Brian S. asks, "Is there a credible source I could quote as to how mortgage originations YTD for 2014 compare to 2013?" That's an easy one. Marina Walsh, VP at the MBA responds, "Q1 of 2013 was $524 billion versus Q1 of 2014 at $226 billion. One could prorate the Q2 2013 and Q2 2014 estimates for one month and add to the first quarter figures for better YTD. Here is the link to our mortgage market forecast and historical quarterly originations, posted on our MBA website for future reference." Thank you Marina! By the way, if residential production is near that level for Q1, it will be the lowest quarter since 2000 - just think how staffing levels have had to increase to handle the same volume.

San Francisco's Bay Equity Home Loans is expanding into the Mountain Region and looking to build market share in Colorado and Utah. It recently hired Area Sales Manager, James Pulsipher and Regional Operations Manager, Jared Peterson to grow the Bay brand in this market, and the company just opened a Loan Fulfillment Center in Grand Junction, Colorado which will process, underwrite and close loans for the region. "We are excited about the addition of James and Jared and feel strongly that with their leadership and a local fulfillment center we are poised for growth in this region. They are seasoned professionals who have produced thousands of loans over the years in this market place", said Chief Production officer, Casey McGovern. Bay Equity is looking to build off this momentum after recently adding strong producers to the team in Grand Junction, Steamboat Springs, Salt Lake City and Montrose. "We are looking to build a team of the best originators in this region who set themselves apart from the competition by driving a customer friendly efficient loan process home to each of their clients", said Area Sales Manager James Pulsipher. If you are interested in learning more about Bay's team in the Mountain Region, please contact Casey McGovern at casey@bayeq. com.

And New American Funding continues its branch expansion across the country, with two opportunities in the Cerritos, California branch office. The open positions require a high level, seasoned Branch Manager and a Sales Manager with loan level training ability. AND, if joining the Cerritos Branch isn't enough to motivate you to join NAF, perhaps their rendition of Pharrell Williams' GET HAPPY VIDEO will inspire you to consider NAF as a potential employer. Enjoy. Send your confidential resume to recruiters@nafinc. com.

The depository bank landscape continues to change. NBT Bank ($7.6B, NY) has sold its 20% ownership interest in Springstone Financial to LendingClub for an undisclosed sum and entered into an agreement to participate in lending activities related to Springstone's financing operations. In Iowa Ames National Corp ($1.3B, a holding company for five banks) will acquire First Bank ($86mm) for about $4.7mm. KBW announced that First Financial Bancorp, the parent company of First Financial Bank, and Guernsey Bancorp announced the signing of a definitive merger agreement. Under the terms of the merger agreement, First Financial will acquire Guernsey for cash consideration of $13.5 million and the transfer of a single bank-owned property with a book value of $1.0 million to Guernsey's sole shareholder. Bryn Mawr Bank Corporation, parent of The Bryn Mawr Trust Company, announced that they have entered into a definitive agreement to acquire Continental Bank Holdings, Inc., in a transaction with an aggregate value of approximately $109 million. And U.S. Bank said it will close 13 branches in Illinois in June/July after its acquisition of Charter One closes. And next-door in Louisiana Guaranty Bank and Trust Co. ($135mm) will acquire Bank of Maringouin ($55mm) for an undisclosed cash sum. (I am sure that the rumor of borrowers growing tired about spelling Maringouin is unfounded.)

Yes, many banks, mortgage banks, and mortgage brokers are scrambling. Many companies rose up from originators who enjoy (enjoyed?) originating loans and helping borrowers, and who are now wondering if they really want to take the responsibility of lending. Life's short, right? Anyway, we can all expect to see news like this in 2014: "Freedom Mortgage Announces the Acquisition of BluFi Lending." In this case, kiss the name "BluFi Lending" goodbye as it will become part of Freedom Mortgage, and its five branches will be rebranded under the Freedom Mortgage name. Freedom's already licensed in all 50 states, but the purchase will "expand Freedom Mortgage's retail footprint in the Western U.S." San Diego's BluFi is about 5 years old and last year averaged about $35 million a month.

And very recently loanDepot LLC, the nation's seventh largest private, independent lender, announced the launch of its wholesale lending division, LDWholesale. "While market and regulatory conditions are pushing many lenders out of the wholesale market, we see a tremendous opportunity to serve brokers who are interested in a wholesale partner backed by the power of the loanDepot brand," said loanDepot President and COO, Dave Norris. "Our expansion into wholesale strengthens loanDepot's commitment to brokers across the country who are working hard to connect home buyers with financing that best fits their needs."

Real estate agents don't like sitting still either. Next week there is a Realtor conference to be held in Washington DC. "Lawmakers, federal officials, and real estate industry leaders will address more than 8,000 Realtors at next week's Realtor Party Convention & Trade Expo. They'll be covering topics such as the future of FHA, innovation in real estate and the need for patent reform, the implementation of new flood insurance laws, commercial and residential economic trends, and the impact of commuting on home prices...Realtors will also be visiting the CFPB and VA to discuss housing programs with staff from both agencies. For more info visit Onsite registration.

Remember when cash-out refis were the most popular thing since NINAs? Well, maybe not... but per the WSJ, even with the appreciation in many parts of the market, they aren't as popular as they once were.

