Yesterday I attended the California Association of Mortgage Professionals conference in Southern California, and was talking to a buddy who works at a vendor shop where he had attended a "topless meeting" earlier this week. Of course my pulse quickened a little until he explained that it was "a meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, cellphones and other electronic devices. The purpose of this is to create an environment free from distraction, to foster enhanced focus and to generate more discussions." Drats! Talking about confusion, I don't know if this story is more for the HR staff or the CFO, but any story involving the IRS and employer-sponsored health coverage is going to turn some heads.

Congrats to Fannie Mae, and to the Treasury. Fannie had a nice 2^nd quarter and will send the U.S. Treasury $4.4 billion in September as an interest-rate increase helped fuel a 27% rise in second-quarter profits.

In addition, Fannie Mae acquired $128.1 billion in single-family mortgages in the second quarter, up from $85.2 billion one year ago and $113.2 billion in the first quarter of 2015. Purchase-mortgage volume accounted for 40.3% of total volume, down from 54.4% a year ago, but up from 36.8% in the first quarter. Fannie Mae's serious delinquency rate has fallen nearly 40 basis points in the past year, and now sits at 1.66% as of June 30. Two years ago, the percentage of loans 90 days or more past due was 2.77%. During the first half of 2014, Fannie acquired 63,570 REO and ended the period with an inventory of 96,800 REO properties.

Remember when Freddie & Fannie, managed by the FHFA, came out with their 97% LTV programs at the end of last year - basically to compete with the FHA program? Apparently the program has not "gained much traction." During the earnings conference call Fannie CEO Tim Mayopoulos in response to its financial report showing that Fannie Mae acquired 9,000 mortgages with loan-to-value ratios between 95.01% to 97% from 600 lenders during the first half of 2015 (less than 1% of all loans Fannie purchased during that period), "We have seen some pickup there but overall, it has been pretty modest."

Over the weekend of Aug. 8, 2015, the File Transfer Portal (FTP) will be updated to include many technical improvements that will make the application more robust and efficient but should be relatively transparent to users. To implement this release, the FTP production application will not be available to process files from 10 p.m. ET on Friday, Aug. 7th until 10AM EDT on Sunday, Aug. 9^th.

Fannie Mae has updated its Selling Guide in announcement 2015-08. Some of its updates include allowance of transactions involving community land trusts, properties with resale restrictions, and Community Seconds® with a subsidized sales price to be underwritten by Desktop Underwriter® (DU®) effective with the DU Version 9.2. updating the weekend of Aug. 15, 2015; increased the LTV, CLTV, and HCLTV ratio requirements for certain attached condo units in established projects under the Limited Review process; and policy update for leased solar panels to permit the lease payment to be excluded from the debt-to-income ratio calculation if certain lease provisions are met, updates to certain insurance requirements, and other clarifications.

Per Fannie Mae's updates to its underwriting policies regarding the use of qualifying income and reserve requirements for conventional loans; Sun West has added more clarity to its guidelines regarding current policies on the submission of Fannie Mae conventional loans to Sun West. Clarification requirements regarding the removal of Conversion of Principal Residence requirements, use of other financial assets, and documentation of qualifying income have been updated.

In response to the updated Loan Level Price Adjustments from Fannie Mae and Freddie Mac, Private Client Group (TPG) announced all High Balance and Super Conforming Purchase, Rate/Term, and No Cash Out Transactions will have a (0.250) pts adjustment.

Freddie Mac's Multi-Indicator Market Index (MiMi) reported that nearly 80 percent of top 100 U.S. housing markets are improving. Highlights from the report show that the national MiMi value stands at 75.4, indicating a weak housing market overall but showing an improvement (+0.69%) from February to March and a three-month improvement of (+1.24%). Year over year, the national MiMi has improved +3.11 percent. Some of the most improving metro areas include Portland, Riverside, San Jose and Nashville.

Many, including myself, think e-signatures, e-closings, e-whatever, will be a major IT focus after TRID is squared away. And some lenders are signaling that they are moving in that direction. For example, NYCB spread the word that it "is committed to an easy eSign experience!" "As the industry leader in electronic mortgage closings, we're committed to providing you and your borrowers with an outstanding experience. In recent weeks, we've been listening to your suggestions and are pleased to implement many of your ideas effective with closings on or after 08.06.15. These simple updates are designed to help you easily understand the process along the way. The best way to review these changes is to review our Online Tutorial."

Updates within the Gemstone eSign® Module: Closing/Settlement Agents and Notaries entering the eSign module on Gemstone will now be presented with an easy to follow, 3-step process to executing the eSign® Closing. To help you complete the required electronic closing procedures, you'll see a new "Proceed to Affirmation" button after all electronic signatures have been provided. And, the required Affirmation statement has been moved up the page for easier, more prominent viewing. We've added a highly visible set of reminder instructions for you to understand your required next steps in the closing and made it easier to navigate from the Signing Room to the Gemstone eSign® module."

What's the scoop on homebuilder & sales trends?

