A new JPMorgan Chase report indicates that summer jobs for young adults have significantly declined. Less than half of young people (46%) who applied for summer employment were enrolled in 2014 and it's projected that tens of thousands of low-income youths looking for employment in the major 14 U.S. cities surveyed will come up short in the approaching summer months. In JP Morgan Chase's "Building Skills through Summer Jobs: Lessons from the Field" report, there has been a 40% decline in summer youth employment over the past year and only 26% of this age group held a paying job in 2011. This employment deficiency particularly impacts economically disadvantaged youth. In the summer of 2013, low-income teens (family income less than $20,000), were 20% less likely to be employed than high-income teens (family income greater than $60,000). As job opportunities for youth wane, it's imperative that they develop the necessary skills to be competitive in the job market.

There has been a lot of news in the last several weeks about 97% LTV loans from Fannie & Freddie, and the changes to the FHA's MIP. It is good to take a quick look back at recent private mortgage insurance news to see what they've been up to lately.

U.S. Mortgage Insurers (USMI) has responded to FHFA Announcement on expanding 97% LTV. USMI is ready to help implement the new program and to ensure that creditworthy borrowers have access to affordable and sustainable mortgages within a well-functioning U.S. housing finance system. For more information, visit its website.

MGIC Investment Corp. reported their December 2014 operating statistics, identifying positive credit trends, with new notices decreasing by 17.9% YoY, but up 13.8% MoM. The cure ratio drastically fell to 78.4% from 105.7% and ending delinquent inventory was down 22.7% YoY compared to 23.4% in November of last year. Paid claims increased 6.2% MoM, up from the 4.1% seen in November and net rescissions and denials increased to 78 from 45 in November. New insurance written totaled $3.3 billion in December, increasing from $2.9 billion in November. To read more about MGIC's operating report by KBW research, click here.

Effective December 15th, Arch MI is making changes to Its Program Guidelines. Its EZ Decisioning℠ and Down Payment Assistance Programs are expanding in order to help you qualify more borrowers for home loans. For more information, view its credit risk bulletin.

MGIC is providing everything you need-all in one place. Starting January 12, you'll be able to reach the following groups by calling one number 877.642.4642 (877.MI.CHOICE): Underwriting Customer Service, Delegated Underwriting Customer Service, ReadiResource Center (technical support), Loan Servicing, Claims Customer Service, Loan Modifications, Consumer Payments, and Recoveries.

United Guaranty is disabling SSLv3 (Secure Sockets Layer Version 3), an obsolete protocol for handling outside connections to our company on January 24th. If your web browser is Internet Explorer version 7 or higher, or a current version of Firefox or Chrome, no expected problems should arise from this change. Connections to United Guaranty outside of the above web browsers, such as Loan Origination Systems, Product & Pricing Engines, and web service calls will need to be tested. You may test your connection now at this link before January 24th.

"Rob, my LOs and underwriter's heads are starting to spin again with the programs, investors, changes, and guidelines that are springing up. Have you seen any decent software out there to help?" Yes, there is plenty of help. This is not an endorsement of either, but two are certainly gaining some traction. The first is Mortgage Elements, created by Mark Paoletti - click on the link, enter the state and the program, and you can see which investors are doing what. The second is called The Rule Tool created by Take Three Technologies. The Rule Tool was built to assist mortgage companies that sell loans to various investors and is specific to your organization - including overlays. You can think of The Rule Tool as a "very cool" three ring binder that is an on-line tool your company can use to organize your investor overlays, and your company's specific overlays/guidelines to the agency rules.

Speaking of software, "While Mr. Obama and our elected representatives play political kickboxing over the 50 bp drop in the FHA insurance premium, the folks at LoanScoreCard want you know that they can save you up to 70% on your FHA AUS costs without 'an act of Congress,' so to speak - nice to be able to save that kind of percentage on anything in our business these days. And when the kickboxing match is over, and the broken ribs are counted in Obama's favor, we could see FHA volume tic up by 20%. LoanScoreCard says that their FHA AUS is a better, less expensive way to get FHA TOTAL Scorecard output than using DU or LP. In fact, Elva Johnson, Director of Production at Ontario-based, retail-wholesale lender First Mortgage Corporation signed up with LoanScoreCard, and is seeing annualized savings of 'around $90,000, in just their retail channel so far.'  She says it is designed specifically for FHA TOTAL Scorecard findings "the way they were meant to be," rather than through an agency AUS engine actually designed for agency use. Elva says it is much more accurate and useful, and saves a significant amount of money on every loan.  First Mortgage Corporation is now in the process of rolling out the use of LoanScoreCard with the broker channel to increase the savings and benefit. LoanScoreCard has built this cool model that you can tinker with, and download, to let you plug your own numbers in, to see how much value proposition LoanScoreCard can deliver for you on your FHA AUS.  Nice.  You get to sell yourself on the idea; no pressure, just bottom line numbers."

The MBA is asking its members to contact their Senators and Representative to ask them to contact the CFPB and ask them to remove the "rate checker" tool from its website AND meet with industry and other stakeholder representatives at the earliest date to ensure that this project benefits the consumers we all seek to serve. "The CFPB should take this misleading tool down and instead focus on providing a resource that encourages borrowers to shop more than one lender and makes certain they understand the base rate and all other costs and terms. Please click HERE below to go to the MAA homepage and click on the "Take Action" button to get started. Please contact MBA's Associate Director of Political Affairs, Annie Gawkowski, at 202-557-2816 if you need assistance."

