The State Regulatory Registry, LLC (SRR) and the Nationwide Mortgage Licensing System (NMLS) have issued an Annual Report for 2011. The report notes that 2011 was the first year that all state mortgage regulatory agencies utilized NMLS to manage mortgage loan originator (MLO) licenses on the system.  In addition, in January the NMLS Federal Registry became fully operational.  By the end of the year the Federal Registry contained active registrations for 11,081 institutions and 375,654 registered MLOs.

According to the report, for the first time almost all of the nearly half-million individual mortgage loan originators (MLOs) along with their license or registration status and other information are now available to the general public on-line through NMLS Consumer Access. 

By the end of 2011 NMLS had registered 17,121 companies holding 22,124 active state licenses.  There were 11,081 depository institutions and subsidiaries registered, and 116,991 individual MLOs holding 226,010 active state licenses in addition to the federally registered MLOs noted above.

Licensing and registration trends show that the number of active companies, institutions and MLOs in NMLS gradually increased throughout 2011 but decreased significantly in January 2011 and January 2012 as entities surrendered or failed to renew by the year-end deadline.  The number of MLO state licenses reached a high of 226,023 on December 31, 2011 but had declined 18.4 percent to 184,345 licenses by the end of January 2012.

As shown in the table below, institutions and MLOs in the Federal Registry represent institutions regulated by five federal entities and a few privately insured credit unions.

The report says that under state supervision, loan origination is still very much a local small business activity.  The vast majority of MLOs, 90,000 or 77 percent, operate in a single state; 13,300 are operating under two state agencies.  Less than 7,000 are operating in more than two states but 3,100 of those are operating in 11 or more jurisdictions.

Companies within the state-supervised mortgage industry conduct a wide range of activities and most employ only a small number of MLOs.  Here is a breakdown of company activities among state-licensed companies.

Realtors® massed on the Washington Mall on Thursday to show their strength in a year in which their trade organization, The National Association of Realtors (NAR) seems anxious on several levels.  An estimated 15,000 Realtors gathered at the foot of the Washington Monument to, in the words of NAR President Moe Veissi "protect the American Dream of homeownership."

According to a press release regarding the Rally to Protect the American Dream as the event was characterized, "Realtors® are working to ensure that people who want to own a home or invest in real estate and can responsibly afford to do so will continue to have the opportunity to do that."

NAR is currently concerned about discussions to include a requirement for a 20 percent downpayment in the proposed definition of Qualified Residential Mortgage and proposals being floated to  eliminate or limit the current tax deduction for home mortgage interest.  The association also wants reform of the secondary market and improved liquidity in both commercial and residential lending.

The rally also helped NAR demonstrate its political clout.  The association, at one time the largest trade group in the country before the housing collapse drove many of its members out of the business, has been concerned about its influence especially since the Supreme Court ruled in the Citizens United case.  Last year it raised the political action portion of its dues by $40, a move that did not sit well with many members, citing  the need to compete against the millions in soft money for political advocacy the ruling was expected to unleash.  NAR hoped to raise $80 million with the increase.

According to the Center for Responsive Politics NAR is number four on its list of "Heavy Hitters" with 41.9 million in political donations since 1989.  They were a major force in electing Isaacson to the Senate in 2004 and in his 2010 re-election.

Those who attended the rally heard from former Realtor and Senator Johnny Isaacson (R-GA) and Representative Steny Hoyer (D-MD).  Isaacson told the crowd that homeownership has always been part of the American dream, "It is my hope that this rally encourages Congress and the president to move forward with policies that are supportive of housing, which is vital to job creation and the recovery of our economy," he said.

Hoyer said, "Stabilizing the housing market remains a central issue for Democrats, who understand we will not have robust economic growth without a vibrant housing market and that access to homeownership remains a critical component of the American Dream."

For the second time in a week a national housing trade organization has shown that purchasing a home is now within the reach of a record number of Americans.  On Tuesday the National Association of Realtors® (NAR) published its affordability index indicating the purchasing power of American households had broken through 200 on its index for the first time in its history.  Today the National Association of Home Builders (NAHB) and Wells Fargo released their Housing Opportunity Index (HOI) which showed that 77.5 percent of all new and existing homes sold in the first quarter of 2012 were affordable to families earning the national median income.  This is up from 75.9 percent in the fourth quarter of 2011.

While NAR used a national median income of just under $61,000 the one used by the NAHB was $65,000, however each study primarily gauged affordability by measuring local home prices against local  prevailing incomes.  

"Homes in this year's first quarter were more affordable than they have been at any time in more than 20 years, yet many potential sales are not happening because of overly tight lending conditions that are keeping hardworking families from obtaining a suitable mortgage," said Barry Rutenberg, chairman of the NAHB. "Without this significant hurdle, the housing and economic recovery could be proceeding at a much stronger pace." 

