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MBS RECAP: 4 Year Prophecy Fulfilled; Now What?

February 27,2020
by admin

10yr yields were as low as 1.24% and ended the day at 1.27% after a decent amount of volatility. MBS gained almost a quarter point, but mortgage lenders did not generally improve rate sheets by that much (and some not at all).

Back in the day (but not too far…), it was hard not to notice that the bond market had a habit of hitting long-term low yields on years that ended in 3 and 8. This began in 1993 and worked out perfectly until 2008. It was the topic of a small amount of inconsequential debate in 2013 as yields were still really low, but had technically bottomed out in 2012. The prophecy was then forgetting in 2018 because, clearly, it wasn’t anywhere close to happening at that point.

Enter 2020 and the rapid rush to new all-time low yields. Consider that in the context of 2012 and 2008 being the last 2 instances of big moves to super-long-term lows and we have a new “4 year prophecy” to replace the “3’s and 8s'” prophecy from the previous 2 decades.

Does any of this matter? No, not really. It’s just kind of interesting to consider. Does anything really matter? Surely, it must, but nothing seems to matter when it comes to derailing concerted global efforts to adjust to a temporarily bleak economic future brought about by Coronavirus (CV). When we have the President declaring that the US outbreak was limited to 15 people, and the next day we have an unexpected headline about California monitoring 8400 people who may have been exposed, 33 people test positive, and 5 of those already leave the state, there’s absolutely no reason that financial markets should consider doing anything but what they’ve been doing.

Stocks are in the spotlight now, with some headlines latching onto the fact that today boasted the biggest single day point loss in history for the Dow (not the biggest % loss though). Given the carnage there, the volatility and overall movement in the bond market is measured by comparison. This could also be a clue that the bond rally is running out of steam. But that’s for tomorrow’s CV headlines to decide.

Lowest Rates in 8 Years, But All Kinds of Disclaimers

February 26,2020
by admin

Mortgage rates hit the lowest levels in 8 years either today or yesterday, depending on the lender, just narrowly edging out the rates seen in early July 2016. There are multiple caveats, however. First off, lenders are responding to recent market movements in different ways. Some lenders move down faster and then remain flat even as the bond market (which dictates rates) improves. Other lenders have been slow to react, but have since moved down more steadily. Still others are somewhere between those extremes.

Perhaps the most important thing to note about mortgage rates this week is that, while they are certainly at long-term lows, they are absolutely NOT moving lower as fast or as much as US Treasury yields. I discussed this in greater detail in the previous rate article and then again this morning on the MBS Commentary blog. Click the links to get caught up, if you’re curious.

Loan Originator Perspective

Wuhan contagion appears inevitable, bond yields are at all time lows, but mortgage rates have scarcely budged the last couple of days. The prospects for significantly lower rates are far from certain, but also appears rates are unlikely to rise quickly. I am locking March closings, floating most loans closing April and beyond.Ted Rood, Senior Originator

Today’s Most Prevalent Rates For Top Tier Scenarios

  • 30YR FIXED – 3.25-3.375%
  • FHA/VA -3.00%
  • 15 YEAR FIXED – 3.00%
  • 7 YEAR ARMS – 2.875-3.125%

Ongoing Lock/Float Considerations

  • 2019 was the best year for mortgage rates since 2011. Big, long-lasting improvements such as this one are increasingly susceptible to bounces/corrections, but 2020’s coronavirus outbreak has provided a second wind for low-rate momentum

  • Fed policy, trade negotiations, and the 2020 presidential election will all play a part in driving rate momentum as the year progresses.

  • The Fed and the bond market (which dictates rates) will be watching economic data closely, both at home and abroad to see just how much of an impact coronavirus will have. Once it looks like that impact is waning, we could see sharp upward pressure in rates (unless another rate-friendly variable steals the show), but that would require a similar bounce in the economic data that has already begun to suffer due to coronavirus.
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders. The rates generally assume little-to-no origination or discount except as noted when applicable. Rates appearing on this page are “effective rates” that take day-to-day changes in upfront costs into consideration.

