The personal consumption index (PCE), another measure of inflation, increased in April largely as a result of higher energy prices; however, excluding food and energy, the core PCE, widely believed to be the Fed’s preferred measure of inflation, increased by 0.1 percent, moderating from 0.3 percent in March, and was up by 1.6 percent from a year ago. This suggests a well-contained underlying inflation and, therefore, a continued modest monetary tightening.

The most spectacular performer of last week, the housing sector, defied expectations of a pullback in April with new record sales of existing single-family homes, condominiums and new homes. Given the remarkable showing of April housing activity, the recently lower mortgage rates, and the record and near-record levels of the Purchase Index in the Mortgage Bankers Association's Weekly Application Survey this month, this year’s home sales should be much stronger than MBA projected last month (a decline of about 3 percent). It is now likely that this year’s home sales could rival last year’s record pace -- or even set a fifth consecutive record.

This week’s economic reports will give us the first glimpse of important, market-moving data for May. The Institute for Supply Management (ISM) manufacturing index should confirm earlier reports of several regional manufacturing surveys that the expansion in the nation’s manufacturing sector has continued a slowdown since last December.

MBA expects the employment report to show a healthy labor market, albeit with less impressive payroll gain than the 274,000 reported for April. Although long-term rates have lately been out of line with fundamentals, a job gain of 200,000 or more could potentially move the 10-year Treasury yield higher.

(Orawin Velz is director of economic forecasting in the Mortgage Bankers Association’s economics and research department. She provides commentary and analysis on key monthly economic indicators. She can be reached at ovelz@mortgagebankers.org.)
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More than half (52 percent) of homebuyers make improvements to their homes within the first year, according to a 2004 survey by the Home Improvement Research Institute (HIRI), Tampa, Fla. Lowe's, Mooresville, N.C., and the National Association of REALTORS (NAR) are partnering to offer a variety of resources that would simplify home improvements when buying or selling homes.

As part of NAR's REALTOR VIP Alliance Program, consumers who are buy, sell or search for homes will receive savings and rebates courtesy of Lowe's through customized mailings from the Realtor they are working with. Consumers will also receive tips on preparing their house for sale or making a new house a home.

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The California Association of Real Estate Brokers, Inc. (CAREB), will receive technology and training resources from First American Corp., Santa Ana, Calif., in an alliance designed to help serve California's African-American homebuyers. First American will provide loan origination technology, non-traditional credit information, sales lead generation data and its Affordable Homeownership Settlement Bundle for a single-price package.

The alliance between CAREB and First American is part of First American's Emerging Markets Initiative, started in October 2003. The organizations said that over time, they hope to increase the number of African-American homeowners by increasing the resources of real estate professionals who serve them.
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Financing consisted of a $51 million first mortgage based on a five-year interest only term. The second mortgage of $14.08 million was an equity based transaction with a co-terminus 5-year interest only term. Richard Scandaliato of NorthMarq Capital Inc.’s Newport Beach regional office arranged the financing.

Cabrillo Palisades Apartments is 98 percent occupied. It consists of 52 two-story apartment buildings and 369 units. The property totals 368,575 square feet, situated on a 12.52-acre site in San Diego County.

On the other side of the coast, NorthMarq’s New York City regional office and its Jacksonville, Fla. regional office worked together to arrange a floating rate bridge loan of $14.205 million for the Villas at Renaissance Square, a 200 unit condominium complex in Clearwater, Fla.

Bruce Whipple, vice president in the New York City regional office, said the loan closed in less than three weeks. Financing was based on a two- year interest only term arranged for the borrower, Montecito Investments Inc., through NorthMarq’s relationship with Capital Source.

