Under the "misery loves company" category for those in the residential lending business, it is interesting to watch the media focus shift onto the payday lending business. (The video is 16 minutes, has some edgy dialog, but is interesting, entertaining, and humorous.)

FHA Commissioner Carol Galante announced that she will be stepping down as head of the agency effective this fall. (Biniam Gebre, general deputy assistant secretary for housing, will replace her on an interim basis.) In a letter to FHA stakeholders, Galante said she decided that after more than five years of service to leave HUD for the University of California, Berkeley, where she will assume the I. Donald Terner Distinguished Professorship in Affordable Housing and Urban Policy. She also will serve as director of the Berkeley Program in Housing and Urban Policy and advisory board co-chair of the Fisher Center on Real Estate Policy. By the way, Congress does not return from its 5-week "August recess" until the week of 9/08/14.  Their current job approval rating is 15% - don't look for any political GSE reform until 2015 at the earliest.

Hey, if you can't measure it, you can't fix it, right? STRATMOR has developed a new survey to determine production data based on turnover, age, and tenure of loan officers. "The value of a mortgage lender is largely intangible - in large part based on the quality, depth and sustainability of the sales force.  However, lenders often do not understand the characteristics and composition of their originators versus peers and therefore can't manage to specific outcomes.  For example, what is the average productivity of your top quintile of producers versus peers? What about the bottom quintile? What is your turnover by age?  By production quintile?  Is the age or tenure of your sales force a factor? Analyze your key originator characteristics by quintile and how that compares to your peers through the STRATMOR 2014 Originator Census survey. The survey will look at data from 2012 and 2013 to provide historical perspective on these and many more topics. For more information, visit the 2014 Originator Census website or email Angie Middlebrook."

Let's get caught up on MSR packages I've seen in the last several weeks. Originators need to remember that rate sheet pricing is directly determined not only by the value of the asset, overhead, and profit margins, but also by the value of servicing of individual loans! Interactive Mortgage Advisors, LLC brokered $27M worth of Freddie Mac/FHLB bulk residential mortgage servicing rights. The offering was 100% of GA fixed rate originations with a pool characteristic of: 5.604% WAC, 118.5 months seasoned, $58,235 Average Loan Balance, with CENLAR being the subservicer. MIAC offered a $201M FNMA/FHLMC/GNMA portfolio $201 Million FNMA/FHLMC/GNMA mortgage servicing portfolio from a mortgage company that originates loans with a geographic concentration in California. The Seller provided full representations and warranties for the loans included in this offering. Key Portfolio Characteristics included: $265,458 Average Loan Amount, 97.61% Fixed and 2.39% Hybrid loans, 57.99% FNMA_A/A, 28.80% FHLMC Gold and 13.21% GNMA_II loans, Weighted average interest rate of 4.498%, 100% Retail, with a geographic concentration in California. Phoenix Capital, Inc. offered up a $380M bulk Fannie Mae A/A and FHLMC ARC servicing rights, with a pool breakdown of: 4.428% WAC, Avg Bal $285K, 15% HARP Originations, 55% Purchase originations,  95% CA geography, WaFICO 745; WaLTV 87%, 55% Wholesale; 45% Retail, and being sub-serviced at Provident Funding & Associates.

To answer a number of emails I've received lately, "yes, I still continue to see MSR pools out there." MountainView Servicing Group, is offering $753 million FNMA non-recourse servicing portfolio that is being made available to the national market. Pool characteristics: 100 percent fixed rate 1st lien product, weighted average original FICO of 760 and weighted average original LTV of 76 percent, weighted average interest rate of 3.63 percent, an average loan size of $208k, with state distribution of Utah (19%), California (14.8%), Arizona (14.2%), and Colorado (11.2%)....and MIAC offered a $671 Million GNMA II mortgage servicing portfolio. The portfolio is being offered by a mortgage company that originates loans with a geographic concentration in California. The Seller will be providing full reps and warrants; the pool characteristics:  $267k Average Loan Size, 98.72% Fixed loans and 1.28% ARM loans, weighted average interest rate of 4.27%, 75% Retail, 19% Wholesale and 5% Correspondent, with bids due Aug 7th.

