How much would you pay to drive a cab? In New York City, in 2014, the price of a Taxi Medallion hit $1.3 million. With Uber and Lyft, Medallions are now running in the $200,000s to the $500,000s. These valuable licenses that allow yellow cabs to operate have historically been a solid investment for owners. I mention this because there are credit unions that allowed medallion owners to take out lines of credit using the medallion as collateral. Due to the collapse in value, enough medallion owners are now underwater that three New York lenders have been placed into conservatorship.

Events and Training

FAMC has published its August 2017 Wholesale "Monthly Customer Training Calendar".  This month's calendar offers a variety of training opportunities such as "Loan Processing", "Mortgage Fraud:  Potential Red Flags", "Self-Employed Borrower:  SAM Part 1, Personal Tax Returns", "LinkedIn Strategies for Loan Officers", and "Blueprint for Taking a Quality Application".

Did you know that Fannie Mae provides participating servicers with free loss mitigation training? Fannie's Know Your OptionsTM Customer CARE (Connect, Assess, Resolve, and Execute) team will present two live webinars each month in August and October. Sign up to learn how to leverage your own servicer model to develop rapport and establish consultative customer relationships, communicate more effectively with borrowers about their options to avoid foreclosure, increase your workout percentage, and more. Its August webinars are scheduled for the 8th and 17th of August; learn more and register today.

Don't miss the NMMLA August 10th Seminar & Luncheon at the Tanoan Country Club. Guest speaker Jack Konyk will discuss recent enforcement actions by the CFPB and others as they pertain to "cooperative" business sourcing and mortgage advertising.

Take a look at the Freddie Mac Learning Center web page for training resources on how the latest addition to the Freddie Mac Loan Advisor Suite - Quality Control AdvisorSM - can be your end-to-end solution for managing the entire post-funding quality control and remedy process.

Sign up for the Freddie Mac free 90-minute webinar ( August 9th, 16th, September 6th and 20th currently available) detailing to discover the possibilities with a Home Possible® mortgage. Home Possible offers you the opportunity to meet the home financing needs of low- and moderate-income borrowers looking for low down payments and flexible sources of funds.

Or there's Freddie Mac's free 2-hour webinar ( August 9th and 23rd currently available) detailing the process to input data for Freddie Mac Flex Modifications into Workout Prospector® and continues through the entire process to achieve a successful settlement. Processing tips and best practices are also provided.

MBA Education offers a new program for mid-senior level risk managers, developed in collaboration with The University of Maryland's Robert H. Smith School of Business. This course will lead students through the core risk management concepts in mortgage finance while incorporating real-world applications and group exercises. The program will be led by Clifford Rossi Ph.D., Professor Executive-in-Residence and Professor of the Practice at the Robert H. Smith School of Business. Clifford, who was previously Managing Director and Chief Risk Officer for Citigroup's Consumer Lending Group, will be joined by industry experts from the GSEs and other mortgage finance institutions. There are currently two options are available for those interested in the program. A half-day workshop will be held in conjunction with MBA's Risk Management and Quality Assurance Conference on September 26th, in Miami. The first full offering of the Advanced Risk Management for Mortgage Professionals will be in Washington, DC in mid-October. For more information, please contact David Upbin.

When I think Phoenix, I think August. But maybe hotels are cheap? FHA is offering a free onsite classroom training in Phoenix. Training will cover a wide variety of topics including Single Family Housing Handbook 4000.1, underwriting the FHA appraisal, Endorsement protocols, the new Defect Taxonomy and Loan Review System (LRS). Registration is underway for this 2-day training, August 15th & 16th.

Company News

If your entire 401(k) is in shares of Ellie Mae, my sympathies - kind of. The price per share is still up about 10% for 2017, which is good for your retirement, but ELLI was down on Friday, at one point, 23% to $84 - its biggest intraday percentage drop ever. The company's EPS and revenue guidance for Q3, FY2017 fell below estimates. ELLI's Q2 earnings also missed estimates as its customers face lower loan volumes due to declining refinance activity and tight housing inventory. "Despite mortgage volumes being down 8% in the second quarter, we were able to grow revenue 16% year-over-year and increased revenue 20% in the first half of the year with volumes down 3%," said Jonathan Corr, president and CEO of Ellie Mae. One should note that up to Thursday's close, stock had risen 31% so far this year.

And what about independent mortgage banker Vanguard Funding out on Long Island? On July 10th of this year, Vanguard Funding, LLC had their NY Mortgage Bankers license purportedly suspended - not good when your headquarters are in that state. This is on the NMLS Consumer Access page. If you go to the website, management has this message: "WE ARE CURRENTLY NOT ACCEPTING APPLICATIONS". All of this prompted one to send me, "Messages in bold are usually not a good thing. Vanguard definitely had some internal issues plaguing them, but it's always a surprise to see a good sized fellow IMB apparently closing up shop."