In Oakland, Calif.,  NorthMarq Capital arranged $11.5 million in financing for a 178 unit apartment complex built in 1975. The financing was provided through Freddie Mac. Michael Elmore, senior vice president and senior director in NorthMarq’s Los Angeles office arranged the deal. The property is an 18-story building on 1.65 acres. It is currently under renovation.
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Julie Piepho, CMB, is president and owner of Milestone Leadership Consulting in Fort Collins, Colo. She has been a CMB since October 2002, graduating with the class at the 89th Annual Convention in Chicago. Milestone Leadership Consulting (www.milestoneleaders.com) specializes in mortgage consulting, individual and organizational leadership coaching, facilitation and public speaking.

Prior to starting her own company, Piepho worked in the mortgage industry for more than 20 years. While her knowledge ranges from sales and operations management, quality control, project management and joint ventures, she says she “grew up” in the savings and loan industry in Wyoming and her last position was as senior vice president with Wells Fargo Home Mortgage.

Piepho’s personal slogan is “helping people reach unprecedented levels of success”. She believes that each individual and organization has a vision and purpose that can propel them to new heights of success. Her experience in all facets of the mortgage industry allows her to help mortgage companies achieve goals the have only thought about.

Achieving the CMB designation was a goal she started on when she was a loan officer in Wyoming. Her association would not pay for any of the School of Mortgage Banking courses, so she put herself through all three courses.

“The dream was so real. I wanted to achieve my designation. A carrot for me with Course III was to get on the floor of the Chicago Board of Trade and actually ‘trade!’ It was so much fun!” Piepho said.

However, she put her goal of achieving the CMB on hold for more than 10 years, because she allowed herself to get caught up in the daily tasks of work and life.

“Finally, my sponsor and great friend, E. Michael Rosser, CMB, finally sat me down and said, ‘It’s now or never! Practice what you teach.’ So once again, I pulled out my goal sheet and put the CMB designation at the top,” Piepho said. By this time, she was out of the daily routine of the corporate mortgage world, starting a new business and studying for the hardest test she would ever take. The dream became a reality and she achieved her goal.

“The designation has impacted my business greatly, because the CMB brings to me the credentials of a 'Doctorate of Mortgage Banking,'” Piepho said. “Individuals and organizations recognize the knowledge, experience and drive possessed by someone has who achieved their CMB designation.”

When asked what advice she has for those interested in the CMB designation, Piepho said: “Just do it! If you’ve been in the industry for at least five years, you’ve probably have the knowledge you need to obtain your designation. If you don’t have the knowledge, it’s easy to find a CMB to sponsor you and help you achieve that goal. With the option of choosing the Residential or Commercial CMB, and progressing to the Master CMB, there is a CMB for you. I challenge you to become one of the elite professionals in the mortgage banking industry by achieving your CMB designation!”

Like Piepho, you too have exhibited the dedication–years of experience, education and participation within your chosen career. It is now time to claim your reward: the CMB.

Since 1973, leaders within the real estate finance industry have earned the CMB to exhibit their dedication to the industry – and to themselves. You may have thought about taking the steps to earn the CMB – but have asked yourself: Where do I get started? What is involved? CampusMBA Designations Staff and the Society of Certified Mortgage Bankers are available to assist you in making the steps in achieving your goal.

CampusMBA’s CMB Online Prep Course, conducted June 3 through July 15, is available to help you prepare for the CMB exam. This six-week web-based course is facilitated by CMB designees, and study materials will cover each Residential CMB exam topic. The instructors will provide feedback on discussion board comments, as well as sample essay responses, in order to help you focus your knowledge on the exam responses. You just have to take the first step: enroll into the CMB program and submit your resume to begin the point assessment process.

You make decisions everyday that impact the lives of others. Make the decision to change yours by earning your CMB this year. To get started today, contact either Jennifer Ridings at jridings@mortgagebankers.org or (202) 557-2763, or Alicia Willey at awilley@mortgagebankers.org or (202) 557-2766. If you are already a candidate and wish to register for the CMB Online Prep Course, call (800) 348-8653 or visit Web-Based Courses at www.campusmba.org.
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Action Mortgage Co. has been an MBA member company since 1998 and has been serving the Pacific Northwest area with residential real estate financing for more than 11 years. Its strong MORPAC campaign will play an important role in reaching the 2006 election cycle goal of $1.2 million.

MORPAC, is the voluntary non-partisan Political Action Committee (PAC) of the Mortgage Bankers Association. It is the only PAC that directly represents the interests of the real estate finance industry in our nation’s political system. MORPAC raises money to help elect and re-elect candidates to Congress who have an understanding of the real estate finance housing industries, who are supportive of our profession. Therefore, it is crucial that we continue to support these officials in order to protect our member companies. MORPAC is the most powerful vehicle for protecting your company.
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The legislation would also grant the regulator authority to hold the GSEs accountable to adhere to their federal charters, review and approve new GSE programs and set and adjust minimum and risk-based capital standards. The bill would allow for Automated Underwriting Systems (AUS) to continue to be offered by the GSEs to originators, which MBA supports. The affordable housing goals are strengthened, most notably by requiring Fannie Mae and Freddie Mac to contribute 5 percent of their income to affordable housing.

This is a major step toward GSE oversight reform and an important victory for MBA.  It is, however, only the first vote on GSE reform in this Congress, and many hurdles remain before a bill is enacted into law. The Administration is not satisfied that the bill reported out of the Financial Services Committee is strong enough, and there has not yet been any action in the Senate. Going forward, the largest area of controversy will be whether, and how, to limit the size of the GSEs' portfolios.  MBA will continue to keep members apprised of developments as the bills continue through Congress.                    

For more information, please contact Chris Harrington at (202) 557-2863 (charrington@mortgagebankers.org).

MBA Testifies at House Hearing on Predatory Lending
On May 24, MBA Chairman-Elect Regina Lowrie testified before the House Financial Services Subcommittees on Housing and Community Opportunity and Financial Institutions and Consumer Credit at a hearing on "Legislative Solutions to Predatory Lending Practices."

Speaking on behalf of MBA, Lowrie expressed strong support for a uniform national standard to combat abusive lending practices and noted MBA's support for H.R. 1295, the "Responsible Lending Act," sponsored by Reps. Bob Ney, R-Ohio, and Paul Kanjorski, D-Pa.  

MBA supports a number of provisions included in H.R. 1295, including the establishment of a uniform national standard, the opportunity for a lender to cure errors and reasonable assignee liability standards. Lowrie also noted that it is important to the mortgage banking industry that yield spread premiums not be considered in the points and fees calculation, as is the case in H.R. 1295.

As always, MBA will continue to update members on the status of H.R. 1295 as it winds through the legislative process.

For more information, please contact Mary Jo Sullivan at (202) 557-2859 (msullivan@mortgagebankers.org).

Brian Montgomery Confirmation Hearing
The Senate Banking Committee held a hearing May 25 on the nomination of Brian Montgomery to be assistant secretary for housing/FHA commissioner. Upon the announcement of Montgomery's nomination, there was some initial concern among committee members that he lacked the background in housing of some previous FHA Commissioners.  However, during Wednesday's hearing, Montgomery presented himself well, describing himself as "a capable manager and steady leader."  Questioning from committee members was moderate. Montgomery is also known to have a close personal relationship with President George W. Bush.

Notably, when asked about FHA market share, Montgomery indicated that FHA has to raise its profile among consumers and be more "nimble."  He indicated that he believes that many borrowers who have received nonprime loans may have been better served by obtaining an FHA loan.

Montgomery committed to a consultative approach on RESPA reform and stated that there is no movement to propose a rule prior to consulting with Congress and industry. He indicated support for a zero-downpayment FHA product. He also surmised that portions of the current high FHA default and claim rates might be attributable to products developed in the late 1990s to increase homeownership that FHA is "now paying for."

The next step for Montgomery is to have his nomination approved by the Senate Banking Committee before it is taken up by the full Senate. While these votes have yet to be scheduled, MBA expects it will be in the near future.

