Aug. 14: DTC, retail, and wholesale jobs; Goldman’s settlement; the CFPB and mortgage insurance; the IRS’ W-2 proposal

The fact that outstanding auto loans have passed the $1 trillion mark is garnering headlines, as well as Ohio’s vote on legalizing marijuana and Warren Harding’s “love child”, but the MBA recently released its Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations for the second quarter of 2015. Commercial real estate lending realized growth in every major property type during the second quarter of 2015. Second quarter commercial and multifamily mortgage loan originations were 29 percent higher than during the same period last year and a 58 percent YoY increase was seen in dollar volume for multifamily properties along with a 32 percent YoY increase for industrial properties. The dollar volume of loans originated in the second quarter of 2015 increased 45 percent for commercial bank portfolios.


In job news Greenbox Loans, Inc. is searching for Account Executives and Producing Regional Sales Managers for its wholesale division and for Regional/Branch Managers and Loan Officers for its retail division. “Greenbox is a specialty lender that is expanding nationwide, and offers a large menu of non-QM and specialty products. Greenbox Loans, Inc. is built around providing a streamlined operational flow with the purpose of providing superior processing, underwriting, and funding timelines that exceed industry standards. The company has 25+ years lending experience, is licensed in 29 states and growing, and offers state-of-the-art, completely paperless proprietary processing software. Confidential inquiries should be directed to Harvey Goldberg (888.377.0900)


And a 20 year+ Orange County company licensed in over 23 states is seeking a Call Center Director of B2C to take the company to the next level. “We have been instrumental in helping tens of thousands of homeowners and investors with their unique financing needs. We are a direct lender and handle the entire loan process in-house from origination to close of escrow. We are a HUD approved FHA direct endorsement lender as well as an approved Fannie Mae Seller Servicer. The ideal candidate will have diverse Call Center and Sales Management experience, and will be responsible for managing inbound and outbound sales teams and must have experience leading managers and understand how to motivate, incentivize, and think big. The candidate should have experience with Lead Aggregators, 5 + years mortgage experience in a call center environment, internet lead experience, and possess licenses in multiple states.” Confidential inquiries should be sent to me at


Another one down: Goldman Sachs Group Inc. will pay $272 million to settle a lawsuit that claimed the Wall Street bank defrauded investors about the safety of about $6 billion of residential mortgage-backed securities they bought in 2007 and 2008. The suit was led by NECA-IBEW Health & Welfare Fund, an electrical worker’s pension fund.


The industry is still buzzing about the CFPB issuing Compliance Bulletin 2015-03 to provide guidance regarding the cancellation and termination of private mortgage insurance (PMI) pursuant to the Homeowners Protection Act of 1998 codified in 12 USC 4901 et seq.(HPA), which was passed by Congress to address difficulties borrowers encountered in cancelling PMI when they had reached a certain level of equity in the property. The HPA provides specific cancellation and termination rights for borrowers and requirements that must be followed. Yet Bulletin 2015-03 summarizes the HPA provisions but does not create any new requirements. Bulletin 2015-03 also describes examples from CFPB’s supervisory experience of PMI cancellation and termination procedures that violate the HPA or create a substantial risk of noncompliance. Anyone in MI, or who originates & services loans with MI, should take a gander at it.


And from New Jersey, Brian caught the fact that the Internal Revenue Service (IRS) issued proposed regulations that would eliminate the automatic extension of time to file information returns on forms in the W-2 series, effective for the 2017 filing series. The IRS requires employers to report wage and salary information for employees on Form W-2. Currently, employers who file Forms W-2 can receive an automatic 30-day extension with the IRS.  Then, a second 30-day extension may be requested. In the proposal, the IRS warns that it would grant a non-automatic extension only in limited cases involving extraordinary circumstances or catastrophe. The IRS requests comments on the appropriate timing to remove the automatic 30-day extension of time to file information returns covered by the proposal including whether special transitional considerations should be given for any category or categories of forms or filers relative to other forms or filers. Comments are due on or before November 12, 2015.  Comments may be submitted through (REG-132075-14).


“Well there’s men hunkered down by the railroad tracks.

The Elkhorn Special blowin’ my hair back.

Tents pitched on the highway in the dirty moonlight.

And I don’t know where I’m gonna sleep tonight


News about the housing market continues to flood the airwaves. First off, condolences should be offered to anyone working with someone trying to buy a home in San Francisco: it has passed up Manhattan. Congratulations to anyone already owning a place.


For folks who like to “poke the bear”, “ruffle feathers”, or “stir the pot”, the Collingwood Group released a research paper on the risks and opportunities of disruption in housing finance. Speaking of this Group, you may recall that earlier this year it released another report suggesting that President Obama’s housing plan would have a minimal impact on the size of the home purchase market. (Recall that the White House said the President’s plan to reduce fees, which the FHA charges borrowers, is designed to help jump-start the housing market.) At that time 47% of respondents to the Collingwood Mortgage Outlook Report for February said that President Obama’s estimate that 250,000 new mortgage borrowers will be added as a result of a reduction in the FHA annual premium is “too high,” while only 34% said it is “on the mark” and 19% said it is “too low.”


Many cities are experiencing a rental affordability crisis as rents gradually increase across the nation. A numbers of factors have increased rental burden among households due to a greater demand for renting after the crash of the housing market, underinvestment in new rental construction, shifting preferences to urban living and slow wage growth. Western cities are the leading edge of diverse renters therefore Zillow’s rental burden analysis focused on six major western cities: Denver, Los Angeles, Portland, San Francisco, San Jose and Seattle. Renter households were split into three different groups in each of these cities based upon their rental burden. Zillow found that rent tends to be lower for households with a high rent burden, but most of the difference between low and high rent burdened households can be contributed towards household income. For households with the lowest rent burden, the median income is four to five times the median household income among households with the highest rent burden. In San Francisco, it’s about six times higher.


