|
Jun. 8, 2011: Lots of agency news & organizational changes; Oregon & MERS; Texas's TAMP goes belly up
Rob Chrisman
Fun with
numbers...In the 2010 Census, for you reverse mortgage lenders,
seven states had a median age of 40 or older: Maine (42.7),
Vermont (41.5), West Virginia (41.3), New Hampshire (41.1),
Florida (40.7), Pennsylvania (40.1) and Connecticut (40.0).
Maine overtook West Virginia and Florida as the state with the
highest median age in 2010. For you first home purchase
specialists, the states with the lowest median age (excluding
the District of Columbia) remained the same as they were in
2000: Utah (29.2), Texas (33.6), Alaska (33.8) and Idaho (34.6).
Utah had the highest percentage of population under age 18 (31.5
percent) and remained the only state with a median age under 30.
Lots of youngin's!
JPMorgan Chase’s CEO
Jamie Dimon asked Federal Reserve Chairman Ben S. Bernanke
whether regulators have gone too far by reining in the U.S.
banking system and are slowing economic growth. “Dimon asked
whether the central banker has measured the cumulative effects
of new capital requirements, mortgage standards and other rules
imposed on the system in the wake of the U.S. financial crisis.
Dimon asked Bernanke if he “has a fear like I do” that
overzealous regulation “will be the reason it took so long that
our banks, our credit, our businesses and most importantly job
creation to start going again. Is this holding us back at this
point?” It is hard to disagree: http://www.bloomberg.com/news/2011-06-07/dimon-asks-bernanke-whether-post-crisis-rules-are-holding-back-u-s-growth.html.
(More below on Bernanke’s speech.)
What was formed by Congress in 1970 to provide liquidity,
stability and affordability to the nation's residential mortgage
markets? If you guessed OSHA, the PBS, or the EPA, you were kind
of close - the year is right. Freddie Mac! A while back I
received this e-mail from an ex-Freddie employee. "Since leaving
I have seen several officers throw in the towel. Peter Frederico
EVP CIO resigned , Kathleen Zaderacky VP Quality Control
resigned, Shelly Poland VP Credit policy resigned, Connie Ferran
VP Credit announced her retirement and there is a rumor that
Mike May the EVP Multifamily wants to leave , but they are
trying to convince him to stay [it didn't work]. I hate to see
this as Freddie has lots of good folks and great customers they
need to serve."
Yesterday came news that Freddie Mac announced several
organization changes, and named new leadership for its
Single-Family, Multifamily, Capital Markets and Compliance
Divisions. Tony Renzi has been named the executive vice
president of a new Single-Family and Operations & Technology
Division, David Brickman has been named as the new senior vice
president in charge of the Multifamily Division, Carol Wambeke
is its new Chief Compliance Officer, and Devajyoti "Doc" Ghose
the senior vice president of Freddie Mac's Investments &
Capital Markets division and the company's Treasurer. On top of
those, Freddie announced that Paul Mullings is senior vice
president of Single-Family Sourcing and Securitization, Tracy
Mooney was elevated to a new role as senior vice president of
Single-Family Servicing and Real Estate Owned areas, and last
year Rob Lux was named senior vice president and chief
information officer. "David Brickman will assume the role of
head of the Multifamily Division after Mike May, the current
head of Multifamily, leaves the company on July 15." Best of
luck, and hope to see you all at the next mortgage conference!
Freddie Mac also rolled out more details on the Servicing
Alignment Initiative and non-performing loan servicing standards
– no lender should ignore them! Visit http://www.freddiemac.com/singlefamily/news/2011/0516_servicing.html
and http://www.freddiemac.com/singlefamily/news/2011/0525_sai.html.
Both Freddie and Fannie spread the word that starting on June
27, “the Uniform Collateral Data Portal (UCDP) will be available
for submitting appraisal data files to Fannie Mae and Freddie
Mac.” There’s a support center, a toll free number
(1-800-917-9291, operators standing by!), and plenty of
information on the web. Ignorance of the law is not an excuse!
Go to https://www.efanniemae.com/sf/technology/commitloandel/ucdp/index.jsp
or http://www.freddiemac.com/sell/secmktg/uniform_collateral_data_portal.html?tab2.
With hurricane season here, and the recent terrible tornadoes,
Fannie reminds us that it does have a disaster plan and
information available for clients: https://www.efanniemae.com/sf/guides/ssg/hurrelief/index.jsp.
(Wells Fargo’s correspondent group also released information on
Disaster Policy Enacted for Certain Zip Codes in Louisiana and
in Missouri.)
In Oregon (unofficial
state motto: “Spotted Owl... It's What's For Dinner”), an
attempt by the finance industry to waive Oregon mortgage
recording laws in most foreclosures died when the Oregon House
Judiciary Committee voted to approve Senate Bill 519 without an
amendment sought last week by loan servicers, title companies
and credit unions. The amendment would have relieved lenders of
ensuring a property's ownership history is properly recorded in
public records before foreclosing outside a courtroom. Recently
Federal judges in Oregon have blocked MERS-related foreclosures,
saying MERS failed to record underlying documents properly as
required by Oregon law in out-of-court foreclosures. (Oregon
allows non-judicial foreclosures to take place outside of a
court.)
