It is so sad that America ranks 25th in the world in math. But at least we're still in the top 10. Speaking of math, the Census Bureau tells us that the wealthiest 10% of American households own 80% of all US stocks (12.1 million households out of 121 million).  Since the total market capitalization of the US stock market is roughly $23 trillion, it suggests that $18.4 trillion of stocks is owned by just 12.1 million households or an average of $1.5 million of equities for every wealthy household.

The last time I used a travel agent was in 1986, when I was grappling with five weeks through the South Pacific (including New Guinea). The travel agent occupation has suffered due to computers, the internet, and consumers going directly to the carrier. Is the LO occupation at risk? Does a company like Bank of America or Wells Fargo really need 8-10,000 of them - each? One can make that argument, and this article mentions LOs specifically. Don't shoot the messenger.

It's been said that living in major metropolitan areas isn't easy; as one person I know who lives in the heart of San Francisco put it, "you have to want to live here, nothing is easy; from parking to buying groceries, it's always difficult." It's a life-style choice for sure, one which can exclude home ownership, especially for first time buyers who face median home prices in SF of $925k. However, San Francisco recently announced a program to promote homeownership within the city limits - DAPs are not dead, and open doors for would-be transplants. The city is now willing to lend certain first-time home buyers up to $200,000 toward the down payment on their first house or condominium. SF Gate writes, "The program provides down-payment help in the form of a loan to first-time buyers of market-rate homes who make up to 120 percent of the area's median income. The city runs similar programs for people buying below-market-rate homes and for others such as police officers and firefighters." When the homeowner sells or refinances, the loan has to be paid off along with a percentage of the property's appreciation, depending on how much of the purchase price the city covered. I left my heart in San Francisco.

Whether it is San Francisco, or Phoenix, or Miami, there are plenty of rentals out there. Reuters has an article on securitizing rental properties: a potential Colony Capital securitization of single-family rental properties. Colony Financial owns approximately 25% of the equity in Colony American Homes, which comprises approximately 33% of CLNY's equity. Many analysts view securitization as a positive catalyst as it provides a source of low-cost capital and mechanism for investors to "get credit for" home price appreciation. For example, assuming a 6% unlevered cash flow yield, we believe returns on equity could exceed 15% (depending on execution, including the advance rate and cost of funds). This would be the second such securitization in the sector following Blackstone's Invitation Homes securitization in October, which was well-received. According to the article, JP Morgan and Credit Suisse may begin marketing approximately $500 million of securities today and into next week.

I know a lot of workers around the country are blocked from watching YouTube videos while at work. While the temptation is too great for some not to watch funny scared cat videos, the rest of us use the medium for its intended purpose: to keep abreast of CFPB field hearings and bureau educational videos. The CFPB's page currently has over seventy videos ranging from introductory compliance videos, to messages from Director Cordray. Next thing you know the Bureau will have its own twitter account. Here you go: CFPB YouTube Page.

Generally, 'open source' refers to a computer program in which the source code is available to the general public for use and/or modification from its original design. Contrary to programs you may purchase and run on your desktop, which are normally 'closed source', 'open source' software is at the opposite end of the spectrum. The source code is included with the compiled version and modification or customization is actually encouraged (Linux operating system is an example of open source). I bring this up due in large part because the CFPB has published open source code to allow lenders to integrate the web-based tool into lender applications or websites, in the hopes banks will build and customize web-based tools for consumer use. Ballard Spahr writes, "In the press release, the CFPB notes that the web-based tool can be used to find the 10 closest HUD-approved housing counselors to a consumer's location and print or save the results...Also, the press release states that lenders can use the tool to comply with housing counseling requirements under Dodd-Frank." As Ballard points out, it is unclear at the moment whether using this tool would bring about compliance, or "safe harbor", for lenders who utilize the source code to build the tool into their websites or applications. The CFPB on GitHub.

