"What I don't like about office Christmas parties is looking for a job the next day." Here are a few tips on how to avoid that. And avoiding mortgage application fraud is even more important - but according to this story in the New York Times this type of fraud is increasing. And how are we in the last non-holiday week of 2014 already?

Something that is unavoidable is M&A in banking and non-depository lenders. A look at Impac's 8-K, filed last week, reads, "Impac Mortgage Holdings, Inc. is currently in negotiations to acquire the mortgage origination business of a leading mortgage originator, which Impac (the Company) believes will complement its current origination business model and position the Company to continue the roll out its new ALT QM loan programs to consumers directly. While negotiations are continuing to proceed, the Company has not yet entered into any definitive agreements related thereto. Although the Company intends to pursue the acquisition, the Company can make no assurances that the acquireree will continue to negotiate until favorable terms can be reached, nor is there any assurance that such an agreement can or will ever be achieved..." Delightfully mysterious - stay tuned...

This is last call to participate in STRATMOR Group's highly sought after LOS Technology Insight survey. This survey now has participation from approximately 200 lenders-- from top 10 originators to small correspondent and broker shops -- with extensive participation from the mid-tier lender group. In order to see the results of this survey, you must participate so don't miss this great opportunity to stand up and be counted! It takes about 15 minutes to complete and, by taking this survey, you will receive high-level summary information as regards to overall market share by product / vendor as well as implementation success metrics. Detailed results will also be available for purchase that will provide valuable insights into doc prep providers, functionality by system (from the lender participants' perspective), deployment preferences, vendor compliance readiness (again, from the respondents' perspective) and upfront cost ranges by system. Don't delay and miss the opportunity to access these invaluable insights that will only be available to our Lender participants. Note that registration ends December 31st.  As is STRATMOR's practice, and to assure confidentiality, we will conduct this as a "blind" survey. All survey results will be aggregated; individual company results will not be disclosed, nor will we publish the results in a way that would enable individual respondent identities to be derived. To participate in the 2014 LOS Technology Insight, register here.

Here's your legal puzzle for the day. What company's t-shirts are now collectibles and has an estimated 209,000 loans that must be reviewed one by one? The answer is Lehman Brothers. Reuters reports that "Judge Shelley Chapman declined a motion for Lehman to increase the amount of reserves it must hold to make payments on 255 residential mortgage-backed securities (RMBS) from US$5bn to US$12.1bn. Chapman also said all 209,000 mortgages underpinning the bonds must be reviewed one-by-one." There's some job security for some out-of-work mortgage folks!

Seventy percent of U.S. adults are unaware of down-payment assistance programs available for middle-income homebuyers in their community, according to findings from the second annual America at Home survey commissioned by NeighborWorks America, a national nonprofit community development corporation based in Washington, DC.

Many Millennials face unexpected hurdles when looking to purchase a home for the first time such as not being able to qualify for a loan due to student debt, low starting salary and the inability to come up with a large down payment.  Zillow analyzed how affordable it is for the average millennial or first-time buyer, given their economic hardships, to purchase a home in certain metro areas. To analyze the data, Zillow assumed that the average first-time buyers makes the median income of $54,000, attains a 30-year fixed rate mortgage with only 5% down and looks for a home priced according to the 33.3 percentile of all home values. Most first time home buyers put less than 20%, so primary mortgage insurance and upfront fees have to be considered and in Q3 of 2014, MI added an average of 1.3 percentage points to the effective mortgage rate. First-time home buyers should expect to pay about 17.4% of their income on a mortgage, compared to 15.3% for more traditional buyers. Despite the hurdles that most millennials face, current affordability for first-time buyers still looks more favorable than the pre-bubble standards from 1985 to 1999, when they could have allocated 22.5% of their income to a mortgage. You can utilize the interactive map to determine how first-time home affordability compares in your area.

A little farther up the age scale, A survey by the Demand Institute finds 63% of Baby Boomers say they plan to stay in their current home when they retire. Of those who said they plan to move, 42% said they would buy a smaller home, 32% said they would buy a larger home and 26% said they plan to buy a the same size home.

Besides downgrading countries like France to AA, Fitch Ratings also publishes reports on residential mortgage-backed securities. And it came out with a forecast for 2015. "While the vast majority of structured finance sectors maintain stable of positive outlooks for 2015, the residential mortgage-backed securities sector faces a 'challenging' environment next year. "Despite strong credit attributes, RMBS issuance is expect to remain anemic as the industry continues to face challenges including ongoing GSE dominance; more attractive financing alternatives such as whole loan sales; new mortgage regulation; and a weak 'AAAsf' investor base," Fitch said in its 2015 Outlook: U.S. Structured Finance. "Fitch expects many of these same challenges will persist in 2015 and keep U.S. RMBS a small niche market with projected issuance in the $15 billion-$25 billion range."

