Under the title, "Too much time on one's hands", anyone involved in the residential construction/remodeling business might find this, uh, interesting.

Hiring in the "mortgage space" continues. Altisource's Origination Services Division is currently hiring DE Underwriters in Missouri, Texas and Ohio to support its growing Correspondent and Quality Control businesses.  Altisource is a "global provider of services focused on high value, knowledge-based functions principally related to real estate and mortgage portfolio management, asset evaluation and customer relationship management." Any interested parties should forward their résumé to amy.boblet@altisource.com.

I have been retained by an Orange County, California-based lender that is looking for a highly skilled director/manager that can develop and lead a national wholesale operations team to be "Best in Class" with strong customer centric focus. The lender, which has been in the news lately for its growth, has a very strong balance sheet including servicing portfolio, is a direct GNMA seller/issuer and has no legacy loan liabilities. The candidate should either live in Southern California, or be prepared to relocate. If you know someone who is interested, they should send their resume to me at rchrisman@robchrisman.com.

My Dad is fond of saying, "Hard work may pay off in the future. Laziness will pay off now." But many LO's who have built their livelihoods around FHA production are dreading what is coming up. Last week, President Obama released his budget for fiscal year 2013. As part of the overall budget, and as the commentary reminded folks of yesterday, HUD stated that it will be implementing a 10 basis point increase to annual premiums for single family loans, and a further 25bp increase for loans over $625,500. So even though the FHFA has already implemented this for Freddie & Fannie, it is only a matter of time until the change hits government production.

Based on comments made by HUD Secretary Shaun Donovan and the current state of the FHA fund, some believe that there is a fairly high likelihood that the FHA premium increase will be more than the 10 basis points mandated by the payroll bill from a few months ago - perhaps as high as 25 basis points. If FHA premiums increase by that much, prepayments will drop, as will new production, which investors like, but one would expect that LO's and borrowers will try to "front run" any increase in FHA premiums and push through production. Finally, it is worth highlighting that HUD and FHA will constantly be monitoring the performance of the insurance fund and if losses continue to exceed their base case expectations, we are likely to see further increases in FHA premiums, and potentially an increase in FHA putbacks.

Speaking of the agencies, occasionally I will ask the question, "Why have both Fannie Mae and Freddie Mac?" especially as they are on parallel paths. I'll even occasionally call the agencies "Frannie." Yesterday they were back in the news when the FHFA said that, with its conservatorship of F&F now in operation for more than three years "and no near-term resolution in sight," it was time to assess its goals and directions.  Few think anything will happen ahead of the November election, but Acting FHFA Director Edward J. DeMarco set out a Strategic Plan for Fannie Mae and Freddie Mac Conservatorships with three goals: build a new infrastructure for the secondary mortgage market, gradually contract the Enterprises' dominant presence in the marketplace while simplifying and shrinking their operations, and maintain foreclosure prevention activities and credit availability for new and refinanced mortgages.

It is important for us average folks to remember that the agencies are currently carrying out two basic roles: a guarantee role and a portfolio role. And the suggested plan from DeMarco, basically, peels off one of those roles. The MBS prices for each agency jumped a little on the news, but if you think about it, this is all a much longer term process and any Gold (Freddie) and Fannie MBS price movement will really be determined by simply supply/demand - just like always. If the two are combined into one Enterprise (Frannie), this equals potential selling of the portfolios, which in the very long run is a net negative for MBS's. There are still slight underwriting differences on the production side, and slight differences on the back side the way pools are guaranteed and handled, so combining the two will take some work if it happens at all. You can read the actual statement here .

There are numerous ways, too many to list, to make money from real estate and mortgage origination. But one way is to invest in the finished product - and folks sense that some MBS's are "cheap".

People need a place to live, right? And second, if you own a lot of places, why sell them one at a time when you could sell hundreds at a time? Freddie Mac has begun talks with institutional mortgage-bond investors interested in buying hundreds of distressed single-family residential properties across the US in order to convert them to rental units.

American Home Mortgage Servicing knows people need a place to live, and the nation's #13 servicer is changing its name to Homeward Residential. The name change reflects the firm's expansion into home lending and other real estate finance-related activities. In the past 12 months American Home/Homeward Residential has added loan closing services, REO management, special servicing, subservicing, risk management, a correspondent and warehouse lending division, and so on.

