During Happy Hour tonight you can work this one into the conversation: Minnesota has 90,000 miles of shoreline. Is that a lot? It is more than California, Florida, and Hawaii combined. Speaking of the coast, BP says the Gulf Deepwater oil disaster has cost it $62 billion in aggregate. That sum is larger than fines levied on individual banks involved in the subprime mortgage crisis or on Exxon related to the '89 Valdez spill - making it the most expensive man-made corporate disaster.

We've had our share of house price & ownership news, and trends in sales. The overall feeling is that listings & inventory are picking up a little bit, which may help things.

Freddie Mac released its monthly Insight for May which focused on rising home prices and the use of Price-to-income (PTI) ratio as a measure of sustainability. The report noted that home prices have averaged a 5.6% increase over recent years according to FHFA data. While PTI ratios provide a useful warning sign for potentially overheated regional / metro areas, some can be explained by other external factors which also need to be considered including nonfinancial reasons for high PTI ratios, credit availability, and changes in leverage.

Freddie Mac wonders if the homeownership rate can fall below 50%. The current level is at 63.5%, which is the lowest in 22 years, and just off the low of 63%, which goes back to 1965, when Census started tracking the statistic. They look at 3 studies, which all predict lower homeownership going forward. The factors inhibiting an increase in homeownership are lower income growth, high rental prices, tight supply, and high student loan debt / tight credit. It is hard to tell what a "normal" homeownership rate as the 2005 spike was the result of a bubble and a lot of social engineering via the housing market, which really started early in the Clinton Administration.

Has the big rally in prices for foreclosed homes run its course? RealtyTrac suggests that it may have, as more and more "mom and pop" investors are winning foreclosure auctions and the professionals are pulling back from the market. Professional investors accounted for almost 10% of all home purchases in the depths of the housing bust, now they account for about 2.5%. There are some fears that this signals another housing bubble. FWIW, home prices are stretched compared to incomes, however that ignores the effect low interest rates are having. Housing bubbles are rare things - prior to the 2006 bust the last bubble in real estate popped in the 1920s. Anyone reading this will probably never see another one. 

Speaking of foreclosures, the people who got foreclosed on early in the housing bust basically missed out on about 10 years of house price appreciation. To add insult to injury, many sold into a cheap housing market (to the professional investors mentioned above) and moved into expensive rentals (managed by the professional investors above). 

Going back into the spring time data reaffirmed the strengthening housing market. The housing data pointed to a market where sales activity is experiencing a springtime burst of activity. One area, however, in the market where the environment remained stagnant involved first-time homebuyers: March's 30 percent level was unchanged from both February and March 2015. First-time buyers in all of 2015 also represented an average of 30 percent.  "With rents steadily rising and average fixed rates well below four percent, qualified first-time buyers should be more active participants than what they are right now," observed Yun. "Affordability and the low availability of starter homes is still a major barrier for them in most markets."

According to the U.S. Census Bureau, North Carolina is now the ninth state with a population of more than 10 million people, as an average of 281 people have been added per day over the last year. Florida has added more people to its state population than California for the first time in a decade and now has more than 20 million residents. California is still ranked as the most populated state with 39.1 million people followed by Texas at 27.5 million. North Dakota saw the largest population increase at 2.3 percent, followed by Colorado, the District of Columbia and Nevada. Other fast growing states over the last year include Utah, Washington, Arizona and Oregon. The population of the U.S. has increased by 0.79 percent between July 1, 2014 and July 1, 2015 to 321.4 million, compared to a rate of 0.78 percent over the previous one-year period. 

Texas now has the lowest number of homes in negative equity, according to CoreLogic. Only 2.1 percent of homes are underwater in Texas, followed by 2.3 percent in Alaska and 2.4 percent in Hawaii.  In Dallas, Texas, less than 1 percent of homes with mortgages are upside down, this number was 30 percent in 2009, but home prices have risen by more than 40 percent in this market, due to increasing home sale prices. In the third quarter of 2015, there were 37.5 million borrowers with at least 20 percent equity, which is up 7 percent from 35 million in the third quarter of last year.

According to Bloomberg News, "The People's Bank of China has started collecting data from the murky world of online financing, in which firms make loans for everything from weddings to mining projects. It's a growing part of a shadow banking market that ballooned 30 percent last year to 53 trillion yuan ($8.1 trillion), or four-fifths the size of the economy, Moody's Investors Service data show. The PBOC also wants to make trading in some commercial loans transparent by building an exchange for transactions, according to local media reports." This so-called shadow lending environment is not good for China, and certainly not good long term for the United States' main buyer of debt. More than 90 percent of China's almost 4,000 lending platforms promised their 2.9 million investors annual returns ranging from 8 percent to 24 percent in March.

Turning to events influencing the world and the bond markets, everyone's thoughts & prayers are with the victims and families of the horrible attack in France - and having a son visiting that area of France is nerve-wracking. As one would expect, the terror attack has garnered everyone's attention but the markets are remaining calm.

Yesterday, however, U.S. Treasury prices fell sharply (the 10-year was down over .5), leading to higher rates, as investors abandoned safe havens like government bonds and the Japanese yen for more exposure to a potential pick-up in economic growth and corporate earnings. The U.S. producer price index for June beat expectations in both the headline and core readings while initial jobless claims remained near their cycle low. Mortgage-backed securities held up okay, but were still down/worse by .125 caught up in the down move in price as lenders were selling.

This morning we've already had the July Empire Manufacturing figure (weak at .55), June Retail Sales (+.6%), and June CPI and Core CPI (+.2%, +.2%). Coming up are June Industrial Production and Capacity Utilization (09:15 EDT), and the scheduled news week ends with May Business Inventories (10:00 EDT) and July Michigan Sentiment (10:00 ET). The 10-year closed Thursday yielding 1.53% and this morning after the initial numbers it is up to 1.56% with agency MBS prices worse nearly .125.

There are a couple upcoming webinars of note.

American Mortgage Law Group and Mortgage Bankers Association are co-hosting a complimentary and very timely webinar, titled, "The Home Mortgage Disclosure Act: Framework, Impact, and Planning." It will be held on Wednesday, July 20, 2016, at 10:30 am Pacific / 1:30 pm Eastern. The webinar will feature special guest speakers from the MBA, as well as AmeriFirst Home Mortgage, and will discuss the "need to knows" about the new HMDA rule, what it means to the industry, and some of the most important best practices to keep you and your company fully compliant. If you and/or anyone at your company are interested in attending this free webinar, please follow this link to register: Click to register and/or feel free to contact AMLG's Managing Member James Brody at jbrody@americanmlg. com.

In FASB news there is a webinar hosted by the MBA on Monday the 18^th.  Session 1, only July 18th, will have a panel of experts from the accounting firm RSM who will provide an overview of the new accounting principle and talk specifically about the impact on investors in mortgage related products. It will also focus on implementation issues and timelines.  Part II is scheduled for August 8^th.

20% of lenders reported that their LOS vendor deliver a satisfactory TRID solution on time. The STRATMOR Technology Insight Survey includes not only lenders experiences with TRID, but also captures detailed information on both LOS and vendor satisfaction. Join more than 100 lenders who have provided feedback on more than 20 Loan Origination Systems. Due to high demand, the deadline to participate has been extended through the end of July. Don't miss your chance to participate in this important industry survey. This survey is for lenders only and should take less than 20 minutes to complete. Participation is FREE and Lender respondents will receive a high-level summary of overall market share by vendor. Detailed survey results and STRATMOR's proprietary analysis of our findings will also be made available for purchase this fall.

Jobs And Announcements

In retail job news, "If you're a producing branch manager or mortgage loan originator, you know that the more loans you close, the better. Assurance Financial has built a reputation for closing loans on time. Our operations staff supports you and your MLO team so you can focus on originating new loans, rather than worrying about closing your pipeline. Assurance is expanding throughout the Southeast and Southwest and looking to hire branch managers and MLOs in Arizona, Colorado, New Mexico, Texas, Arkansas, Louisiana, Mississippi, Tennessee, Alabama, Ohio, Virginia, North Carolina, South Carolina, Georgia, and Florida." For more information, contact Paul Peters, CMB (225-239-7948) or visit www.LendTheWay.com/Careers.

A growing, mid-size level independent mortgage banker domiciled in the Phoenix, AZ area is looking to add a talented enthusiastic person to fulfill a CFO position. "We are willing to relocate someone that would be a good fit to add to our team that has an entrepreneurial spirit to help continue to build and lead high-performing finance organization. We need someone to evaluate our current finance team and identify capability gaps, oversee/integrate financial analysis underlying strategy-setting process, overall financial analysis, reporting and controls and annual budget setting." Please send resumes/questions to me & specify opportunity.

For correspondent sellers, The Money Source (TMS) is continuing the buildout of features for their cutting edge EASY platform. EASY's newest feature allows Correspondent Sellers to download their purchase advice into one bulk Excel report. Your accounting staff will thank you later. TMS is also proud to announce their record breaking month with loan purchases/fundings topping $1B in June! Come see why so many are choosing TMS as their partner for Correspondent lending. For more details on how you can become an approved Seller to The Money Source, please email EVP of Correspondent Sales, Jeff Vanderluit.

String Real Estate Information Services, among the fastest growing providers of outsourcing, technology & consulting services to the US real estate industry, is actively recruiting for an Operations Manager to work from its offices in Bethesda, MD. "This position is essential in ensuring that our team is working smoothly and efficiently to provide our clients with the solutions they need in a timely and accurate fashion. We are looking for outstanding players from the title industry with a proven track record of success! String has been an Inc500 company and a SmartCEO Future50 honoree. Our clients consist of leading US mortgage banks, title agencies and real estate technology providers all across the US. We see tremendous growth opportunities ahead of us: growth over the last two years has been 50% year-on-year. Consider joining us and being an integral part of that growth. Interested candidates should please send their resume to our HR consultant Angela Wells."

Congrats to PRMG and Jay Boand who is PRMG's new Director of Correspondent for the company's Correspondent Division. Jay Boand (pronounced: Bond, Jay Bond) brings with him over 11 years' experience in the mortgage industry primarily in Correspondent Lending and will be responsible for all Correspondent Lending activities including optimizing the efficiency of the loan fulfilment process, delivering world class customer service to clients in alignment with PRMG's mission, and the future development of a delegated offering.

And Capstead Mortgage announced that Andy Jacobs has resigned as President & CEO of the company. Phil Reinsch, who had served as the company's EVP & CFO, was named as the new President and CEO.