One of the key determinants of the value of servicing is the method of foreclosure in a given state. That, in turn, often determines the length of time and amount of effort involved in foreclosing. Two and a half years: Connecticut ranks among the top ten states with the longest average delinquency for loans in foreclosure, with the average delinquency of 2 ½ years. That's a long time no matter which side of the foreclosure you are on; however, a huge part of this story rests with the fact Connecticut is a judicial foreclosure process state; states governing their foreclosures process' in such a manner account for 42% of all active mortgages, however, some 70% of loans in foreclosure are in these states as well.

As some know, and many may not, judicial foreclosure proceedings are when a mortgage lacks the power of sale clause. In such an instance, many states require the foreclosure to be processed through the state's courts. If the court confirms that the debt is in default, an auction is held for the sale of the property in order to acquire funds to repay the lender. Here are some stats: foreclosure inventory is 3.5X higher in judicial states than non-judicial, and more than 60% of these loans have been past due for two years or more, loans in foreclosure in judicial states have been delinquent an average of 1,084 days (compared to just 775 days in non-judicial states), and the states with the highest number of average days past due for loans in foreclosure....(dare to take a guess?) are all judicial states: New York and Hawaii are each above 1,300 days, while New Jersey and Florida both top 1,200 days.

Things may be changing in Connecticut, however. Ben Lane of Housingwire writes, "new legislation sponsored by a longtime Realtor, homeowners and lenders in Connecticut now have an alternative method for foreclosure sales that seeks to bypass the judicial backlog and expedite the foreclosure sales process. On June 3, Connecticut Governor Dannel Malloy signed H.B. No. 5514 into law, which creates a foreclosure by market sale method. The bill, which was sponsored by State Representative Joe Diminico, who has been a Realtor for more than 30 years, allows property owners who are in the beginning of the foreclosure process to work directly with a broker and the mortgage holder to "speedily sell the property" and avoid the time-consuming judicial foreclosure process." Legislation that actually works as intended? Well, that's TBD, however, the new legislation which is now in effect, there may be a welcome reduction of the glut of foreclosures in the state.

Let's see what some vendor counterparties have been up to recently.

Secure Settlements, Inc. announced a Title Agent Discounted Surety and Fidelity Bond Program with E.R. Munro & Company where "SSI Low Risk Agents Who Meet Program Requirements Can See 35% Rate Savings." "The announcement comes after several months of discussions and negotiations to find better pricing for surety and fidelity coverage for title agents who are screened and vetted and achieve a low risk rating under the SSI risk analytics model.

SSI's vetting process, developed after nearly seven years of consultations in London, Bermuda and New York with insurance industry risk professionals, will help to underwrite the discounted surety and fidelity bond program.  The national carrier will require a closing agent rating of "low risk" by SSI for a title agent to be eligible for coverage.  The program will be marketed and administered by prominent bond broker E.R. Munro & Company of Pittsburgh, Pennsylvania.

Essent Group Ltd. came out with its 2nd quarter earnings which turned some heads. ESNT reported GAAP of $0.23 and operating EPS of $0.23, beating estimates due to higher Insurance In Force (IIF), a higher premium margin, and a lower combined ratio. New Insurance Written (NIW) was $5.9 billion, up from $3.6 billion in the 1st quarter. Insurance-In-Force (IIF) increased QOQ to $39.4 billion from $34.8 billion in 1Q. The average premium margin was up to 54.3 bps, from 53.6 bps from last quarter. Essent's combined risk-to-capital ratio was 16.2x. The company also had $171 million of cash at the holding company, down from $207 million.