TREPAC Investors 2020

February 26,2020
by admin

Platinum R President’s Circle – $10,000 + $2,000 to PC

Golden R President’s Circle – $5,000 + $2,000 to PC

  • Diana Ayers sustaining
  • Christi Borden sustaining
  • Vicki Fullerton
  • Tom Gallagher
  • Rene Galvan sustaining
  • Bob Hale sustaining
  • Natalie Henshilwood sustaining
  • Becky Hill sustaining
  • Ronnie Matthews sustaining
  • Mike Mengden sustaining
  • Deborah Spangler sustaining
  • JoAnn Stevens sustaining
  • Ray Wade sustaining

Golden Rs ($5,000)

  • Greenwood King Properties sustaining
  • Wayne Stroman sustaining

Crystal R President’s Circle – $2,500 + $2,000 to PC

  • Mario Arriaga sustaining
  • Esther Cordova
  • Karen Driscoll sustaining
  • Chad Khan sustaining
  • Michelle Murray sustaining
  • Jennifer Wauhob sustaining

Crystal Rs ($2,500)

  • Shannon Cobb Evans
  • Edna Corona sustaining
  • Nancy Furst sustaining
  • Carol Knott Teft
  • Dianne Moore sustaining
  • John Nichols sustaining
  • Peggie Pentecost sustaining
  • Michelle Posey sustaining
  • Nancy Villarreal
  • Jeff Walters sustaining

HAR Diamond – $1,500

  • Marsha Fisk
  • Krista Lancton
  • Christine Rayburn
  • Ed Wolff
  • Gerald Womack

Sterling R President’s Circle – $1,000 + $2,000 to PC

  • Tiffany Curry

Sterling R – $1,000

Lorraine Abercrombie John Daugherty Carol Marple Sam Scott
Marilyn Arendt Jonathan Denissen Dianne McCoy Susan Smith
Ward Arendt Wanda Deveraux Bob Miles Savanna Stanford
Susana Arpe
Margie Dorrance Nelly Mitford Tim Surratt
Aracely Arrazolo
Priscilla Ennis Mary Moffett Marilyn Thompson
Karishma Asrani Cheri Fama Denise Moore Debi Trahan
Jennifer Auer
Trish Ferrier Thomas Mouton Jeani Turk
Kristen Babik
Danny Frank Veronica Mullenix Ruben Villarreal
Misty Bacon
Susan Goehrs John Nichols Ann Walker
Sandy Benson Tracy Goodeaux John Nugent Dottie Wanko
Jamie Bertrandt
Kristi Halphen Mary Papageorge Tina Wilcher
Shad Bogany
Grant Harpold Team Parodi Cynthia Williams
John Braun
Klaus Hernandez Blake Plaster Kristian Williams
Kenya Burrell-VanWormer
Danny Ho Samantha Plomer Jemila Winsey
Amber Burton Alfred
Abbie Holland Lauren Price Patrick Winsey
Bernadine Cannon Pam Hughes Chanel Raesis Beth Wolff
Michael Clapp Theresa Hughes-Hill Chaille Ralph LaCinda Yoakum
Paula Cleveland
Nadia Jubram RE/MAX The Woodlands
Rob Cook Natalee Kelaher Shannon Register
Fabian Corzo Chris Kelso Kat Robinson
Troy Cothran Katie Kossev Rockwell Team
Cherin Cox James Krueger Vernice Ross
Ashley Crum Gary Lee Cristina Schaefer
Jill Daniels Amy Lonsway A. David Schwartz, III
Shawn Dauphine Melissa Marentez Shelly Scanlin

Capital Club – $500

  • Rob Adams, Jr.
  • Cynthia E. Berry
  • Christine McCoy Duncan
  • Tiffanie Jones
  • April Maestri
  • Kiley Rapier
  • Rita D. Santamaria
  • Shareece Schafer
  • Grant Trammell
  • Brent David Turnage

Lone Star Statesman – $250

Susan L. Brown
Elias Camhi
Becky Cornelius
Ashley Esparza
Bill Evans
Chuck Finnell
Lisa Holder
Rachel P. Hrncir
Jennifer E. Jacaman
Gayle G.Kennedy
James Lawson
Michelle R. Marek
Michael McLin
Melissa A. Mims
Connie Moreno
Thinh Pham
Sarah Walder
Brian Worrell

Source: Houston Association of REALTORS®

View Listing Traffic and Track Leads Using CommGate

February 26,2020
by admin

Commercial Gateway ( is continually working with its programming team to meet the needs of the commercial real estate community. We have reached out to brokers and agents, taken their comments and suggestions, and turned them into a plan to continue the expansion of CommGate services.

