Today the House Financial Services subcommittee is holding another hearing on GSE reform. Nothing is simple, but with Congress we really have an uphill battle. It would be good if more folks joined the Mortgage Action Alliance. It's free. Critics ask, despite the best efforts of our industry, how can we expect Congress to spring into action on reforming the GSEs with F&F earning billions, or tackle housing reform, when it can't even come to a consensus about legislation for bump fire stocks (aka bump stocks) for guns? Few issues seem straightforward any more.

The Millennial Whoop

When all is said and done, is the new generation (born 1982-2000) of potential home buyers much different than any other generation? When you were 20 years old, did you own a home? Despite being weary of being surveyed, a survey of millennials by Bank of the West finds 56% of those ages 28 to 34 own their home vs. 27% of those ages 21 to 27 (for a total of 43% overall). Meanwhile, 41% rent, 15% live with parents or family and 1% live with friends. Zillow data finds that Millennials have become the biggest demographic of homebuyers with 42% - of which close to 50% live in the suburbs.

Wells Fargo research finds 41% of millennials are not putting any money away for retirement. One reason mentioned is that they are earning around 20% less than boomers were at their age. The Census Bureau reports real median household income increased 3.2% from 2015 to 2016, rising to $59,039. This is the highest level since 1999.

Focusing on housing, access to credit is only one of the issues out there. How about inventory? Affordability? If the FHA was fully functioning, fine, but are there homes for first-time home buyers to purchase? Lenders know that broader thinking is needed.

Almost a majority of millennials shop for new homes because "they're tired of their current digs", says Realtor.com.

Ellie Mae released data from its Millennial Tracker analyzing Millennial mortgage applications from September. The report found that Millennials are taking advantage of attractive interest rates to refinance, with share of refinances by Millennial borrowers reaching the highest percentage since February.

Back in April an analysis by Fannie Mae showed that the rate of departure of younger U.S. citizens from the family home was accelerating. But this is certainly regional. In San Francisco, for example, people in their 20s and early 30s are likely to be employed but not homeowners since the average sales price of a place is $1.25 million.

As starter home demand soars, some builders are creating new products to meet first-time buyer needs. According to a Pew Research Center analysis, 19% of the U.S. population fell into "multi-generational households" categorization in 2014 versus 12% in 1980. To quantify this impact on household formation, from 1990-2000 some estimate that approximately 270,000 fewer households were formed than if the share of 50-plus year-old living with their child held constant. Similarly, from 2000-10, the headwind was an estimated 200,000 households.

Millennials are making news on a daily basis at this point.  Whether it's office space that millennials prefer or how seniors are "more millennial" than millennials, the trend to include generational analysis in an article is borderline out of control. The Wall Street Journal identified a trend quickly blaming millennials for it (shocker) and then went on to describe how it might actually be a good thing. The trend? A shortage in the housing market. The reason? Millennials have "preferences" for wanting to "live closer to transit, restaurants, and their workplaces." For instance, "the share of young, educated people living in the urban core of Washington D.C., for example, increased 8.6% between 2000 and 2014.

Jeremy Potter writes, "In keeping with the "millennials are changing everything" theme. Inc. magazine found that millennial women are dominating the work place. Women are landing higher paying and more visible jobs than their millennial men counterparts. While largely a good thing overall, the author could not resist predicting the downside. Here, the downside appears to be income and employment trends that show men are taking lower income positions and/or not pursuing education or higher paying career paths. Instead of highlighting the competitive benefits here, the author looks to the 'politically important cohort' that now has 'distinct economic disadvantage' and rightly observes, this will have the result of delaying 'the American Dream,' including home ownership. I believe change is good and pressure breeds the smart and the strong rising to the top, so I'm not worried. Though, there's no denying it will have an impact on socio-economic trends including home ownership."

Capital Markets

The actual announcement is at 3PM ET, noon PT, regarding the nominee to lead the Federal Reserve. Small banks likely will gain some reprieve from regulation IF President Donald Trump names front-runner Federal Reserve Governor Jerome "Jay" Powell to replace Janet Yellen as head of the central bank. Powell would be the first former investment banker to lead the Fed, and the wealthiest; economists have held the post for more than 40 years.

Generally speaking rates improved slightly Wednesday although there were some minor movements between coupons, securities, and maturities. Why? Supply and demand: we may see a larger issuance of 2-, 3-, and 5-yr notes. The Treasury left auction sizes (until February) for next week's 3-, 10- and 30-year auctions unchanged. And although it came in largely as expected, the Federal Open Market Committee Statement led to a slight improvement in 30-year bond prices. But agency MBS prices more closely track the 5, 7, or 10-year Treasuries, and the 10-year closed unchanged at 2.38%.

In terms of actual news yesterday, it pointed to a continued solid U.S. economy. The ISM Manufacturing Index showed that manufacturing conditions remain solid, but total construction spending remains modest and an inhibitor of stronger real GDP growth.

This morning we've had the latest Bank of England decision. (Expected to hike rates for the first time in 10 years, it did.) We've had the usual pre-employment data Friday Challenger Job Cuts (only 29,831 layoffs in October), weekly initial jobless claims (-5k to 229k), and Q3 Preliminary Productivity (+3%, strong). We start the day, waiting for Trump's nominee for the Fed Chair seat, with rates from Wednesday's close: the 10-year is yielding 2.36% and agency MBS prices are better a smidge.