Recently the Independent Community Bankers of America called on the FHFA to withdraw its proposal to restrict access to Federal Home Loan Banks. The ICBA wrote that "the agency's plan to require FHLB members to hold between one percent and 10 percent of their assets in home mortgage loans at all times contradicts Congress and will restrict access to mortgage credit." Community bankers view access to FHLB's as vital to the overall health of their banking community, and proposed "restrictions" would deter their serviceability in the surrounding communities. ICBA Senior Vice President of Mortgage Finance Policy Ron Haynie wrote. "Without ready access to the low-cost advances provided by the FHLBs to community banks, many of those banks would be forced to severely curtail home mortgage lending in the communities they serve." The exact sticking point with community lenders is the FHFA's proposal to implement an ongoing asset test to retain FHLB membership, which would force community banks to either hold more mortgage-backed securities in portfolio,  or have some have suggested, possibly force banks to pass up opportunities to make other types of consumer, small-business or agriculture loans. How is the Federal Home Loan Bank system faring? Well, total outstanding debt climbed to $847.2B in 2014, from $766.8B in 2013, which constitutes the highest year-end total since 2009 when members began running off FHLB borrowing tapped during financial crisis.

As I wrote recently regarding eminent domain, and the government's place at the table, "....the MBA summed things up nicely with the headline, 'Congress Enacted MBA-Supported Provisions to Block Eminent Domain Mortgage Seizures'. On this topic, K&L Gates has a terrific article, Eminent Enabler. Laurence Platt writes, "At least for the next year, Congress has materially impaired the ability of local governments to seize underwater residential mortgage loans through eminent domain by cutting off federal insurance or guarantees to refinance the seized mortgages and then securitize the refinancings. Without this federal 'take out' through mortgage insurance provided by the Federal Housing Administration, and guarantees of mortgage-backed securities by the Government National Mortgage Association, local governments will have to find private sources of long-term funding to pay for loans that they attempt to seize." As some have pointed out, private money could step in and create such a market, but at what risk? Given the FHA's inability to refinance, local governments would have to seek the help of private lenders; given that FNMA and FHLMC have already determined these loans are ineligible for purchase, coupled with the litigious nature of the original seizure, this appears unlikely.  

The move in rates (and yes, mortgages are lagging considerably, but still...) has really given a shot in the arm to applications and locks, and residential lenders across the nation are licking their chops over February and March volumes. (Let's hope margins hold up!) In fact this morning the MBA gave us last week's application numbers echoing what everyone was thinking. Apps hit a 17-month high for a second straight week, up 14% with refis jumping 22% although purchases dropped 2.5%.

For more market news, the "benchmark" 10-year T-note closed Tuesday at 1.81% and is within 2.5 basis points of its lowest close since May 2013. And we may just hit it this week, given all the problems overseas. In this country we did have the Housing Starts and Building Permits duo: Starts were +4.4%, hitting its highest level in over six years, but Permits were -1.9% (single family +4.5% but multi-family was -11.9%). In the early going the 10-yr is at 1.78% and agency MBS prices are roughly unchanged.

Jobs

SecurityNational Mortgage Company, licensed in 48 states, has tripled its size in the last 18 months. "We are growing in all areas and currently looking to fill several positions on the West Coast. We have an immediate need for Area Managers, Branch Managers, Loan Officers, Processors and Underwriters in California, Oregon, Washington and Hawaii. Join an established, publically traded company that supports the sales effort in every way: state of the art technology, marketing, CRM, local ops, an aggressive compensation plan, medical/dental/vision and matching 401K." For a confidential interview contact the following Regional Managers: Todd Bruess (Washington/Oregon), Henry Gonzales (Southern and Northern California, and Tom Douroux (Southern California/Hawaii).

On the new product side, Roadrunner Solutions is an exciting free service to help LOs connect their pre-approved borrowers with local Real Estate professionals. "Roadrunner has a large network of Realtors that will respect the relationship between the LO and their borrower. Roadrunner will improve your closure rate and help deliver the high level of customer service required for the purchase money borrower. If you are a Call Center LO, run a Call Center Platform, originate loans outside of your local area, or just struggle to find quality Realtors, Roadrunner is a great service for you to try with no fees or any cost to the borrower.  Roadrunner has also added website design and support to their product offering. If you would like to find out more e-mail us."

American Pacific Mortgage is hosting Business Planning Events for its Originators, Guests as well as Realtor Partners throughout the month of January. All Originators and Realtors are invited to attend. Led by Kurt Reisig, CEO, and Scott St. John, VP of Production, these events offer guidance in establishing simple, but attainable goals for 2015. "What better way to start the new year than by defining and establishing production, financial, as well as personal goals.  Each workshop is designed to deliver results for your business in 2015. There have been 7 well attended events so far in major markets this month, with 4 Events coming up....Phoenix, AZ on 1/23, Burbank, CA on 1/26, Ontario, CA on 1/27 and Sacramento, CA on 1/30/15. The workshop runs from 9am-2pm with lunch provided. Call 1-866-625-9352 right away to learn more and register for this career changing course! Map out your success for 2015 and Register TODAY....Available seating is limited!"