As I mentioned yesterday, it's good now-and-then to step back and look to see how mortgage banking as a whole is performing, by looking at how publicly traded banks are performing. Most of the large mortgage originators have now reported 1Q14 results. To the surprise of no one mortgage banking earnings declined driven by lower mortgage volumes: total originations were down nearly 30% from the 4th quarter of 2013, and for "the big boys" applications were down almost 10%. Gain-on-sale margins were mixed but generally came in above expectations. Many expect that first quarter to be the low point and for volumes to trend up for the remainder of the year, reflecting seasonality. Mortgage servicing rights ("MSRs") were generally down as rates fell from the beginning of the quarter - not that anyone is going to refinance, but the market is cautious. And the value of servicing has gone up quite a bit in the last 6-9 months.

SunTrust Banks:  Overall, STI had a decent quarter. The company showed material progress towards its FY14 efficiency ratio target after several quarters of disappointing results. The incremental discipline shown with expenses, combined better than expected mortgage banking income and improved credit led to a core earnings result of $0.72/share, compared to analysts $0.68 estimate. In particular, the uptick in mortgage banking income was a positive sign given STI recently exited the wholesale channel and the more consistent servicing fees are becoming a larger portion of fee income. STI reported $43M of mortgage production income while mortgage servicing income came in at $54M. The beat in mortgage production was almost entirely related to a jump in the gain on sale margin to 1.38% from 0.79% last quarter. This was partially offset by a 21% decline in originations to $3.1B compared to $3.9B last quarter and our $3.5B estimate. Mortgage servicing income also came in better than expected, primarily due to a $9M benefit from hedging. Going forward, if STI can continue to remain disciplined with managing their expense base, analysts believe it is setup well to increase operating leverage and drive down the efficiency ratio, especially in an economic environment where rates are increasing in a measured fashion.

Zions Bancorp: It has been well reported that ZION was the only bank out of 30 tested by the Federal Reserve to fail its "stress test, "so I won't really go into that portion of the quarter. Since, ZION has significantly de-risked its balance sheet by selling close to $1B of trust preferred CDOs, which should put the company in a much better capital position. However, the Fed likely won't reply back to ZION's resubmission until early in the third quarter and the stock will have the overhang of a potential equity raise for the next three months. This process obviously is a big headache for the company and shareholders, but it doesn't have to be. Some analysts believe if ZION were to spin-off one of the larger bank subsidiaries, it could generate enough capital to fill the hole they currently have and would not have to publicly deal with CCAR next year.

BB&T Corp.: Overall, the first quarter was weaker than expected due to a big decline in fee income, driven primarily by lower mortgage banking and other income. This was reflected in the core pre-provision net revenue number of $861M compared to estimates of $882M, even though this quarter benefited from a $23M timing change in recognizing insurance revenue. BBT reported servicing revenue of $54M, compared to the $20M of origination revenue. This shift continues to depict the competitive nature of the correspondent lending market, which accounted for approximately 63% of BBT's total originations during the quarter. The mix of correspondent lending versus retail lending actually declined this quarter and may be a reflection of the competitive nature of that channel given the appetite for MSRs in a low rate environment. Total originations declined 29% to $3.8B from $5.3B in 4Q13 while loans sold declined 50% to $2.9B from $5.8B. Due to change in channel mix, BBT actually reported a gain on sale margin of 0.69% compared to 0.55% in 4Q13 (26% increase).

For me, today will consist of a drive from Austin, TX to Las Cruces, NM. (Anyone know any good restaurants in Las Cruces?) For the United States, it will mean another day of a shrinking U.S. budget deficit. Shrinkage is prompting the Treasury Department to rein in its auction size for two- and three-year notes. "Deficits keep coming down, and that makes the Treasury cut the coupon issuances," said Ira Jersey of Credit Suisse Group. "Better tax receipts are helping lower the deficit, so Treasury doesn't need to issue as many bonds." But that doesn't mean they are not trying to be resourceful in the product development group...

I would imagine working at the U.S. Treasury in product development, is nothing like working in product development at a mortgage bank. For one, mortgage bankers are always rolling out new product...or at least modifying existing programs to suit the demand of investors. The last time the Treasury rolled out a new marketable product, Bill Clinton was still in office, Elton John had the number one song on a remake of "Candle in the Wind," and the Florida Marlins won the World Series beating the Cleveland Indians (who never get any love) in seven games. All that changed on January 29th of this year, however, when Treasury auctioned its new "Floating Rate-Note" security. The new two-year FRN is a fixed-principal security with quarterly interest payments and interest rates indexed to the thirteen-week Treasury bill.

Keeping on with the thrill of the bond markets... there was no thrill yesterday, which is fine with Capital Markets groups. Originators continue to sell, and money managers, REITs, and the Federal Reserve continue to buy (with the Fed buying mostly 4% securities). I'll save you the trouble by saying there isn't much in the way of news today aside from some trade balance numbers and a 1PM EST Treasury 3-yr note auction of $29 billion. The yield on the 10-yr. T-note, which closed Friday at 2.59%, closed Monday at 2.61%. In the very early going we are nearly unchanged from Monday's price levels.

Correction on a listing from yesterday: PMAC advertised for a compliance manager, but had the incorrect link to the precise job. Here is the correct link.