Capital Markets

Being one, I know that capital markets folks are often accused of cyphering (putting a message into secret writing). We're pretty good at deciphering as well. What does the Fed reducing its balance sheet mean for LOs and their borrowers?The NY Fed released a new two-week FedTrade schedule covering the July 28 to August 10 period, and it showed about $1.2 billion a day of Agency MBS purchases. If lenders originate $1.6 trillion total of residential mortgages in 2017, that is $6.4 billion a day - including jumbo, non-QM, and bond programs - non-agency stuff.

I bring this up because at some point it will end - and the Fed has done a fine job telling us that. Michael Ehrlich with ThomsonReuters kindly crunched a few numbers for me to determine that there is $5.5 trillion of Ginnie, Fannie, and Freddie (Agency MBS) out there. Of that, the Fed owns about 1/3 - $1.75 trillion - or more than a year's production of all types of residential mortgages. Not only that, but remember that the Fed was a big buyer when 30-year rates were .75% lower than where they are now, so those bonds are underwater by several points.

The Fed doesn't want to spook the markets, drive long-term rates higher, sell in a poor market, or negatively impact the U.S. housing market. But the industry is worried about the pace of the Fed selling over a year's worth of underwater agency mortgage-backed securities. Who out there in the U.S. or world wants to own billions of dollars of fixed-rate 30-year 3.5% mortgages? A slower solution would be to merely stop reinvesting early prepayments.

Looking at interest rates, the U.S. Treasury market, and along with it MBS, traded higher when the U.S. GDP report for the second quarter was a tad weak in the inflation reading. And the U.S. Employment Cost Index grew less than expected. Of note is that U.S. household saving fell to 3.6% in Q4 of 2016, the lowest rate in nine years! The treasury rally extended on the back of reports that North Korea had conducted a missile test with the 10-year yield touching a low 2.287% before pulling back. The 10-year note price improved nearly .250 and the week ended with it yielding 2.29% (up 5.5bp on the week).

But it is a new week, with today being the last business day of July, for economic news. Not much happened over the weekend to move the markets, although in U.S. politics the narrative is shifting away from healthcare toward tax reform but it will probably be at least a couple of months before a credible and plausible plan emerges. Donald Trump isn't dropping the repeal/replace efforts in health care, and some believe that this could undermine the ACA exchanges further by withholding subsidy payments.

For economic news, later this morning we'll have the Chicago Purchasing Manager's Index and Pending Home Sales for June. Tuesday has Personal Income and Consumption/Spending (an index tracked closely by the Fed), the PCE figures, Construction Spending, and ISM Manufacturing Indices. Wednesday is the MBA's application survey for last week and the ADP Employment Report. Thursday brings Challenger Job Cuts Report, Initial Claims, Factory Orders and ISM Non-Manufacturing Index. Friday closes out with the Employment Report and International Trade. We start with rates little changed versus Friday evening: the 10-year is yielding 2.29% and agency MBS prices are "unched a bunch."

Jobs and Products

Fresh off its second rated securitization in 2017 of non-QM loans by Angel Oak Capital, Angel Oak Mortgage Solutions, "the leader in the non-QM space, announced the addition of 5 more AEs to help brokers grow its business across the country. David Hill joined in Atlanta, Gerica Coad in Sacramento with Sal Perez (Inside Sales), Stacy Flanigan in Tampa and Denise Perez in Fort Ft. Lauderdale. And Angel Oak Mortgage Solutions is not done, as it continues to hire additional Wholesale Account Executives across the country as well as underwriters and other operations positions in its Atlanta headquarters. Come build your career with the nation's top Non-QM lender by visiting or watch this clip from Mortgage News Network's Top Mortgage Employer's interview for more information."

Maxwell recently announced the release of their API integration with LOS provider, LendingQB. This integration allows documents and data to flow between the two systems and enables Maxwell to keep stakeholders in the mortgage informed about progress. Maxwell is the leading software for non-bank lenders to compete, enabling loan officers to provide a digital and customizable loan application, automatic document collection, and automated notifications & reminders to keep the process moving. Maxwell's API has always allowed connectivity to your LOS, and with a direct LendingQB integration it will sync and update with the click of a button, allowing you to increase productivity, grow your business, and provide the ultimate borrower experience. To learn more and request a demo visit

SocialSurvey has launched their Enterprise Reputation Management platform for 3 more lenders in the past few weeks. These lenders are: American Interbanc MortgageFrost Mortgage Group, and Synergy One Lending. Also launching in the next few weeks will be: NFM Lending, First Commonwealth Bank and Central Bank of St. Louis. Check out what one new user said, "SocialSurvey has help me increase my online presence and highlight my client relationships. This has driven more business to Embrace Home Loans!" As soon as a survey is completed, feedback from the happiest customers will be automatically shared on social media sites and web-pages to leverage your company's great client experiences into more business. Learn how it works and how easy it is to launch with them by contacting Craig Pollack. If your company is not actively managing your online reputation, then you are giving the microphone to your unhappy customers and letting them control the narrative.