The combination of marketing, brand placement, and design graphics is a real art: when it works, great, but when it doesn't, well...

Economists study long and hard to learn certain rules, like: "If you're going to give a number, don't give a date. If you're going to give a date, don't give a number. And if you do get it right, don't look surprised." Besides the handful of "I told you so" folks, in 2005 were large numbers of economists or analysts predicting the decline in property values we'd seen by 2009, four years in the future? I mention this because yesterday this headline caught my eye: "Home Prices Expected to Rise 22% Through 2017". Wow - and we're talking houses here, not tulip bulbs.

I have been asked to assist a large Orange County, CA lender in its search for a Director of Loan Delivery/Post Closing. The candidate must have Fannie, Freddie, Ginnie, and MBS delivery experience, experience with ULDD, be well versed in custodian bank oversight, with Encompass experience being a plus. The lender is currently doing $500 million per month, with a mix of 85% retail and 15% wholesale, and is licensed in 25 states. The ideal candidate should either be in O.C. or be prepared to be relocated to that area. Please send confidential resumes to me at rchrisman@robchrisman .com.


And headquartered up the coast, CMG Financial is currently recruiting nationally for retail Loan Officers and wholesale Account Executives, with both in-office and remote opportunities available. Established in 1993, CMG is a privately held, nationwide, multi-billion dollar lender currently licensed in 43 states, focused on continuing to expand its national footprint, and whose lending channels include wholesale, retail, correspondent, and Strategic Field Engagement. CMG is the developer of the only patented mortgage product on the market, and its competitive advantages include FNMA/FHLMC Direct Lender, HARP 2.0 Unlimited LTV Authority, top tier pricing and product mix, operational superiority, compliance and regulatory support as well as forward-thinking leadership. All interested individuals should send an e-mail to our Corporate Recruiter-Amy Gallow Agallow@cmgfi .com. Learn more about the company at

As companies continue to recruit and hire, others are taking a realistic look at production staff. From what I am seeing, one of the hardest decisions I am hearing now is in "cutting dead wood" on the production side and thus allowing top producers to flourish. Investment banks are usually pretty good at this, and in fact BlackRock announced layoffs yesterday for that very reason. In this environment where pipelines are 20-30% below Halloween levels, and experts expect the 2013 residential production pie to shrink by 10-20%, few lenders have the ability to take a tough approach with anyone who can possibly supply the parent with loans "to grease the machine." But realistically, if a full time producer averaged 1-2 loans per month in 2012, are they really going to pick up their game in 2013 and not be a drag on operations? After all, as Ops will tell you, it is usually the lower producing agents and branches that create the most work for internal staff, taking away resources from those in the top percentile. Think about it.

On Saturday the commentary had information about the cost of g-fee increases ("And the cost for every one of them to obtain a home loan has gone, and will continue to go, up...the Fannie gfee increase for all those LOs out there who think that 2-3 basis points is 2-3 basis points in price. It is not...this will translate to a 14 to 25 basis point ding in price (assuming a 6 to 8 multiple give today's buy down grid)."

I received this note from an industry vet out on the West Coast: "I think it's high time for the main stream media press to start to sit up and take notice about just how much the government is taking (taxing?) borrowers in the form of 'g-fees'.  This is a term that we in the industry know very well, but how many folks on Main Street truly understand that the 'g-fee' is the same as monthly fees paid to the government, via FNMA and FHLMC, straight from their mortgage?  The term has become political camouflage - Congress has hit on it as a way to silently tax borrowers, and many under-informed members of congress are even tempted to write legislation that uses g-fees to pay for non-related government programs, which in turn would have the intended consequence of silently taxing one group for the direct subsidization of another.  (Thank goodness for the MBA's relevant and valuable work here). And what about the Agencies, as they position themselves for eventual (we hope anyway) separation from government backing they are realizing that they need to become For Profit organizations, and when that happens G-Fees will be their main revenue. When will the LA Times, the Boston Herald, the San Francisco Chronicle, or even USA Today start to write about the fact that the government is benefiting by taking over a half a point in rate from most recent loans made to borrowers?  And at what point does the growing g-fee portion of the interest rate present an obstacle to financing the low and moderate income borrowers that Congress and the regulators are working so hard to support?  If a borrower can qualify at 3.75%, but due to the increase in g-fees, the only rate available is 4.25%, then how is that helping them buy a home?"

