency 2nds revisions. Contact your Account Executive for questions regarding these changes.

Bayview Correspondent Lending has updated its Non-QM Portfolio Products. The summary includes **Standard loan amounts up to $1,500,000, Non-Warrantable Condos to 70% LTV on Primary Residences. Primary Residence, Second Homes and Non-Owner Occupied properties

Single Family Attached/Detached, condominiums, Planned Unit Developments, Leaseholds and standard agency Rural Properties: Maximum 80% loan-to-value (LTV) on all products (LTV reductions may apply for Second homes, Investment properties and jumbo loan sizes).

Fifth Third has clarified eligibility and asset requirements on all Fannie Mae products. These clarifications include but are not limited to the following: delayed financing, continuity of obligation and multiple financed propertied for the same borrower. Asset requirement including business assets, life insurance funds, and VOD requirements are also updated. Contact your Sales Representative for complete update information.

For the month of June, Angel Oak Funding Wholesale set another record in production and "continues to execute on its plan to aggressively grow its non-Agency/non-QM business. With a footprint primarily in the southeastern U.S., CA and TX, the company continues to deliver on its commitment to bring make-sense lending back to the mortgage business."

Penny Mac is aligning with recent Freddie Mac changes as outlined in Freddie's 14-12 bulletin in its announcement 14-36. These changes include large deposits, monthly debt payment-to-income ratio requirement, Open Access and Power of Attorney.  Penny Mac announcement 14-35 aligns to Fannie Mae's recent updates regarding Cash-out transactions, Continuity of obligation, multiple financed properties, POA, and other Asset Policies. Announcement 14-34 from Penny Mac discusses availability of employment beginning after close allowed on conforming LP loans.  To view these Penny Mac announcements, visit: gopennymac or contact your representative for complete details.

The markets did not do much yesterday, but overnight saw quite a move. Wednesday morning was quiet, but we saw some movement after a weak 10-yr T-note auction ("lukewarm demand as the issue tailed by 1.2bps at 2.597%. Stats were weak with 39.6% awarded to indirects, 13.9% directs and a 2.57 bid to cover"). We also had the minutes from the June Fed meeting, indicating that the final QE taper will be $15Bln in October if the economic outlook holds. And of great interest is that discussions are still occurring as to what/how tools will be used to raise rates. So as expected, the FOMC minutes included discussion on the Fed's exit strategy and there is support for continuing reinvestment purchases past the first rate hike. "Many participants agreed that ending reinvestments at or after the time of liftoff would be best, with most of these participants preferring to end them after liftoff."

That is yesterday's news. In the early going we're seeing a nice rally/improvement in rates. There are a host of "reasons" but this all still feels like a bout of consolidation/digestion in an environment of very thin liquidity and no news. Sentiment began deteriorating earlier in the week although the fundamental landscape hasn't shifted much. There were a few "negative" headlines (China's exports were a touch below estimates, industrial production in France & Italy were light, Portugal worries continue to reverberate through Europe, Japan machinery orders plunged, etc.).

Here in the U.S. we've seen Initial Claims (expected at +312k from +315k, it was -11k to 304k, with the 4-week moving average -3,500). The Treasury concludes its latest round of coupon auctions with $13 billion reopened 30-year bonds at 1PM EST. In the early going the 10-yr. is better by .5 and down to a yield of 2.50% after closing Wednesday at 2.55%, and agency MBS prices are better by about .250.