A hockey coach once said, "Last year we couldn't win at home and we were losing on the road. My failure as a coach was that I couldn't think of anyplace else to play."

Before the financial crisis, the banking industry was too concentrated and clubby. Now, many argue that it is even more so, especially since not only are many banks going out of business, but Chase, Citi, BofA, and Wells are actually becoming larger. And it is not as if the big banks are trying to boost their customer service with lower fees and paying higher rates on checking accounts! Where else are people going to bank?

So why aren't significant numbers of customers and clients moving on to other banks? For you and me, "switching costs" are a real hassle. Shutting down a bank account, with its credit card or utility bill-paying links, transferring the account, and setting up all the links isn't anyone's idea of a good time. The same goes for refinancing - it is often easier for a borrower to do it with the same company that already holds your loan. And no matter how much one gripes about their bank, more often than not a big-name bank's name is reassuring. Most developed nations have a more concentrated banking system than ours. But too much concentration of the financial industry increases risk, since a handful of dominant players are more likely to make the same kind of mistakes. But unless consumers rise up to move their money to credit unions or smaller banks, the market isn't going to deal with the problem - and that means Washington might have to.

On the lending side, banks are continuing to adjust their personnel, reducing staff in some areas but hiring in others. For example, Flagstar Bank, the nation's 12th ranked lender by volume, is expanding its Home Lending Business Channel. "Flagstar enjoys national recognition as a top originator in the Broker/Correspondent Community and aspires to achieve similar success with Home Lending. Flagstar remains committed to its lending partners across the nation, and can lend in all 50 states." I am not an LO, but the suite of products & technology it gives its reps seems pretty impressive, including Agency/FHA/VA/Portfolio & Rural Product(s), EOrginate/EProcess/EUW/EDocs/EClose, Personal Loan Officer Websites, Co-Branded Servicing Statements, Database Campaign Management Tools and more. If you're interested, or know anyone who is, e-mail homelendingsupport@flagstar.com or visit https://careers.flagstar.com/.

Yesterday the commentary mentioned the Quicken Loan comp issues possibly being heard by the Supreme Court. Quicken Loans said in a statement, "Quicken Loans has never charged unearned fees and never will.  We won this case on summary judgment at the trial court level on undisputed evidence that the fees that Quicken Loans collected were, in fact, earned.  The ruling in favor of Quicken Loans was also upheld on appeal by the U.S. Court of Appeals for the Fifth Circuit.  It is unfortunate that once again our legal system is being used to extort money from job producing companies by plaintiff attorneys who attempt to manipulate and distort reason, logic and the law with the hope that companies will capitulate and settle rather than embark on a lengthy and expensive defense of right versus wrong.  Quicken Loans will never give in to these unscrupulous operators who only exist because companies and courts allow them to continue their immoral gamesmanship. Quicken Loans has and always will conduct itself in accordance with state and federal law."

Out in California, Impac Mortgage Holdings reported a 1st quarter loss of nearly $1 million versus income of almost $6 million a year ago. The company is dealing with the same issues as everyone else: liquidity risks, falling home prices, regulatory uncertainty, and litigation risks related to the securitization of mortgage loans. "The ongoing economic stress or further deterioration of general economic conditions could prolong or increase borrower defaults leading to deteriorating performance of our long-term mortgage portfolio." Impac said its investment in securitized non-conforming loans continues to be adversely affected by housing market conditions, leading to more defaults and higher loss severities.

NAR released some interesting Realtor profile information. Their median income (half above, half below) declined 4.5% to $34,100 last year, which followed a 3 percent decline in 2009. Members licensed as brokers earned a median of $48,700 in 2010, while sales agents earned $24,900. Per NAR, 16% earned a six-figure income, 14% work less than 20 hours per week, 57% are women. The typical NAR member is 56 years old with only 3% of members being under the age of 30 (22% are 65 or older). NAR had less than 1.1 million members in 2010, a 21.3% decline from the peak in 2006. For all the stats visit NARPress.