One of the latest features is a listing traffic report. This graphical report is presentation-ready and may be downloaded as a PDF file for you to print, save, or email. The report not only gives you a tally of all the visitors, but it also displays the origin of the listing traffic. CommGate member traffic generally originates from the research system, while public users browse listings on the public-facing, other partner sites, or the national portal

Other new features include the leads report and its accompanying alert notification. The report gives you the names, telephone numbers, and email addresses of people who either viewed a listing detail page, downloaded a marketing flyer, or added your listing to a report bundle. You can view this report in real time by clicking the View Leads link on the CommGate dashboard. The CommGate system will also send you a daily alert email with the details of the previous day’s activity.

Give the Commercial Gateway team a call for a quick tutorial at (713) 629-1900 ext. 363 or send an email to

Source: Houston Association of REALTORS®

Home Sales Crushed Expectations And Are Now Near a 2 Year High

February 26,2020
by admin

Pending home sales bounced back last month after an unexpectedly dismal performance ended the prior year. The National Association of Realtors®said its Pending Home Sales Index (PHSI), which had dropped 4.9 percent to 103.2 in December, posted a 5.2 percent increase last month to a reading of 108.8. This is 5.7 percent higher than the Index in January 2019.

The PHSI is a forward-looking index based on contracts for existing home purchases. It is generally expected to predict existing home sales over the next several months.

Pending sales rose in three of the four regions compared to December with a small dip in the West. All four regions bettered their year-earlier readings.

An improvement in the PHSI was anticipated, although the results were at the top of the forecast range of 1.0 to 2.5 percent made by analysts polled by Econoday. Their consensus was an increase of 2.2 percent.

“This month’s solid activity – the second-highest monthly figure in over two years – is due to the good economic backdrop and exceptionally low mortgage rates,” said Lawrence Yun, NAR’s chief economist.

“We are still lacking in inventory,” he said, noting December’s and January’s combined supply was at the lowest level since 1999. “Inventory availability will be the key to consistent future gains.”

“With housing starts hovering at 1.6 million in December and January, along with the favorable mortgage rates, among other factors, 2020 has so far presented a very positive sales climate,” Yun said. “Moreover, the latest stock market correction could provide exceptional, even lower mortgage rates for a few weeks, and that would help bring about a noticeable upturn in the coming months.”

Pending sales in the Northeast rose 1.3 percent to 92.9 in January, 1.2 percent higher than a year ago. In the Midwest, the index increased 7.3 percent to 105.3. This was 6.5 percent higher than in January 2019.

The South posted an 8.7 percent gain to start the year and its PHSI of 129.4 was a 7.1 percent annual increase. The index in the West declined 1.1 percent in January 2020 to 92.6, but still was a jump of 5.5 percent from a year ago.

The PHSI is a leading indicator of existing home sales and is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the Index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. NAR will release existing home sales results for January on March 20.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

LO Jobs; Pooling, Non-QM, Appraisal Products; CFPB, Audit, Exams, and Compliance News

February 26,2020
by admin

I was telling my cat Myrtle that U.S. lenders are continuing to bask in the glow of a great 2019 and a start to 2020 (with March and April now looking very good, given rates), but that one of the big worries is about branches and referral partners being picked off, either through acquisitions or by competitors. She seemed disinterested. But she is particularly seemingly interested in is what regulators and Agencies, from the CFPB and HUD through to state “mini-CFPBs,” are doing. For example, just this week we saw a plethora of acronyms in one sentence: The Federal Housing Finance Agency (FHFA, overseer of FNMA and FHLMC) issued a request for input (RFI) related to non-bank membership into the Federal Home Loan Bank System (FHLB). Bank or non-bank, we lend in a very regulated world: more below.