Remember that "Pending Home Sales were down 1.8% in June but remained near May's level, the highest in over nine years." NAR chief economist, says although pending sales decreased in June, the overall trend in recent months supports a solid pace of home sales this summer. "Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers' comfort level," he said. "The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows." Strong price appreciation and an improving economy is finally giving some homeowners the incentive and financial capability to sell and trade up or down," adds Yun. "Unfortunately, because nearly all of these sellers are likely buying another home, there isn't a net increase in inventory. A combination of homebuilders ramping up construction and even more homeowners listing their properties on the market is needed to tame price growth and give all buyers more options."

But there is always someone to blame for certain things, and assigning blame for the housing shortage is no exception. Lawrence Yun, chief economist for the National Association of Realtors, repeated his primary theme on this topic of the past year: That the inventory shortage is due to a lack of new construction. That topic is highly debated, with some economists arguing that builders disproportionately favor constructing high-priced housing to bolster their profit margins. Builders have countered that there isn't sufficient demand at the entry-level to warrant large-scale production of less expensive homes.  "We will still have an inventory shortage if builders won't build," Mr. Yun said. "It is just simple math."

An interesting stat demonstrates the lack of starter homes on the market. 10 years ago, about a quarter of new homes had 3 or more bathrooms. Today, that number is 36%. The average size of a new home has increased by something like 140 square feet since the crisis. If you look at the homebuilders, Toll Brothers has been seeing all the action, while the more diversified builders like D.R. Horton and Pulte are only recently beginning to focus on the first time homebuyer. Here are all sorts of fun facts about new construction, courtesy of the Census Bureau. This speaks to both sides of the income inequality debate that has been raging in Washington. If you are an aging baby boomer with assets, QE has been very good to you. If you are a Millennial, the results are mixed at best. You had a very narrow window to pick up a bargain in the real estate market and it closed very quickly. Now house prices are again over their skis relative to incomes. In fact, Bank of America is expecting slightly negative house price growth in 2017-2019 as income growth fails to materialize. What is a Millennial with a bunch of student loan debt to do? Go to Atlanta, Dallas, or Houston.

With the spring market picking up, new home construction is on the rise, reaching a seven year high. According to TD Bank's third annual Mortgage Service Index, the survey discovered that 30 percent of Americans consider now to be a good time to buy a home, compared to 20 percent last year. About 29 percent of consumers were also likely to purchase a home this year, compared to 21 percent in 2014. The Index identified that 2 in 5 consumers feel like there is a lack of inventory in their price range and 44 percent are not familiar with home affordability programs. The majority of buyers (86 percent) felt they had adequate means to educate themselves about the home buying process, 51 percent believed banks could offer more pertinent and helpful information online and 49 percent thought banks could provide better training to loan officers so they could explain options more clearly. Almost half (45 percent) of buyers sought information on home financing through individual meetings with realtors and lenders, whereas 56 percent of Millennials said they obtained information from bank websites, 35 percent through expert websites and 22 percent though social media. Half of Millennials said they were very or extremely likely to purchase a home within the next year and more than one-third consider now to be a good time to buy. To read more about TD Bank's survey, click here.

How about dem rates?! Yesterday Initial Jobless Claims continued their trend: claims have been below 300K since March, the longest stretch since Richard Nixon was in office. Yet the Challenger Job Cuts report showed that employers announced 105,696 job cuts in July, the highest number of job losses in almost four years. Treasuries rallied with the 10-year note hitting an intraday low of 2.22%.

All that is forgotten as this morning we've had the jobs numbers. Nonfarm Payrolls for July came in a +215k, a shade lower than expected, but June revised higher to +231k. The Unemployment Rate was right on expectations at 5.3%, and Hourly Earnings were +.2%. Lastly, the "Underemployment Rate" stands at 10.4%. For anyone looking to predict what rate sheets are going to do, we closed the 10-year at 2.23% Thursday and this morning we're at 2.23% with agency MBS prices nearly unchanged. A yawner of a Friday!

Jobs and Announcements

A well-known East-Coast consulting company is searching for someone with Encompass experience. The candidate will be on an Encompass team working on Encompass development, client interactions, and managing their own projects. The company is a "growing, well established east coast consulting firm that is looking for experienced Encompass users that are interested in joining its team. The team member will be integral part of project team and actively involved in all aspects of Encompass related projects and work with clients on a national level." Please submit confidential inquiries/resumes to me at rchrisman@robchrisman.com, and specify the job.

"Are you a great underwriter and looking for a great new opportunity? MetaSource is a national QC and Compliance Company that audits mortgage files for lenders nationwide. MetaSource is growing and looking to fill multiple positions in our mortgage auditing department. We are seeking Senior Mortgage Auditors/Quality Managers and Mortgage Auditors in our Bristol, PA Draper, UT or Tempe, AZ locations. We are also seeking contract auditors who will have the ability to work from home. At MetaSource our solutions manage risk, improve quality and increase efficiencies for the leading lenders in the industry. For more information click the link above or contact Lisa Lovejolley at 801-905-1516.