Take your pick. A second home can mean endless headaches, unexpected costs, and shattered plans. On the other hand, a vacation home might mean a great time, something you can pass down to your kids, and, at this time of year, perhaps, prices for places are coming down. Here is a WSJ story about interesting things to consider before buying one. And Austin Neal sent a listing from his area. "It doesn't appear they received the de-clutter memo prior to the listing photo session. Not sure if all the mannequins come with the house or not."

Negative legal headlines for our industry

A complaint was unsealed in federal court in Central Islip, New York, charging Edward E. Bohm, Edward J. Sypher, Jr., and Matthew T. Voss, senior executives at Long Island mortgage lender Vanguard Funding, LLC with conspiracy to commit wire and bank fraud in connection with their obtaining more than $8.9 million of warehouse loans for Vanguard to fund mortgages. The defendants allegedly misused the loans to pay personal expenses and compensation, as well as to repay earlier fraudulently obtained loans. Bohm, Sypher and Voss were arrested.

And Colorado-based Cherry Creek Mortgage faces a federal discrimination lawsuit filed by a California couple who say they were denied health benefits by the company because of their same-sex marriage-one of them who was just a year out from suffering two heart attacks.

State-level changes

If you think federal rules and regulations are complex, just try being a lender in multiple states. It becomes expensive keeping up with all the changes.

The Oregon state legislature has passed Senate Bill 254 which requires financial institutions to participate in a Department of Revenue data match system and passed House Bill 2356 which outlines the requirements for a debt buyer seeking to bring legal action to collect a debt; and amends provisions concerning the licensing requirements for debt buyers. Each financial institution shall conduct a data match with the department that compares a list of delinquent debtors, identified by name and Social Security number or other taxpayer identification number, against a list of persons who hold accounts at the financial institution to enable the department to identify which, if any, delinquent debtors hold accounts at the financial institution.

If financial institution fails to participate in the data match system or fails to comply with the rules established to administer the data match system, the department may impose a civil liability penalty on the financial institution.

The Ohio Office of Attorney General, Consumer Protection, amended provisions relating to the required disclosure at closing, effective on July 20, 2017. Ohio Rev. Code Ann. §1345.031(B)(8) states that suppliers must disclose to the consumer that they can pull out of the transaction at any point including receipt of prior estimates of closing costs or signed an application. Also, suppliers must disclose the consumer should not close a loan transaction that contains different terms and conditions than those promised.

Ohio Admin. Code Sec. 109:4-3-23 states that a supplier must provide the notice attached to this rule as appendix A, which will now be named "Disclosure of Right Not to Close", provide a copy of the signed disclosure each consumer who is a party to the transaction at the closing. The supplier must retain the original or a copy of the signed form in the consumer's loan file for a period of at least two years from the date of closing, or as required by other applicable state or federal law, whichever is greater.

Mississippi passed legislation in March creating a tax-free savings program for home buying and related expenses, like programs in Montana, Colorado, Virginia, Iowa, and Minnesota. Mississippi buyers open qualifying accounts with participating financial institutions. The accounts function like 529 savings accounts for college expenses, allowing contributions made during the tax year to be deducted from taxable state income. Individuals can deduct up to $2,500 and joint filers $5,000. The account interest is tax-free as well.

There is no time cap or limit on how much can be saved, and if the money remains in the account (or is withdrawn for eligible expenses), it is not subject to income taxation at the state level. If the money is used for other purposes, the borrower is penalized 10 percent of the withdrawal amount and all back taxes associated with the account.

By pairing these state down payment savings accounts with low-down payment mortgages (such as Fannie Mae's HomeReady mortgage, which offers 3 percent down), a path to homeownership is created for many, notes David Griffith, president of Mississippi REALTORS. "And that path is now less than 18 months for the average Mississippian," he says.

Other states are taking notice as well. Oregon is considering a first-time homebuyer savings proposal that would allow individuals to deduct $5,000 from their state income, and joint filers $10,000 to buy their first home. The account could grow to $50,000 for up to 10 years. Pennsylvania lawmakers reportedly plan to introduce a similar bill later in 2017. New York, Oklahoma, Maryland, Utah, and Louisiana have also shown interest in approving their own legislation.

Capital markets

Plenty of investors want more yield, right? ThomsonReuters reports that a large list of nearly US$700m pre-crisis mortgage bonds will be put up for sale today, "providing a dash of spice to a market in a late-summer lull." The biggest bond is a $165.1 million senior block of a 2007 subprime mortgage deal from Option One Mortgage, one of the largest lenders before the subprime mortgage crisis. Price talk on the 5.82% coupon note ranges from 98 cents on the dollar to 102, according to trade data provider Empirasign. Most of the other bonds are being talked around 90 cents and higher, according to Empirasign.

Looking at the immediate past, like yesterday, U.S. Treasuries ended the day on a mostly higher note price-wise and the "benchmark" 10-yr yield settled at its lowest level of the week, ending just a basis point above last week's low. The semi-flight to quality was caused by comments from President Trump, who said he is committed to building a wall on the U.S.-Mexico border even if it requires a government shutdown. How will that help our nation's economy if the government shuts down?

