According to the 2010 US Census data and the Survey of Income and Participation Program, working from home is on the rise: back in 1999, 9.5 million reported working from home for at least one day per week, and that number has increased to 13.4 million, equal to about 9.5% of the American workforce.  Two of those 13.4 million started working from home between 2005 and 2010.  As for income, the survey found that those who worked entirely onsite had a median household income of $65,000, while those who worked entirely from their homes recorded a median household income of $74,000.  For those who worked at a mix of those two, median household income was substantially higher at $96,300 per year.  Geographically, the largest proportions of people working from home were found in metro areas in the west, southwest, and southeast, with the highest percentage in Boulder, CO (10.9%).  Considering the world-class powder available in the Boulder area, this is unsurprising.  Also unsurprising was the fact that Mondays and Fridays were the most popular days to work from home.

Anyone who's been in the biz for more than a few years remembers the Implode-o-meter. Have all the weak parties left the arena? Probably not, but mortgage-related business closings and failures are on track to post fewer incidences in 2012 than any year since the mortgage crisis began. In the third quarter of 2012, 17 mortgage-related businesses failed, down from 25 in the previous quarter and 31 in the same quarter last year, according to a report released by Mortgage Daily. Bank closings followed this trend, falling from 15 failings in the second quarter to 12 in the third. Both numbers are down from the third quarter of last year, when 26 banks failed. Bank failures have been on the decline for the past four consecutive quarters. Two nonbank mortgage-related entities closed in the third quarter. This is down from nine in the previous quarter but on par with the three posted a year ago. Meanwhile, credit unions continue to post few closings - three in the third quarter and one in the second. Year-to-date, 69 businesses have exited the mortgage sector, and Mortgage Daily predicts by year-end the total could be fewer than 90. Last year's total was 137. Mortgage-related business closings have not been this low since 2006, the year before the subprime crisis when just 31 closings took place. In 2007, 167 mortgage-related businesses shut their doors, most of them nonbank entities, and the sector has continued to see heightened volumes of closures each year since then. While numbers are currently low, Wells Fargo's exit from wholesale lending did make a splash last quarter.

While we're talking about companies within the industry, the home loan industry continues to ruminate on the Ocwen's purchase of Wilbur Ross's Homeward Residential Holdings. Ocwen is known as a servicer of non-A-paper loans, while Homeward Residential is a lender and servicer more focused on A-paper products. It is reported that Ocwen has long coveted the loan-origination business because of its higher profit margins, and buying Homeward will give it a steady supply of mortgages for it to service. Who wants to sit there and watch its portfolio run off every day? Ocwen owns servicing from Barclays PLC, Morgan Stanley, and Goldman Sachs, among others, and it has become the largest servicer of subprime mortgages, with assets of $5.4 billion as of the second quarter. Meanwhile, Homeward (ex-American Home) came together with purchases of Option One Mortgage and a large servicing portfolio from the Citi Residential Lending unit of Citigroup Inc., CMC, and Cunningham. Reports indicate that Homeward's mortgage originations are running at a $10 billion annual rate.

And remember that non-depositories like Nationstar and Ocwen are not subject to the same current, and very possible (with Basel III), rules that banks are. Many banks have lowered their SRP's and are selling servicing in anticipation of the new rules around capitalization and risk. There are new limits on the amount of mortgage-servicing rights a bank can hold, and they carry a higher risk profile than other types of assets that count against a bank's capitalization - not so with non-depositories. Bank of America, for example, has sold off much of its mortgage-servicing rights (MSR's): valued at $7.4 billion at the end of 2011, they were down to $5.7 billion at the end of the second quarter.

And no one is arguing that the home loans being originated now constitute some of the cleanest, best documented, and well appraised loans ever. Will the market continue to improve? Clear Capital, based in Truckee, California, says that, "Recent gains in housing are closely linked to rising consumer confidence." And consumer confidence is not helped by Congress's inability to push through tough legislation - which includes the looming "fiscal cliff." There is a fear that Congress will not act in time to avert the looming "fiscal cliff" that lies in wait at year-end, Clear Capital warns. There is $500 billion in expiring tax breaks and new government spending cuts scheduled to take effect at midnight on December 31, 2012, and the Congressional Budget Office warns it could send a shock through the financial system so deep that we might find ourselves in another recession. "Even if federal lawmakers do agree on a resolution to mitigate the impact of impending debt-trimming measures, Dr. Alex Villacorta, Clear Capital's director of research and analytics, says consumer confidence is still at risk if Congress fails to act quickly and allows economic uncertainty to escalate with each day the end-of-year deadline draws closer. This government-induced falling consumer sentiment will keep homebuyers on the sidelines, Villacorta warns, and 'throw a wrench into the recovery.'" Read the whole report.