Analysts knew what Fitch said about regulations. Namely that this year global regulators finalized many outstanding regulatory issues, most notably, risk retention, Regulation AB II, and Basel III, along with regulatory capital and liquidity guidance for financial institutions. Fitch said it expects issuers will spend "significant efforts" implementing processes to comply with the new regulations throughout 2015. It also noted that with the Federal Reserve's sunset of quantitative easing, market attention will turn to timing of Fed tightening and a higher rate environment in general. "The effect of higher rates will be felt across all sectors, albeit to varying degrees," Fitch said. It said rising interest rates and unwinding QE will not destabilize the global recovery or financial markets, although an increase in financial market volatility is expected.

In general, the news last week reinforced views that the fourth quarter of 2014 is doing pretty well - which ordinarily would push rates higher. The most impressive data point this week came from the November retail sales report that showed sales climbing 0.7 percent for the month while October sales were revised higher. Inflation data for November reflected the continued slide in oil prices with declines in both the producer price index and the import price index.

But there are two sides of every coin, and every economic statistic. Paul Jacob with Wunderlich Securities points out that, "The rally of 2014 has stampeded through virtually every counter-argument:  strengthening economy, solid stock market, the end of QE balance sheet expansion, rumblings from the Fed about the Funds rate. Sitting from 2.09% on the 10-year in Dec. 2014, it's a useful place to step back and review the bullish and bearish arguments for the bond market." And so we have the dual meanings of oil weakness & dollar strength, inflation, the Federal Reserve's actions, the labor market, consumer spending, the volatility in the stock market, and so on.

The markets will continue to be driven by the price of oil although this week's FOMC meeting will give us more information. The 8th and final meeting of 2014 for the Federal Open Market Committee (FOMC) is scheduled for December 16-17.  It was at the Fed's December 2008 meeting (held on 12/16/08) that the FOMC voted unanimously to cut short-term interest rates to near zero from its then current level of 1%.  Since then, the FOMC has met 47 times and voted on each occasion to leave rates unchanged

Certainly lower gasoline prices are stoking consumer confidence (the University of Michigan's preliminary Consumer Sentiment Index for December surged to 93.8, well above consensus expectations) and more confident consumers are buying more stuff. The Libyan National Oil Company says that the oil ports of As Sidra and Ras Lanuf had stopped operating because of fighting - and it is tough to forecast our economy when our markets are driven by news like this.

Hey, only a short period left to do your Christmas shopping! Or maybe I should say, close your loans. Regardless, we're faced with another week of titillating economic news here in the U.S. starting with today's Empire Manufacturing number, the Industrial Production & Capacity Utilization duo, and the NAHB Housing Market Index. Tomorrow is another duo - Housing Starts and Building Permits. Wednesday we'll see the Consumer Price Index and the Federal Open Market Committee's rate decision (don't look for any excitement). Thursday is Initial Jobless Claims, a Philly Fed number of little consequence, and the Leading Economic Indicators figures. The 10-yr closed Friday at 2.09% and this morning we're up to 2.13% with agency MBS prices only worse a few 32nds.

 

Jobs

For jobs, Radian Guaranty, Inc. is seeking an Inside Account Executive to work in its Philadelphia headquarters. Qualifications include a minimum one year of Mortgage Insurance or Mortgage Product experience, previous corporate telemarketing/call-center experience preferred and a minimum of one-year experience in customer service or sales capacity. Headquartered in Philadelphia, Radian connects lenders, homebuyers, investors and loan servicers using a suite of private mortgage insurance and related risk management products and services. "We help promote and preserve the tradition of homeownership while protecting lenders from default-related losses on residential first mortgages. Our commitment to homeownership is built on a foundation of evaluating credit risk; we help clients and investors expertly and prudently manage risk in any market condition." Qualified individuals are encouraged to apply!

And PRMG, one of the top 25 mortgage companies in the United States, is seeking a Correspondent Underwriting/Operations Manager at its headquarter location in Southern California to lead the overall loan process. This position is responsible for ensuring that all service level agreements as set by the company are maintained, while efficiency, quality and productivity goals are met for (processing, closing and underwriting). The individual in this position will also work to facilitate a positive, dependable, team-oriented environment among Operations and Sales staff. Requirements include a bachelor's degree or equivalent work experience, a minimum 5 years of operations management and a proven track record in mentoring and leadership. PRMG has over 750 employees nationally and is licensed in 47 states with nearly 50 branches located throughout 10 states. Contact HR@prmg. net for a complete job description or confidential inquiries.