In Texas (unofficial
state motto: “Armadillo is the Other White Meat) the four Texas
branches of the Texas Association of Mortgage Professionals are
disaffiliating themselves from the state nonprofit and
potentially changing their names. Why would they do that? TAMP
filed for Chapter 7 bankruptcy protection with plans to close up
shop. (It is not to be confused with the Texas Mortgage
Bankers Association!) "The dramatic erosion in membership
and the downward pressure on revenue generation, the financial
constraints as a consequence have placed TAMP in an untenable
position," said the president. TAMP has/had four branch chapters
located in San Antonio, Houston, Dallas and Austin.
In the commercial
sector, analysts at the Royal Bank of Scotland looked at
155 loans in commercial mortgage-backed securities and found 44%
re-default after modification! CMBS followers have noted that
since 2008 commercial securities have rebounded much faster than
residential mortgage-backed securities deals, and may even hit
$40 billion this year. Most of the loans RBS studied were
modified in 2010, so we may not know for sure until 2012 how
things go because it takes roughly two years before a modified
loan re-defaults. But so far RBS analysts found that 87 of the
loans, totaling $944 million, re-defaulted at an average loss of
23% but this was actually a lower loss severity than loans where
no modifications were made (50%).
As mentioned above, Ben
Bernanke spoke yesterday, but for the most part reiterated the
previous Fed stance. He is looking for a second half bounce.
While several indicators "suggest some loss of momentum,"
Bernanke expects growth to "pick-up somewhat in the second
half." The economic recovery, broadly speaking, is continuing at
a "moderate pace" but "frustratingly slow" in that the
unemployment rate is not descending in a more appreciable way.
Looking at inflation, Bernanke reiterated his core position:
first, the slack in the US labor market "should continue to have
a moderating effect on inflationary pressures." Second,
inflation expectations remain well anchored and “reasonably
stable.”
Sometimes I am asked,
“How much riskier are agency residential mortgage-backed
securities than ‘risk-free’ Treasury securities?” In answering
that, the current coupon MBS yield is at 3.93%, which is about
the same level as where it was on December 3rd. The 30-yr
Treasury bond is at 4.23%, while the “benchmark” 10-yr is
sitting around 2.97%. The difference is relatively
straightforward, but with the decline in MBS production and
continued demand, many believe that mortgage rates will improve
relative to Treasury yields. Overall, mortgage rates should
continue to benefit from benign prepayments, favorable technical
factors noted above, and attractive carry.
Zooming in on
yesterday, MBS prices ended the day better by .125. We had a
decent 3-yr note auction, which helped the fixed-income markets
in general. Today the only news besides the MBA application
index (which was little changed) is the 2PM EST Fed's Beige
Book, with economic anecdotes from the 12 Districts in
preparation for the two-day FOMC meeting that begins June 21. We
also have a Treasury auction of $21 billion in 10-year notes at
1PM EST. With that the 10-yr is down to 2.97% and MBS prices
aren’t doing much of anything.
The Washington Post
has a yearly contest in which readers are asked to supply
alternate meanings for common words. (Neologism - a new word,
meaning, usage, or phrase.) The winners are:
1. Coffee (n.) the person upon whom one coughs.
2. Flabbergasted (adj.) appalled over how much weight you have
gained.
3. Abdicate (v.) to give up all hope of ever having a flat
stomach.
4. Esplanade (v.) to attempt an explanation while drunk.
5. Willy-nilly (adj.) impotent.
6. Negligent (adj.) describes a condition in which you
absent-mindedly answer the door in your nightgown.
7. Lymph (v.) to walk with a lisp.
8. Gargoyle (n.) olive-flavored mouthwash.
9. Flatulence (n.) emergency vehicle that picks you up after you
are run over by a steamroller.
10. Balderdash (n.) a rapidly receding hairline.
11. Rectitude (n.) the formal, dignified bearing adopted by
proctologists.
12. Pokemon (n) a Rastafarian proctologist.
13. Oyster (n.) a person who sprinkles his conversation with
Yiddishisms.
14. Frisbeetarianism (n.) (back by popular demand): The belief
that, when you die, your Soul flies up onto the roof and gets
stuck there.
15. Circumvent (n.) an opening in the front of boxer shorts worn
by Jewish men.
If you’re interested,
visit my twice-a-month blog at the STRATMOR Group web site
located at www.stratmorgroup.com . The current blog
is new and takes a look at the opinions on QRM’s impact on our
industry. If you have both the time and inclination make a
comment on what I have written, or on other comments so that
folks can learn what’s going on out there from the other
readers.
|
