Tonight I head to Houston for a couple days, and the city certainly has its share of coffee houses. What if purchasing your next house near a Starbucks could be your best investment? According to an article published by the Huffington Post, since 1997 homes located near a Starbucks coffee shop have a much higher rate of appreciation than other homes (96% versus 65%). Do house hunters believe Starbucks signifies a neighborhood is urbanizing? Or a Starbucks translates into a safer neighborhood and more than half of home buyers want restaurants and cafes within a short distance of their home? Zillow opines that a neighborhood Starbucks isn't the result of home appreciation, it causes them and the closer you live to one, the better.

Richey May & Co is opening up the data collection phase of its Annual Salary Survey of Independent Mortgage Bankers that includes base and incentive compensation data.  The survey accumulates data for over 50 positions in nine different departments, and includes a comprehensive report that benchmarks participating companies against their peers.  If you would like to learn more about participating in the survey, please email Tyler House.

Legal eagles know that a federal judge has thrown out much of Prudential Financial Inc.'s lawsuit accusing Bank of America Corp of defrauding it before the financial crisis into buying more than $1.9 billion of residential mortgage-backed securities that later soured. But Bank of America lost its bid to overturn its fraud verdict in which a jury found BofA liable for the sale of toxic loans to Fannie Mae and Freddie Mac before the financial crisis, which compelled BofA to pay a $1.27 billion civil penalty. American Mortgage Law Group reports that, "While this will indeed strengthen correspondent lenders' positions in dealing with BofA's repurchase demands, BofA continues its unrelenting shake down of correspondent lenders in an effort to recuperate its losses stemming from the mortgage meltdown.  AMLG represents many of these lenders, and has seen BofA issue numerous Tolling Agreements to stop the clock on the applicable statute of limitations, which is four years in California for breach of contract claims.  BofA has also been pushing lenders to settle up, even if it means negotiating some very attractive global settlements. To AMLG's knowledge, BofA has yet to file suit on its alleged repurchase claims, but continues to issue numerous demand letters, almost to the point of harassment as some lenders have stated."

Plenty of folks are in Las Vegas at the Asset-Backed Security conference, including Eileen O'Grady. "Hi, Rob - Eileen O'Grady here, reporting on the ABS West Conference in Las Vegas. There was already a lot going on in the first day of the IMN/SFIG-sponsored ABS West Conference.  They seem to have been able to clean up after those messy mortgage bankers from last October.  Now they have to keep an eye on flocks of investors, attorneys, issuers, sponsors, primary and master servicers, NRSRO's (Rating Agencies), trustees, regulators, accountants, attorneys (...said that already, but there are a lot of them...) analytics firms and technology firms  (....phew....) who make up the structured finance industry for residential and commercial mortgages and consumer loans.  Some of the members of these flocks are known to leave PowerPoint decks strewn about, and to climb Cirque du Soleil ropes at intermission on a dare.  However, it's a conscientious group overall; the conference sessions were fully underway by 1:00 PM today, a Sunday. Here's the agenda.  Worth a review to see what is in store - or not - in the RMBS market in the short and mid-term, and to see who the leaders are.  Any mortgage banker who cares should pay close attention. Tomorrow, Barney Frank will talk, and then Tuesday Mary Matalin will balance the rhetoric.  Wish they were doing it at the same time, don't you?

"Chatter so far is AB II - AB II - AB II.  Panelists are pretty frank about the gap between what regulators and investors want for data going forward and what the counterparty agreements and technology allow everyone else to do.  It's a Grand Canyon wide gap right now.  All I see is opportunity for sharp players to bridge the gap with the right legal perspective, the right technology and, yes, a big checkbook.  May - or may not - render a wider counterparty spread; some of these solutions will be very pricey.  But right now, most folks are just trying to stem the flow of increasing demand for data from investors, regulators and other stakeholders.  I think I heard someone say that regulators want to know how many Starbucks soy lattes are purchased on borrowers' credit cards; something about how a build-up of genetically modified soy products tend to result in 5 day late payments among certain credit card holders.  Something like that....

"On day #2 I feel like I'm back in B School with very heady stuff here at ABS West, co-sponsored by the Information Management Network (IMN) and the Structured Finance Industry Group (SFIG). Comic relief was provided by none other than former Congressman Barney Frank, author of Dodd-Frank, and Congressman from 1981 to 2012. Wow - that's tenure.

"Mr. Frank is smart and market-supportive, but cognizant of the need for refs to be on the court when the bball game is played because street ball leaves too many players wounded and on the sidelines. Mr. Frank's stories about AIG rendered gasps among a pretty die-hard crowd when he reminded us that, when first asked how much of a bailout AIG would need, its CEO, Mr. Greenberg replied, 'We don't know.' Mr. Frank likened the subsequent suit by AIG against the US government, after receiving $170 billion in two bailouts of $85 billion each, to an arsonist suing the fire department for water damage.  Now that's funny.

"Mr. Frank, promoting his book, name withheld, (all he said was 'I have a book coming out') regaled the 10:15 AM audience with some 'war stories' from the depths of the crisis, and offered a Democrat's view of how the Democrats were/are pro-market, while the Bush Republicans declared 'hands off' of Fan/Fred as the GSE's were skiing the Black Diamond trails towards conservancy.  As my mom used to say, there are 3 sides to every story:  yours, his, and the truth. Today, we heard Barney's side.