Opportunities, Products, and Promotions

"loanDepot is always looking for ways to improve on process, technology and customer experience, so it's no surprise management just launched an enhancement to its Digital Mortgage Application allowing for Day 1 Certainty. "D1C", for short, is a validation service that provides eligible borrowers the freedom from having to provide supporting income and asset documentation during the loan approval process. It also provides lenders, like loanDepot, the ability to bypass calculating income in some cases. Borrowers go through the process of instantly retrieving their income and/or assets through an easy-to-complete online application. That information is passed to the lender as 'verified' and the loan officer is then able to review the application while the system evaluates if the borrower is eligible for D1C. With mello, loanDepot's proprietary technology platform, D1C is integrated at application rather than later downstream giving their LOs a competitive edge over other lenders with this service. Contact Shane Stanton for a walk through of this game-changing technology."

"Floify, the mortgage automation solution for top-producing mortgage professionals, has just made the life of an LO a lot easier. After Floify's recent partnership and integration with Hippo Insurance, LOs now have the power to conveniently initiate a homeowner's insurance quote directly from within a Floify loan flow. Once initiated, borrowers can review competitive options from several carriers, then customize and purchase their policy via their desired insurance provider. Once purchased, the borrower's EOI can be uploaded to their Floify loan flow. This is just one more way Floify is continuing to improve mortgage automation for LOs like you! With Floify, LOs have reported being able to reduce workload by up to 5 hours/loan and dramatically improve the lender-borrower experience. To see how Floify can help you streamline your mortgage workflow, request a live demo. Already know how well Floify will work for you? Get started with a free trial, plus 25% OFF your first 4 months."

Built by Originators for Originators, PRMG Retail continues to expand its footprint nationwide by opening 7 new branch locations during the month of October! "Along with the drive and ambition to bring the American Dream of Homeownership to all cities across the country, PRMG has now opened its doors in Campbell, CA, Irvine, CA, Bloomingdale, IL, Severna Park, MD; St. Charles, MO, Montclair, NJ, and Tallmadge, OH. PRMG is devoted to growing its retail platform and is always looking for Motivated Loan Originators to support the mission to being 'Progressively Better in All that They Do.' Voted TOP 5 of the 50 Best Companies to Work for in America, No. 1 Best in the Desert 2017, NMP Visionary Organization 2017, CAMP Corporate Affiliate of the Year 2017 and TOP 25 of 100 Mortgage Companies in America! PRMG employs nearly 1,600 people!  If you're ready to join a top-tier team and company, then it's time to talk!"

HomeBridge Wholesale, already one of the country's leading renovation lenders, has hired industry veteran Elias Mascobi in the role of Senior Renovation/Manufactured Housing Sales Manager to further grow its presence in the renovation market and expand its newly launched manufactured housing programs. "Mascobi, with more than 25 years of lending industry experience, is uniquely qualified for his new position having previously managed a team that specialized exclusively in renovation products and manufactured housing. His extensive knowledge of these products, along with his strong leadership skills, will enhance HomeBridge's already strong market presence. HomeBridge Wholesale is currently looking to hire experienced managers in key markets throughout the country, and account executives nationwide. Industry professionals who want to be part of a thriving organization can learn more by emailing jobs@homebridge.com."

Application Programming Interfaces (API) have existed for decades, but their relevance has peaked recently due to the emergence of the 'digital lending' paradigm. It is critical that business users fully comprehend their full potential. So, don't miss this informative webinar, "The API Economy," co-presented by LendingQB and The Mortgage Collaborative, to learn what APIs do, how they work, and how to maximize their application. Wednesday, Nov. 8 at 2 p.m. EDT. It's 1 hour long and limited to 75 participants, so register today!

The Mortgage Bankers Association announced the appointment of Laura Hopkins as Director of Strategic Member Relations, joining the Association's Member Engagement Team (M-Team), where she will report to Tricia Migliazzo, VP of Member Engagement. Ms. Hopkins will focus on maximizing the engagement of the Association's top member companies via providing comprehensive account management and support, connecting members to the MBA resources that support their needs, and engaging them on the policy issues they care about. Ms. Hopkins will also coordinate and facilitate integration with MBA's senior management team and staff.

Northpointe Bank welcomes Phil Durban as director of business development - Community Lending, responsible for developing new relationships, while supporting current clients, in Northpointe Bank's community lending business channel. Northpointe Community Lending provides private label mortgage solutions to community banks and credit unions across the country and provides compliance support, expanded products and delivery solutions, all while working with stakeholders to keep operating costs balanced.

Impac Mortgage Holdings, Inc. announced that William S. Ashmore has informed the Company of his intention not to seek renewal his employment agreement and to step down as President and as a member of the Company's Board of Directors effective December 31, 2017. Mr. Ashmore has been President at Impac since 1995 at the time of its initial public offering and a director since 1997. He has also served as Chief Operating Officer for over 10 years. Joe Tomkinson, CEO, said, "I want to thank Bill for his tremendous contributions to Impac for over 20 years..."