What's the difference between apathy and ignorance? I don't know and I don't care. The odds are pretty good that practically every residential lender knows and cares about whether or not they made money in the 2nd quarter. (If you didn't, well, I know plenty of good companies trying to add production units...) But how much? It turns out that independent mortgage banks reported a net gain of $1,522 on each loan they originated in the second quarter of 2015, better than the 1st quarter. For new LOs that doesn't mean that your mortgage bank should improve their pricing on every loan by $1,500. Management needs that to pay for buy backs, handling complaints, legal fees, margin calls, increased capital requirements, more compliance personnel...

Who doesn't like interesting survey results? I'd wager that if I ran one about capital markets personnel that gambled regularly, the number would be less than 10%. Did you know that approximately 20% of the Spring STRATMOR Compensation Connection respondents did not pay a Base Salary to Loan Officers?  Would you like to have access to a wealth of other proprietary compensation information that is available to STRATMOR Compensation Connection participants? The survey has been re-opened for new participants. "57 of your peer lenders participated in the Spring survey. Don't miss your chance to understand market compensation for positions across your organization."

Speaking of rankings, who needs to wait for HMDA? Michael Ehrlich, data master with Thomson Reuters, sliced and diced data from the Bank Call report for Q2. "Out of the 6400+ depository banks, 885 originated mortgages for sale into the secondary market in Q2, up from 865 banks in Q1, though down from 912 Banks in Q2 of 2014. Banks originated $210 Billion in 1-4 family mortgages for sale into the secondary market in Q2, compared with $173 Billion in Q1. Banks also increased their volume of correspondent/wholesale originations from $80 Billion in Q1 to $96 Billion in Q2. This link lists the TOP 75 Bank TPO channels, ranked by volume."

But wait - there's more! "Banks continue to retain much of their ARM production. Banks that are not setup to originate mortgages themselves are increasingly sourcing ARM assets from non-bank originators and other banks. The analysis displays the quarter over quarter net change in the bank's arm portfolio, though it is ranked by a RATIO of the Quarterly ARM increase to the # of Mortgage Loan officers. This ratio helps to provide insight into which banks may be sourcing ARMS externally (via pool acquisitions or via a correspondent flow arrangement). Notice how the top 6 banks in this list have no MLOs! HELOCs have not seen much change when it comes to secondary market activity. The lack of an established secondary market for HELOCs and other 2nd Liens continues to prevent most non-banks from originating these products. However, there were a handful of banks that were able to find buyers for their HELOCs. TCF Bank continues to be the top seller of HELOCs into the secondary market. They do acquire HELOCs via a wholesale channel, and then apparently sell them off to someone. Their financials show that TCF is one of the few banks who are actively servicing HELOCs for others, so it's likely that a private capital investor/hedge fund is acquiring the asset. TCF sold $289 Million in HELOCs in Q2, more than all of the other combined.

State-level changes

Vermont has recently made revisions to consumer protection laws, as Senate Bill 73 modifies rules that include rent-to-own agreements, financial literacy and the Security Breach Notice Act. Regarding the Security Breach Notice Act, changes include that a data collector may provide notice of a security breach to a consumer by one or more of the methods listed, as it previously stated notice may be given by only one of the methods listed. The Bill also gives definitions, limits and requirements for rent-to-own agreements, with a new definition for "merchandise" to exclude real property or a mobile home.  The bill also creates the Vermont Financial Literacy Commission to improve the financial abilities of Vermont residents, which will include an elven person commission.

The Texas Department of Insurance has amended provisions regarding basic manual for the writing of title insurance, creating an addendum to the Closing Disclosure form. These provisions are effective August 1st. Closing agents in Texas will now be required to use the state closing disclosure, called the Texas Disclosure, in an effort to help consumers understand the costs involved with the closing. The state disclosure gives clear and complete information regarding costs of title insurance at the closing. The Texas Disclosure requires real estate agent commissions to be listed and it adds a signature line authorizing the settlement agent to disburse the funds. The actual cost for title insurance is also included. The Texas Disclosure will not replace the Closing Disclosure but supplement it.

New York City securitized property loans were up 47% year-over-year to $11.54 billion in the first half of 2015, the highest total in the first half of any year since the 2008 global financial crisis. "I would definitely say that underwriting has gotten more aggressive in the last six months, whether or not it's gotten more lax is hard to say," said Gabriel Silverstein, head of Angelic Real Estate.

New Hampshire has enacted Bill 147 to reflect an increase in the homestead exemption amount for every person from $100,000 to $120,000, effective January 1, 2016. The homestead right also exists in manufactured housing which is owned and occupied as a dwelling.

A new State-Specific Education Notice has been posted for Oklahoma. Effective November 1st, 2015 the requirement to complete annual continuing education in a classroom setting at least every two years has been removed.

