Baby Boomers like lists and rankings. Here is one that I ran across: the 50 highest paying professions not needing a college degree. There are a couple mortgage-related jobs on the list, arguably including #1 which is "Financial Service Sales Agents." That may be small comfort as loan officers spend the next several weeks making sure their locked loans fund, wondering about the market for rate and term refis, and deliberating over the work put into the unlocked loans on their desk.

We've been hearing about the 2016 election for years, and the news just keeps coming. Of course, we have the impact on interest rates, but from a longer term perspective lenders are hoping for the best in terms of doing away with unnecessary and punitive rules and punishments. And so mortgage lenders are hoping for relief from regulatory backlash. Mortgage bankers say it is possible that a new attorney general appointed by Donald Trump would scale back these lawsuits, lessening risk of regulatory retaliation and possibly paving the way for big banks to return to FHA lending.

And things look promising, unless you work at the CFPB. After promising during the campaign to "get rid of Dodd-Frank," President-elect Donald Trump has named Paul Atkins (a fellow critic of the post-financial crisis law) to lead the transition team's review of independent financial agencies. Trump's transition team on Thursday affirmed its opposition to Dodd-Frank, publishing a post online that reiterated the Republican candidate's calls to dismantle the financial reform law. "The Dodd-Frank economy does not work for working people. Bureaucratic red tape and Washington mandates are not the answer," the transition team said.

Beyond general calls to dismantle Dodd-Frank, Trump did not clearly articulate enforcement and policy positions for financial markets. But Atkins has given detailed-and oftentimes harsh-critiques of the financial reform law, taking swipes at everything from the heft of its rulemaking burden to the framework of the whistleblower program.

Testifying before the Senate banking committee in 2011, Atkins called the Dodd-Frank law a rushed "calamity" that would breed uncertainty without directly addressing the causes of the financial crisis. "It is my belief that a major cause of the uncertainty handcuffing our economy today is in fact government policy, particularly the sweeping new financial law enacted last year ostensibly for the sake of market stability and investor confidence," Atkins said. "Because many of the provisions were not directly related to the underpinnings of the financial crisis, investors ultimately will pay for the increased costs associated with the mandates without receiving commensurate benefits." Atkins added: "That is the single tragedy of Dodd-Frank."

And Forbes published an article about how after an appeals court ruling, President Trump could fire CFPB Director Richard Cordray

Keeping the current regulatory environment in perspective, and remember the source, NAHB Economics estimates that 14 million American households are priced out of the market for a new home by government regulations.

Although the election may bring changes in the regulation of housing finance, low down payment programs will continue to be important tactics to reverse the multi-year decline in homeownership. Saving for a down payment is still the greatest single barrier keeping first-time buyers from becoming homeowners. Median down payments for first-time buyers fell to only 4 percent in 2016, down from six percent in 2015 and as the summer season ended, first-time buyers matched their highest share of buyers since July 2012.

Speaking of low down payments, the traditional program for that is FHA. The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), sells insurance to protect lenders against loan defaults. The program is popular among first-time home buyers, in part because it allows mortgages with down payments as low as 3.5 percent and credit scores of 580. Yesterday HUD released the FHA's 2016 annual report to Congress on the FHA's Mutual Mortgage Insurance Fund (MMIF), and the news was good. The report showed continued improvement in the capital ratio of the MMIF to 2.32%, vs. 2.07% in the prior year, as the fund's value increased by $3.8bn to $27.6bn. This is the second consecutive year the MMIF has met its statutory requirement.

The Single Family Forward portfolio accounted for the entire improvement in the value of the MMIF, increasing $18.3bn, more than offsetting the $14.5bn decline in the volatile HECM (reverse mortgage) portfolio which was "primarily the result of changes in HECM modeling assumptions." These assumptions were related to improved estimates in expenses and sales prices in defaulted loans per the report.

The question for investors is: will another cut in MIPs come following the improvement in the capital ratio? Recall that in early 2015, MIPs were cut from 135 basis points to 85 basis points with GNMA issuance exploding as a result, having recently overtaken Freddie Mac. Yesterday MBS traders didn't do much with the news: modest cheapening in the G2/FN 3.5% and 4% swaps since mid-day from elevated levels.

And traders didn't do much for a reason. Despite the good news, top officials at HUD ruled out any possibility of a mortgage insurance premium cut in the foreseeable future, saying there are multiple factors, not just the health of MMIF, that go into such a decision. "These very strong results do indicate that there is room to return pricing to a level that reflects the risk in the program," FHA chief Edward Golding said Tuesday. A decision to cut fees would look at factors such as the economic outlook and the budget implications of a cut in addition to the health of the fund, Golding said. The comments from the FHA that a premium cut was not planned should be a positive for the mortgage insurers.

The FHA said that the improvement was driven in part by a decline in loan defaults. The percentage of mortgages 90 days or more past due fell to a 10-year low of 4.92 percent. The annual report is likely to add to pressure for the FHA to cut fees. The agency in January 2015 cut the annual premium it charges a typical borrower to 0.85 percent from 1.35 percent. The Obama administration said at the time the move would enable more first-time home buyers to enter the market, while some critics said the lower fees would just inflate home prices. 

Remember back when the last price cut caused the prices of some Ginnie Mae-guaranteed securities backed by FHA loans to decline, as investors anticipated more borrowers would refinance. Unlike Fannie Mae and Freddie Mac, whose fees are governed by an independent agency, HUD, the FHA and the White House control whether and when to lower or raise fees. That means that even if the Obama administration chose to lower prices on its way out the door, the Trump administration could change that policy.