"So much to talk about, but for today, let's just thank Andy Davidson for his visionary leadership in guiding the establishment of the SFIG, and in his firm's evaluation of Fan/Fred Credit Risk Transfers (CRTs) that enhance Fan and Fred's viability in the midst of their reform.  Check out Fannie's CAS CRT's and Freddie's STACR CRTs to view how the GSEs are mitigating shareholder (taxpayer) risk, as they undergo reform.

"Answer: 'One guy got elected to the Senate, one guy died and one guy was re-districted.' Question:  'How did Barney Frank become Chairman of the Financial Services Committee?' After Mr. Frank's presentation, the 6500 attendees (a record!) scurried about to sessions ranging from 'Assessing Liquidity in Consumer ABS:  The Syndicate Banker and Trader's Panel' to 'RMBS Regulation:  Has the Dust Finally Settled?' to 'Roulette, Blackjack or Poker:  Which Path to Retirement?' followed by too much food, too much drink and not enough sleep to face another content-rich day tomorrow." Thank you very much Eileen!!

Speaking of products, there are a couple developments in lending.

In addition to national expansion, on the product side my good friends at NRL Mortgage have more skin in the game by recently announcing the addition of their "JUMBO IS HERE" pricing program. "This program significantly increases our aggressiveness in the Jumbo market and further solidifies the commitment to our originators across the country in offering enhanced products and pricing to increase their business" says Ron Zach, President of NRL. (If you are in the market for a Jumbo loan, call 713-275-1300 for details and for branches that have originators focused on Jumbo business, email joinourteam@nrlmortgage.com  to schedule a confidential conversation.)

Impac Mortgage announced the availability of its Texas Cash-Out Refinance. Approval is required for originating and closing Texas Cash-out refinance transactions. This option is available with all Fannie, Freddie, and AltQM products. Cash out transactions must comply with all Texas Cash-Out Rules which can be viewed by following the Texas C/O link.

Titan Capital Solutions, a wholly-owned correspondent investment subsidiary of mortgage services provider Titan Lenders Corp., announced it has begun purchasing lenders' "scratch and dent" production - loans rejected by the GSEs and private investors due to data, document and compliance errors with varying degrees of severity. Adding "scratch and dent" represents a significant product expansion for TCS, which previously purchased only jumbo loans from its approved sellers. "Historically, 'scratch and dent' referred to loans with egregious errors in underwriting or compliance," said Mary Kladde, CEO of TCS. Now we're seeing the GSEs issue repurchase demands on performing loans due to minor flaws in origination, such as bad comparable selections." Eligible performing problem loans include Conventional, Jumbo, non-QM and agency-ineligible loans.

Turning briefly to the markets, yes, rates have moved higher - not due to U.S. news but due to continued events overseas. Yes, we are a global community. We do have to sell $64 billion of Treasury debt this week in a regularly scheduled auction, but the bond market seems more interested in what happens during European trading hours, like being spooked by Greece's stand-off with the European Union and deadlier fighting in Ukraine. Or the lack of those things happening. The U.S. is looking at a different economy from the rest of the world. And U.S. homeowners aren't the only ones refinancing. How about that massive, unusually long-dated bond offering by Microsoft of $10.75 billion?

For numbers, the risk-free 10-yr T-note closed Monday at a yield of 1.98% and this morning we're sitting at 2.00% and agency MBS prices are worse a shade.

 

Jobs and Announcements

Freedom Mortgage is actively hiring experienced Mini C & Wholesale Account Executives in the Northeast including New England States and NY.  We are also looking for market share in the Mid-Atlantic states PA, NJ, MD, DE, WVA and VA.   Freedom Mortgage is a national FNMA, VA, FHA approved seller/servicer, and is ranked as the # 2 issuer of GNMA's and # 3 largest Wholesaler in the country in 2014.  We have a full service operation center in Newark Delaware.  To learn more about Freedom Mortgage in this region please contact John Turner, Northeast Regional Vice President. For inquiries and/or questions about other markets, please email Keith Bilodeau.

"Looking to expand your horizons in 2015?  Looking to be financially rewarded for your efforts?  Then look no further. A multi-billion dollar nationally-recognized mortgage lender is expanding its geographic footprint and is searching for very select, top-tier mortgage professionals capable of rapidly progressing into a multi-branch Regional Management role.  Our unique regionalized model and superior service offers unparalleled opportunity for growth. The ideal candidate is currently a mortgage broker or an existing retail branch manager, with monthly production of $3-5+M, and possesses strong recruiting skills. First year income for this position is projected to be in the mid-to-high 6-figures. As a direct seller to all agencies, we offer a comprehensive suite of products with virtually no overlays, nationwide licensing and regionalized fulfillment. Our system allows the branch / regional manager direct input into operating margins and MLO compensation, while a culture of dedicated corporate support and recruiting assistance allows the manager to focus strictly on sales and branch network growth.  Qualified candidates in search of benefiting from superior pricing, 100% branch credits and multi-branch overrides" are encouraged to submit a letter of interest and/or resume to me.

On the new product side, Roadrunner Solutions is an exciting free service to help LOs connect their pre-approved borrowers with local Real Estate professionals. "Roadrunner has a large network of Realtors that will respect the relationship between the LO and their borrower. Roadrunner will improve your closure rate and help deliver the high level of customer service required for the purchase money borrower. If you are a Call Center LO, run a Call Center Platform, originate loans outside of your local area, or just struggle to find quality Realtors, Roadrunner is a great service for you to try with no fees or any cost to the borrower.  Roadrunner has also added website design and support to their product offering. If you would like to find out more e-mail us."