April « 2010 « MBSQuoteline Blog

Below is a collection of articles, news, and announcements associated with our industry.

Archive for April, 2010

BlogTalkRadio Podcast – Apr 26, 2010

Wednesday, April 28th, 2010

Mitch Kider, Weiner Brodsky Sidman Kider PC, was back by popular demand. Last week’s topic of paying overtime to loan originators created many questions which Mitch this week tried to answer. The majority of the questions had to do with (a) what options are available to consider loan originators exempt from overtime; and (b) if they, in fact, cannot be considered exempt, when do they need to begin paying OT and how do they do it.

No one liked the answers given. The recent reversal of opinion by the Department of Labor says that loan originator duties no longer qualify originators as exempt under the administrative exemption. The outside sales exemption will not apply to most originators as they, too often, work from their office or home office. Mitch made the case for originators to be considered exempt under the professional exemption. This will become more and more applicable as the recently implemented loan officer licensing and certification laws kick in. Someone in the industry will need to work with the Department of Labor to determine if loan originators then should be exempt under the professional exemption. If the DOL agrees, we may have the answer we want, loan originators will be exempt. But the answer will likely take months, if not years to receive.

In the meantime, what do you do? According to Mitch, each lending company should begin now to establish policies and documentation to support tracking originator hours and should begin paying OT.

Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lending with Dave Lykken and MBSQuoteline’s Joe Farr :

MBSQuoteline supplies the essential market information necessary for effective decision making by Originators when assisting borrowers during the loan origination process, and for secondary marketing departments while managing pipelines. For additional information or to sign up for a free 2-week trial subscription, visit www.MBSQuoteline.com or call 800-627-1107.

Tune in every Monday at 12:00pm as mortgage industry veteran, David Lykken, along with frequent guest Joe Farr provides up-to-the-minute information on interest rates, loan programs and “hot” industry news related to the mortgage industry. Dial: (646) 716-4972 or log in at: www.blogtalkradio.com/lykken-on-lending

Tags: BlogTalkRadio, Department of Labor, Joe Farr, loan officer licensing and certification laws, loan originators, Lykken-on-Lending, MBSQuoteline, Mitch Kider, outside sales exemption, overtime, podcast, Weiner Brodsky Sidman Kider PC
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Increased Fed Support for MBS Sales

Friday, April 23rd, 2010

Friday morning, CNBC reported that support is growing among Fed officials to begin sales of mortgage-backed securities (MBS) from the Fed’s portfolio. In a program which ended March 31, the Fed purchased $1.25 trillion of MBS to help lower mortgage rates and boost the economy. According to CNBC, “at least” six members of the Fed’s policymaking committee support near-term MBS sales if the economy continues to improve. The selling could begin as soon as the third or fourth quarter of this year. Fed Chief Bernanke still views the likely time frame to begin MBS sales as next year, but his recent comments have indicated a willingness to keep more options open. With the next Fed meeting taking place on Wednesday, the 2:15 et release of its statement will take on added significance. If the Fed actually conveys an intention to begin to sell MBS soon, mortgage rates would be likely to rise on the news.

Tags: Bernanke, CNBC, Fed, Federal Reserve, MBS, MBS sales, MBSQuoteline, mortgage backed securities
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BlogTalkRadio Podcast – Apr 19, 2010

Thursday, April 22nd, 2010

MBS prices are down 3/32nds this morning. Leading Indicators were released at 10:00 a.m. et and were a little stronger than expected. Last week was another good week for mortgage rates. Mortgage rates fell about 10 basis points during the week. The Fed Beige Book painted a pretty picture for mortgage rates, slow growth and low inflation. CPI confirmed the low inflation part as it reported prices in March rose at a 1.1% annual rate. Volatility continued during the week. Volatility has persisted since the end of the MBS purchase program on March 31^st. As the Fed is no longer a consistent big buyer, the market is functioning more naturally and that includes reacting more significantly to economic announcements and changing sentiment.

Mitch Kider, of Weiner Brodsky Sidman Kider PC, joined the show to discuss the result of a recent Department of Labor ruling which changes an interpretation of labor laws as it relates to loan originators (LOs) and overtime. The new ruling overrides previous rulings that allowed LOs to be exempt from overtime as they were considered to be performing administrative duties. Now their duties are not considered administrative and the labor laws says, if they do not meet the definition of an outside salesman, they should receive overtime. This raises many questions. Do LOs need to begin to fill out time sheets? When are LOs not working? Aren’t they selling all the time? How do you measure the amount of overtime to pay? How far back do companies need to go to determine if overtime is due? Mitch will join the show again next week (Monday @ 12:00 p.m.) to answer these an other questions on this subject.

We would like to hear from you. Has your company already begun to pay LOs overtime? Do LOs really want to work stated hours and document their time?

Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lending with Dave Lykken and MBSQuoteline’s Joe Farr :

Tags: Beige Book, BlogTalkRadio, Brodsky, CPI, David Lykken, Department of Labor, Fed, Federal Reserve, inflation, Kider, labor laws, leading indicators, loan originators, MBS Prices, MBS Purchase Program, MBSQuoteline, Mitch Kider, mortgage prices, mortgage rates, Sidman, Weiner
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BlogTalkRadio Podcast – Apr 12, 2010

Thursday, April 22nd, 2010

MBS prices are up nicely this morning, up 9/32nds. No economic data was released this morning. The Dow is also up. It is above 11,000 for the first time in 18 months.

