[I am away from the computer on a daily basis, and my access to e-mail is sporadic and not timely. In my place are daily commentaries from a series of very knowledgeable mortgage industry people with different backgrounds, and they have been given very little direction about what to write about - the latest is below. Our views may or may not coincide, but I thank them for their time in volunteering and helping out.]

Today's contribution comes from:

Brian Benjamin
Two River Mortgage & Investment


To all those that have served or are serving on active duty: Thank you.

Independence Day:

"On July 2, 1776 the Second Continental Congress voted to approve a resolution of independence. After approving the vote for independence, attention was directed at writing the Declaration of Independence. The Declaration of Independence was to be a statement explaining this decision to seek independence from Great Britain. Thomas Jefferson was the principal author". As we should all know, The Declaration of Independence was approved and signed on July 4. Enjoy the holiday.

 "In a remarkable coincidence, both John Adams and Thomas Jefferson, the only signers of the Declaration of Independence later to serve as Presidents of the United States, died on the same day: July 4, 1826, which was the 50th anniversary of the Declaration."


The CFPB has just released its second proposals in a series of five. The CFPB wants industries input. Go to http://www.consumerfinance.gov/knowbeforeyouowe/ and VOTE. I would recommend you print out the 2 proposals prior to voting. They are in the process of merging the GFE and TIL. I have met with the CFPB Mortgage Markets team on a number of occasions and they are very earnest in their request for industry responses. They received over 13,000 to the first proposal.

If you want to continue to participate you may register on the CFPB home page www.cfpb.gov to receive their emails..

Political Advocacy:

As Steve Emory wrote last week, our industry needs to speak up and get the truth out. In the Spring of 2010, I got very frustrated and called the FRB's Mr. Mondor, Esq.. We had a very pleasant conversation about the FRB Rule and its integration. In his somewhat lengthy legalese, he gave me his version of what would transpire.

The next day I drove from NJ to DC and started banging on doors, so to speak. Our politicians in DC only know what they are told. Most of their information comes from media sources or lobbyists. Many ranking officials did not know about the FRB Rule on Originator Compensation as late as February 2011. It was simply amazing to me how disconnected our elected officials, both parties, are from the reality that the 'boots on the street' have to experience.

As we approach our Day of Independence, it's time for you to exercise your independence. Go visit your elected official. You don't have to drive to DC, go visit them in their local district Talk to them about your issues and concerns. Your elected officials are in district most of August. Call their DC office and ask for the Scheduler and make an appointment today.

Fannie Mae:

The following are two excerpts come from last week's Fannie Mae's Economics and Mortgage Market Analysis 

 "This month marks the two-year anniversary of the current economic expansion, which so far has been quite disappointing. The prospects for accelerating growth have grown dimmer recently with downward revisions of first-quarter activity and most economic data for the current quarter being downbeat. Markets have reacted quite negatively, but the question is whether the repeated onslaught of global shocks has generated an overreaction. We believe the doomsayers are wrong; nevertheless, growth is slowing appreciably and recession risks have risen."

"For 2011, we now expect economic growth to come in at 2.5 percent, a downgrade from 2.9 percent in the previous forecast and more than a full percentage point lower than our forecast at the start of this year"

Now I'm only an arm chair economist and mortgage market analyst, but after 25yr in the mortgage industry as a loan officer, broker and banker and the self employed owner of a small business for most of that period, I, as most of you, can recognize fluff. And this is fluff. And not the marshmallow fluff we loved as kids.

Let's look at this again. We are in a "two year economic expansion", which is "disappointing". I must have missed the economic expansion. I'm perplexed. Are we expanding or is it disappointing? After all the bad news of the past few years I would have thought an expansion would be easily visible. Fannie openly notes that they are having downward revisions. Just the most recent is a revision from 2.9% to 2.5%. This new target is after a 1% reduction. So, is the report really saying that Fannie Mae is now targeting a 28% lower economic growth rate?


This week Rep. Scott Garrett (R-N.J.) and Rep. Carolyn Maloney (D-N.Y.) had their United States Covered Bond Act pass out of the Committee.


I recently had a conversation with Ian Coate's (NAIHP Vice President) and appraiser advocate. Ian noted the following:

The business and profession of appraising is being phased out by external forces.  The systemic appraisal protections, that high quality appraisals provide to the mortgage process, has been severely damaged by recent changes to the appraisal guidelines and laws.  The Home Valuation Code of Conduct (HVCC), which was implemented in May 2009 and then codified into federal law in the Dodd-Frank Act, has been the single biggest destructive force to the appraisal profession in recent years.

With the average age of an appraiser at 57 years old, and the sharp decrease in appraiser trainees (caused by the downward pressure on appraisal fees), this country is facing the next mortgage related meltdown in 6-10 years due to a shortage of highly qualified appraisers.  To become licensed as a certified appraiser, one must possess an associate's degree or higher (soon to be a 4 year college degree), take 250 hours of approved appraiser education, and perform 2500 hours of trainee experience in no less than 2 years time.  With this large investment of time and resources paired with the relatively low income expectations in the appraisal field, there is little hope of attracting highly qualified candidates to enter the profession.  And despite financial institutions' desire to obtain property valuations more quickly and cheaply, the alternative valuation methods such as AVMs and BPOs are simply too unreliable and are dangerously inadequate when compared to traditional appraisals. 

The HVCC issue must be addressed immediately in order to correct a myriad of negative consequences which ail our mortgage system.

Editor's note:

It's an NMLS world, right? The biennial course provider renewal process gets underway beginning today and "we're starting to receive quite a few phone calls about the process.  A list of providers who are due in July and a few tips to prepare follow: - As noted previously, NMLS moved from a fixed biennial renewal period to monthly rolling renewals based upon the two-year anniversary month of the initial approval date.  This means the date listed on the Approved Provider List may be further out than the one listed on your initial approval letter.  Providers should use the date listed on the Approved Provider List which can be found here: http://mortgage.nationwidelicensingsystem.org/courseprovider/Documents/NMLS%20Approved%20Course%20Providers.pdf - Just like we do when you have a course up for renewal, you will be notified at least 30 days prior that your renewal period is approaching. - We will host a webinar on July 12th for providers who are due in July and August to go over the renewal process, the application forms, and to answer questions.  An invitation to attend the webinar will be sent to those providers are due in these two months. The updated July and August provider renewal list has been reposted.  See http://nmlseducation.wordpress.com/2011/06/21/439."