Zelman & Associates published their second quarter banking survey indicating that lenders are focusing on acquisition, development and construction (AD&C) lending to residential and non-residential builders and developers. Demand for AD&C capital reached 65.4 in the second quarter up from 64.7 in the first quarter and growth forecasts were raised to 16 percent in 2015 and 12 percent in 2016. Survey respondents rated the availability of credit for non-residential projects at 63.5 and overall multi-family capital availability was rated at 69.6. For more information regarding the banking survey, contact Ivy at


How do student loans impact potential home buyers (Millennials?) and the housing recovery? A Department of the Treasury and Department of Education paper suggests, “Historically, society provided a significant subsidy to young people through the widespread availability of inexpensive public higher education. However, over the past several decades, there has been a substantial shift in the overall funding of higher education from state assistance, in the forms of grants and subsidies, to increased tuition borne by students.” Despite the debt burden from student loans, there are benefits to seeking higher education. The median weekly earning for a full-time, bachelor’s degree holder in 2011 was 64 percent higher than those for high school graduates. Education allows for gains in earning potential and increases the probability that individuals remain employed. During the Great Recession, unemployment rates for college graduates were low, while the rates for those without a college degree increased. Unfortunately, the cost of education has increased at a faster rate than the rate of inflation over the past decades as states have reduced funding for higher education, resulting in institutions relying on tuition to fund operations, therefore increasing the cost of college education.


Back in May Wells Fargo’s economic team observed that Comparing state aid for education from 1995 to 2012, the amount of state aid has increased for all races but the increase in tuition costs has been greater. For the 2011-2012 school year, Asians were paying on average $30,000 for tuition plus room and board versus $24,500 for Hispanics, $25,200 for African Americans and $26,700 for Whites. Out-of-pocket costs, which are the price of attendance minus expected family contribution and any financial aid, also increased 85 percent for Hispanics, 92.3 percent for African Americans, 97.5 percent for Whites and 89.3 percent for Asians between the 2011 and 2012 school year. Funding for higher education has shifted from the states to the federal government but in the form of student loans rather than grants that do not need to be paid back. This of course, has had a significant effect on the housing market, as young adults are delaying home buying due to being straddled by student loan debt.


CoreLogic home prices for June 2015 were up 6.5% YoY, including distressed sales and the annualized seasonally adjusted MoM HPA reached 9.3%. New York reported the strongest acceleration and the largest positive reading, increasing to 25.5%. Portland and San Francisco also reported strong MoM growth at 19.1% and 16.9% respectively. Growth was weakest in Boston, Miami and Detroit. Case-Shiller prices are expected to end 2015 up 3.7% and although home price gains have been seen throughout the nation, muted home price appreciation may become the new reality as income growth has not been able to keep up with rising housing prices.


In regards to credit standards and ability to obtain a mortgage, recent reports from the Federal Reserve Bank and the New York Federal Reserve were less encouraging. The Fed’s “Report on the Economic Well-Being of U.S. Households in 2014” noted that while many renters were interested in owning their own home, half of those surveyed indicated an inability to afford a down payment as a reason for renting and 31% indicated inability to qualify for a loan. The survey also found that many individuals were ill-prepared for a financial disruption, which would seem to make lenders less inclined to ease standards — especially after the losses and fines incurred from the financial and housing crisis.


In the New York Fed’s Survey of Consumer Expectations, Housing Survey — 2015, the primary reasons cited for renting versus owning included not enough money saved/too much debt; don’t make enough money, don’t want the upkeep of ownership, and credit not seen as good enough.


Sixteen tons and what do you get? Another day older and deeper in debt. Bonds sold off Thursday – for no other reason than the markets got acclimated to the idea of a liberalized currency regime in China and U.S. Retail Sales (and the revisions to the June data) spooked investors who had been thinking that the December FOMC meeting was the liftoff point for rates. The $16 billion 30-year Treasury auction was met with “tepid” demand. Who wants to lock up their money for 30 years and earn 2.88%?


But it’s a new day, with new news. Remember when all we could talk about was Greece? After debating the matter all night, Greece’s parliament voted to approve the terms of the third bailout package offered by the country’s international creditors. Support from opposition parties gave Greek Prime Minister Alexis Tsipras more than the 151 votes in the 300-member chamber needed to defeat growing opposition from his own Syriza party. The vote clears the way for Eurozone finance ministers to act on the deal later today.


Here is this country we’ve had July’s Producer Price Index and Core PPI (+.2%, +.3% respectively, both a shade slightly higher than expected). Ahead of us are July’s Industrial Production and Capacity Utilization (8:15 Central Time) and August’s Michigan Sentiment (9:00 CDT). We sent the 10-year home to bed at 2.19% Thursday and this morning we’re at 2.18% with agency MBS prices roughly unchanged versus Thursday’s close.



A small boy is sent to bed by his father.

Five minutes later…”Da-ad….”


“I’m thirsty. Can you bring a drink of water?”

“No, you had your chance. Lights out.”

Five minutes later…”Da-aaaad…..”


“I’m THIRSTY. Can I have a drink of water??”

“I told you NO! If you ask again, I’ll have to smack you!!”

Five minutes later…….”Daaaa-aaaad…..”


“When you come in to smack me, can you bring a drink of water?”





(Copyright 2015 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Rob Chrisman