May 22: Underwriting job & warehouse option; Lawsky bails and sails; new Lehman/GreenPoint suit; home & land price trends

Yes, I know it is the Friday before a 3-day weekend, after which it is okay to wear white shoes to formal events. (And yes, there will be a commentary tomorrow with some pretty informative letters.) But there is little time to comment on fashion when instead we can turn our attention to smutty trademarks. There aren’t many of them in lending, but they are out there in other industries, and the U.S. Court of Appeals for the Federal Circuit is set to reconsider whether banning scandalous trademarks violates the First Amendment.


LDWholesale continues to grow month over month, recently adding territories in CT, TX, RI, IL, MA, MO, NC, FL and SC. Management is currently seeking a Director of Underwriting to join in on their success. “The person in this role will serve as a resource for underwriting support, guideline expertise and credit related initiatives, specific to Wholesale Lending. An ideal candidate will be a natural leader with the ability to work on a loan level and strategic basis. Experience in supporting multiple branches (LDW operates in Southern CA and Plano, TX) is preferred. This person will also share LDW’s Rock Star Mentality and Motto: We do what’s right, the right way, at the right time. If this sounds like a fit for you or someone you know well, please contact Walter Mar, LDW’s corporate recruiter, or click here to learn more.”


On the warehouse side, there’s no longer a requirement to sell business to Flagstar’s Wholesale division to have a Flagstar warehouse line. Flagstar also offers lines of all sizes both for established bankers, as well as emerging correspondents. Even better, customers get to deal with their own direct point of contact—not rotating representatives in a phone queue. “We offer customers a relationship, not just a transaction,” says Joe Lathrop, who has headed warehouse lending at Flagstar for 16 years. “Plus, we have the stability and capabilities of a federal savings bank behind us.”  Flagstar has been in wholesale lending since the bank opened in 1987 and has been offering warehouse lines since 1992, so it’s earned its chops in the space. Today Flagstar ranks sixth nationally in warehouse lending commitments and ninth in mortgage originations. (Inside Mortgage Finance December 2014). For more info on obtaining a warehouse line click on the link above or call 800-945-7700; Equal Housing Lender, Member FDIC.


In other personnel news, New York’s boy Benjamin Lawsky is leaving to form a legal and consulting firm and lecture at Stanford University.


One can be sued, and can also sue someone else. Case in point: Lehman Brothers’ new lawsuit names Syncora Holdings, U.S. Bancorp and GreenPoint Mortgage Funding. “Lehman Brothers Holdings Inc. is suing three financial institutions over bundles of soured old mortgage loans, calling claims that Lehman owes hundreds of millions of dollars ‘grossly exaggerated and baseless.’”


Speaking of law, the recent case of Huntington v. Miller confirms that HOAs may not reject partial payments on assessment liens in order to prosecute foreclosure. The decision was made based upon the notion that an association must accept partial payment made by an owner, apply the payment in the approved order and the obligation must continue even after a lien has been recorded. The case identifies that an owner can postpone legal foreclosure if they continue to make partial payments that keep the amount owed under $1,800. To read more about the court’s decision, click here.


We continue to have housing news, and it is good to take a look at some various measures once in a while in order to gauge trends. They aren’t bad!


Zillow recently analyzed home values near military facilities in order to determine pricing volatility and found that homes near military bases are valued at about 34.8 percent more than the U.S. median home value. In March, the median price for a U.S. home was $178,400 but the average home near a military base was $240,553. Homes near the bases of all five of the major U.S. military branches (Army, Navy, Air Force, Marines and Coast Guard) experienced this trend. Consequently, homes near military facilities were hit harder by the housing collapse but have also recovered more quickly. When home prices crashed, the average decline on U.S. home values was 22.4 percent compared to 26.9 percent for homes near military bases. This would have negatively affected families that are constantly moving due to relocation assignments. Homes near Army bases are the most affordable but are still $50,000 more than the  U.S. median home value, whereas homes near Navy, Coast Guard and Marine bases are valued at $90,000 or more.


According to Wells Fargo Economics Group, home sales and new home construction are set for stronger gains in 2015, as the first three months of this year are already ahead of the pace from a year earlier. Increased builder sentiment, pending home sales and mortgage applications from those purchasing homes suggest that the market will pick up during the spring selling season. Job and wage growth are also contributing factors to the uptick in the housing market, as over the past year more household formations have increased due to an improved labor market. Over the past four quarters, 1.5 million new households have been formed. Although all these signs point to an improved housing market, during the first quarter of the year, homeownership rates declined to 63.7 percent, which is the lowest level in almost 20 years. Young adults have shown a preference to rent rather than buy and as homeownership rates after the Great Recession declined, there has been a rise in the rental market for single-family homes and an apartment boom in major cities. Wells Fargo Economics Group predicts that a stronger job growth will reverse this trend. The national rental vacancy rate fell 1.2 percentage points over the past year to 7.1 percent, which has resulted in an increase in rent of up to 3.4 percent. The number of homes underwater has also dropped within the last five years, as only 10.8 percent of homeowners are in negative equity at the end of 2014. New home sales are expected to rise 19 percent this year and a 4.3 percent rise in existing homes sales is also anticipated.