On July 15th, the NMLS placed a license item on every state MLO license not yet compliant with the continuing education requirements for 2015. The purpose of this is to remind individuals that they need to complete CE in order to renew their license for 2016. An MLO and the company account administrator should receive an email regarding the placement of the license item on every license they hold that is not yet in compliance. The license item does not impact a MLO's current license status and all MLO's can view their current year requirements by logging into NMLS and clicking "View Education Record."

The New York Times reports the Federal Reserve has declined an application by a credit union to open a master account for state-licensed marijuana businesses in Colorado. The conflict continues to be that while some states have legalized recreational marijuana, it remains illegal at the federal level.

Rhode Island amended the Fair Housing Practices Act to include military status discrimination as an unlawful housing practice. Military status as a veteran with an honorable discharge or an honorable or general administrative discharge, service member in the Armed Forces is now a protected group of individuals. Landlords and those who have the right to sell, rent, lease, or manage a housing accommodation cannot inquire about the military status of an individual nor can they discriminate against any applicant based on their military status.

Rhode Island has also amended consumer privacy regulations to protect any individual from loss of privacy cue to failures or limitations of corporate customer privacy measures. The Bill defines prohibited acts or practices when soliciting a consumer for a residential mortgage loan to include failing to state that the solicitor is not affiliated with the lender/broker, failing to state that the solicitation is based on personal information that was purchased from a consumer reporting agency and knowingly using information from a mortgage lead to solicit consumers on the do not call list.

Nevada has recently adopted provisions regarding foreclosure mediation. The new provisions will abolish the program on June 30th, 2017. A mortgagor or the person who holds title of record may initiate mediation to negotiate a loan modification under the mediation process on or before December 31st, 2016. If the mediator determines that the parties are unable to agree to a loan modification, the mediator may recommend that the matter be terminated.

The NMLS has posted the new National Test Content Outline in order to reflect the TILA-RESPA Integrated Disclosure Rule and the results of the job analysis study. The updated national test with uniform state content will be in effect on Saturday, October 3rd. NMLS will host a webinar with course providers to explain the changes within the next few weeks. For more information regarding the new exam, click here.

Housing and mortgage industry trade groups have come together to support S. 1711, a bill that would provide a temporary safe harbor, or hold-harmless period, from the enforcement of TRID through the end of the year. This bill is identical to H.R. 2213 in the House, which had already been supported by the industry. A letter  addressing the sponsors of the bill highlights that most companies will not have enough time to test their systems in accordance with TRID and that a grace period will allow stakeholders to make a good-faith effort to comply with TRID without the fear of any repercussions.

Up and down and all around - so go the bond markets. Few lenders, however, are moving their rate sheet prices tick for tick, and wisely so: that increases hedge costs, and what lender wants that? Yesterday we learned that Durable Goods Orders were strong at 2%, and June's number was revised upward. Although autos were a big part of things, many of the components were the highest they'd been in a year! But the stock markets once again grabbed everyone's attention and imagination, and the yield curve steepened quite sharply as the 30-year yield moved 33 basis points above its Monday low to 2.95%.

Yes, the inevitability of a September Fed move has ebbed, and in fact yesterday, with a nod toward the old Alan Greenspan-speak, NY Fed President William Dudley said, "From my perspective, at this moment, the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago." But things are still data driven!

For thrills and chills today we've had Initial Jobless Claims (-6k to 271k), the second estimate of the second quarter GDP and GDP Deflator (revised higher to 3.7% from 2.3%, Personal Consumption higher). Coming up is also July's Pending Home Sales and, if you have some loose change sitting around, a $29 billion 7-year note auction. Our friend the benchmark 10-yr T-note closed Wednesday at 2.17% and this morning, after the strong GDP number, we're at 2.19% with agency MBS prices are worse but currently less than .125.

Jobs and Announcements

Everyone likes lists, and changes are afoot in company rankings. The VA recently released its latest quarterly report of new VA guarantees issued. Basically this report correlates to VA production nationwide by lender as loan guarantees equal loans funded. During the 2nd calendar quarter of 2015 (VA's FY15 3rd quarter) the VA ranked 1,252 different lenders (from those guaranteeing 1 loan a quarter to those guaranteeing over 16,000 loans in one quarter). 360 Mortgage Group, LLC is excited to announce that its rank improved to being the 9th largest VA lender in Q2/2015 due in large part to its broker partners that accounted for 80% of its volume. 360 Mortgage also improved its 2nd quarter VA IRRRL production and is now ranked as the 5th largest VA IRRRL lender nationwide (behind Freedom Mortgage, Sun West Mortgage, Wells Fargo and Quicken Loans). The VA lending sector of the mortgage industry is one of the fastest growing loan types nationally and those originators and lenders which assist in servicing this country's veterans all deserve a giant pat on the back! Lenders and brokers looking to establish a relationship with a top 10 VA lender (and a top 5 IRRRL lender) may contact 360 Mortgage (866.418.2997).

(By the way, 360 Mortgage reminds us that those interested in learning more can sign up to receive updates from the US Department of Veterans Affairs.)