Last week was a great week for the mortgage market. MBS prices improved about 24/32nds during the week. Most of the improvement followed a very strong 10 yr Treasury auction. Strong demand and foreign participation fueled a rally in Treasury prices, which spilled over to MBS prices. Also kind to MBS prices during the week were the minutes from the 3/16 Fed meeting. The minutes showed that the Fed was nearly unanimous in their belief that Fed funds rates need to stay very low for an extended time and that inflation was not a concern. Next week will be full of significant economic announcements. On Wednesday both CPI and Retail Sales for March will be released and on Thursday Industrial Production will be released.

Glen Corso, Executive Director of the Community Mortgage Banking Project, joined the show to discuss further the need to voice concerns about the 5% risk retention provisions in the current Financial Reform bill before the Senate. Glen described that passage of the bill with this provision in its current form will be detrimental to community mortgage bankers and their customers. Glen proposed a revision to the bill to exempt from the retention provisions soundly underwritten loans. The Bill is expected to be voted on by the full Senate in late April and Glen encouraged all the listeners to contact their Senators.

Andy Schell, a CPA and a CMB, joined the show to discuss the importance of quality loan level accounting systems and reports. Too many mortgage bankers have no way of knowing which of their loans make them money and which cost them money.

Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lending with Dave Lykken and MBSQuoteline’s Joe Farr :

Tags: Andy Schell, BlogTalkRadio, Community Mortgage Banking Project, Consumer Price Index, CPI, David Lykken, Fed, Federal Reserve, Glen Corso, Industrial Production, inflation, Lykken-on-Lending, MBSQuoteline, mortgage bankers, mortgage prices, Treasury, Treasury Auction, Treasury prices
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BlogTalkRadio Podcast – Apr 5, 2010

Thursday, April 22nd, 2010

MBS prices are lower this morning after a stronger than expected ISM Services Index was announced at 8:30 a.m. et and then at 10:00 a.m. et a much better than expected Pending Home Sales number was released. This followed a week last week that saw MBS prices fall by about 1%. Last week included the end of the Fed’s MBS purchase program, but the end of the program cannot be the sole blame for the drop in MBS prices. Treasury prices fell as well and stocks improved. Generally, the economic announcements during the week, including the Nonfarm Payrolls, were better than expected increasing the need to build in yield to cover longer term inflation. The spread in yields for 10 yr Treasuries versus mortgage-backed securities did widen but only by 15 to 20 basis points.

The focus of the mortgage industry regarding pending legislative and regulatory issues is now placed squarely on the Senate Finance Committee’s passage of the Restoring American Financial Stability Act. This Act contains many provisions which if passed will impact mortgage companies, but possibly none as significantly as a provision which will require mortgage originators and/or security issuers to retain 5% of the risk of the loans they originate and sell. Special guest Glen Corso, Managing Director of the Community Mortgage Banking Project, explained the vague nature of many of the risk retention provisions of the Act and the substantial degree to which regulatory decisions will dictate how its provisions are interpreted. The retention of risk as included in the Act will substantially change the mortgage industry.

Guests Tom Millon and Rob Katz joined the show to finish the discussion on the risks of implementing a mandatory delivery strategy versus a best efforts strategy. Experienced professionals and accurate, timely data were identified as essential elements of a successful conversion.

Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lending with Dave Lykken and MBSQuoteline’s Joe Farr :

Tags: best efforts strategy, BlogTalkRadio, Community Mortgage Banking Project, David Lykken, Fed, Federal Reserve, Glen Corso, ISM Services Index, Lykken-on-Lending, mandatory delivery strategy, MBS, MBS Purchase Program, MBSQuoteline, mortgage prices, National Association of Realtors, nonfarm payrolls, Pending Home Sales Number, Restoring American Financial Stability Act of 2010, Rob Katz, Tom Million, Treasury, Treasury Auction
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BlogTalkRadio Podcast – Mar 29, 2010

Thursday, April 22nd, 2010

MBS prices were volatile last week and fell about half a point during the week. Most of the push for MBS prices lower came from weak Treasury auctions. On Wednesday the 5 Yr Treasury Note received lower than usual demand, especially from foreign investors, and the yield required from the bidders was higher than the previous trading range. The weakness in the Treasury auction spilled over to the MBS market. The economic data released during the week was mixed with Durable Orders better than expected and the housing data was a little weaker than expected.

All of the focus in Congress now that Health Care has passed seems to be with the Restoring American Financial Stability Act of 2010. This proposed law will have sweeping changes for the mortgage industry, if passed. It includes the creation of a new regulator for consumer protection, retention of 5% of the risk on loans originated and then sold, and increased HMDA reporting requirements, among other things. This 1300 page bill seems to be on a fast track.

Discussion continued on the risks and benefits of converting a mortgage company’s operations from a best efforts delivery of loans originated to a mandatory delivery. The focus of this week’s discussion was on the importance of good data and the need for additional data collection points. Accurate and timely data on loans in pipeline and closed loans is essential to effectively hedging the interest rate risk associated with mandatory delivery of loans, special guest Rob Katz of Del Mar DataTrac explained. Also critical to effectively managing the risk, is the need to have a centralized lock desk to communicate with investors. Having loan originators lock directly with investors may work in a best efforts environment, but not so in with mandatory delivery.

Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lending with Dave Lykken and MBSQuoteline’s Joe Farr :

Tags: BlogTalkRadio, David Lykken, Delmar DataTrac, Durable Orders, Health Care, Health Care Reform Bill, HMDA, inflation, interest rates, investors, Joe Farr, loan originators, Lykken-on-Lending, market, MBS, MBS market, MBSQuoteline, mortgage backed securities, mortgage market, mortgage prices, podcast, Restoring American Financial Stability Act of 2010, Rob Katz, secondary market, Treasury, Treasury Auction, unemployment
Posted in BlogTalkRadio Podcasts | Comments Off