The U.S. Census Bureau tells us that in many of the largest cities of the most-populous metro areas, downtown is becoming a place not only to work but also to live. Between the 2000 and 2010 censuses, metro areas with 5 million or more people experienced double-digit population growth rates within their downtown areas (within a two-mile radius of their largest city's city hall), more than double the rate of these areas overall. Why not skip having that car?! Sweet home Chicago experienced the largest numeric gain in its downtown area, with a net increase of 48,000 residents over 10 years. New York, Philadelphia, San Francisco and Washington also posted large population increases close to city hall. On the other end of the scale, New Orleans and Baltimore experienced the greatest population declines in their downtown areas (35,000 and slightly more than 10,000, respectively).

We all know that companies shrink, and companies grow. Due to its rapid growth, AFR, Inc. is searching for Quality Control Underwriters, Lock Desk Specialist, retail processors, wholesale Acct mangers, Underwriters, processing trainees, and a secondary marketing assistant. AFR is a Ginnie issuer, Fannie/Freddie seller servicer based in Parsippany, NJ, and is currently funding over $300 million per month and is primed for another growth cycle specifically in correspondent lending. AFR is licensed in 48 states and offers the ability to work remotely for some positions.  Candidates should email Robert Pieklo (Robert@afrmortgage .com) with confidential resumes or questions. (One can also visit http://www.afrmortgage .com.)

On the other coast, American Capital Corporation is opening an underwriting office in Walnut Creek, California. "The lease has been signed and the target move in date is Nov 1st.  We are identifying candidates for underwriting and Jr. underwriting positions." ACC has been around since 1994 and is a well-capitalized privately held mortgage banker doing over $1 billion annually, offering a "full product mix." The company already does both retail and TPO originations (wholesale is the ACBN channel) in California, New Mexico, Colorado, Hawaii and Oregon, and will be soon expanding into Idaho, Tennessee, Utah, and Montana.  If you are qualified and interested, please confidentially email Jen Smith, Head Underwriter/VP, at jen@acbnonline .com. (For company information visit http://www.americancapmortgage .com/.)

And there is reason for lenders to grow and try to gain market share. Fannie Mae came out with its forecast for 2013 stating that U.S. growth as measured by the Gross Domestic Product (GDP) will remain below 2% for the remainder of this year.  (Remember that Fannie's and most others, 2% growth forecast for 2012 was too optimistic.) The GSE also said that the housing market is generally improving, but the hurdles surrounding tax and government policies will drag on the economy next year. This will help to keep rates low, although be careful what you wish for. With QE 3, rates have come down again, and we expect they will stay lower for longer than we had previously forecast.  Many expect a fairly substantial amount of refis to spill over into 2013, as any apps taken from here on out aren't likely to close before January. Everyone is still yammering that eventually rates will rise at some point during our lifetimes, with some suggesting the second half of 2013. When that happens, good luck to anyone who built their livelihood around refis. There is an unsubstantiated rumor that the MBA is adding substantially to its original 2012 volume estimate, as is everyone, and to its 2013 volume estimate. But look for a 20-25% drop from '12 to '13 with roughly a 55% refi share in '13, down from mid-70s% in '12. Just guessin'.

A good chunk of those loans will be guaranteed by the VA. In fact, loans guaranteed by the Department of Veterans Affairs surged by 50% in the fiscal year ended September 30. According to one report, the department guaranteed almost 540,000 loans in fiscal year 2012, the most since 1994. According to Mike Frueh, the director of loan guarantee service compared with five years ago VA volume is up some 300 percent. (Yes, that is a "3" with two zeroes after it.) About 338,000 of them were for the purpose of refinancing - thank you Fed! And for borrowers who were/are in the service and already have a VA-backed mortgage, they can obtain an interest-rate reduction "relatively easily" per the VA. "The department's streamlined refinance program doesn't require these borrowers to 're-prove' that they qualify - and no down payment helps on the buy side as does no paying for mortgage insurance. Even the loan amounts help - from $417,000 to $1.094 million, depending on the property's location. In the New York metropolitan area, the limit is $777,500. The department doesn't finance its loan programs, but makes them attractive to lenders by guaranteeing a portion of each loan. Individual lenders set the closing costs and the interest rates, which are currently comparable to those on conventional fixed-rate loans. The minimum credit score required to qualify for a V.A. loan is about 620. Check them out some time.

In this increasingly government-focused world, what Congress gives Congress can take away. As if we don't have enough other things to worry about, the Transaction Account Guarantee program (TAG) provides unlimited FDIC insurance to deposits in non-interest bearing transaction accounts until December 31, 2012. TAG is scheduled to expire at the end of this year and, following its expiration, FDIC deposit insurance will be limited to $250,000. Data from the FDIC indicate that the balance in noninterest bearing transaction accounts of more than $250,000 had sharply increased from $996 billion to $1.56 trillion in 2011. Unless the TAG program is extended these accounts lose the unlimited FDIC insurance at the end of this year and it appears likely that domestic banks could lose about $500 billion in deposits from noninterest bearing transaction accounts over the next two years. Perhaps more will go into rental properties - they have a decent yield!

