The Wall Street Journal reports banks are beefing up cybersecurity defenses by taking actions that include banning employees from using USB drives, not allowing employees to use work emails for personal use, warning employees not to post out-of-office replies on email, to be careful what they post on social media, and not to click on links in questionable emails from unknown sources. And a survey by The Economist on cyber incident readiness by businesses finds the top things executives think would assist their company to be better prepared for a cyber incident are: better understanding the potential threats, raising awareness of existing preparations across the company, and testing existing preparations for an incident.

In response to lender feedback, Fannie Mae will implement expanded whole loan committing grids on Monday, February 1, 2016, providing greater transparency and enhanced certainty of execution for 15-year and 30-year commitments. This change will give our whole loan sellers the transparency of the specified market that has historically been available through an MBS execution. View the infographic to learn more.

Sun West has updated its Conventional high-balance product guidelines with the new LTV matrix to coincide with Fannie Mae's aligned Loan-to-Value (LTV) eligibility requirements for high-balance conventional mortgages with LTV eligibility requirements for standard conventional mortgages.

Stearns has expanded Fannie Mae guideline options as of December 12th. Visit Stearns website for details.

Peoples Bank is only offering Fannie Mae's HomeReady product for Purchase Transactions.  The new loan product became available effective 12/21/2015.

Citi Correspondent is providing Best Practices of the scope of additional information needed with an appraisal in order to make informed decisions regarding the eligibility, or ineligibility of un-permitted additions as guidance from both Fannie Mae and Freddie Mac is slightly vague and may not provide as much detail as needed for the complete review of un-permitted additions.

Fifth Third has updated its guidelines per Fannie Mae's expanded policy for age restricted properties which now permit all occupancy types for purchase or refinance transactions. Eligible Property Types (including eligible condo projects and PUDs) 1 or 2-Unit Primary Residence or Investment Property 1-Unit Second Homes. Occupant aged 55 and older may be a non-borrower or a tenant. Refer to Fifth Third's Correspondent Underwriting Guidelines for additional information.

Per Freddie Mac's retirement asset updates, Fifth Third Mortgage removed the limitation that no more than 70% of the retirement account's value may be used. 100% of the vested balance or percentage vested may be used as reserves and will no longer require evidence of liquidation for down payment or closing cost if the combined value is at least 20% more than the amount needed. Note:  Proof of liquidation remains a requirement if required to complete transaction and required excess percentage.

Investment properties were removed from Kinecta FCU's Super-Conforming ARM product.

Any news or studies on those Millennials that the entire industry is intrigued about? Sure there is! And by the way, interest in this age group is not confined to lending: retiring workers are increasing in nearly every occupation and industries are wondering how they're going to "lure" younger workers to fill their spaces. When was the last time you saw a 20-something welder or plumber?

How long will everyone take to realize that Millennials - per our Census Bureau those born between 1982 and 2000 - are in no hurry to marry, have kids, or save up enough money and then finance a house? It will happen eventually. Still it doesn't stop the fascination with their every move but the ones that I talk to aren't too excited about constantly being under the microscope.

"The millennial generation is moving out of the basement of their parents' homes," says Steve Rick, chief economist of CUNA Mutual Group, which sells insurance and investments to credit union members. Yes, and Fannie Mae Says Millennials Are Finally Leaving Their Parents' Basements.  Homeownership has been delayed but not forgotten.  According to the ACS (Census Bureau's American Community Survey), the number of homeowners aged 25-34 fell by more than 250,000 in each year between 2007 and 2012, but has declined by less than 100,000 annually since then," Fannie Mae said. "In fact, the decline between 2013 and 2014 was statistically insignificant, the first indication of stability in the number of young homeowners since the onset of the Great Recession." So while the number of homeowners in that age range is still on the decline, the trend looks poised for a reversal, and Fannie Mae said it won't take much to see positive growth in millennial homeownership in the near future.

The Census Bureau projects there are 75 million Millennials, 66 million Gen X, and 75 million Boomers in the US today. But that is changing. Nielsen projects the US population will be about 322mm next year with a median age of 38 years old (and a median household income of $55,551). By age, the population next year should be: 65Y+ (15%), 45-64Y (26%), 35-44Y (13%), 18-34Y (23%), <17Y (23%). In the next 10 years millennials will be 75% of the workforce. And according to the Census Bureau, the number of people age 65Ys+ will triple over the next 25 years and reach about 80 million.

94% of young renters eventually want to buy a home, according to the NAR. If wage inflation returns, 2016 could be the year that this pent-up demand for housing begins to be felt in the industry.

Research by UBS finds millennials will go to the following sources most frequently when seeking financial advice: spouse/partner (62%); parents (41%); friends (26%); other family members (15%); a financial advisor (14%).