The note continued, "G-fees are supposed to be the risk premiums paid for the purpose of guarantying that the investors in an Agency mortgage backed security will continued to be paid if the servicer fails. That's it. Does it really cost more than .50% of a borrower's interest rate to insure that banks and mortgage companies large and small, who issue securities and service loans, will not fail?  (Especially in the case of regulated institutions that already have the FDIC behind them.....)"

With all the potential change going on with Freddie & Fannie, some states may be taking things into their own hands - or trying to. For example, in Texas, there's a 30 year mortgage industry veteran named Rick Baron who's attempting to persuade his state legislature to create its own Fannie Mae, but with a few key differences. He's pitching a standalone state-sponsored nonprofit mortgage securitization firm to buy and securitize Agency eligible loans from Texas mortgage lenders and sell them to MBS investors through the TBA and Specified Pool secondary markets. Since a nonprofit company that meets its mission is exempt from corporate taxes and isn't required to distribute profits to investors, it can bank its net operating revenues into an ever-growing Guaranty Reserve Fund to assure investors they will always be repaid. Texas is economically healthy and does over $35 billion in mortgages per year, so with just a one-third market share and as little as 1% profit margin; it can easily bank over $100 million per year.

Literature noted that, "Rick is convinced that what brought down Fannie and Freddie started in the late '90's when well-meaning politicians required them to lower their credit standards to broaden home ownership and investors pressured them to take on more risk for the sake of higher profits. A nonprofit securitization firm removes the incentive to take more risk for the sake of profits, and with proper legislation no one could ever require it to lower its standards or touch its reserve fund. A nonprofit is transparent, easier to regulate than a private company, and can pay its executives market wages and tie bonuses to reserve fund benchmarks. When the model is adopted by other states or regions, well capitalized nonprofits could be used to transition the industry away from the federal government and serve as a replacement for Fannie and Freddie. His goal is to preserve the traditional best practices of mortgage lending that worked quite well for the six decades before Fannie and Freddie lost their way."

And, "Since Agency eligible (fully documented ability and willingness to repay) loans will be exempt from QM and QRM rules (including risk retention) for at least the next 7 years, creating a securitization firm that deals only in prime quality loans and uses its net operating revenues to build reserves to protect investors will reduce and possibly eliminate taxpayer risk over time.  It will replace a government guarantee with a cash guarantee (and maybe even a little gold). Rick has spoken with several smaller MBS investors and they are very interested, but he's had trouble getting feedback from the institutional MBS investors because they 'won't speculate on hypotheticals'. If you're a large fund manager and think quality Texas MBS backed by an ever-growing reserve fund would be a viable investment, he would love to hear from you. He's scheduled to meet with his state representatives on March 20th, and his odds of success go up with big MBS investor support. Otherwise, Rick believes if Texas builds it, they will come." You can contact Rick at and you can see a short video explanation as well as more detailed written material on his blog at

Let's go to some training and events news:

The National Association of Processional Mortgage Women, in conjunction with HUD, will be hosting a webinar on the FHA's rehabilitation loan programs, energy efficient mortgages, and solar and weatherization programs today.  The program will discuss how these programs can be used with both purchases and refinances.  Register

And the same two groups once again will provide a training session on selling HUD REO properties, which will cover the roles of the asset and field service managers, who is eligible to purchase HUD REOs, types of home listings, electronic bidding, incentive programs, and common delays.  Registration info can be found here.