Lender Products and Services

Appraisal tech company, Reggora, announced that it has raised $10 million in Series A funding from Spark Capital and other investors. With the funding, Reggora will focus on adding to its engineering, sales, and operations teams, expanding its nationwide presence, and continuing to innovate in the real estate valuation space. Reggora is a modern appraisal technology company that provides mortgage lenders and appraisal vendors with a two-sided software that streamlines the appraisal process from A to Z. Through advanced and customizable workflows, Reggora’s core features include payment processing, algorithmic appraisal ordering, automatic rule-based reviews, appraisal delivery, status updates, and more. Lenders using Reggora today experience significantly reduced appraisal turn times, lower internal overhead, and an improved buyer experience. For more information, please contact

Super Jumbo and non-QM wholesale lender FundLoans announced the release of its Million Dollar Mortgage Experience podcast episode, The Art of Negotiation. In the highly anticipated episode, FundLoans CEO, Jon Maddux sits with former FBI hostage negotiator and best-selling author, Chris Voss, to discuss communication tactics that are a must in any sales toolbox. FundLoans, a leader in exception-based lending, is paving the way in Jumbo and Super Jumbo lending by offering 48-hour turn times for loan amounts $1.5 MM and greater. To find out more about FundLoans, email

While the coronavirus might pose a threat to public health, the rise of the super virus has had a curious effect on the mortgage market. Maxwell explores the impact of epidemics on the lending industry in their new blog, Market. “For a heads up on what to expect if the coronavirus continues to spread, read the blog here.

Have you heard about the FHFA’s proposed changes to pooling practices? Do you know how they could affect pricing and liquidity in the secondary market? After responding to the FHFA’s Request For Input (RFI) in January, MCT’s Bill Berliner has prepared a handy overview of the proposed changes, including their objectives and implications. Read the white paper and stay informed about regulatory developments that may impact your business.

We Live in Regulated World

Despite the change in administration in Washington DC in January 2017, the CFPB has not gone away. In fact, it is very active, and to pretend it has gone away, or been defanged, is a mistake. The good news is that most companies have made the changes necessary to comply with regulations. (Yes, I realize that some have made changes to comply with holes in the regulations, but that is a different topic.) There’s a lot of stuff going out in the regulatory world, and any lender who says, “I’m not worried, my vendors will tell me what to worry about” needs to up their game. Besides that, vendors involved in technological innovation are also coming increased regulatory scrutiny.

For example, the Consumer Financial Protection Bureau, the South Carolina Department of Consumer Affairs and Arkansas Attorney General Leslie Rutledge have filed a lawsuit accusing several companies of helping to broker contracts that offered high-interest credit to disabled veterans and other consumers. The case built on several previous bureau actions and charged the defendants with four counts of deceptive acts and one count of unfair acts.

As mentioned above, the FHFA issued an RFI related to non-bank membership into the FHLB. Responses will be collected through June 23. Capital markets folks know that mortgage REIT access to the FHLB window is important since FHLB financing could strengthen both the earnings and risk management of the stocks. KBW tells us that access for the small handful of REITs that were grandfathered in (NLY, RWT, STWD, TWO, IVR, and LADR) will lose access as their existing advances expire (although generally over multiple years).

Less than a week ago the CFPB issued a Supplemental Notice of Proposed Rulemaking (NPRM) to amend Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA), to require debt collectors to make certain disclosures when collecting time-barred debts (the “Supplemental Proposed Rule”). Buckley tells us that, “The Supplemental Proposed Rule adds to the CFPB’s proposed rule, issued May 7, 2019, to amend Regulation F to broadly implement the FDCPA, with respect to third-party debt collectors (the ‘Proposed Rule’). The Bureau noted when releasing the earlier Proposed Rule that it was contemplating additional disclosure requirements for time-barred debt, and reserved space for such disclosures within Regulation F, as then proposed. The CFPB released several documents related to the Supplemental Proposed Rule, including a fact sheet discussing the Supplemental Proposed Rule and a report on the disclosure of time-barred debt and the right of revival, providing findings from quantitative disclosure testing that the CFPB conducted.”

If you’re interested in TRID, which is not going away but is being refined and hopefully improved, and have questions about corrected Closing Disclosures (CDs) and the 3-Business Days waiting period before consummation, Model Forms, construction loans, providing Loan Estimates (LEs) to consumers, and Lender Credits, you’re in luck as “The Bureau” has posted Frequently Asked Questions related to the TRID Rule and lender credits.

Recall that late last year the Fed released proposed rules that would ease Dodd-Frank regulations for banks $100B to $250B in assets. The press is calling these “smaller banks” but we will let you be the judge of that one. According to the Financial Times, bank mergers have not been nearly as plentiful as before the crisis, partly due to increased regulatory scrutiny pushing excess capital into dividends and buybacks vs. mergers.

