The Dodd-Frank Act is almost 4-years old, but regulators have only completed 52% of its 398 rules, according to Davis Polk & Wardwell. For example, the Securities and Exchange Commission has yet to complete rules governing swaps tied to securities, and rules on asset-backed-securities underwriting also need to be written - here's a status report: Dodd-Frank Rulemaking Resource Center.

Congrats to Wendy Barnett who recently joined Arch Mortgage Insurance Company as an Area Sales Manager for the California region. Wendy will be responsible for hiring, developing and supporting Arch MI's sales team in California. Through its recent acquisition of CMG Mortgage Insurance Company and the IT and operating platform of PMI, Arch MI is writing new MI business in the credit union and broader mortgage market and making a strong entry into the competitive mortgage insurance industry. While Arch MI now has experienced regional and national sales teams, it is continuing to build its sales force in California and other markets. Interested candidates should contact Arch MI at resumes@archmi. com.

And RPM Mortgage, Inc. ranked 6th among medium-sized firms for "Top Workplaces in the San Francisco Bay Area", is searching for an SQL Server Database Administrator. The primary responsibilities are to analyze, design, and support applications that interface with the database computer language SQL. The person will report directly to the Director of Software Development, and the candidate can be located anywhere in the US. The candidate is expected to ensure new database code meets RPMs standards for readability, reliability, and performance, provide developers a list of the top 10 most resource-intensive queries on the server weekly, and suggest ways to improve the performance on each, etc.  Learn more here.

Before we go too much further, I have two minor corrections to yesterday's commentary - that's my reward for getting up too early. First, Charles Fiscus, of Shackelford, Melton & McKinley, points out that "the proper name of the Plaintiff in the Wells Fargo case is Lonzie Leath (not Heath). The case docket # is 05-11-01425-CV, Dallas Fifth Court of Appeals, for those folks who want to read the Opinion, etc." Thank you Charles. In addition, several folks wrote about Howard Hanna Mortgage Services, pointing out that it is not purely a "builder's real estate company".

In a related matter regarding promotions, over the last few months a couple folks sent in the Costco Mortgage promotion. ("Shopping for a new home or refinancing a loan? We put you in touch with lenders who offer outstanding service and exclusive discounts for members. Lender fees for Executive Members are capped at $600. Lender fees for Gold Star and Business Members are capped at $750.") I don't believe that it is the government's, including the CFPB, intent to eliminate promotions.

Mergers, acquisitions, and takeovers continue in the banking and lending industry. This includes credit unions, and the NCUA approved the following number of mergers over the past six months: Feb (17), Jan (12), Dec (27), Nov (17) and Oct (24).

Universal American Mortgage Company, the mortgage banking subsidiary of homebuilder Lennar Corporation, announced that it has acquired certain assets of Pinnacle Mortgage Group, Inc. The STRATMOR Group served as the exclusive advisor to UAMC and initiated this transaction. Pinnacle, a Colorado-based mortgage company founded in 1995, is licensed in seven Western states and has ten established retail office locations in Southern California and Colorado.  Pinnacle will join UAMC's retail mortgage operations operating under the Pinnacle Mortgage Group brand name while transitioning to UAMC's retail brand name, Eagle Home Mortgage. The combined company is licensed in 26 states and has 100 branch offices.

Banco Santander, Spain's biggest bank, will acquire the Miami, FL private banking unit of BNP Paribas for an undisclosed sum. Ohio's Peoples Bank ($2.1B) will buy Ohio Heritage Bank ($251mm) for $37.6mm in cash (15%) and stock (85%). Investment banker KBW announced that MainSource Financial Group, Inc. has entered into a definitive merger agreement to acquire all of the common stock of MBT Bancorp in a cash and stock transaction valued at approximately $33.8 million. Spain's 4th largest bank, Banco Popular (remember e-loan?), is reportedly in talks to buy Citibank's retail banking and credit card business in Spain. But Crain's Chicago Business reports Banco Popular North America is interested in selling its Chicago and Southern California franchises. In North Carolina Vantagesouth Bank ($2.2B) will sell a branch to Sound Banking Co. ($134mm), and in New York Bank of America is selling six branches to National Bank of Delaware County ($262mm, NY). BBVA Compass ($72B, AL) has applied with regulators to add loan production offices (LPOs) in CA, OH and TX. BBVA said it opened 12 LPOs in 2013. First Tennessee Bank (TN) will open a loan production office in Texas.

Speaking of mergers, last year Raj Date, a former official at the Consumer Financial Protection Bureau, started Fenway Summer. There was a lot of interest in another possible non-QM investor, and now we have news that an announcement will be made that it has merged its mortgage venture with a start-up called Ethos Lending, allowing it to start making home loans in the next few months. The plan is to extend loans that are not eligible to be purchased by Fannie Mae or Freddie Mac. Here you go.

Friday we can look forward to Chase and Wells' earnings. Although their market share has been slipping, given their collective place in the industry they always bellwethers for general conditions in the mortgage industry. We did, however, have Radian release its monthly operating statistics for March. New default notices decreased 7.8% from February and the ending delinquent inventory declined 5.0%. The delinquent inventory was down 12.8% from 4Q. March new insurance written (NIW) was up 30% M/M at $6.8 billion for the quarter. And MGIC came out with its numbers as well. MTG reported monthly operating statistics for March. Credit trends were strong with the cure ratio reaching 150% vs. 143% in March 2013. New default notices were down 11.1% M/M and 14.5% Y/Y. NIW came in stronger M/M at $2.0 billion. This brought total 1Q NIW to $5.2 billion vs. $6.7 billion in 4Q13 and $6.5 billion in 1Q13.