For more information, please contact Renee Rappaport at (202) 557-2758 (rrappaport@mortgagebankers.org).

MBA to Host Government Housing Finance Programs Conference
On June 2 and 3, MBA will host its inaugural Government Housing Finance Conference in Washington, D.C. The conference will highlight the important role of government homeownership programs and will foster greater communication between lenders and policymakers. 

Featured speakers include Roy Bernardi, deputy secretary at HUD; Frank Davis, general deputy assistant secretary/deputy FHA-Housing Commissioner at HUD; Keith Pedigo, director of loan guaranty services with the U.S. Department of Veterans Affairs (VA); Russell Davis, administrator of the Rural Housing Service with the U.S. Department of Agriculture; Michael Frenz, executive vice president of Ginnie Mae; and MBA Chairman Michael Petrie, CMB.

To register for the conference, visit the Web site at http://events.mortgagebankers.org/fha2005/default.html.  

For more information, please contact Tim Doyle at (202) 557-2860 (tdoyle@mortgagebankers.org).

Illinois House Passes "Predatory Lending Database" Legislation
On May 26, the Illinois House of Representatives passed HB4050, a bill that amends the Residential Real Property Disclosure Act to create a four-year predatory lending database pilot program. Two new amendments were attached to the bill this week, increasing the number of zip codes included in the pilot program.

The database would require loan originators, brokers, credit counselors, title insurance companies and closing agents to submit information online.  Section 72 of the bill requires brokers and loan originators to submit the following to the predatory lending database: loan terms, rate, amortization, fees charged by originator and yield spread premium payable outside closing. In the pilot program area, brokers and loan originators would be required to submit such information to the database within 10 days of receipt of a mortgage application.

Within those 10 days, brokers and loan originators would also be required to provide borrowers with a disclosure notice that lists a minimum of three lenders and their rates and terms. The notice must also indicate whether the comparisons include a prepayment penalty, negative amortization, balloon payment, adjustable rate, or fixed rate and, for each lender, include information on the amortization period, monthly principal and interest payable and yield spread premium, and any other money a broker or loan originator may receive.

MBA's Capitol Assets Program set up a Web site that MBA members residing in Illinois and members of the Illinois MBA may visit to send a letter to their respective state legislator opposing this bill.  To view the letter and talking points, go to http://www.capitolconnect.com/mbaa/alertdetail.aspx?AlertID=42. 

The bill now moves to the Senate for consideration. 

For more information, please contact Beth Percynski at (202) 557-2866 (bpercynski@mortgagebankers.org).
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The Mortgage Bankers Association hosts its first Government Housing Finance Conference, beginning here in Washington, D.C. on Thursday, June 2 and concluding on Friday, June 3. For more information, see "MBA Advocacy Update" above or go to the conference Web site atWeb site at http://events.mortgagebankers.org/fha2005/default.html. 

Upcoming Reports/Events:

