I was in Kansas yesterday, and saw a sign, "Ladies, if a man says he is going to fix something, he will. There is no need to remind him every six months about it." But being reminded once in a while is a good thing. Jeffrey Parks with RPM in Southern California wrote, "Not much has been said about the plight of the First Time Buyer but it is a big problem that needs addressing.  We have always considered this borrower to be the lifeblood of the real estate industry because, in most cases, their purchase frees up a "move-up" buyer.  As anyone who works with them knows, however, they are using FHA or some other small-down program when qualifying to make an offer and then competing against cash buyers.  The result is that their offers are uniformly rejected.  Many agents are burned out and frustrated after many unsuccessful offers and the buyer becomes discouraged as well. Certainly the current low inventory is a culprit here but the old adage "cash is king" is also in play.  When an investor is earning .001% in a money market on his or her $200,000, why not buy a condo that rents for $1200 and get a 4 to 6% return with potential for future appreciation?  This problem will go away when the housing inventory "pipe" starts to fill up but when will that be?"

(I also saw a billboard in the drought-stricken region. In big letters: "Your Wife is Hot!" And in small letters underneath: "You'd better get her A/C repaired.")

Turning to some job opportunities, I have been retained by a Northern California mortgage banker that is seeking an experienced Secondary Marketing/Capital Markets candidate at its headquarters to support its growth to $1 Billion in fundings. The lender is a locally owned, 100% retail, purchase oriented mortgage banker growing rapidly in Northern California. Mortgage production consists of a full suite of loan products including Conventional, FHA/ VA (including 203Ks), Reverse and Jumbo loans.  Successful candidates should have 3 years minimum experience in Secondary (pricing loan scenarios, reviewing /confirming lock requests, selling loans to investors, managing hedge positions, developing price comparison and other reports, etc.), as well as being excellent communicators. Please send confidential inquiries or resumes to me at rchrisman@robchrisman .com.

Also in Northern California, Oakland's Trinity Mutual is searching for both a VP of Production and VP of Operations. The VP of Production will be directly responsible for the sales and processing activities of the branch, sales leadership, recruiting, mentoring, motivating, strategy development and execution, marketing, process management, and compliance. The individual is expected to make loan officer recruiting and management the main activity. The VP of Operations will manage Setup, Loan Processors, Doc Drawers, Funders, Post Closers and Underwriters for Wholesale and Retail Operations. Trinity is a reverse mortgage lender, licensed in California (and soon Oregon and Washington. For more information visit TrinityMutual.com, and to see full job descriptions and/or submit confidential letters of interest contact Michael Fullam at MFullam@trinitymutual .com.

What is the product mix like these days? Freddie Mac reported that more than 95% of all borrowers in the 2^nd quarter who refinanced went into a fixed rate loan and 30% shortened their loan term. And to go along with this news, yesterday the MBA reported the third straight drop in applications from the week before. The Market Composite Index decreased 7.4%, with refi's dropping 9% and purchases increasing about 1%. Still, the refinance share sits at 80.0% of total applications, and the HARP share of refinance activity was unchanged at 24%. The ARM share increased to 4.0% of total applications. Analysts wonder if the recent theme that we have seen over the past few weeks (the population of borrowers benefitting from these stagnant/higher mortgage rates continues to dwindle) is continuing. If it does, companies will either focus on purchases, or begin shift their focus to non-vanilla loans (like HARP) as a means to generate more volume and support their operations overhead.

 While we're chatting about nationwide trends, there is certainly money and value in data. [READ: Average Time From Application To Closing Rises To 48 Days]  Ellie Mae's recent Origination Insight Report showed that in July 58% of mortgages that closed were refinances, up from June's 54%. (Compare that to the MBA's weekly numbers.) Conventional mortgages made up 67% of the mortgages originated through Ellie Mae and FHA loans accounted for 24%, for a total of 91%. Ellie Mae states that its sample represents more than 20% of U.S. mortgage originations (versus the MBA's 75%). Maturities were predictable: about 80% 30-yr, 15% 15-yr (easy to remember!), and 3% ARM's. But Ops folks pay particular attention to Ellie's stats showing that it took loans an average of 48 days from application to close in July, a number that has inched up slowly over the last few months. In terms of pull-through, Ellie Mae reviewed a sampling of loan applications initiated 90 days prior to calculate a closing rate for July: 46%. A typical loan closed during the period had a borrower FICO score of 748, DTI of 23/34 and a loan to value of 80 percent. With the exception of the LTV which has increased by one percentage points, the quality standards are higher than a year ago when the typical FICO was 741 and the DTI was 25/36.  Loans for which the applications were denied typically had an LTV of 85 (compared to 82 percent a year earlier) and a 710 FICO score and 28/44 DTI.  The last two are again higher than a year ago when the typical FICO was 696 and the DTI was 29/45. And for those HARP fans out there, conventional loans with LTV's above 95% declined for the second straight month. 

Yesterday's information about higher prices for specified pools brought some observations, including one from Doug Mayers with MIAC. "Regarding small balance loans, it might be worth pointing out that the spec pool pay ups are only one of two countervailing dynamics in the pricing.  The other is the servicing value, which is lower on low loan balance loans because the read between servicing revenue and cost to service is tighter and may be negative in some cases.   Those who are selling direct to the agencies and are able to create specified MBS pools are in a position to pass through some of the spec pool pay up, but this will be diminished somewhat by the lower servicing value.  Those who can sell only to the aggregators are probably getting only the MSR related hit, and getting little or no benefit for the spec pool pay up that the aggregator will likely receive. As Tad points out, the pay ups are not guaranteed, and can fluctuate, so it can be difficult to pass through consistently."