What is more important, being profitable, or doing a lot of volume? The old adage, "you can't go broke making a profit" is true. Not to be confused with "The Dark Knight", Black Knight's February mortgage data, although a couple months old, showed that monthly loan originations dropped to their lowest levels in over 14 years. Every originator worth their salt knows that January is usually bad, and February worse, and most companies have seen a nice pick up in March and into April.

The Black Knight numbers are worth a look, however, especially if you're trying to show your poor results were shared by numerous other residential lenders. "February's data showed the continued trend of declining origination activity we've been observing since mid-2013, with monthly originations falling to their lowest recorded point since at least 2000," said VP Herb Blecher. "In spite of this decline, residential real estate sales have remained strong due at least in part to investor activity and the fact that cash sales account for almost half of all transactions. In addition, while total transaction levels were flat on a year-over-year basis, traditional (or "non-distressed") sales were up almost 15 percent from last year as the share of distressed transactions continues to decrease.

Of great interest to fans of the CFPB, Black Knight also examined the impact of the implementation of the Consumer Financial Protection Bureau's new rules in January and observed a sharp shift in the timing of foreclosure starts. As the CFPB rules dictate that foreclosure cannot begin until after 120 days of delinquency, the data showed foreclosure starts at the 90-day mark have all but ceased, while four-month delinquency starts have risen over 100 percent since December. At the same time, foreclosure sales hit the lowest levels since 2007. With fewer loans in the foreclosure process, these numbers will continue to decline, but the result has been an increase in pipeline ratios (the time necessary to clear through the backlog of loans either seriously delinquent or in foreclosure at the current rate of foreclosure sales). This has been most pronounced in non-judicial states such as California and Nevada where legislative actions have contributed to the slowdown more significantly over the last several months. Dig in at Black Knight's most recent First Look release.

Regardless of profitability being more important than volume for a lender, volume is easier to talk about, although maybe not so pleasant. This morning we learned from the MBA that last week's mortgage applications dropped 1.6% from one week earlier. It is the fourth decline in four weeks after a spike of almost 10% at the start of March. The refinance index decreased 5% from the previous week and is at its lowest level since the end of 2013 although the purchase index increased 3% from one week earlier. The refinance share of mortgage activity decreased to 51% of total applications from 53% the previous week and is at its lowest level since July 2009. For ARM fans, the adjustable-rate mortgage share of activity remained unchanged at 8% of total applications.

Generally speaking, depository banks have more assets (read: cash) than mortgage banks. The MBA and others are closely following news on possible margin posting requirements when a security is sold to a broker-dealer when hedging a locked pipeline: Margin Call Plan on Mortgage Bonds Draws Protest: Credit Markets. The FINRA proposal would force mortgage-bond dealers to collect cash or other assets as margin on TBA trades, and would expand on an earlier set of guidelines by the group of major dealers and investors known as the Treasury Market Practices Group. The TMPG developed margining guidelines mostly adopted last year by its members.   Before any margining rules can be enacted, FINRA would need to ask the SEC to publish a potential final version for more public input and approve the rulemaking.

Bloomberg reports that "Freddie Mac to Seek Securities Sales Linked to Riskier Mortgages." The risk-sharing bonds that Freddie Mac and competitor Fannie Mae started offering in 2013 resemble a new model for the $9.4 trillion home-mortgage market envisioned by legislation introduced last month by the leaders of the Senate Banking Committee.

Looking briefly at the commercial mortgage sector, Deutsche Bank and Cantor Fitzgerald are underwriting a $1 billion commercial mortgage-backed securities deal, and decided to forgo getting the stamp of approval from Moody's Investors Service. In the wake of the financial crisis, Moody's has been part of most similar deals. Investor demand for higher-yielding bonds has prompted underwriters to move forward without Moody's approval.

How long as your LO staff been originating loans? The last time the Federal Reserve began a series of interest rate hikes was almost 10 years ago. Over the 2-year period from 6/30/04 to 6/29/06, the Federal Reserve raised short-term interest rates 17 times.  The S&P 500 gained +15.5% (total return) over the 2-years beginning 6/30/04, i.e., aggregate total return for the 2-year period, not per year.

The market's attention Tuesday was on the change in price drops from one month to the next. As Thomson Reuters mentioned, "The focus in MBS trading was on monthly-related settlement activity on 30-year FNMAs and FHLMC, and it influenced spreads across the stack, as well as, overall volume." This certainly impacts extension costs - so LOs are hoping their loans fund on time. And due to the demand for agency MBS, mortgage securities improved roughly .250 in price while the 10-yr T-note only improved .125. At least the market could put its attention somewhere, as there has been a dearth of economic news. That may change a little later today with the release of the minutes from the March 18-19 FOMC meeting and the Treasury auction of $21 billion in 10-year notes. For numbers, rates have slid slightly higher overnight: the 10-yr's yield, which closed Tuesday at 2.68%, is 2.70% in the early going, and agency MBS prices are worse a shade.