Time for a little bank, investor, and lender news, although not necessarily from here in Chicago! As always, for full details read the bulletin, but these will give you a taste of things.

In Saturday's commentary I mentioned two bank closings on Friday, but missed one: GulfSouth Private Bank, Destin, Florida, was closed and SmartBank of Pigeon Forge, Tennessee, assumed all of the deposits.

Wells Fargo retail is heavily rumored to have increased the minimum credit score it accepts for FHA purchase loan applications through its retail channel as well as non-Wells Fargo refinances to 640.

On the warehouse side, Stonegate Mortgage, which bought NattyMac from Guggenheim Partners, is beginning to flex its muscle. Stonegate has been gearing up to offer its correspondents and others warehouse financing.  Stonegate's CEO/founder Jim Cutillo said that the company wanted to be involved in the front end of the loan financing process in order to ensure loans are "serviceable and saleable" from that point on. The company wants to be viewed by GSEs and investors "as someone who is improving the due diligence, credit and
collateral process," Cutillo said. The company has been expanding its third-party originations
and servicing portfolio this year thanks to a private equity transaction with Long Ridge Equity Partners, a New York-based private investment firm. Stonegate also has been considering acquisitions of retail home loan originators, as well as "organic" growth in that loan channel through hiring.

By now clients know that changes to Flagstar's policy on loan originator compensation took affect with locks dated October 9th and after.

As of October 1st, Mountain West Financial increased the annual Guarantee Fee for all new USDA loans from 0.3% to 0.4%, which applies to both purchase and refinance loans.  USDA loan applications with an annual fee of 0.3% that were not been obligated and issued a Conditional Commitment issued will be subject to the 0.4% g-fee increase.

On its 10/4 rate sheet GMAC has made pricing adjustments to several Jumbo ARMs and fixed-rate products.

Bay Equity has placed all new loan submissions that do not include an Anti-Steering Disclosure on hold.  New submissions that include incorrectly completed Anti-Steering Disclosures will have a "PTD-Originator" condition added, which requires a properly executed Disclosure to be submitted at least one day before the Note date.

M&T Bank is requiring all properties in Ferry and Okanogan counties in Washington whose appraisals were completed before July 20, 2012 to be re-inspected.  The re-appraisal should be completed by whoever completed the first one and must include exterior photographs and verification that the property's marketability has not been adversely affected. Effective for all registrations dated October 8th and after, M&T will no longer fund loans for properties with oil and gas leases.

In recent weeks, mortgage rates have been pushed and pulled mostly by Fed policy expectations and European Union headlines. With little news on these fronts, though, the US economic data emerged as the main driver of mortgage rates last week. Unfortunately for mortgage rates, the data was generally stronger than expected, and rates ended the week higher. Economic data have surprised positively in the US, and risk aversion has declined as policymakers have made further progress in Europe. However, we believe that significant challenges, such as banking sector deleveraging and fiscal policy constraints, continue to be a drag on the global economy.

Looking back, it isn't all pointed in one direction, and we have had a spate of noisy data, beginning with the large downward revision of Q2 real GDP growth to 1.3 percent. Then we had a major decline in September's unemployment rate to 7.8 percent. We also saw house starts and permits spike in September. UI claims have been all over the place. Orders for Durable Goods lived up to its reputation for being volatile, existing home sales for September gave back some of their strong August gains.

The national housing data released this week continued to reflect solid improvement. September Housing Starts jumped 15% from August to the highest level since July 2008. Building Permits showed similar strength. September Existing Home Sales were 11% higher than one year ago, making 15 straight months of increases on an annual basis. Inventories of unsold existing homes declined to the lowest level since March 2006. The October NAHB Home Builder Sentiment index rose slightly, its sixth consecutive monthly increase, to the highest level since June 2006.

This week's economic data exceeded expectations nearly across the board. Important broad indicators of economic growth, including Retail Sales and Industrial Production, showed solid increases from last month. The Philly Fed manufacturing index rose to the highest level since April. Perhaps the biggest surprise came from the housing data (see below). While stronger economic growth is great news for the economy, it tends to increase future inflationary expectations, which is bad news for mortgage rates.

Here in Chicago, chatter is focused on building capacity with all the cash that is out there, quality control, and compliance, QM, Basel III, and investor gossip. (And the Wells retail news above.) But that doesn't stop the economic news from being churned out. Fortunately for the participants, there isn't anything scheduled until Wednesday when we have some housing-related numbers (the MBA index, New Home Sales, and FHFA Housing Price Index). We also have an FOMC rate decision Wednesday afternoon (my bet is on "overnight rates unchanged"). Thursday is when my ne'er-do-well brother-in-law's number shows up (weekly Jobless Claims), and we'll also have Durable Goods and yet another housing number (Pending Home Sales). Friday is some Michigan Sentiment number, and a potentially important number for the election: GDP. We closed the 10-yr Friday at 1.77% - too early to know where it is this morning...

No, I don't think that this person is a mortgage banker, broker, title officer, salesman for a broker dealer, whatever. But never, ever overestimate the intelligence of people, given this short video: