Federal agencies have issued the final standards in regards to Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. We will see more regulators and regulations as Section 342 mandates each federal agency to establish an Office of Minority and Women Inclusion to be responsible for all matters relating to diversity in management, employment, and business activities.  The final standards provide an outline for regulated entities to create and strengthen their diversity policies and practices. Don't be left behind.

What's in a number? How 'bout 10,000? Mortgage Servicing News reports that, per the FHFA, more than 10,000 mortgages were refinanced through the Home Affordable Refinancing Program in May. (500 a day!?) The month's performance brings the total number of HARP refinancings to 3,324,228 since the program began. HARP-related refinancings represented 5% of total refinance volume in May. Borrowers with loan-to-value ratios of at least 105% comprised 24% of HARP loans. Borrowers with loan-to-value ratios of at least 125% made up 8% of HARP loans. HARP refinancings made up at least 13% of all refinancings in both Florida and Georgia. That's more than twice the national rate of 6%.

The CFPB has announced that David Bleicken will be Acting Associate Director for the Division of Supervision, Enforcement and Fair Lending, which is one of the three main divisions at CFPB.   The Division is responsible for examining banks and mortgage companies as well as filing enforcement actions.  Before joining the CFPB, David was with the Pennsylvania Department of Banking (before Securities was added). Meredith Fuchs, pronunciation unknown, currently general counsel for the CFPB, will be Acting Deputy Director when Steve Antonakes leaves.

Consumers now can post narratives of their mortgage complaints on the CFPB's website. The first batch of the more than 7,700 narratives was posted on June 25^th and included hundreds of mortgage complaints. Lenders cannot post their own narratives but have to choose between a few pre-selected options such as "company believes it acted appropriately as authorized by contract or law" or "company chooses not to provide a public response." Much of the mortgage complaints stem from bad customer service borrowers experienced when trying to contact the lender or loan servicer about a problem and are then ignored or bounced around. Many in the housing industry believe that the CFPB's approach is one-sided because it uses unsubstantiated and unverified information, nor does the bureau validate the legitimacy of the complaint. Although, the result of these published complaints has benefited some borrowers, as one homebuyer said his complaint to the CFPB got him a $12,750 refund check and an apology letter from his lender in less than a week.

As the CFPB has delayed the effective date of TRID until early October, several lenders and investors have acted accordingly. For example, Citi has published a newsflash advising legal and compliance teams to monitor the situation. Citi will communicate any changes to their implementation that may affect your compliance development.

Who says Millennials aren't responsible? ID Analytics announced a new study that analyzed consumer behavior among Millennials, Generation X and Baby Boomers. The study examined how often Millennials are seeking and being denied credit. According to the CFPB, more young adults have a higher rate of being "credit invisible", meaning their credit history is "unscorable" based upon current scoring standards. ID Analytics research found that Millennials are being denied credit at a higher rate, even when outperforming demographics with the same credit score range. Baby boomers and Generation X are two to three times more likely than Millennials to be delinquent in making a payment by 12 months or more.

Based upon traditional scoring methods calculated from a mortgage, credit card, auto loan and other installment loans, almost 40 percent of people below 30 years old have a FICO score bellow 621, while others do not have credit scores at all. This type of scoring method may not be valuable for Millennials or provide an accurate assessment of their credit worthiness. Alternative methods would allow insight on how to understand credit worthiness among Millennials by analyzing credit data from banks, wireless, online and sub-prime markets. To read more about ID Analytics' article, click here.

While we're talking about those darlings of the popular press, there are more Americans renting now than in many years - and the bulk of them are in their 20's and early 30's. The homeownership rate has declined for 8 years to 63.7% vs. a peak of 69% in 2004. In the past 10 years, as home ownership has declined, the number of new rental households has increased by 770K annually (the strongest growth since the 1980s). Some of us can remember what mortgage rates were like in the 1980s, so renting rather than buying a home was a logical choice for many people in those years.

But rates are darned low! It turns out that many of the people currently living in rentals are former homeowners who lost their homes to foreclosure and now have credit reports too damaged to buy another home (given much tighter lending requirements). This is not necessarily a permanent circumstance as credit eventually improves and for some, the opportunity to buy a home will once again become possible. Some estimates look for housing starts to rise to 1.9mm by 2019, up from 1.0mm in 2014 as a result.

Home builders are watching the 5 million foreclosures that occurred during 2010 and 2011. Why? Although some loan programs will allow them in sooner, these will be wiped off credit reports by 2020, so that should help increase demand down the road. These two drivers may point to more building later on, but also indicate that there will be a robust rental housing market for a while. This bodes well for banks involved in multifamily lending.

It is also interesting to note that the national vacancy rate for rental housing is at its lowest point in nearly 20 years, and this shortage of properties is causing rents to rise. A report by Harvard finds that 20% of the households that make $45k to $75k per year spend more than 30% of their income on rent. The report also found that the number rises close to 50% in the country's most expensive cities. Pacific Coast Bankers Bank suggests that these reasons, plus the fact that Millennials want to stay mobile, are waiting until later to get married and have children, all add up to opportunity in multifamily lending. There has already been a surge of activity in the multifamily lending sector.

Millennials have begun entering the housing market and will be the largest cohort of home buyers in the near future. As the economy begins to improve, so does the job market and financial standing for many Millennials, allowing them the opportunity to qualify for a home loan. According to NAR, 70 percent of student loan borrowers owe less than $25,000 and the overall financial situation for Millennials is strengthening. The Labor Department reported that the unemployment rate for adults between 25 and 34 years old fell to about 5 percent in February 2015 and 42 percent of Millennials said they plan to buy a home in the next one to five years.

As I travel around visiting with lenders the common theme is that in order to engage Millennials and change their mindset to favor buying, it's important to incorporate technology into your business model. Studies show that home buying Millennials search for homes online using easy-to-use mobile apps and discuss home financing through text messaging. Companies should also utilize social media to attract Millennials and educate them. Another way to connect with Millennials is through their parents, by setting up seminars for parents who want to help their children through the home buying process. Finally, supporting the values of Millennials will draw their attention, as 83 percent said they would buy from companies that supported solutions to specific social issues and 63 percent want their employers to contribute to social or ethical causes they felt were important.

Sure enough, when all eyes were on the unfolding Greece situation, a while back there was a rise in existing home sales in the US. However, even with a rise, Tim Rood of the Collingwood Group warns against getting too excited. He said that the housing market will be "uninspiring for the next two years but that's not necessarily a bad thing." The reason for this is a simple one: supply. He says that there is no supply because of the 15 million homes that are underwater are mostly in the $200,000 and below range. These are starter homes for the millennials. Millennials are currently in the renting stage because they don't have enough built up credit or a stable enough jobs in order to buy a home. In a couple of years when they are ready to buy, the demand will return allowing these homes to be sold. 

Flipping to interest rates, after it spent much of last week in the 2.30% range we closed out the 10-year on Monday at 2.23% as U.S. government notes and bonds continued their two-week rally today after the Chinese stock market "bit it" overnight. While the FOMC has downplayed the risks presented by the crises in the Eurozone and China to its economic outlook, the market is taking these risks more seriously than the Fed. The U.S. economy is relatively closed in terms of real economic activity, but the risk of the global financial system transmitting any shocks to U.S. assets are concerning investors.

Today there is little in the way of scheduled news to move rates, but we will have the May Case-Shiller 20-City Index at 3AM Hawai'i time and July Consumer Confidence at 4AM Hawai'i time, along with a $26 billion 2-year note auction. In the early going we're at 2.25% on the 10-year and agency MBS are off about .125.

These are from a book called Disorder in the American Courts, and are things people actually said in court, word for word, taken down and now published by court reporters that had the torment of staying calm while these exchanges were actually taking place. (Part 2 of 5.)

Jobs and Announcements

Any sales personnel interested in management should know that Sindeo is looking for a Sales Director to drive business growth by managing and developing a large, nationwide team of Mortgage Advisors. "Sindeo is building a dynamic, diverse team to revolutionize the mortgage experience for consumers. Their mission is to simplify life's largest financial decision and help people make smart mortgage choices to get the right loan at the right time. The company is also looking for client-service oriented mortgage professionals in San Francisco, San Diego, Denver, Portland, Hawaii, and Washington DC who share their passion for giving homebuyers a first-rate experience. Want to be part of the team that is building something new? Apply today! (By the way, Sindeo is a 2015 Finalist for Most innovative technology company.

In the wholesale and correspondent channels, PRMG's Dave Pilotte, Regional Vice President, Northern CA and Phil Gouskos, Regional Manager, Midwest Region are actively looking to hire motivated and experienced wholesale and correspondent AEs to help support and serve both Northern California and Midwest markets. "More Organic Growth for PRMG in Northern CA and the Midwest Region!  Please send all resumes and inquires to HR@prmg.net. PRMG has over 1000 employees nationally and is licensed in 47 states with nearly 60 branches located throughout the country! Isn't it time that you took a good look at PRMG?"

And on a global scale, after having completed a successful acquisition of Republic Mortgage Home Loans, Academy Mortgage is looking for additional merger and acquisition opportunities with like-minded companies. "Academy Mortgage was the perfect match for our company," said Scott Leishman, former president and CEO of Republic Mortgage Home Loans. "Service-oriented and people-centric, Academy has an incredible team and culture for success. The production of our loan originators and branches under the Academy model has increased substantially, making this one of the most successful acquisitions in the industry." Leishman invites companies interested in confidentially exploring merger or acquisition opportunities with Academy to contact him. Inquiries may also be directed to Kevin Haycock, Academy's Senior Manager, Mergers and Acquisitions. With more than 200 branches and 2,300 employees nationwide, Academy Mortgage is one of the top independent purchase lenders in the country as ranked in the 2014 CoreLogic Marketrac Report.