MGIC Investment Corp. reported monthly operating statistics for July. Credit trends were positive with the new notices declining by 17.5% Y/Y although up 4.4% M/M. Total delinquent inventory was down 26.6% Y/Y and 0.6% M/M. New Insurance Written (NIW) increased to $3.6 billion from $3.2 billion in June. Cures of 6,321 were down 3.6% M/M vs. a 1.7% decrease in June and a 2.2% decrease in July 2013. The cure ratio fell to 80.1% from 86.7% in June and 81.0% in July 2013.

United Guaranty Corporation (UGC) reported pre-tax operating income of $210 million for the second quarter of 2014, compared to pre-tax operating income of $73 million in the prior-year quarter. Current quarter results reflect increased net premiums earned and lower incurred losses due to $89 million in favorable prior year reserve development. First lien favorable prior year development of $79 million was driven by updated assumptions for overturn rates on previously denied claims related to a settlement with a mortgage lender. Net premiums written decreased 9 percent to $249 million. Domestic first-lien new insurance written decreased 20 percent to $11.1 billion in principal of loans insured, driven by declining mortgage originations from refinancing activity. Quality remained high with an average FICO score of 750, and an average loan-to-value of 92 percent on new business.

AllRegs, soon to be purchased by Ellie Mae, released a product addressing depository lender requirements. Clarifications in Reg G placed new emphasis on the education of registered mortgage loan officers as it relates to both federal and state laws. The guidance suggests that not only must training be ongoing; it must now match the specific origination activities of mortgage employees. AllRegs Depository CE Library consists of over 25 self-study courses covering both federal and state laws as they relate to activities surrounding mortgage employees.

Ellie Mae launched new consumer direct solution for Lenders; Encompass Consumer Direct Provides Self-Service, 24/7 Online Access for borrowers.

United Guaranty is implementing new technology for billing, collections, and disbursements. The target date was Friday, August 1, 2014.

Interest rates? There's not much going on, here or overseas, so I won't waste your time. Friday the 10-year T-Note closed at a yield of 2.42%, which is about where it closed yesterday, which is where it is this morning, and agency MBS prices are unchanged.


Cornerstone Mortgage, Inc. an independent and highly successful retail mortgage banker headquartered in St. Louis, Missouri continues to grow and is seeking an experienced Senior Controller. Cornerstone has been rated a Top Place to Work in St. Louis in 2012, 2013, and 2014 by its employees and is a direct seller to Fannie, Freddie and Ginnie. A qualified candidate will have ample experience in mortgage banking and specifically mortgage accounting with exposure to managing payroll, treasury in addition to a team of accountants. The person will be responsible for interim financial statement preparation, yearend audit, taxes, warehouse line management and similar responsibilities. The position requires an accounting degree with an MBA a plus and CPA preferred. An ideal candidate will have experience selling direct to FNMA/FHMLC/GNMA and the required financial reporting; experience with AMB and Mortgage Builder is a plus. Please send resumes to Jim Dean, president.

One Southern California Lender is rapidly growing and is looking for the right team to help fuel its' growth. Synergy One Lending, a mortgage lender based in San Diego, is searching for qualified individuals to fill new positions in Funding, Shipping, Processing, Licensing, Compliance, Payroll, and Marketing. With the recent expansion into Wholesale Lending, Synergy One Lending is searching for Account Executives for its' San Diego headquarters. Please direct inquiries and resumes to Info@SynergyOneLending. com. (This week, Synergy One Lending is introducing its NuPath product through its wholesale and retail channels. This product is a unique twist on the "lease-to-own" program. It allows credit-challenged individuals to choose the home of their dreams now and rent it for a period of time while they repair their credit. They can purchase the home when they are qualified to do so at the original purchase price. By locking in at today's price, the consumer captures the equity in a growing market as they repair credit. For more information about this program, go to their website  or contact Ron Krueger, Divisional President.

In other personnel news, Caliber Home Loans, Inc. announced the appointment of Michael Brown as Senior Vice President of its National Builder Division.