There are plenty of ways to divvy up people (those who like soggy cereal, those that don't, those that can form their tongue into an "o", and those that can't, for example.) Another way is your net worth & attitude toward work. A Merrill Lynch report finds millionaires are twice as likely to keep working in retirement than the rest of the population and 33% of those with $1mm to $5mm in investible assets are currently working in retirement (vs. 15% of retirees with less than $250k). The top reason reportedly was a desire to stay mentally active, which came in much, much higher than working for the money. (What's wrong with doing Sudoku puzzles instead?) On the other side of the spectrum, according to CNN/Money 1 in 3 adults are now in collections. Few can argue that the gap between the haves and the have-nots is widening.

Switching over to FinCEN and SARS, Jonathan Foxx, the president and managing director of Lenders Compliance Group, writes, "On the SAR Stats, you might be interested in my article HERE, entitled "Bitcoins and SAR Narratives," published last week."

And Larry Schneider of Exchange Analytics, Inc. observes, "It is worthwhile to remind readers that this August marks the 2-year anniversary of FinCEN's requirement that non-bank residential mortgage brokers adopt an Anti-Money Laundering (AML) program (the requirement was effective August 13, 2012).  Among the minimum requirements is that every mortgage broker's AML program must be independently reviewed.  We thought it might be helpful to discuss some of the more frequently asked questions concerning the AML audit.

"How frequently must my firm conduct an independent test of its AML program? The answer lies in your company's assessment which takes into account the unique risks associated with its particular products and services, size, market, and other issues. And while each mortgage broker's AML program will necessarily be different than those with different product, geographic, and other risks, a "Best Practices" approach would indicate that the independent test be conducted no less than every eighteen months.

"What happens if my firm doesn't conduct have an independent test?  Who polices this? The Financial Crimes Enforcement Network (FinCEN) and Treasury Department has the authority to investigate mortgage brokers for compliance with this requirement. At this time there have been no formal actions taken against mortgage brokers, however keep in mind that this requirement is just two years old.  Companies in other regulated industries that have the same requirements for a longer period of time have had very significant penalties levied for failure to conduct this review.  For example, last month FinCEN levied a civil penalty of $45,000 against Mian Inc., a money service business, for failure to implement and maintain an effective written anti-money laundering program and for failure to conduct an independent test of its AML program.

"Can I do the audit myself? The short answer is that independent audits can be done internally by any officer or employee who is not the firm's designated AML Compliance Officer.  If there is no one on staff qualified or if yours is a one-person shop and you wear multiple hats, including that of the AML compliance officer, then you should seek the services of a qualified third party."

The left continues to push Mel Watt to do principal mods on loans held by Fannie Mae. Not sure it is going to happen, as it would undoubtedly trigger a wave of strategic defaults. Interesting that the couple mentioned in the article said they refinanced into a loan with "abusive" terms. A Fannie Mae loan was abusive? Or was this part of the American Dream Commitment, where Fannie partnered with the big subprime players like Countrywide, Irwin, Doral, etc. and agreed to buy their loans for their own balance sheet. Anyway, it looks like Mel Watt is giving the affordable housing advocates the Heisman and running out the clock on principal mods, much to the chagrin of the left.

Regardless, investors took note yesterday when the FHFA extended its comment and feedback period concerning g-fees. (Generally speaking, hikes will further thwart lending and originations of agency product and make jumbo rates even lower on a comparative basis. This might be fine as the Fed scales back its purchases.) The deadline for its "Request for Input" on the guarantee fees (g-fees) that Fannie Mae and Freddie Mac charge lenders is now Monday, September 8 (versus the old deadline of August 4). FHFA noted that it is extending the deadline for g-fee input to coincide with the deadline for FHFA's Request for Input on draft private mortgage insurer eligibility requirements (PMIERs), also due September 8. Analysts were quick to point out that this will be seen as a positive for the mortgage insurers since it means that the FHFA is taking a broader view on the impact of PMIERs on the mortgage market.

Fannie Mae announcement 2014-14 updates or clarifies policies on the following topics: ordering a property valuation for short sales, Mortgage Releases, and foreclosure sale bidding instructions; documenting military indulgence relief requests; submitting financial statements and reports; and calculating the monthly principal and interest payment for mortgage loan modification 2014-14. Servicing Notice Adjustment to Modification Interest Rate and Updates to Fannie Mae Forms alerts servicers to the July 14 update to the Fannie Mae Standard and Streamlined Modification interest rate as well as updates to several Fannie Mae forms Notice .

Freddie Mac and Fannie Mae (the GSEs) published additional documentation to support the mortgage industry with the implementation of the Uniform Closing Dataset (UCD). The new documents provide helpful information to supplement the MISMO mapping document UCD.

Additionally, Freddie's newest bulletin outlines servicing requirement changes that will help make doing business with Freddie easier: 2014-14.

Freddie Mac announced new selling system delivery data critical and warning edit messages to be implemented on July 21. The loan-to-value (LTV) comparison edits were not implemented and will be delayed until August 18 Delivery Data Messages.

