Seattle's Zillow has published good news for the real estate industry. Its report regarding hidden households and future housing activity indicates that the number of adults per household has increased to 1.83 in 2012, from 1.75 in 2000. This means that there are 5.4 million extra households on top of the existing 116 million households as a source of potential "housing energy." Zillow calculated the level of potential housing energy by the number of potential households, which are the additional households that would be gained if the average number of adults per household returned to 2000 levels - Riverside, Miami and Orlando had the highest share of potential energy.

"I don't like making plans for the day because then the word 'premeditated' gets thrown around in the courtroom." We don't want that, but one thing Realtors and lenders want is young folks with less debt. (There is one company that I know of that is refinancing student debt and helping potential first time home buyer's credit: Social Finance.) A Wells Fargo survey of Millennials finds 47% spend at least 50% their paychecks servicing debt related to credit cards, student loans, mortgages and others.

With the majority of the millennial generation already saddled with debt it may be surprising to find that more millennials are moving to larger and more expensive metropolitan areas.  While these cities do attract young adults for their cultural attractions and public transportation, these cities offer more job opportunities for millennials than other areas. Zillow's analysis of U.S. Census data suggests that there is an inverse relationship between a city's unemployment rate and its share of millennial movers. There are outliers in the data that include Chicago, San Francisco and New York that are attracting a large number of millennials even though the unemployment rate is high. Also, cities like Miami, Las Vegas and Phoenix should be attracting more millennials, since rent is affordable and unemployment rates are low, but they are not. In fact, older movers are more inclined to move to Arizona or Florida and may outnumber younger movers in these areas. Since millennials are moving to cities where home prices are very expensive, more young adults may not intend to a buy a home in the near future as it is out of their reach. Instead, they are moving to these cities because of income growth and employment opportunities.

The Mortgage Bankers Association (MBA) announced a new private exchange which will offer healthcare and other employee benefits for its member companies. The announcement noted that, "Addressing the challenges of maintaining a competitive employee benefit program, 'MBA Health Link' will provide an easy solution for employers wanting to control costs while offering more benefit options to meet the varied needs of their employees. The creation of MBA Health Link is being made possible through an exclusive partnership with Arthur J. Gallagher & Co., a US-based global insurance brokerage and risk management services firm. 'MBA is pleased to partner with Gallagher to create MBA Health Link and thus offer healthcare and employee benefits that are exclusively for our diverse membership,' said MBA Senior Vice President, Residential Policy & Member Engagement, Pete Mills." Companies that adopt MBA Health Link will utilize a defined contribution (DC) strategy.  Unlike the defined benefit approach, a DC strategy allows for transparency in total employee compensation and makes it possible for employers to link their long-term benefits budget with metrics relevant to their business.  A DC strategy works best in a private exchange environment, where employees have a choice on how to spend their benefits dollars. For more information, contact Tricia Migliazzo.

The results from the 2013 American Housing Survey is a detailed report that presents a summary of statistical data in the form of a spreadsheet covering a variety of housing figures.  Topics include single-family homes, apartments, manufactured homes, vacant units, family composition, income, housing and neighborhood quality, housing costs, appliances, fuel type, remodeling and repair, and recent moves. The American Housing Survey is conducted biennially and is sponsored by HUD. This year, new topics to the survey include disaster planning and emergency preparedness, public transportation, household involvement in neighborhood and community activities, and the presence of adult children living at home.

Zillow analyzed U.S. home construction by decade and state, beginning in 1900 up to the current decade. The analysis grouped homes according to the decade they were constructed, encompassing a total of 12 decades, excluding homes that were previously built and then destroyed or rebuilt. Nationally, the greatest portion of existing homes was constructed between 2000 and 2009, representing 16% of all homes built during that decade. Eleven percent of all U.S. homes were built before 1950 and the majority of U.S. homes were constructed in 1950 or later. Homes constructed before 1920 only account for 3% of the current national housing stock, whereas the largest portion of Washington D.C.'s housing stock was built before 1920. Nevada and Arizona saw the largest amount of homes built from 2000 to 2009, at 36% and 29% respectively. Construction has waned since the beginning of the current decade, and is below par the rate set in the latter half of the 20^th century and previous decade.

Let's move on to Freddie and Fannie updates from the last few weeks - they never stop.

I have been asked recently about Fannie's HomePath product. No, it is not discontinued. Rather than offer HomePath as a negotiated variance, Fannie created a new version of HomePath is now available to all lenders as guide-eligible product. This was done in response to feedback from lenders who wanted direct access to some of the flexibilities in HomePath. Lenders should review the guide and the announcement at www.fanniemae.com in order to be familiar with the differences and/or speak with your rep.

Fannie Mae is accepting delivery of HUD-guaranteed Section 184 (HUD-184) Native American mortgage loans and Rural Development (RD)-guaranteed Section 502 (RD-502) loans as standard products for whole loan committing and delivery, with no variance required (MBS execution will be available at a later date).For more information, click here.

Fannie Mae updated policies related to project standards requirements, including changes and clarifications to fidelity/crime insurance and liability insurance for certain projects. In conjunction with these policy changes, the Condo, Co-op, and PUD Eligibility web page has been enhanced and new and updated resources are available. Policy change pertaining to how loan-level price adjustments are applied to certain mortgage loans for borrowers without credit scores, allowing for applicable loan-level price adjustments to be applied based on the credit score of a co-borrower, if applicable, rather than the lowest credit score range. To view the entire announcement 2014-13, click here.

