Who says that privacy is alive and well? No one. Check this out.

"Rob, folks wonder about Realtors charging 5-6% commissions, regardless of transaction amount, whether that is fair, and whether or not the National Association of Realtors has any clout. I found this site showing NAR's lobbying efforts - apparently it was #3 in total dollars spent in 2011. This is more than 'big oil,' more than 'big pharma,' and more than military/aerospace." (A look at this year's, assuming these figures are correct, shows the NAR is #2.)

Working with Realtors is something lenders do, and many of those lenders are hiring. In Southern Florida, Home Financing Center is searching for a Chief Financial Officer, and Quality Control and Compliance Officer, and Operations Manager, and underwriters. (Talk about growing!) HFC is the largest privately owned mortgage company in South Florida, is #5 in market share in Miami-Dade County, and is growing. Home Financing Center is also looking for personnel who are experienced with Ginnie Mae Secondary or Ginnie Mae Servicing. For more information on the company visit http://www.homefinancingcenter.com/home.aspx, and resumes should be directed to opportunites@homefinancingcenter .com.

And up the Atlantic Coast in Maryland, American Bank is currently seeking talented leaders to develop our Mortgage Branch lending network in the Mid Atlantic area. American is a federally chartered community bank in Maryland, and the mortgage division has been a vital component of the bank for over 15 years and is well positioned to grow in the marketplace. Regional Managers will be directly responsible for the sales and processing activities of the branch, and specific areas of responsibility include sales leadership, recruiting, mentoring, motivating, strategy development and execution, marketing, process management, and compliance. The Regional Manager is expected to be a presence in the community; building B2B networks, engaged in community events, and building the company brand. The requirements for interested candidates include 5+ years of successful outside retail mortgage origination experience in the current lending environment, a track record of recruiting, and managing a dynamic sales force of 12+ team members, and extensive understanding of mortgage lending, including FNMA, FHLMC, FHA, & VA products and guidelines. For serious inquiries only, please forward your resume to the Group Vice President of the Bank, Mike Baynes at mbaynes@americanfsb .com.

Just because you're the biggest doesn't mean you don't have problems. Wells Fargo announced that it could lose $2.6 billion in addition to the reserves it has already set aside for investor requests to buy back soured mortgage loans, a 13 percent increase from three months ago. Wells is the #1 lender, but "only" the fourth-largest U.S. bank. It had previously said that it increased its reserves in the second quarter for so-called repurchase requests because of rising demands from Fannie Mae and Freddie Mac for losses tied to loans made from 2006 to 2008. At the end of June, the bank had total reserves for repurchase requests of $1.8 billion, up from $1.4 billion at the end of March. The estimate of possible losses on top of those reserves is "reasonably possible" but does not represent a "probable loss," the bank said in its quarterly filing, reports Reuters. As we know, Fannie and Freddie publicly say that they are trying to diminish losses for U.S. taxpayers. Bank of America (#2 bank) has set aside $15.9 billion in reserves for repurchase requests and has said it could lose an additional $5 billion.

But let us talk about those agencies - hats off to them! Freddie Mac announced that it will not require any infusion of cash from the U.S. Treasury following its profitable second quarter. The company will also pay $1.8 billion to the Treasury as a dividend on the 10% senior preferred stock the department holds. During fiscal 2012 (to date) Freddie Mac has paid $3.6 billion in dividends while drawing $0.02 billion in financial support from the government.  In FY2011 it paid $6.5 billion and drew $7.6 billion.  Since it was placed in federal conservatorship in August 2008 the net draw has been $52.2 billion. The results were good - are they enough to discourage too much meddling from politicians about its fate? Freddie reported net interest income during the quarter of $4.4 billion, a decrease in provisions for credit and derivative losses, and overall net income for the second quarter of $3.0 billion compared to $577 million one year earlier and comprehensive income of $2.9 billion compared to $1.8 billion. Harp 2.0 refinancing through Freddie Mac has reached over 200,000 borrowers this year - over one-quarter of the total number of HARP refinancings since the program began in 2009.  More

And this morning Fannie Mae reported a net income of $5.1 billion for the 2nd quarter of 2012. This compares very well to the loss of $2.89 billion last year. Net revenues for the 2012 second quarter rose to $5.82 billion from $5.24 billion in the comparable period in 2011.

Much has been made of the "record-low" interest rates have hit and how conducive an environment it is to refinancing.  Refinancing through the revised Home Affordable Refinancing Program (HARP 2.0) grew to a 33% share of all Fannie Mae and Freddie Mac refinancing in June, surging from the 20% share the program posted in April. And the proportion of those refinancings with very high loan to value (LTV) ratios also increased significantly. It appears that the changes made early this year to the HARP program (removing the 125 percent LTV ceiling, reducing and/or eliminating some fees, and easing lender risk) have worked.  During June Freddie and Fannie refinanced a total of 382,539 loans, and of those over 125,000 were HARP loans. While the HARP loans were fairly evenly divided between F&F, Freddie Mac did less refinancing overall and slightly more HARP loans so had a much higher share of those loans, 44% compared to 26% at Fannie Mae.

