In news that should surprise no one, the Census Bureau reports that the U.S. population 65 and older is growing faster than any other group and is now the largest in terms of size and percent of the population according to a new 2010 Census brief. According to the 2010 Census, there were 40.3 million people 65 and older on April 1, 2010, increasing by 5.3 million since the 2000 Census. In 2010, the older population represented 13% of the total population, up from 12.4% ten years earlier. Between 2000 and 2010, the population 65 and older grew 15% while the total U.S. population grew 10%. For you reverse mortgage experts, 85- to 94-year-olds experienced the fastest growth between 2000 and 2010 - up 30%!

Hopefully few of those folks need to work to make ends meet, but if they did there are mortgage companies hiring. In Colorado, Peoples Mortgage Corporation (a subsidiary of Peoples National Bank) created a new division in the state led by Jeff Garman and Paul John and is looking for retail LO's & mortgage bankers. Mr. Garman, VP of Sales and Business Development, comments that, "our platform is second to none and truly brings solid producers to the next level." This division is also looking for in-house closing and post-closing departments. Contact Jeff Garman at jgarman@epeoples.com or Paul John at pjohn@epeoples.com for more information.

And out in Northern California, I have been retained by a well-capitalized, expanding mortgage bank to assist in its search for a National Underwriting Manager. It is licensed in 12 West Coast states and is currently funding approximately $100 million a month. The ideal candidate will be responsible for managing the underwriters' performance through the development and implementation of monthly score cards, the underwriting quality of all office locations, implementing training, working with other senior managers, tracking investor guidelines, rolling out new products, and so on. Please send resumes to me at rchrisman@robchrisman.com. (I am in meetings much of the day, but will respond when I can.)

How much did single family investors help cause the credit crisis? The New York Fed's latest study shows that real estate "investors"-borrowers who use financial leverage in the form of mortgage credit to purchase multiple residential properties-played a previously unrecognized, but very important, role. "These investors likely helped push prices up during 2004-06; but when prices turned down in early 2006 they defaulted in large numbers and thereby contributed importantly to the intensity of the housing cycle's downward leg." Hey, don't shoot the messenger: http://libertystreeteconomics.newyorkfed.org/2011/12/flip-this-house-investor-speculation-and-the-housing-bubble.html. It certainly shows why many servicers are wary of extending several loans to one borrower, in spite of proponents saying those borrowers are "professional investors and know what they're doing."

Last week the commentary discussed the industry trend away from selling loans to aggregators and toward direct agency approval. John Jacobs, SVP of Secondary for Patriot Bank Mortgage wrote, "I am responding to the comment about the amount of business going to Fannie direct.  We are a relatively small correspondent lender and we are applying to become a Fannie seller/servicer for the reasons you have stated in the past.  Very low multiples being paid for servicing are driving the retention of servicing for those companies that can afford the cash flow hit. In a past life, I have been a buyer of servicing, and am stunned by how long the 'cartel' has been able to buy servicing with well less than 100 basis points of the price being paid for the servicing rights.  Irrespective of prepayment speeds, the economic value of current production has to model out well north of 100 basis points. Competition will change this dynamic if other correspondent lenders decide to compete for the business. They are delusional if they think that they can continue to buy loans in major size for long, once the sellers realize how much they are leaving on the table by selling servicing instead of retaining it.  As the saying goes, 'we only want to date pretty girls' but that may not always be possible."

Yesterday the commentary mentioned a precedent in Georgia for GMAC's pulling out of Massachusetts in its correspondent & wholesale channel. Chip C. from FNC wrote, "Rob, the issue here in Georgia was assignee liability.  The legislature passed a law which made the investors liable for the potential errors of the originators.  Fannie and Freddie immediately withdrew from the state (at the time they had the deepest pockets), and of course mortgage credit would have dried up has the law taken effect." And Brian B. from Two River Mortgage noted, "Also, it was New Jersey that S&P refused to rate and thus lenders were pulling out when they implemented their High Cost Loan law. I believe it November 2003."

The realization has set in that the best parts of HARP 2.0 will not be available until after the first quarter of 2012 for brokers and mortgage bankers for borrowers who are upside down by more than 25%. First, only Fannie Mae and Freddie Mac loans executed before May 31st, 2009 are eligible. While the manually underwritten products are currently available, they are open only to loan servicers - most other lenders cannot process manually underwritten conventional loans. One lender wrote, "The products that RMCV will be offering utilize the AUS engines which unfortunately won't support the updates until March 2012.  While we can continue to offer the DU Refi Plus and Open Access products currently available, we cannot offer the updated features until the AUS engines recognize the changes."

The CFPB is accepting complaints regarding home mortgages and will be prepared to handle complaints for all consumer financial products by the end of 2012. For the latest news on mortgages from the agency visit http://www.consumerfinance.gov/press-center/.