On July 23, HUD issued Mortgagee Letter 2014-16, which requires FHA mortgagees to retain electronic copies of certain foreclosure-related documents and extends the record retention period to seven years after the life of an FHA-insured mortgage. HUD advises that, in addition to any requirements for retaining hard copies or original foreclosure-related documents, loss-mitigation review documents also must be retained in electronic format. Those documents include: (i) evidence of the servicer's foreclosure committee recommendation; (ii) the servicer's Referral Notice to a foreclosure attorney, if applicable; and (iii) a copy of the document evidencing the first legal action necessary to initiate foreclosure and all supporting documentation, if applicable. The letter adds that mortgagees also must retain in electronic format a copy of the mortgage, the mortgage note, or the deed of trust. If a note has been lost, mortgagees must retain both an electronic and hard copy of a Lost Note Affidavit. The letter is effective for all foreclosures occurring on or after October 1, 2014.

Let's take a look at some upcoming events that should help folks sharpen their mad skills.

Peoples Bank (located in Albuquerque) is holding a special presentation where the topic will be, "Residential Lending in the First Half of 2014 / Expectations for the Remainder of the Year" on August 5 from 9:00 AM -1:00 PM. I will be speaking at this event and then host a panel discussion on this topic with fellow panelists representing the Greater Albuquerque Association of Realtors, Albuquerque Economic Development and the Central New Mexico Homebuilders Association. For those in the New Mexico Market interested in attending please email Adam Consiglio.

The 41st Annual CMLA Convention is scheduled for August 6th -8th in Vail Colorado and includes guest speaker, retired Colorado Rockies baseball player Todd Helton on Friday. Registration ends July 31st: CMLA convention.

The Central Texas Association of Mortgage Professionals (CTAMP) is hosting Carolyn Jones the new commissioner for the Texas Department of Savings and Mortgage Lending (TDSML) at our luncheon on Tuesday August 19, 2014 at 11:30AM at the Great Hills Country Club in Austin Texas. Please sign up early as seating is limited. Go to for reservation and payment.

If you're in D.C. in early September, you may be interested in the CHLA 2nd Annual Fall Conference.

And don't forget the MBA Regulatory Compliance Conference 2014 in Washington D.C. September 28-30 which includes over 30 sessions.

Hey, just because Interest Only products are now in the realm of non-QM, and thus primarily bank balance sheets for new originations, doesn't mean older IO securities aren't trading out there in the market place. Their price activity and volume is proving to be quite interesting.

The Conference Board's Consumer Confidence Index for July sure turned some heads yesterday. Even if you're not more confident, whoever it surveyed sure is! The index went from an upwardly revised 86.4 (it was 85.2) to 90.9 and well above expected 85.4. This is the highest level for the index since October 2007. "Expectations" went up from 86.4 to a huge 92.7, highest since February 2011. The Conference Board suggests "the recent strengthening in growth is likely to continue into the second half of this year." Meanwhile, the S&P Case-Shiller Index didn't do much from one month to the next, but is still up 9.34% on an annual basis. Per this metric, prices are back to summer 2004 levels, led by rocking markets in San Francisco, Tampa, and Chicago.

For those quantitatively inclined, on Monday agency MBS prices improved about .250, and the 10-yr's yield by day-end was 2.46% - certainly near the low end of where it has been since MLK Day. Today is a new day, however, and as I head from Reno to Ontario we have a lot on the ol' plate. First up was the MBA application numbers for last week: -2.2% (refis -4%, purchase apps were +.2%). Next were the ADP private employment numbers. Expected +220k, they were +218k. And we also had the first look at the 2nd quarter GDP numbers, giving us a sense of whether or not the U.S. economy is expanding. It was expected higher from the -2.8% readout last time, and indeed it came in at +4.0% on an annual rate and the 1st quarter was revised to -2.1%.

Finally, the FOMC statement will be released at 11AM PST, and many expect another $10 billion tapering equally split among MBS and Treasuries. That would bring the monthly MBS agency purchases down to $10 billion, setting up for the final months ahead of an expected cessation in October. For market numbers, after the ADP and GDP numbers we are at 2.51% and agency MBS prices are worse about .250-.375.


On the jobs front, some companies continue to expand. Genworth Financial is seeking an Account Executive in Atlanta, Georgia. "Candidates should have exceptional customer interaction skills, as well as a proven track record of sales execution and leadership. The person hired will be expected to provide the highest level of internal and external customer service, manage customer relationships, and develop growth strategies for assigned accounts. In addition the successful candidate will develop calling plans to cover all assigned accounts, monitor branch volume and calling activity, take necessary actions to achieve account volume goals, and execute and lead implementation of Genworth products and initiatives. The ideal candidate will have 2+ years of experience in a regional or territorial sales role, have a college degree or equivalent of industry/sales experience, great presentation and communication skills, and have the ability to work flexible hours with occasional overnight travel. Candidates should contact Kristin Miller and for more information on the company visit Genworth.

And Ann Arbor's Gold Star Mortgage Financial Group "is one of the fastest growing companies and top 50 lenders in the nation, expanding its national footprint from coast-to-coast. 2014 has found Gold Star selectively adding the finest Loan Originators and  industry-leading branches, most recently developing markets in Wisconsin, Florida, Texas, Indiana, Utah, Colorado, Oregon and Ohio. Founded in 2000, and now operating in 23 states, Gold Star supports its growth strategy with a superior operations and underwriting infrastructure, a commitment to relationship-based service and cutting-edge technology. Gold Star has been recognized as an Inc. 500/5000 company, and most recently by Mortgage Technology Magazine as one of the nation's Top Tech-Savvy Lenders." To find out more about Gold Star's career building opportunities and culture, contact Shawn Sirko.