The total of HARP 2.0 loans written in the first six months of this year was 422,969, surpassing the 400,024 written during all of 2011.  Since the program was originated in April 2009 1,444,820 borrowers have refinanced through the program. But this is not evenly distributed across the U.S. The proportion of loans refinanced through HARP was double the national average in Nevada, Arizona, and Florida. HARP refinances represented two-thirds of GSE refinancing in those states, and in those three states borrowers with LTVs greater than 105 percent represented more than 80 percent of HARP volume compared to 62 percent nationally.

For borrowers with loans under $85,000, however, the amount they could save tends not to be worth the trouble of going through the refinancing process, which these days can be just as much of an effort as obtaining an original loan.  Such loans are enormously attractive to investors, who at the moment are fretting about the high prices of government-backed securities.  Owing to the expansion of various government programs as well as historically low loan rates, bonds guaranteed by Fannie, Freddie, and Ginnie are averaging 108.65 cents on the dollar, the highest since 1986.  This is also due to the extra costs investors incur for particular bonds above prices in trading where there's a degree of uncertainty as to precisely which securities they're buying.  With the risk and high prices associated with government-backed bonds, investors are willing to pay premium prices for bonds that are the least likely to prepay quickly.

Rock-bottom rates do not a refinancing boom make, necessarily.  The number of refinancing applications, 57% higher than the low recorded this last March, did hit a three-year high earlier this month, but the pace remains 46% below a 2003 peak.  Many bond buyers believe that any refinancing boom activity will be hindered by, amongst other issues, the increasing limitations placed on lenders that restrict their overall capacity and consumers' misgivings about what they perceive to be as a lengthy and difficult process.  With regards to the latter, many homeowners are under the impression that they can't qualify due to depressed housing prices and increased demands for paperwork and verification.  Most low-balance loan holders don't realize the variety of options available, however, and mortgage-bond investors aren't hesitating to pay the protection costs associated with the securities comprised of such loans because of the fact that they're less likely to be refinanced.

Investors seem to be of the consensus that the use of HARP may be nearing its zenith, and consequently pay-ups on the types of highest-rate bonds that provide a guarantee against borrowers' use of the program aren't gaining as much as predicted.  For a while the assumption was that low-balance borrowers with the lowest rates, who presumably had taken out their mortgages fairly recently, wouldn't be as likely to refinance in the immediate future.  Rates, however, have continued to fall, meaning that such borrowers being slow to prepay are no longer a sure thing.

Tuesday was not a good day for rates, although it was hard for anyone to put their finger on why. The $32 billion 3-yr auction will be mopped up by maturing 3-yr and 10-yr issues totaling over $54 billion - so there is more than enough cash chasing yesterday's auction and this week's supply. The supply of agency MBS's has been averaging $1.5-2 billion a day, which matches the Fed buying, and any leftovers are mopped up (yes, I used that term twice) by REIT's and money managers. Although the mopping helped mortgage prices relative to Treasury prices, it didn't help the entire market, so MBS prices were worse by about .250 but the T-note was worse by about .625 and closed at 1.63%.

For a little European excitement, let's turn to Greece. (I guess that's better than turning away from Greece.) Faced with a 3.2 billion euro European Central Bank bond maturity on 20 August, Greece plans to avert default by issuing additional treasury bills - details will be announced Friday. We'll be watching, since the tactic is needed because the next round of rescue money from international lenders has been delayed.

Here in the U.S. today we had/we'll have the MBA's mortgage application numbers for last week, Productivity/Unit Labor Costs, and the Treasury's auction of $24 billion in 10-year notes at 1PM EST. Last week's residential apps dropped almost 2%, but refi's still account for 81% of total volume. And ARM's are still an afterthought at 4% of overall volume.

The first reading for Q2 Productivity is projected at +1.3% (came in at +1.6%) from -0.9% in Q1, while ULC are seen at +0.6% (actually +1.7%) from +1.3%. In the early going we find the 10-yr at 1.62% and MBS prices are up slightly.



A duck walks into a hardware store and asks the guy behind the counter, "Do you have any duck food?"

"No." replies the clerk, "this is a hardware store and we do have any duck food."
The next day the duck goes into the hardware store again and asks the guy behind the counter, "Do you have any duck food?"
"No," replies the clerk, "This is a hardware store; we do have any duck food. I told you that yesterday!"
Next day the duck go into the hardware store again! It asks the guy behind the counter, "Do you have any duck food?"
No replies the clerk, "This is a hardware store, we do have any duck food. I told you that several times now, you dumb duck, and if you come in again I will nail your feet to the floor!!!"
Next day the duck go's into the hardware store again! It asks the guy behind the counter, "Do you any hammers sir" the guys say, "No, sorry, we are fresh out of hammers."
"Well than can I have some duck food?!"