The FHA is providing a webinar on March 20th that will go over the most common questions it receives from appraisers, which range from new construction, property inspection requirements, and the FHA Appraiser Roster.  Register

Also taking place on the 20th is a webinar on the FHA Home Equity Conversion Mortgage program, which will be conducted by representatives from the Santa Ana Homeownership Center.  The program will cover the fundamentals of the program and will feature a Q&A session at the end.  Register

The FHA and HUD will be holding a webinar today on the FHA 203(k) Rehabilitation MI program that will go over the program features and underwriting strategies.  Loan officers, processors, brokers, and agents are all welcome.  Registration info can be found here.  A webinar on FHA 203(h) Home MI for Disaster Victims webinar will take place the same day and will cover eligibility requirements, maximum insurable mortgages, closing costs, prepaid expenses, minimum borrower cash investment, mortgage terms, MIP payment, and refinancing policies.  Register

The FHA will be offering on-site appraisal training in Denver, CO on March 27th.  The training is worth seven continuing education credits that will be accepted by the State of Colorado for appraisal licensing requirement purposes and will cover both standard protocol and recent updates.  Register

On the 28th, the FHA is holding a session on underwriting and insuring FAQs, also in Denver.  Maximum mortgage calculations refinance transactions, FHA REO, credit overlays, and income and asset scenarios all feature on the agenda.  Register.

The Colorado Mortgage Lender Association will be holding its 22nd Annual Rocky Mountain Mortgage Lenders Expo on April 4th, also in Denver.  Go here more information and registration links.

AllRegs has announced that it will be launching an online consumer training platform in conjunction with HUD intermediary HomeFree-USA that will provide resources on homebuyer education, homeowner education, and financial literacy.  Courses on offer include "Keys to Improving and Understanding your Credit," "Essentials of the Real Estate Process," and "Preventing Foreclosure: Exploring Your Options," amongst others.  More details

Okay, so rates improved yesterday, given the possibility that a country (Cyprus) can literally tax bank accounts and take money out. Just because the markets have seemingly forgotten about European problems doesn't mean they've magically gone away. Of course, Cyprus is known to be an offshore banking mecca for Russia, the country is caught between a rock and a hard place, and the parallels between it and a country like the United States are small. Nonetheless, we saw a flight to quality, and lower mortgage coupons benefitted from the rally and light supply. (Thomson Reuters reported that Tradeweb MBS volume was also minimal at 82 percent of the 30-day moving average.) Agency MBS prices improved nearly .250 in price and the 10-yr improved .375 and closed at a yield of 1.96%.

Today we've had Housing Starts and Building Permits, projected lower to 915k from 890k and increasing to 925k from a revised 904k, respectively. They actually came out at +917K (+.8%) and 946k (+4.6%), both very close to what was expected. In addition, the FOMC begins its two-day meeting at 1PM EST with the statement and press conference tomorrow afternoon - don't look for much to change. In the early going agency MBS haven't budged from Monday afternoon, and the yield on the 10-yr is nearly unchanged at 1.94%.

My Favorite Animal
Our teacher asked what my favorite animal was, and I said, "Fried chicken."
She said I wasn't funny, but she couldn't have been right, because everyone else laughed.
My parents told me to always tell the truth. I did. Fried chicken is my favorite animal.
I told my dad what happened, and he said my teacher was probably a member of PETA.
He said they love animals very much.
I do, too - especially chicken, pork and beef. Anyway, my teacher sent me to the principal's office. I told him what happened, and he laughed, too.
Then he told me not to do it again. The next day in class my teacher asked me what my favorite live animal was.
I told her it was chicken. She asked me why, so I told her it was because you could make them into fried chicken.
She sent me back to the principal's office. He laughed, and told me not to do it again. I don't understand.
My parents taught me to be honest, but my teacher doesn't like it when I am.
Today, my teacher asked me to tell her what famous person I admired most. I told her, "Colonel Sanders."
Guess where I am now...