Of course, LO comments on Realtors continue. "I've been in the business 20+ years and I work with realtors.  Reason #28 why Realtors don't play fair - 98% of them are desperate and 'this deal' is their only deal. As a result, they will do everything possible, including steering, to try and get 'this deal' closed as well as parlay 'this deal' into future deals.  Also, I'm seeing agents convince owners to short sale their home. The agent then arranges a buyer at a much discounted price. The agent will help that buyer flip the home for a $50k to $200k profit that the agent and the buyer then split.  I see it over and over again. (These agents call me looking for FHA or Fannie financing that they have every intention of paying off in 3 to 6 months. Of course I tell them 'it doesn't work like that, find another lender'.) People should remember that LO's are only paid on the portion of the transaction that is financed so more often than not our commissions are even less by comparison. If you care to use this scenario in a future email, feel free but do not use my name as I'll be hung out to dry with my agents."

"Everyone is upset their compensation has been capped and realtors still have 3-6% income possibilities and we have zero possibilities outside what we decide upfront with different lenders.  Welcome to our reality, there is no real stigma attached to realtors with regards to the housing meltdown, they weren't complicit at all, just us brokers, we still shoulder the major part of the blame burden for the mess, of course the lenders were completely not to blame, those 103% combined CLTV neg-am's from one lender or the 100% jumbo stated/stated at a 580 credit score from another with only .50 hit to the pricing had absolutely nothing to do with the whole scenario. Everybody wake up already!!!"

What kind of loans are folks obtaining when they refi? Freddie Mac reported that in the first quarter of 2011 fixed-rate loans accounted for more than 95% of refinance loans, regardless of whether the original loan was an ARM or a fixed-rate loan. An increasing share of refinancing borrowers chose to shorten their loan terms during the first quarter. Of borrowers who paid off a 30-year fixed-rate loan, 34 percent chose a 15- or 20-year loan, the highest such share since the first quarter of 2004. We had the MBA's weekly Mortgage Application Survey this morning. Apps jumped 8% last week, up for the third week in a row. Refinancing was up over 13%, although purchases dropped 3%. Both the overall index and the refinance index reached their highest levels since early December, with refi's accounting for almost 67% of total apps.

"Rob, do you really think that the Founding Fathers intended a nation of 300 million to be ruled by a Federal Government of about 536? Of course the debt problem in the US continues to be a great concern - now, if only they'd do something about it! We cannot sustain the current combination of low interest rates, low inflation, and the dollar's foreign exchange value versus other currencies given the existing patterns of federal government spending and expected future budget deficits. The failure to control spending will result in some combination of higher inflation, higher interest rates, a weaker dollar, weaker economic growth and, hence, a lower standard of living in the United States relative to the rest of the world going forward. This is what the debt ceiling debate is all about."

Regardless of debt worries, yesterday the fixed-income market did quite well. The yield on the 10-yr T-note broke down below 3.15%, making new lows for 2011, and mortgage pricing is going along for the ride. Their prices don't always move in opposite directions, but once equities slipped into negative territory Treasuries rebounded off the lows on very light activity.  The weaker-than-expected housing and Industrial Production data only increased the bid for Treasuries. By the end of the day the 10-yr was down to 3.12% and current coupon mortgage pricing was better by .125-.250 on average mortgage banker selling of MBS's.

With rates dropping investors sense a short run pickup in refi activity, but also believe that it will be weaker compared to 2010 based on equity issues, LLPA hurdles, and the usual underwriting issues. There's a sizeable amount of distressed property on the market, credit conditions remain very tight for borrowers, home values keep slipping, existing home owners are having a difficult time selling their homes, and the economy and jobs market aren't exactly confidence boosters at the moment. All of this puts a damper on lending, as well as homebuilders' sentiment.

Two men driving to a friend's house became lost, and they stopped to ask for directions.
(Yes, that's the joke today.)