I don’t know if this will make you feel better or worse, but most banks are ill-prepared for complying with the regulatory requirements of an internal audit. Many issues can be found in an internal audit. From being understaffed or undereducated, to a disregard for standard procedures, negligence and breach of fiduciary duty by directors, and even a failure to conduct a timely audit, the list goes on and on. Audits normally look for internal control weaknesses, including weaknesses relating to loan underwriting and credit administration, or repeated deficiencies, where the financial institution ignored findings or left them in an unresolved status. Audit reports should provide at least a description of the scope of work performed, a determination of the underlying causes, a judgment about the significance of the findings, and conclusions regarding the severity and pervasiveness of findings.

Auditors should always have the necessary knowledge and training to conduct certain audits effectively. In general, audits should be performed on time and concluded within reasonable timeframes, and have a scope size sufficient to ensure reliable findings. Internal auditors should not be charged with both audit and operational responsibilities in several areas, which diminishes their respective independence and may lead to governance violation for management. Audit risk analysis and planning must ensure that the audit’s scope covers the range of criteria commensurate with the level of risk in the different areas of the audit.

The Lenders Compliance Group reminds us that a bank’s internal audit department should be tracking exceptions identified by outside entities, including recommendations made by regulators and other third parties, to ensure that such exceptions are appropriately corrected or scheduled for corrective action. It would benefit all banks to develop and implement a comprehensive corporate-wide risk assessment program, enhance their audit exception tracking, better monitor corrective action plans, revise internal audit policies periodically, and fortify the oversight of the Audit Committee.

Lenders Compliance Group posted an article on its Mortgage FAQs website, titled Compliance Management System – Exam Readiness. One of their subscribers got cited for a deficient compliance management program and asked for some urgent guidance. Jonathan Foxx, LCG’s Chairman, wrote a response that you should read. He lays out the dangers in not being prepared, provides a whole set of important questions for self-assessment, and, as a solution, offers the CMS Tune-up!™ – one of many “mini-audits” that the compliance firm has pioneered – which LCG says is cost-effective, done relatively quickly, and offers “actionable findings.” The article has links for presentations and appointments as well as for scheduling calls and audits.

Capital Markets

Financial markets have been rattled by the spread of the coronavirus outside of China this week, with U.S. Treasury rates recording their fifth consecutive day moving down yesterday. The coronavirus outbreak is on track to become a pandemic with most new cases now arising outside China. Norway has its first case as does Brazil, Croatia, France, Finland, and Georgia. While there are only 15 confirmed infections in the U.S. so far, emergencies are being declared in California and almost 100 people on New York’s Long Island are being monitored for signs of the pathogen. So far, the global death toll is approaching 3,000 with more than 81,000 ill.

Rates fell again yesterday, the 10-year Treasury yield ended the session -2 bps to 1.31 percent, though the fall was not as drastic as the beginning of the week. The coronavirus has added uncertainty into U.S. structured finance, which has been humming along since the start of 2020 on low rates and strong investor demand, but uncertainty has been added to the sector’s outlook for the rest of the year.

While structured products tend to lag the secondary moves seen in markets such as equities or high-yield bonds, securitizations are not immune to pressures from the spread of the virus. According to Bloomberg, corporate bond sales in Asia, Europe, and the U.S. slowed considerably in recent days. Those worries have been compounded by possible regulatory changes if a Democrat wins the White House and ongoing challenges in the industry’s transition away from the London interbank offered rate (LIBOR). The “uncertainty band” has widened. I prefer to look at the positives: the current drop in U.S. bond yields is both spurring refinancing in real estate and MBS issuance.

Today’s economic calendar began with a laundry list of economic reports. We’ve had January Durable Orders (-.2% ; ex-transportation +.9%) weekly Initial Claims (+8k to 219k), the second estimates of Q4 GDP (2.1%, unchanged) and the Q4 GDP Deflator (). Later today brings January Pending Home Sales, the February KC Fed manufacturing index, $32 billion 7-year Treasury note auction results, and Fed speak from both Chicago’s Evans and Cleveland’s Mester. In the early going Agency MBS prices are better by a solid .125 and the 10-year is yielding 1.28 percent. As one would expect, mortgage prices are lagging in this bond market rally: prepayment speeds increase, and the credit risk as picked up slightly.