A Deloitte survey of millennials (I wonder if they are growing weary of being asked questions) finds 73% believe businesses have a positive impact on wider society. Further, when asked what businesses should try to achieve, millennials flagged "job creation" and "profit generation" right alongside "improving society." The survey also found that when asked to identify the personality traits of true leaders, millennials most often cited: strategic thinking (39%), being inspirational (37%), having strong interpersonal skills (34%), vision (31%), passion and enthusiasm (30%) and being decisive (30%). That doesn't sound very different from other generations at the same age in business and is in line with how many in other generations still think.

On the good news front for community banks, the Deloitte survey also found that millennials in developed markets prefer to work for large well-known businesses (35%) almost as much as they want to work for medium-sized less well-known businesses (32%). Differentiating your bank in this area could draw in more millennials over time perhaps. Also of interesting note though, only 11% wanted to own their own start-up business and the same percentage wanted to work for a small start-up.

Consulting firm CEB found millennials are very competitive with 59% saying competition is what gets them up in the morning and 58% compare their performance against peers. Both of these percentages are 8 to 10 percentage points higher than the respective levels for boomers, so that too is a good sign of hunger and drive among millennials. Finally, we look at that social thing and a need for constant contact with others and kudos from bosses. Yes, this group is highly connected, but that doesn't mean they believe everything they read or see. In fact, the CEB survey found 37% of millennials don't trust peer input at work vs. 26% for other generations. Further, 41% of millennials say employees should do what their manager tells them vs. 30% of boomers.

Switching gears to legal matters, JPMorgan Chase will pay an additional $48 million to settle remaining issues stemming from missteps in its handling of mortgage servicing accounts.

And the Washington, D.C.-based watchdog organization Campaign for Accountability "has called on the Department of Justice to investigate three former members of the Obama administration for revolving door practices related to the future of Fannie Mae and Freddie Mac. In a Dec. 15 letter to the Justice Department, CFA Executive Director Anne Weismann asked for an investigation into the post-government activities of Mortgage Bankers Association President/CEO David Stevens, the former Assistant Secretary of Housing and Federal Housing Commissioner at HUD; Michael Berman, the former advisor to HUD Secretary Shaun Donovan; and Jim Parrott, the former adviser to Secretary Donovan."

There was nothing to move bonds, and thus rates, on Tuesday, or any really intriguing capital markets tales, so I won't waste your time. In fact we closed the bond markets pretty much where they were at the end of Monday. Today is a different story, however. We've already had the MBA's weekly mortgage applications figures. To no surprise to lock desks, the MBA reported that applications fell 27% even when adjusted for the holidays. Refis were down 37% during the last two weeks and purchases were down 15% (but are still higher than a year ago by 22%).

Coming up is the December ADP report, at 7:15AM CST, is expected to show job gains of 210k vs. 217k previously. The November trade deficit, at 7:30AM CST, is expected to improve slightly to $43.0bn vs. $43.9bn previously. The December Markit Services PMI (final) and ISM Non-manufacturing PMI, mid-morning, are expected to be mixed vs. prior reports at 53.9 and 56.0, respectively. November factory orders, at 10:00am, is expected to decline 0.4% vs. rising 1.5% in October. In the afternoon will be the minutes from December's FOMC meeting. And as mentioned above we saw 2.25% on the 10-year at the end of Tuesday, exactly where we were Monday afternoon. But in the very early going this morning we're down to 2.18% and agency MBS prices are better by .250-.375.

Jobs and Announcements

Can you believe that Envoy Mortgage Company doubled its headcount in 2015? "Our Correspondent Lending Division (CLD) played a huge role in that growth and has recently completed Envoy's team of Regional Account Managers with the addition of Wendy Lovett who will be responsible for developing the Southwest region. As Envoy CLD continues its growth throughout the country, new sales positions have been created: four AVP - Business Development positions have been created that will focus 100% of their efforts on developing new business partnerships in strategic areas (Carolina's and Central US to name a couple), and an East and West Division Manager will be hired to help manage this growth for their respective divisions. The theme for Envoy's recent internal sales summit meeting was 'No Growth, No Glory!' Envoy is definitely on pace to achieve that glory in 2016." Qualified candidates that are interested can forward their resume in confidence to Todd Potter, SVP & National Sales Manager.

Radian, one of the industry's largest private Mortgage Insurance companies, is growing its sales team and "has an excellent opportunity for a seasoned sales professional. The Regional Director, New Business Development is responsible for pursuing and closing key sales opportunities in the South West market. We are looking for a dynamic individual who has experience in Mortgage Insurance and/or Correspondent Lending Sales. If you are interested in joining the Radian team we would welcome the opportunity to speak with you. Please send your confidential inquiry/resume to Sarah Keene."