Here's an "interesting" sales pitch to consumers. "In working with sellers, we've found that most people have the false assumption that the bank does not want to foreclose.  While this is true in some cases, the banks actually WANT to foreclose on many of the homes out there. Why? Well, the longer you wait to sell your property, the more costs the banks have into it, and the less willing they are to negotiate. That's why when we acquire your property we immediately begin our legal foreclosure defense to stop the bank in its tracks. We force their cooperation because they know we could drag the legal process out for years.  That is why we have such a high success rate (over 90%) of buying the note from the bank.  Remember that our process also protects you from having to face a deficiency judgment, or receiving a 1099 from the lender...Once your property is sold to us, you can track our progress in purchasing your note from the bank here:  http://walkawaytoday.org/fusion/." The note came from "Richard Vaughn, Acquisition Manager, Home Advocate Trustees LLC" at www.walkawaytoday.org - "the nation's largest short-sale buyer." Richard can be found at rvaughn@walkawaytoday.org.

Are banks going to be buying mortgages next year? (Not the servicing, but the asset.) Banks are seeing sharp growth in deposits regulatory pressures to remain in liquid assets, and a lack-luster growth in demand for loans & leases. An important driver of the growth in domestic bank deposit base in 2011 came from the sharp increase in dollar deposits by foreigners (at an annualized rate of $373bn in 2011) and analysts expect foreigners to continue to prefer to park cash in U.S. dollars than in other currencies (specifically, Euro) over the next several months. Based on the historical data, and the current outlook for various factors that are likely to drive bank demand for securities, look for them to invest up to $200 billion in new cash in securities over the next one year. But the capital and liquidity coverage ratios imposed, or expected to be imposed, by Basel III should continue to play an important role in determining the bank demand for agency MBS.

The REMN 203(k) training website was incorrectly noted yesterday. The webinar isn't until 12/12, so there's time: https://www1.gotomeeting.com/register/731336208.

And for those who'd rather learn about USDA loans, Mountain West is hosting a webinar on 12/12 from 10:30-11:30AM PST: https://www2.gotomeeting.com/register/506737586.

The bond market still isn't convinced Europe will successfully find a solution to save its banks and avoid defaults. And with no substantial scheduled news out of the U.S. our markets reflect what is going on there: Europe will set the tone. (Recent U.S. economic data, while improving, is still indicating a stagnant economy at best. Housing remains in depression and employment shows little to no improvements.) Monday 10-year notes closed nearly unchanged at 2.05%. MBS volumes were up slightly, but demand was good so agency mortgage prices saw a slight improvement. Today is a blank on the data front. In the early going we find the 10-yr up to 2.08% and MBS prices worse by about .125.

(Parental discretion advised.)
Why some folks do not attend High School Reunions.
Jan, Sue and Mary haven't seen each other since high school. They rediscover each other via a reunion website and arrange to meet for lunch in a wine bar.
Jan arrives first, wearing beige Versace. She orders a bottle of Pinot Grigio.
Sue arrives shortly afterward, in gray Chanel. After the required ritualized kisses she joins Jan in a glass of wine.
Then Mary walks in, wearing a faded old tee-shirt, blue jeans and boots. She too shares the wine.
Jan explains that after leaving high school and graduating from Princeton in Classics, she met and married Timothy, with whom she has a beautiful daughter. Timothy is a partner in one of New York's leading law firms. They live in a 4,000 sq. ft. co-op on Fifth Avenue, where Susanna, the daughter, attends drama school. They have a second home in Phoenix.
Sue relates that she graduated from Harvard Med School and became a surgeon. Her husband, Clive, is a leading Wall Street investment banker. They live in Southampton on Long Island and have a second home in Naples, Florida.
Mary explains that she left school at 17 and ran off with her boyfriend, Jim. They run a tropical bird park in Colorado and grow their own vegetables. Jim can stand five parrots, side by side, on his "manhood".
Halfway down the third bottle of wine and several hours later, Jan blurts out that her husband is really a cashier at Wal-Mart. They live in a small apartment in Brooklyn and have a travel trailer parked at a nearby storage facility.
Sue, chastened and encouraged by her old friend's honesty, explains that she and Clive are both nurses' aides in a retirement home. They live in Jersey City and take vacation camping trips to Alabama.
Mary says that the fifth parrot has to stand on one leg.


If you're interested, visit my twice-a-month blog at the STRATMOR Group web site located at www.stratmorgroup.com . The current blog reminds everyone about how government intervention in the housing market is nothing new. If we forget history, we are doomed to repeat it, and it is important to know the last 15 years of the history of the agencies. If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what's going on out there from the other readers.