Guaranteed Rate is seeking acquisition opportunities with mortgage companies looking to maximize profitability. Guaranteed Rate, the 3rd largest retail lender in the country, experienced record growth in 2019, creating a great opportunity to partner with like-minded leaders looking to take advantage of our expertise and economies of scale. If you are an owner or CEO of a mortgage company that is looking for better pricing, increased profitability, lower risk and much less stress and hassle, we urge you to e-mail Mark Filler to learn more about integrating your business into our platform.

Spread the word! Colonial Savings, F.A. and its mortgage divisions, Colonial National Mortgage and CU Members Mortgage, are expanding in 2020! This privately owned, Fed-chartered, retained-servicing lender has been financially solid for 68 years and is highly respected! Key positions are available in Dallas/Fort Worth; Underwriting Manager, IA SVP, Servicing Financial Analyst, Sr. Fair Lending Analyst, Retail Mortgage Trainer, Loan Servicing Trainer, Retail Loan Officers and more! Colonial also has a NEW Executive Sales Consultant position in its Midwest Territory (IL, IN, IA, KY, OH, MI, MN, WV, WI). Visit and Apply Today! Also, click here to learn more about the exciting 20 in 2020 recruiting initiative! EOE | M/F/Disability/Vet. | Equal Housing Lender | NMLS ID 401285

A Comptroller is being sought to work alongside the CFO at a strong and rapidly expanding mortgage lender due to innovative technologies and best-in-class performances. Candidate must demonstrate strong knowledge of accounting fundamentals, leadership qualities and communication skills. Incredible culture and career opportunities that make it a one-of-a-kind opportunity. Please submit resume and contact information to Chrisman LLC’s Anjelica Nixt.

MBS Day Ahead: Don’t Expect Mortgage Rates to be Thrilled

February 26,2020
by admin

Good morning. 10yr yields are in the 1.2’s. All-time lows.

We follow MBS and the 10yr Treasury yield (and other rates, when relevant) here. The focus is on the 10yr for THESE REASONS.

Today will be “interesting” then, because mortgage rates aren’t going to do what the 10yr is suggesting. I’ve broken this down before in excruciating detail HERE. <—- That’s the definitive link on this topic, but I’m going to break it down in different, mostly smaller words.

When you get a mortgage, a lender writes a check on your behalf in exchange for you agreeing to pay them back over time. Why would the lender do that? Because they’re counting on you paying back more than you borrowed.

That’s simple right? If they loaned you $250k to buy a house, and you make at least one payment, they’ll get their $250k back plus whatever interest you paid in the first month. Shouldn’t they be happy?

No, not at all. They’d actually be pretty pissed off. Your new loan is a thing of value that can generate money for an investor. As such, they’re willing to pay more than the principal amount of the loan for the right to collect interest. So your $250k loan may have cost $260k to purchase/fund. If you’re familiar with the concept of lender-paid closing costs, that’s where that money comes from. Bottom line, in the above scenario, the lender needs to collect $10k in interest before they break even.

If the lender were buying US Treasuries, they wouldn’t have to worry about the US government deciding to pay the loan back too quickly. Treasuries don’t even have that option. They also don’t have as much interest-earning potential for investors. The mortgage investor is taking more risk for more reward. The risk is that you pay your loan off too quickly and they don’t make money on interest.

When rates fall super duper fast, those risks increase quickly. The investors who buy mortgages know this, so those premiums begin to decline. $260k becomes $258k, etc.

What we’re dealing with here are the building blocks of lending. Whether we’re talking about a Treasury bond or a mortgage, both are loans. Both have a price for the investor/lender and a rate of return. Price and rate are the two key inputs that decide the cost of any given loan. A higher price paid by the investor is the same thing as the investor accepting a lower rate of return and vice versa.

So when we talk about “premiums beginning to decline,” we’re talking about investors paying LOWER prices for any given rate of return. And as the previous paragraph discussed, when an investor is paying a lower price, it’s the same thing as you paying a higher rate. In short: super fast drop in rates = investors worried you’ll refinance too soon for them to break even = investors pay less of a premium for your loan so they can break even sooner, and lower prices = higher rates for you.

If you’ve been reading this and think your head is about to explode due to a logic bomb you think I missed, don’t worry… I didn’t miss it. I realize what I wrote above could be reduced to the assertion that “rapidly falling rates = higher rates.” Here’s how that works:

Just throw the word “relatively” in front of “higher rates.” For the investor who buys loans/bonds (whether it be mortgages or Treasuries), everything is relative. When the rates are falling across the board (i.e. Treasury yields of all kinds declining in concert with mortgage rates), it means investors are paying higher prices for those loans across the board. The refi risk scenario discussed above means the investor isn’t increasing their price offering for mortgages in proportion to the price increases for something like US Treasuries (which, again, don’t carry that “refi risk”).