Investor, agency, and banking updates continue. For the most precise information, read the actual bulletin, but these recent changes will indicate how things are trending.

Spirit of Texas Bank SSB ($305mm) will buy Oasis Bank ($84mm, TX) for an undisclosed sum. BOK Financial (OK) announced it will buy Denver's The Milestone Group Inc., a wealth management company with about 250 high net worth clients and about $1.3 billion in assets under management. Arizona's Western Alliance Bancorp ($7.0B) will buy Western Liberty Bancorp ($180mm, NV) for $55mm in cash and stock, or about 0.74x tangible book. Western Liberty is the parent company of Service1st Bank of Nevada.

Congrats to US Bank, which was upgraded from "A" to "A+" by S&P with its short term A-1 rating reaffirmed.

Bank of America has closed a net 262 banking centers since the beginning of 2011. That puts it well on its way to meeting plans outlined by CEO Moynihan who wants to cut 750 over the next few years. The bank is taking the action as it seeks to cut $5 billion in operating costs.

NMI Holdings Inc., which raised $550 million in April to open a mortgage insurer, is being sued by an Arizona regulator acting as the receiver for PMI Mortgage Insurance, which it seized last year. Accusations include saying that some PMI workers stole information and did tasks for NMI over at least seven months before joining the new MI company. Along with damages, the state wants NMI to be forced to withdraw any applications with insurance agencies and mortgage financiers Fannie Mae and Freddie Mac that relied even partly on taken from PMI. Here is more. An editorial comment from one mortgage banker said, "We'd be happier if PMI would concentrate on paying claims at more than 50 cents on the dollar instead of going after the 'fresh capital' trying to enter the market."

In spite of the closure, Wells Fargo Wholesale's Early Pay Off policy continues to apply to all loans.  Clients should note that loan registrations that are intended to pay off a Wells-serviced loan that funded fewer than 100 days before July 23, 2012 will be cancelled if they haven't yet been received.

Wells Fargo Funding has updated its Market Classification List to reflect current market transitions.  The revisions will affect all Best Effort Registrations, Best Effort Locks, and Mandatory Commitments dated August 6, 2012 and after.

With regards to condo project status data as it pertains to the ULDD update, Wells Funding will continue to use the appraisal and/or the project classification on Fannie Form 1008/Freddie Form 1077 to determine the project status. If the status can't be determined using either the appraisal or the 1008/1077 that is submitted in the closed loan file, the loan will be suspended so that the 1008/1007 can be updated to show the project status as new or established in the Underwriter Comments section.  This policy went into effect on August 20th.

Citibank has published a list of the documents that must accompany loans submitted for purchase.  Conventional loan packages are required to include the final loan application (Form 1003), Uniform Underwriting and Transmittal Summary (Form 1008), note, credit report, and the AUS findings and appraisal where applicable. FHA loan packages should include the note, final loan application, FHA Form 92900LT, credit report, and the Conditional Commitment, AUS findings, and appraisal if necessary.  For VA loans, the submitted package must include the note, final loan application, credit report or IRRRL, and, where pertinent, the appraisal, AUS findings, lender's Notice of Value, and VA Form Loan Analysis 26-6393.  The final HUD1/HUD1A is required for all packages, or, for escrow states, the estimated HUD-1 settlement statement and Final HUD-1 settlement statement signed by the escrow officer.

As per Citi's updated credit overlays, borrowers with conventional or government loans on multiple properties are subject to revised exposure limits.  The full list of July credit overlays can be accessed here.

How 'bout those sales of existing homes? They increased nationally in July, up 2.3% from June and 10.4% higher than July 2011.  Sales figures include single-family homes, condominiums, townhouses, and cooperative apartments.  The median price for an existing home sold in July was $187,300, up over 9% from a year ago. This is the first time there have been five consecutive months with year-over-year price increases since May 2006.  July's increase was also the strongest since January 2006 when the median annual increase was 10.2 percent.

But that wasn't all that happened yesterday. The markets reacted to the news that Merkel is willing to discuss the extension of support to Greece, for 2 years perhaps, as European problems drag on. But the major news was the unexpected tone in August's FOMC Minutes, indicating additional QE was a higher probability than the markets had priced in after a moderate recovery in economic releases as of late. Minutes suggested low expectations for employment recovery by the end of 2014 while inflation is expected to be in check, additional asset purchase programs would be beneficial, and extending the outlook for low rates beyond 2014 and even into a recovering economy would be beneficial. Suddenly e-mail in-boxes were filled with rate improvements, and the U.S. 10-yr Note closed at a yield of 1.72%, up about .75 in price. (It's pretty rare that I can say, "I told you so," but I did suggest earlier this week that there was no reason for rates to be up there.)

And mortgage rates are all about supply and demand, right? Well, with lock desk volumes down, and pipelines pretty well hedged by being sold, ThomsonReuters reported less-than-thrilling supply of $1.5 billion. Demand was good from the usual suspects (hedge funds, money managers, REITS, banks, the Fed, and overseas), leading to a nice rally.

For today's thrills and chills we had good ol' Initial Jobless Claims (+4k to 370k, kind of a non-event), and will have 10AM EST's New Home Sales for July, another housing price index (FHFA's), and the announcement of next week's 2, 5, and 7-yr note auctions. In the early going the 10-yr is sitting around 1.68% and MBS prices are about .125 better.

Here's something for animal lovers, not so much comical but more for general interest. Things would be interesting in the locker room if humans did this: http://gizmodo.com/5936782/the-science-of-why-wet-animals-shake-themselves-dry.