Clear Capital is a force in "the appraisal space," and last week the commentary had a letter concerning AMC's. Here is a note I received in response from Jim Reno, a certified appraiser and president of PCA Appraisal Management. "I agree with a lot of what Mike Ousley at DVS has said about a lot of AMCs.  Mike is a friend and a colleague that I respect a lot.  He's a good guy. Readers need to keep in mind, however, that there are both good and bad AMCs, just like there are good Internet portals and there are others like AppraiserLoft.

The letter last week points out many flaws in most AMC work.  Many AMCs are not run well and few are run by certified appraisers with lending experience.  PCA Appraisal Management, Inc. ( is different because I'm an appraiser and prior to that I was a lender for seven years.  I was frustrated by the HVCC model so I started my own AMC to do what the others could not. First, accountability is paramount.  If the appraisal is flawed, we replace it at our cost.  Conditions or changes are handled within 24 hours. Our clients have direct communication with us day and night.  We're not a middle-man any more than a LO, AE, or Realtor.  We are a partner to our clients.  Our job is to insure timeliness and quality.  100% of our assignments are placed by hand. That means we don't just shotgun them out to the Net and wait for takers.  We know our appraisal team personally.  We know who on our rotation is best for the job, who is already busy, who is sick and who is on vacation.  EVERY order is placed within hours of reception.  There is no delay in assignment.  Our appraisers are paid fairly Net 30 (soon to be Net 15) and always have been. Our appraisers have ample time to inspect and write their reports. (In September, our turn time was 6.19 days, our condition percentage was just 14.3% and only 3% of our reports had value rebuttals.) While some lenders may prefer ordering on a portal, a website is still a website - you are simply posting messages on a site and then waiting for a reply.  Readers should remember that companies like PCA are different, and offer personalized service that lenders rely upon."

Switching gears, how about some upcoming training news?

Fannie has added another DU Version 9.0 webinar on October 9th in preparation for the new system's integration later in the month.  The session will give an overview of the updates to the credit risk assessment and eligibility requirements.  See this link to register.

Zillow, in conjunction with the University of Southern California Lusk Center for Real Estate, is hosting an event on the California housing market entitled "Navigating the Post-Bottom Landscape" on October 12th in San Francisco, CA.  The forum will feature a senior member of the FHA as the keynote speaker and two panels of industry professionals, who will discuss the best time to buy property in California and the future of Proposition 13.  Register here.

As of October 31st, Fannie will be requiring users to register for the Technology Manager application, and in preparation is offering several live webinars that will give an overview of the program.  Register

The Texas Mortgage Bankers Association will be holding its annual Educational Seminar and Marketplace, on November 12th and 13th in Sugar Land, TX.  This year's program, entitled "Mortgage Challenges of Olympic Proportions," will cover the potential impact of the November election, the state of the American economy, the future of the GSEs and the FHFA, and Dodd-Frank compliance. More information and registration here.

As a reminder, HUD launches HERMIT, its new online automated system, on October 9th.  For information on accessing the user manual and details of the enhancements, go here.

The FHA will be hosting an appraisal training event in Denver, CO on October 10th.  Updates to FHA appraisal policy, appraisal protocol, and property eligibility are all on the agenda.  The session is worth seven hours of continuing education acceptable for the State of Colorado appraisal licensing requirements.  Register

There will be a full day of "FHA FAQ and Updates" in Denver the following day (October 11th) for those interested in topical FHA issues.  The program will discuss credit and income scenarios, occupancy and refinance transactions, 203(k)'s, the Energy Efficient Mortgage program, and REO transactions.  Attendees will have the chance to have discussions with HUD staff as well.  Register

(The bond markets are closed today - Happy Columbus Day!)

Several days ago as I left a meeting at a hotel I desperately gave myself a personal "TSA pat down." I was looking for my keys.  They were not in my pockets.  A quick search in the meeting room revealed nothing.
Suddenly I realized I must have left them in the car.  Frantically, I headed for the parking lot. My wife has scolded me many times for leaving the keys in the ignition.  
My theory is the ignition is the best place not to lose them.
Her theory is that the car will be stolen. As I burst through the door, I came to a terrifying conclusion: her theory was right.  The parking lot was empty.
I immediately called the police.  I gave them my location, confessed that I had left my keys in the car, and that it had been stolen.
Then I made the most difficult call of all, "Honey," I stammered; I always call her "honey" in times like these. "I left my keys in the car, and it has been stolen."  
There was a period of silence.  I thought the call had been dropped, but then I heard her voice.  "Idiot", she barked, "I dropped you off!"
Now it was my time to be silent.  Embarrassed, I said, "Well, come and get me."
She retorted, "I will, as soon as I convince this policeman I have not stolen your car."
Yep, it's the golden years.