As a reminder, the CFPB announced it will begin the rulemaking process for changes to the reporting requirements under the Home Mortgage Disclosure Act (HMDA). The agency will assemble a Small Business Review Panel, seeking early feedback on ways to improve HMDA requirements; however, early-on, it is apparent that HMDA data will ultimately become a greater area of focus with regulators in the future. The announcement included possible changes to the following areas: making lenders report information that will help regulators gauge access to credit in the mortgage market (explaining rejected loan apps, whether the lender considered the loan to be a Qualified Mortgage,  borrower's DTI); requiring lenders to report additional information that can alert regulators to problems in the industry (length of the loan, total points and fees, length of any teaser or introductory interest rate, applicant or borrower's age and credit score); requiring financial institutions to report additional underwriting and pricing information; streamlining HMDA reporting to align with existing data collection methods already used by the mortgage industry to collect information on processing, underwriting, loan pricing, and secondary market sales. Official CFPB HMDA site.

Plenty of folks in the industry are waiting for the CFPB to level financial penalties on originators, since they, in simple terms, are viewed as being responsible for their company's compensation plans. As a reminder, back in December, the CFPB ordered GE CareCredit to refund $34.1M for deceptive health-care credit card enrollments. CareCredit offers personal lines of credit for health-care services, including dental, cosmetic, vision, and veterinary care. So who is the primary driver of this finance, you ask? Well, doctor and dentist offices, of course...Timeo Danaos et dona ferentes. Currently, the product is sold by more than 175k enrolled providers across the country, and there are approximately 4 million active cardholders. According to the CFPB, roughly 85 percent of CareCredit borrowers were placed in a deferred-interest financing plan. Under this "no interest if paid in full" plan, consumers make monthly payments while CareCredit assesses 26.99 percent annual interest on a consumer's balance throughout a promotional period, which can range from six to 24 months. If any portion of the balance has not been paid when the promotional period ends, the consumer becomes liable for all of the accrued interest. The bureau claims that such lending programs, have deceptive enrollment processes, inadequate disclosures, and poorly trained staffs. So the CFPB, keeping in-line with their belief that an educated consumer creates low market volatility (ok I just made that up, but it's not too far off) has posted "What's the deal with health care credit cards?" Four things you should know.

I am fortunate enough to do a little speaking at various conferences, and one is coming up in a couple weeks - time flies. The WMBA Wisconsin Mortgage Bankers Conference is April 2nd. There is quite a lineup of speakers at this conference, including Governor Scott Walker, the Midwest Regional management from the CFPB, and Bill Cosgrove, Chairman-elect of the MBA.  Many of the state associations are working more closely with the National MBA which is improving their representation on both national and state issues. (Speaking of Wisconsin, Inlanta Mortgage in Brookfield, Wisconsin, continues to expand its partner offices.  It seems the partnership platform is a solid alternative for entrepreneurial mortgage bankers/brokers to avoid duplication in operations/ compliance expenses and improve net income).

Strafford, a national provider of CLE/CPE webinars, will be conducting a program entitled Mortgage and Consumer Lending: Defending Disparate Impact Claims Amid Aggressive Regulatory Enforcement on April 17, 1PM EST. Phil Stein with Bilzin Sumberg in Miami will be a panelist, so should be worthwhile. Here is the program.

Plaza Home Mortgage's Successful Selling to the Realtor Market seminars are coming to Ohio, Missouri, Texas and Utah in March and April. During each comprehensive 3-hour seminar, discover how to get 5-10 quality Realtor relationships for 2014. Each course will cover 5 key areas to a successful sales strategy. 

Sliding over to the markets, it is becoming harder to argue that the jobs market is flailing. The number of Americans filing applications for unemployment benefits held last week near the lowest level in almost four months, a sign the labor market continues to strengthen. That was enough to push rates higher, and agency MBS prices were pressured most of the day. Analysts continued to ruminate, and act on, thoughts that Fed Chair Yellen saying rate hikes could start six months after the end of QE. That is quite a shift from today's environment in which the New York Federal Reserve Bank is buying $2.16 billion per day of agency MBS.

For numbers, agency MBS prices were worse than Wednesday by about .125; the yield on the U.S. 10-yr T-note ended Thursday at 2.77%. While the Malaysian airplane disappearance is setting records for a news story that has no news, not much happened overnight in the financial markets. In the early going we're unchanged from Thursday's closing levels.