Looked at another way, if the overall “rate of return” for the bond/loan investor is declining, the simple act of keeping mortgage rates ‘unchanged’ is the same as raising mortgage rates when the overall rate of return in the bond/loan market is holding steady. It’s all relative.

BOTTOM bottom line: the mortgage investor has to worry about you paying your loan off too quickly, so it’s not at all uncommon to see mortgage rates get stuck in the mud even as Treasury yields surge to all-time lows. Given enough time and market stability, mortgage rates eventually follow, but without enough time, sometimes they’ll just wait here and reconnect with Treasuries when rates head back up.

Importance of the Data

February 26,2020
by admin

The 2020 Census will determine congressional representation, inform hundreds of billions in federal funding, and provide data that will impact communities for the next decade.

The 2020 Census will provide a snapshot of our nation—who we are, where we live, and so much more.

The results of this once-a-decade count determine the number of seats each state has in the House of Representatives. They are also used to draw congressional and state legislative districts.

Over the next decade, lawmakers, business owners, and many others will use 2020 Census data to make critical decisions. The results will show where communities need new schools, new clinics, new roads, and more services for families, older adults, and children.

The results will also inform how hundreds of billions of dollars in federal funding are allocated to more than 100 programs, including Medicaid, Head Start, block grants for community mental health services, and the Supplemental Nutrition Assistance Program, also known as SNAP.


The U.S. Constitution mandates that the country count its population once every 10 years. The results are used to adjust or redraw electoral districts, based on where populations have increased or decreased.

State legislatures or independent bipartisan commissions are responsible for redrawing congressional districts. The U.S. Census Bureau provides states with population counts for this purpose.

Federal Funding

The results of the 2020 Census will inform decisions about allocating hundreds of billions of dollars in federal funding to communities across the country—for hospitals, fire departments, school lunch programs, and other critical programs and services.

Learn more about how census results can have an impact on your community.

Business Decisions

The 2020 Census will be valuable to businesses, as the results will provide a rich set of data on the communities they serve, including population trends and growth projections.

Business owners rely on census results to make decisions, such as where to open new stores, restaurants, factories, or offices, where to expand operations, where to recruit employees, and which products and services to offer.

Did You Know?

Each year, Census data informs federal funding for more than 100 programs, including school lunches, highway construction, and education.

Source: Houston Association of REALTORS®

HUD 2020 Update: Service Animal Guidelines for Landlords

February 26,2020
by admin

Often time’s landlords are reluctant when leasing property to pet owners. No matter what policy the landlord decides, by law they must make an exception when approved applicants have a service animal or documented assistance animal. By making an exception, that means not charging pet fees, pet deposits, and making reasonable accommodations for the individual and service animal.

There are many good reasons to be familiar with these guidelines. Following the law is the biggest factor, knowing these guidelines will also help in detecting fraud when applicants claim to have a service animal. It’s no secret that applicants will often present their pet as a service animal to avoid paying fees and pet deposits. It should be a priority from all of us to maintain the integrity of service and support animals for the individuals that need it.

January 28, 2020 the US Department of Housing and Urban Development (HUD) released their updated guidelines for “Assessing a person’s request to have an animal as a reasonable accommodation under the Fair Housing Act (FHA).” (Download PDF Here.)

This notice provides best practices for complying with the FHA.

There are two sections to this notice.

  • Assessing a Person’s Request to have an animal
  • Guidance and documenting the need for assistance animals

Something to remember when assessing a person’s request. Assistance animals are not pets. Animal is the proper term to use. They are animals that do work, perform task, assist, and/or provide therapeutic emotional support for individuals with disabilities.

There are two types of animals covered in theHUD Notice.

  • Service Animals
  • Support Animals, also referred to as Assistance Animals

60% of FHA complaints received are concerning denial of reasonable accommodations and disability access. The most common are request for reasonable accommodations involving service and assistance animals.

What is a Service Animal?

Under the ADA service animal means, “any dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability. Other species of animals, whether wild or domestic, trained or untrained, are not service animals for the purposes of this definition.

What can I ask regarding support animals?