At the other end of the spectrum, commercial real-estate firm Grubb & Ellis Co. filed for Chapter 11 bankruptcy protection, requesting an expedited sale as it faces $30 million in debt that matures on March 1 and insufficient cash to make it through the first quarter. BGC Partners Inc. has agreed to acquire Grubb & Ellis with a $30 million credit bid, or the use of debt as currency, plus $4.8 million in bankruptcy financing. (BGC Partners just purchased Newmark Knight Frank late last year, another large commercial real-estate firm.) Based in Southern California, Grubb & Ellis blamed the loss of a major facilities account, a merger gone wrong and continued operating losses resulting from the economic crisis and slow recovery for its financial woes.

The publication "Mortgage Currentcy" sent out some recent statistics from the NMLS, specifically a comparison of licensee stats during the last six months of 2011.  In June 2011 there were 16,153 companies holding 30,945 licenses, and at the end of 2011 there were 17,155 companies holding 33,106 licenses. The number of branches also increased from June to December, going from 17,387 to 18,902, although the number of licenses those branches held dropped from about 267k to 226k. But, per NMLS and Mortgage Currentcy (edited by Karen Deis), the individual licenses shot up from 201k to 376k. And their research showed that the top 3 lending institutions hold 43% of all licenses, and there are nearly 3,000 MLOs licensed in 11-21 states.

Learning is a good thing, especially since few can keep up with current events. The next monthly conference call of the California Mortgage Bankers Association's Mortgage Quality and Compliance Committee (MQAC), which is free, is tomorrow at 11AM PST. "If you missed the recent NMLS Annual Conference, or if you have questions for CSBS, here is your chance to catch up on the latest!" It is a webinar, and contact Dustin Hobbs (dustin@cmba.com) for web information, or, to join the teleconference portion, dial 1-800-351-6802 and give the operator passcode 4378.

If learning about VA IRRRL's is more to your liking, there is another free webinar tomorrow at 9AM PST, 12PM EST, offered by REMN Wholesale. "In this webinar, you will learn about the opportunity in offering VA Interest Rate Reduction Refinance Loans (AKA VA Streamline): the simple process of offering our veterans savings each month, in many cases, only a drive by appraisal is required, and diversify with this new source of business." The link to register is here.

Yes, it is Wednesday already, there was no U.S. economic news yesterday, the Treasury's sale of $35 billion in 2-yr notes went just fine, and Tradeweb reported that mortgage banker MBS sales volume was a little light (has everyone who could refinance done so?). With Greece being a little less risky, the "risk off" trade showed up (more on that tomorrow) and our 10-yr T-note worsened nearly .375 in price and closed around 2.05%; rate-sheet MBS prices were worse by about .250.

The weekly mortgage application data (for week ending Feb. 17) from the Mortgage Bankers Association came out this morning. The MBA said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 4.5%, with purchase apps down about 3% and refi's down almost 5%. The refinance share of total mortgage activity dipped to 80.1% of applications - still the lion's share.

It is still too early to know exactly where the markets are heading, and things look pretty close to where they closed out Tuesday. Generally, Wednesday's session looks to be influenced again by Treasury supply ($35 billion of 5-yr notes) and Greece. We'll also have NAR's Existing Home Sales numbers at 7AM PST.

(Parental discretion advised, I guess.)
Students in an advanced Biology class were taking their mid-term test. The last question was, "Name seven advantages of Mother's Milk," worth 70 points or none at all.
One student, in particular, was hard put to think of seven advantages. He wrote:
1.) It is perfect formula for the child.
2.) It provides immunity against several diseases.
3.) It is always the right temperature.
4.) It is inexpensive.
5.) It bonds the child to mother, and vice versa.
6.) It is always available as needed.
And then, the student was stuck. Finally, in desperation, just before the bell rang indicating the end of the test, he wrote:
7.) It comes in 2 attractive reusable containers.
He got an A+

If you're interested, visit my twice-a-month blog at the STRATMOR Group web site located at www.stratmorgroup.com. The current blog discusses residential lending and mortgage programs around the world, part 2. If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what's going on out there from the other readers.