Fannie Mae posted Advance Notice of Future Changes to Investor Reporting Requirement.

This Lender Letter provides advance notification to servicers of changes to certain investor reporting requirements that will become effective in or around the third quarter of 2016. To view the letter, click here.

Fannie Mae announced the publication of the new Single-Family Servicing Guide, which will replace the 2012 Servicing Guide in its entirety. For details, view the announcement by clicking here.

Freddie Mac and Fannie Mae have rescheduled the update to the Submission Summary Report (SSR) in the Uniform Collateral Data Portal® (UCDP®) for December 7. To review the planned UCDP changes, click here.

Freddie Mac is updating Loan Prospector® on November 24 to align with the changes to the requirements for Freddie Mac Home Possible® mortgages.

Fannie Mae has provided notification of upcoming changes related to the assessment of compensatory fees for delays in the liquidation process. To view the Lender letter, click here. Additionally, servicers are notified of changes to two Servicing Guide Exhibits, Foreclosure Time Frames and Compensatory Fee Allowable Delays, and Allowable Foreclosure Attorney Fees.

Freddie Mac's recent bulletin covers several servicing requirement changes including MI delegation of authority for foreclosure sale bidding and requirements for handling insurance loss settlements when the mortgage premises is located in an eligible disaster area as well as properties that are not. To view the complete bulletin, click here.

Fannie Mae released its new Servicing Guide that would replace the 2012 Servicing Guide in hopes of making it easier for servicers to do business with Fannie Mae. The new guide is intended to make locating policies and requirements easier, has created a separate Servicing Guide Procedures and allows for real-time updates. All announcements issued through October 17, 2014 have been incorporated into the new guide. The Servicing Guide has been rewritten to exclude policies and requirements that are not required or duplicative and content has been revised to be consistent with the selling guide. Other changes include submitting the term "lender" for "seller/servicer", "seller", or "servicer", there is a separate Balloon Mortgage Loan Servicing Manual and Investor Reporting Manual.

Turning to the secondary markets, Cerberus' FirstKey is coming to market with an MBS. Besides being guilty of being yet another company with a midDle letTer capitalized, the security is of interest to the market since it is a jumbo deal, rated by Kroll, and backed by loans from CMG and Cornerstone.

Supply and demand continued to set mortgage rates yesterday. Mortgage banker supply picked up, and demand was limited - supposedly due to nervousness about today's Fed minutes. (When I worked on a trading desk we'd blame mysterious Middle Eastern buyers or sellers.) Still, prices improved and by the close the yield on the 10-year was down to 2.32% and agency MBS prices were better by a tad. (A "tad" is a very precise terms known only to capital markets personnel.)

This morning we had the MBA's mortgage application numbers (+4.9% overall, purchases +12% last week!) and will see October Housing Starts and Building Permits. But investors will be more focused on the 2PM EST release of the FOMC minutes from the mid-October meeting which could be particularly market moving. In the early going we're back to 2.34% on the 10-year T-note and agency MBS prices are worse slightly.

Jobs and Announcements

Mortgage Services (MSI), a subsidiary of First State Bank, Member FDIC, has maintained a successful presence in the mini-correspondent channel since its exit from the traditional wholesale model 12 months ago. MSI continues to work with bank and credit union partners throughout the Midwest and is looking to build on its success by adding seasoned sales professionals to further this growth. This is a large territory (ten Midwestern states), working solely with banks & credit unions. MSI offers both wholesale and mini-correspondent fulfillment out of our Oakbrook Terrace & Bloomington, IL operation centers.  Please contact Brian Busch for further details.

Also in the Midwest Optimal Blue Secondary Services is searching for a Business Development Manager in IA, IN, KY, MI, MN, OH, and WI. "The BDM will prospect their territory to achieve maximum profitability and growth in line with company vision and values. The BDM also will be responsible for maintaining a relationship with existing accounts in territory to gain feedback on current satisfaction and identify new opportunities for the client to deploy our systems and services, and is responsible for establishing plans and strategies to expand the customer base in their designated territory area. Please me for the full job description; confidential inquiries and resumes should be sent to careers@optimalblue. com.

In correspondent news, "When choosing a correspondent partner, lenders often focus on the two P's: Product and Price. But what about the third 'P'- Philosophy? Philosophy is probably the most intangible of the three P's but it can have the most dramatic effect on a lender's profitability. For example, some lenders purchasing correspondent loans truly follow the 4155, while others proclaim they have no overlays, and then leave you and your team guessing with their inconsistent approach. One lender that is making a name for itself in the no-overlay correspondent arena is Endeavor America Loan Services. EA's credit philosophy is to truly follow FHA, VA, USDA, and Fannie guides without adding any overlays. EA is seeing dramatic growth in their correspondent channel using this philosophy, coupled with their focus on speed and service, as they position themselves to become the Zappos of the Mortgage Industry." Learn more on how to become approved with Endeavor America by visiting its correspondent or wholesale website today.

Congrats to Mark Casale, Chairman, CEO and President of Essent Group Ltd., who has been named the EY Entrepreneur Of The Year^TM 2014 National Financial Services Award winner. (The EY Entrepreneur of the Year Award, a leading business award for entrepreneurs, encourages entrepreneurial activity and recognizes leaders and visionaries who demonstrate innovation, financial success and personal commitment as they create and build world-class businesses.)