These are the recommend assessments to help determine if an animal is a service animal under the ADA.

  • Is this animal a dog?
  • Is it readily apparent that the dog is trained to do work or perform tasks for the benefit of an individual with a disability?

After the above assessment, housing providers are advised to ask only the two following questions:

  • Is the animal required because of a disability*?
  • What work or task has the animal been trained to perform?

*Never ask about the nature or extent of a person’s disability.

There are additional best practices in the HUD notice depending on how these questions are answered. Following HUD’s guidelines will reduce your liabilities tremendously. This means if a person tells you their snake is a service animal, you can refer to the ADA definition of a service animal, which explains it is not.

How are support animals determined?

There are many places an applicant can go online and print documents stating they have a support animal. Documents should be from a doctor’s personal assessment. They should have personal knowledge of the patient and the details of the disability to make a determination. If a person pays a fee for this documentation over the internet with no doctor/patient relationship, that documentation may be rejected.

Best practices include asking the following questions to the documentation provider:

  • The patients name
  • Whether the health care professional has a professional relationship with that patient/client involving the provisions of health care disability related services
  • The type of animal(s) for which reasonable accommodation is sought
  • Date of last consultation

There are many examples in the HUD 2020 notice that can help you become more familiar with the best practices. I encourage you learn it, and reduce your liabilities. New services such as will take on the liability and provide housing providers with an assessment of service animals and assistance animals.

Source: Jason Waggoner has worked at ACUTRAQ since 2008 helping property managers and real estate brokers maintain compliance and increase efficiency.

Source: Houston Association of REALTORS®

Mortgage Applications Calm Before The Storm?

February 25,2020
by admin

There was a new round of interest rate cuts during the week ended February 21, but consumers largely ignored the additional potential for refinancing. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage volume, increased by 1.5 percent from the previous week on an unadjusted basis, but was down 7 percent on an unadjusted basis. The increase in the adjusted index may have, in part, been because of an adjustment to account for the Presidents’ Day Holiday which shortened the week.

The refinance share of mortgage activity fell to 60.8 percent of all applications from 63.2 percent the previous week. The Refinance Index dropped 7 percent although it remained 156 percent higher than during the same week in 2019.

Purchase mortgage applications did increase. The seasonally adjusted Purchase Index rose by 6 percent from one week earlier although the unadjusted Purchase Index dipped 1 percent compared with the previous week and was 10 percent higher than during the comparable period a year ago.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

“Last week appears to have been the calm before the storm. Weaker readings on economic growth caused a slight drop in mortgage rates, bringing them back to their level two weeks ago, but applications overall moved 1.5 percent higher,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Refinance applications for conventional loans dropped a bit, but FHA refinances increased more than 22 percent. Purchase volume remained strong, supported both by low rates and the increased pace of construction over the past few months. With housing supply at low levels, new inventory is a positive development for prospective homebuyers.”

Added Fratantoni, “As fears regarding the coronavirus have increased, Treasury yields have dropped to record lows this week amid the ensuing financial market volatility. Next week’s results will show the impact this drop in Treasuries had on mortgage activity.”

The FHA share of total applications increased to 10.5 percent from 9.5 percent the previous week and the VA share fell to 11.8 percent from 12.1 percent. USDA loans accounted for 0.5 percent of the total, up from 0.4 percent the week prior.

Average mortgage rates declined during the week for all products tracked by MBA. Effective rates also moved lower.

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with origination balances at or below the conforming limit of $510,400 decreased to 3.73 percent from 3.77 percent and points decreased to 0.27 from 0.28. Rates for the jumbo version of the 30-year FRM, loans with balances exceeding the conforming limit, decreased to 3.72 percent from 3.79 percent,with points increasing to 0.23 from 0.19.

The average contract interest rate for 30-year FRM backed by the FHA averaged 3.84 percent with .26 point. The prior week the rate was 3.86 percent with 0.24 point.

Fifteen-year FRM had an average rate of 3.18 percent, down from 3.22 percent a week earlier. Points declined to 0.23 from 0.26.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) dipped to 3.21 percent from 3.23 percent,with points increasing to 0.28 from 0.21. ARMs had a 5.3 percent share of the weeks activity compared to 5.4 percent during the week ended February 14.

MBA’s Weekly Mortgage Applications Survey been conducted since 1990 and covers over 75 percent of all U.S. retail residential applications Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.