May 31: Consumer Confidence, The Conference Board
June 1: MBA Weekly Application Survey
June 1: Construction in Place, Commerce Department
June 2-3: FHA/VA/USDA Housing Finance Conference, Washington, D.C.
June 3: Employment, Labor Department
June 3: Joint Economic Committee Monthly Statement
June 5-8: MBA Presidents Conference, Palm Beach, Fla.
June 7: Consumer Credit, Commerce Department
June 8: MBA Weekly Application Survey
June 8-10: MBA Non-prime Lending & Alternative Products Conference, Washington, D.C.
June 8: Wholesale Trade, Commerce Department
June 10: Trade Balance, Commerce Department
June 10: Treasury Department Monthly Statement
June 12-17: CampusMBA School of Mortgage Banking Course II, Denver
June 14: Producer Price Index, Bureau of Labor Statistics
June 14: Advance Retail Sales, Commerce Department
June 15: MBA Weekly Applications Survey
June 15: CampusMBA: Creating New Customers, San Francisco
June 15: Consumer Price Index, Bureau of Labor Statistics
June 15: Housing Market Index, National Association of Home Builders
June 15: Beige Book, Federal Reserve Board
June 15-17: CampusMBA eMortgage Workshop, San Francisco
June 16: CampusMBA: Creating New Customers, Denver
June 16: New Residential Construction, Commerce Department
June 17: CampusMBA: Essentials on Employment Law, San Francisco
June 22: MBA Weekly Applications Survey
June 23: Existing Home Sales, National Association of Realtors
June 24: New Residential Sales, Commerce Department
June 27: MBA Commercial/Multifamily Regional Servicing Forum, San Francisco
June 28: Consumer Confidence, The Conference Board
June 29: MBA Weekly Application Survey
June 29: Gross Domestic Product, Bureau of Labor Statistics
June 29-30: Federal Open Market Committee Meeting
July 4: Independence Day Holiday (MBA offices closed)
July 10-15: CampusMBA Commercial School of Mortgage Banking I, San Diego
July 12: CampusMBA: Creating New Customers, San Diego
July 12-13: CampusMBA SPeRs and MISMO Workshop, Washington, D.C.
July 13: CampusMBA Audio Program: Making Maintaining Complex Rules Simple
July 17: CampusMBA: Essentials on Employment Law Compliance, San Francisco
July 17-22: Campus MBA School of Mortgage Banking Course I, Washington, D.C.
July 21: CampusMBA: Creating New Customers, Washington, D.C.
Aug. 2-3: CampusMBA: MASI--Capital Markets and Mortgage Pricing Workshop, Washington, D.C.
Aug. 9: Federal Open Market Committee Meeting
Aug. 14-19: CampusMBA School of Mortgage Banking Course III, Chicago
Aug. 21-26: CampusMBA School of Mortgage Banking Course I, San Francisco
Aug. 24-25: CampusMBA: Detecting and Avoiding Mortgage Fraud, San Francisco
Aug. 30-31: CampusMBA: Emerging Markets, Washington, D.C.
Aug. 31: CampusMBA Audio Program: Paper Pusher No More
Sept. 7-9: MBA Regulatory Compliance Conference, Washington, D.C.
Sept. 11-13: MBA Document Custody Conference, Miami Beach, Fla.
Sept. 18-23: Campus MBA School of Mortgage Banking Course II, San Diego
Sept. 19-20: MBA Quality Assurance Conference, Chicago
Sept. 20-21: CampusMBA: Handling Fraud Files, San Diego
Sept. 20-21: CampusMBA: Advanced Regulatory Compliance, Atlanta
Sept. 20: Federal Open Market Committee Meeting
October 21-22: MBA State & Local Workshop, Orlando
Oct. 23-26: MBA Annual Convention & Expo, Orlando
Nov. 1: Federal Open Market Committee Meeting
Nov. 7-9: MBA Accounting, Tax & Financial Analysis Conference, Boca Raton, Fla.
Nov. 10-11: MBA Residential Underwriting Conference, Coronado, Calif.
Nov. 30-Dec. 2: Legal Issues in Mortgage Technology Conference, San Diego
Dec. 4-9: CampusMBA School of Mortgage Banking Course II, Las Vegas
Dec. 7-9: CampusMBA Underwriting University, Miami
Dec. 13: Federal Open Market Committee Meeting

2006
Feb. 5-8: MBA Commercial Real Estate Finance/Multifamily Housing Convention & Expo, Orlando
Feb. 14: Servicing Management Workshop, Phoenix
Feb. 14-17: MBA National Mortgage Servicing Conference & Expo, Phoenix
March 29-April 1: MBA National Technology in Mortgage Banking Conference, San Diego
May 7-10: MBA National Secondary Market Conference, Chicago
May 16-19: MBA Commercial Asset Administration Conference, New Orleans

Information about MBA Events can be found at the MBA Web site, www.mortgagebankers.org; and at the CampusMBA Web site, www.campusmba.org.
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