Thank goodness the bond market quieted down a little on Tuesday after three trading days of bad rate moves and volatility. Although the 10-year T-note worsened .125 in price Agency MBS closed higher in price and tighter in spread as some recent post-election market moves paused, and there was news to move rates one way or another - but interest rates have certainly proved they are subject to "headline news."

Mortgage bond traders gave more attention to the FHA's annual report to Congress on the FHA's Mutual Mortgage Insurance Fund which showed continued improvement in the fund's capital ratio to 2.32% vs. 2.07% in the prior year. The improvement leaves open the possibility, however doubtful, that the FHA could try to squeeze through a cut in MIPs before the new administration takes over. 

This morning we've had the MBA's report on last week's application data. Given the rate movement last week it is no surprise apps fell over 9%, with refis dropping 11% and purchases down 6%. The Producer Price Index for October was unchanged, core -.2%. Coming up are October's Industrial Production and Capacity Utilization, at 7:15AM MT (expected +0.6% and 75.9% vs. 0.1% and 75.4% previously) and the National Association of Homebuilders Housing Market Index (expected to remain unchanged). After the overnight overseas trading and early numbers the 10-year is yielding 2.27% and agency MBS prices are worse .250 versus last night.


National MI is offering a webinar titled "Reaching the Hispanic Homebuyer" today from 11-12 PST. Led by Kristin Messerli of Cultural Outreach Solutions, it is brought to you by National MI's MI University, "with a commitment to delivering high quality educational content to our customers. Hispanics accounted for 69% of the growth in homeownership last year. Next year, they are expected to increase their market share significantly. While Hispanic homebuyers present an opportunity for mortgage and real estate professionals, they also require a keen understanding of marketing and customer service preferences that are specific to them. This 1-hour session will detail how mortgage professionals can gain insight into critical buyer nuances, and how to use practical steps to develop a winning strategy with Hispanic Millennials, Hispanic Gen Xers and Hispanic Baby Boomers.

Is the only thing better than a closed loan a free party? This industry works hard and plays hard. National Mortgage Professional Magazine knows that! That's why this year's Holiday Networking Parties in December in Irvine, CA, Fort Lauderdale, FL and in Long Island, NY they're giving originators a powerful program of business building workshops before it's party time...and it's all FREE. These events include strategies on building your purchase business from Ron Vaimberg, a powerful presentation from Frank and Brian of National Real Estate Post, a Certified Military Home Specialist Workshop by Boots Across America, learn how to "Knock Out Your Competition" with Barry Habib, and a Renovation Lending Workshop with Damon Richardson. Workshops will be followed by a networking party where attendees will mix and mingle with other successful mortgage loan officers and celebrate the evening with music, complimentary food, and a heavy dose of holiday cheer!

Jobs and Announcements

As refinances wane, loan officers are looking for expanded credit to drive jumbo business. Redwood Trust recently released a 90% LTV option, Select 90 QM, which is a 30-year fixed program that allows for borrowers with high FICO scores and reserves that features no MI and loan limits up to $1.5 million. "It's an expansion of Redwood's current 90 LTV Choice program, the difference being Select 90 has rates that are attractive when borrowers don't need a 90 LTV to purchase a home, but choose to keep their assets invested elsewhere. Redwood's Choice program continues to generate momentum especially with sub-700 FICOs. "Too many credit worthy borrowers are turning away from the market due to misconceptions about what loan products are available to them," says Redwood Managing Director Matt Tomiak. "Our recent expansions and new programs allow originators to help borrowers and create significant revenue opportunities for Redwood's network of jumbo sellers." All Redwood's programs are backed by make sense credit, flexible exceptions and the same, consistent delivery for which Redwood is known. Talk to your Redwood Trust Account Exec for details."

One can't change what one can't measure, and "We keep hearing that mortgage companies need a more efficient method of accessing and communicating loan status data to branch managers, loan officers and other personnel. They need to do this in a timely manner before the data becomes outdated. Some companies provide ways of accomplishing this, but at an extremely high cost. Special Agent X is offering a reasonably priced solution through its new mortgage intelligence platform, X-Ray. This dashboard transforms massive amounts of information on loans, leads and accounting, as well as information from customer relationship management systems and loan operating systems, into easy-to-understand, readily available analytics and reports that drive top-level decisions at mortgage companies/branches. Essentially, with X-Ray, users have 24/7 mobile access to real-time, actionable mortgage intelligence. There also is a White Paper available on increasing efficiencies at a mortgage branch:

In job news, "Royal Pacific Funding's rapid expansion is creating massive opportunities for AEs looking to expand their territorial footprint. If you're an AE in Northern California, AZ, UT, CO, OR, WA, ID, TX or NM, it's the perfect time to check us out and benefit from being first on board and gaining unfettered access to the accounts you need to grow your business. Royal Pacific Funding is also looking for highly motivated operational support in all facets of the business, including Set Up, Underwriting, Account Management, Doc Drawing and Funding. Please send all resumes to Michael Clary, President. Don't wait, there's never been a better time to upgrade your career and join a winning team."

In personnel news, congrats to Inlanta Mortgage, Inc.'s new SVP of Business Development Chad Gomoll. Chad comes to Inlanta Mortgage with over 20 years of experience in mortgage lending and financial services and will drive and oversee the new growth for the company. And Inlanta announced the addition of Dave Stephan as Third-Party Origination (TPO) Manager, helping to foster relationships with bank and credit union partners and to guide them through the TPO process.