We did learn that new home sales for July were at a seasonally adjusted annual rate of 571,000, slightly less than expected and down 9.4% from the revised June rate of 630,0000 (from 610,000) and down 8.9% from the same period a year ago. New home sales growth is continuing at a frustratingly slow pace despite the tailwinds of low mortgage rates and low unemployment.

This morning we've had weekly initial jobless claims (+2k to 234k). Later is the July Existing Home Sales figure. We start Thursday with the 10-year at 2.19% and agency MBS prices worse about .125 versus last night.

Jobs and Announcements

Industry veterans John Stanforth (Co-founder of Block Mortgage) and Will Colley (formerly with Coldwell Banker Commercial) have formed Polara Builder Equity Fund, LP to invest in residential land acquisition and development (A&D) projects. Polara has partnered with an institutional private equity fund to provide debt financing for the development of buildable lots. To continue its growth, Polara is looking for investment partners from the lending industry who can not only invest a small amount of capital (alongside Polara's capital), but as importantly provide on-the-ground intelligence for current and future lending plans. The typical borrower is a regional or nationally known builder. There is a tremendous need for liquidity in the land A&D sector due to the harsh banking regulatory environment coupled with a historical shortage of residential lots. Polara's current geographic focus is in the high growth MSA's in the Southeastern United States, primarily in Georgia and the Carolinas, and has plans to expand into other states in the coming years.

Planet Home Lending has added an aggressively priced non-QM loan to its already expansive line of retail products. Planet's revolutionary product helps borrowers who just miss the prime jumbo line due to lower credit scores, higher DTIs or LTVs, and recent credit events. To join the winning team at Planet Home Lending, contact John Cutajar (949-860-1925).

New America Financial Corporation is proud to announce its placement on the Inc. 5000 List of America's Fastest-Growing Companies for 2017, an exclusive ranking of the nation's fastest-growing private companies that achieved remarkable and sustained three-year growth and expansion. "We are honored to be ranked on the Inc. 5000 list for 2017. Our success these past years is directly attributed to our commitment as an organization to fostering meaningful relationships with our valued clients and referral partners, in addition to our enhanced focus on operational efficiencies that support our expansion goals.  This recognition is a true testament to our sustained growth, our dynamic culture and our greatest strength of all, our people," said Michael Rappaport, President & CEO. Since its formation in 2006, New America Financial Corporation has expanded its presence into 17 states and the District of Columbia.  

"Are you an owner struggling with decreasing loan production and increasing origination costs? Does heightened regulatory pressure keep you up at night? Do you have strong, capable sales teams and branches who could flourish if they had more resources, support systems and better pricing? Then consider aligning your business with a company that has been certified as a Great Place to Work® and repeatedly recognized as a Top Employer. While some mortgage companies are facing unprecedented challenges in 2017, Castle & Cooke Mortgage, LLC (NMLS #1251) continues to grow. The company is interested in expanding into the Northeast, Southeast and Northwest by acquiring existing regional mortgage companies.  Ideal candidates will have a regional footprint of 5 to 7 branches staffed with high-performing teams with track records of success. If you're interested in learning how aligning with a company that promotes a culture of support and excellence can help you grow your business, contact Heidi Iverson (801-461-7164)."

"Moving your business successfully to a new company may seem challenging and full of hurdles. After all, there is lots to consider when first starting out elsewhere, including clients, referral partners, marketing and new technology. loanDepot, America's fifth largest retail lender, has devised a dedicated 'Concierge' to dispel this common misconception about moving pains. Having this type of hands-on support team guiding all transition efforts is what positions loan officers for success.  With a great deal of investment on loanDepot's' part, the Concierge will serve as a bridge between originator and each key stakeholder, including top producing veteran Loan Officers, a dedicated Pipeline Transition Team, Processing Team, Marketing Team and other services. With such a fantastic VIP onboarding experience, originators will bring their business to full power starting day one. If you're looking to take your business to the next level, contact Shane Stanton for more info on your own dedicated transition Concierge."

We are in the midst of a huge digital shift that will define the new economy. Having a strong Social Media presence is imperative for your mortgage business. Mason-McDuffie Mortgage saw this trend three years ago and launched our Social Media program which has won awards for Social Media from the Building Industry Association Bay Area and Social Media Marketing World. Our CIO & Chief Strategy Officer, Jason Frazier, has been recognized two years in a row as one of the Most Connected Mortgage Professionals by National Mortgage Professional Magazine and was recently recognized by Inman News as one of the top 20 people in real estate to follow on Snapchat. Through our sponsorship, Frazier also co-founded one of the fastest growing Social Media-focused Real Estate groups on Facebook which was ranked #4 by Mxt Media. We created a coaching program for our Mason-McDuffie Loan Officers focused on Social Selling and Community Building so they can take advantage of this tremendous opportunity to grow their business. If you are interested in what we are doing at 'MasonMac,' check us out.

iServe Residential Lending LLC announced an initiative to help home ownership in rural America through the USDA Single Family Housing Guaranteed Loan Program. The USDA Single Family Housing Guaranteed Loan Program is "dedicated to the preservation of our rural communities. The USDA has compiled and published a map of eligible communities. Over 85% of USDA loans are made to first-time homeowners, with 100% of the appraised value of a purchase property available to be financed. Some or all closing costs may be built-in as well if the appraised value is higher than the sales price."