What would we do without the review section on Amazon, uh? Gaining insight from people who have already purchased an item you are interested in buying can save a lot of time. For instance I’m in the market for a new TV, and this Samsung 105” 4K Ultra HD LED TV, for only $119,999.99 has four stars and plenty of reviews. James M. Brown wrote, “It is Great Wall mountable, per the manufacturer. I cannot comment on a typical home wall as I sold mine to buy the TV.” Plotz writes, “Great as a second monitor.” And finally Eric Smith wrote, “I was able to purchase this amazing television with an FHA loan (30 year fixed-rate w/ 4.25% APR) and only 3.5% down. This is, hands down, the best decision I’ve ever made. And the box it came in is incredibly roomy too, which is a huge bonus, because I live in it now”….and speaking of reviews, Wells Fargo’s April Housing Wrap-up is worth a glance if you’re interested in rental v owning conversations.


Zelman & Associates released its March Land Development Survey, indicating that acquisition and development activity has moved higher for the second straight month. The development index increased YoY, supporting the forecast for double-digit community count growth and a 22 percent growth in single-family housing starts in 2015. Builders are expected to have a positive outlook to the current market conditions and the fundamental outlook for housing is continuingly improving with the 2015 new order forecasts at 6 percent above consensus. For more information contact Ivy.


Recently Quicken Loans released its March Home Price Perception Index and Home Value Index. According to the Home Price Perception Index, appraiser opinions are 0.40 percent less than homeowner estimates, compared to only 0.13 percent in February. Seventeen of the twenty-seven metro areas that were analyzed maintained higher appraiser opinions than homeowner estimates.  The Home Value Index suggested that home values in March declined 0.56 percent. On a yearly basis, homes were valued 6.42 percent more in March 2015 than in March 2014. Despite the negative housing trend, home values on a national scale are still exhibiting healthy gains. Per geographic region, the West had the highest home value index for March followed by the South, Northeast and Midwest.


The MBA is a wealth of information, and the forecasts and commentary section is a frequent resource of mine. From the Research and Economics group, Joel Kan reports on 2015 Q1; the 140 characters or less (give or take) highlights follow….US housing slowed in the first quarter, with both single family and multi-family housing starts coming in lower than expected in February and March….Interest rates remain low, primarily on concerns about economic growth abroad and aggressive monetary policy moves by the ECB and BOJ….A strong economy, job growth, and increasing wages should provide the push for more household formation, and consequently, a lift for housing overall….Overall inflation continues to be held down by fuel prices, but we expect these prices to stabilize over the next year and edge back up to the 2 percent mark….Our projection for overall US economic growth is 2.5 percent in 2015 and 2.5 in 2016, which will be driven mainly by strong consumer spending and steady business fixed investment.


Even as far back as January things were picking up. Zelman and Associates published its January Land Development survey indicating that homebuilders were slowly gaining confidence in the market given the optimistic signs going into the spring season. The development index slightly decreased in January to 61 from 61.9 in December. Development activity was highest in the Houston market but could pose a risk in the event of deteriorating demand in 2015 due to low oil prices. Survey respondents expect 10% community count growth over the next year, with the highest growth expected in Las Vegas and Austin, and lowest growth expected in Baltimore, Phoenix and Miami. Finished lot demand inched up to 65.2 from 65.1 in December and finished lot supply was down 2% YoY, but is expected to increase 4% over the next year.


Bopping over to the markets we had a nice bond rally Thursday after a spate of economic news here in the United States. Existing Home Sales fell to 5.04 million in April from 5.21 in March, according to the NAR. Inventory is still low but the situation is improving, with the unsold inventory increasing to 5.3 months’ worth from 4.6 months in March. The median home price rose to $219,400, which is up 8.9% year-over-year but just shy of the peak reached in 2006, when the median sale price for the year was $221,900. Sales of existing homes, which account for roughly 90% of all purchases in the U.S., have been constrained by rising prices, limited inventories and tight credit. At the current sales pace, it would take 5.3 months to exhaust the supply of homes on the market.


We also had Jobless Claims increase, the Chicago Fed National Activity Index less negative in April, and the Philadelphia Fed May Business Index unexpectedly weakened. The Treasury, as expected, announced it will auction $26Bln 2s, $35Bln 5s and $29Bln 7s next Tuesday through Thursday. But those “on the inside” said the major rationale behind the rally was the much lighter corporate calendar which has clearly had a sizable impact on Treasuries especially in the long end.


Today we will have an early close in the bond markets, but we’ve also had the Consumer Price Index which was +.1% in April but -.1% year over year. Thursday saw a 2.18% close on the 10-yr and this morning we’re at 2.20% with agency MBS prices off a shade ahead of a holiday weekend.



(Yes, this is a joke, not a self-narrative.)

Several years ago, I returned home from a trip just when a storm hit, with crashing thunder and severe lightning.

As I came into my bedroom about 2AM, I found my two children in bed with my wife, Karey, apparently scared by the loud storm.

I resigned myself to sleep in the guest bedroom that night.

The next day, I talked to the children and explained that it was O.K. to sleep with Mom when the storm was bad, but when I was expected home, please don’t sleep with Mom that night.

They said OK.

After my next trip several weeks later, Karey and the children picked me up in the terminal at the appointed time.

Since the plane was late, everyone had come into the terminal to wait for my plane’s arrival, along with hundreds of other folks waiting for their arriving passengers.

As I entered the waiting area, my son saw me, and came running shouting, “Hi, Dad! I’ve got some good news!”

As I waved back, I said loudly, “What’s the good news?”

Alex shouted,

“Nobody slept with Mommy while you were away this time!”

The airport became very quiet, as everyone in the waiting area looked at Alex, then turned to me, and then searched the rest of the area to see if they could figure out exactly who his Mom was.





(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