The most affordable major housing market in the first quarter was Indianapolis-Carmel, Ind., where 95.8 percent of homes sold during the period were affordable to households earning the area's median family income of $66,900.  Other major markets ranking high in affordability were Dayton, Ohio; Lakeland-Winter Haven, Florida and Modesto, California.  New York City and surrounding areas in New York and New Jersey ranked as least affordable for the 16^th consecutive quarter.  Just 31.5 percent of homes sold during the quarter were affordable with the areas' median income of $68,200.  Other largely unaffordable areas were the San Francisco area, Honolulu, and Los Angeles.

There were substantial improvements in delinquency rates during the first quarter of 2012 according to the National Delinquency Survey for the period released this morning by the Mortgage Bankers Association.  At a conference call for media accompanying the release, Jay Brinkmann, MBA's Chief Economist and Senior Vice President of Research and Education said that the combined percentage of loans in foreclosure or at least one payment past due was 11.33 percent, a 120 basis point (bp)  decrease from last quarter and 98  from one year ago.  This was the lowest that this measure has been since 2008.

This improvement was driven by a 62bp  decrease in the rate of loans that were 30 days or more delinquent.  Brinkmann said that the first quarter generally experiences a decline in 30-day delinquencies for seasonal reasons but this year the decrease was even larger and that rate, in fact, has returned to historical norms at 3.13 percent.

There was also a decrease in seriously delinquent loans, down 29bp, and this was not accompanied by an increase in foreclosure starts which, in fact, decreased 3bp on a non-seasonally adjusted basis.  Brinkmann said, looking at the two figures together leads to the assumption that a lot of very delinquent loans are being resolved in a manner other than foreclosure. 

The overall delinquency rate decreased to a seasonally adjusted rate of 7.40 percent, down from 7.58 percent in Q42012 and 8.32 percent in the first quarter of 2011.  Loans 90+ days delinquent were at a rate of 3.06 percent versus 3.11 and 3.62 percent.

Nationally the percentage of loans in foreclosure rose slightly but Mike Fratantoni MBA's Vice President of Research and Economics said the top-line figure covers up a couple of trends.  "First, the percentage of loans in foreclosure is up for prime and FHA loans.  The percentage of subprime loans in foreclosure continues to fall as the subprime loans age and the problems loans are resolved one way or the other.  However, the percentage of loans in foreclosure for both FHA loans and prime fixed-rate loans are climbing and are just below all -time records." 

"The problem continues to be the slow-moving judicial foreclosure systems in some of the largest states," Franantoni said.  While the rate of foreclosure starts is essentially the same in judicial and non-judicial foreclosure states, the percent of loans in the foreclosure process has reached another all-time high in the judicial states, 6.9 percent.  In contrast that rate has fallen to 2.8 percent in non-judicial state, the lowest since early 2009."

The difference in the rates is even more disturbing in certain states.  In Florida the percent of loans in foreclosure is now 14.31 percent.   New Jersey and Illinois are trailing Florida substantially but  still have rates of 8.37 percent and 7.46 percent and, Brinkmann said, their rates are increasing.  Ten judicial states have rates above the national average of 4.39 percent.  On the other hand, among the 29 states using a non-judicial process, only Nevada has a higher rate of loans in foreclosure (6.47 percent) than the national average.

Five state now account for over 52.4 percent of all foreclosures in the country while accounting for only 32.1 percent of the loans services They are Florida, California, Illinois, New York, and New Jersey.

This judicial/non-judicial dichotomy is beginning to play out with FHA loans as well.  The foreclosure inventory for FHA loans is 3.83 percent, an increase of 29bp from the previous quarter.  The rate in judicial states, however is 5.59 percent compared to 2.69 percent.  Fratantoni indicated that this was somewhat the case for  VA loans as well.  "You have to ask yourself, " he said, "who is going to bear the costs of this differential foreclosure rate?  They are being passed on to all FHA borrowers in the form of higher across-the-board increases in insurance premiums, and ultimately to the taxpayers if the FHA insurance fund develops a shortage.

Another problem FHA is encountering is the result of the sharp increase in loan volume they experienced in the 2008-2009 period when other credit dried up.  Those loans are now entering the period in their life cycle most when delinquencies commonly occur.  Right now, while that vintage of loan accounts for 15 percent of all delinquent loans but represents 47 percent of FHA delinquencies.

In answer to a question during the conference call, Brinkmann said that he had seen little impact from the recent settlement agreement with servicers from five major banks.  He said the foreclosure inventory might have built a bit in anticipation of it, but "we know it didn't affect the 90 day bucket."  Any impact now that the agreement has been signed might not be noticed as it would have to differentiate itself from everything else that is going on in the system and it would also be felt largely on a state by state basis rather than nationally.

Brinkmann summed up the NDS report saying,  "Overall it has good news about where  we are going but the bottom line is we are still dependent on the economy."  As the job situation has improved so have delinquency figures and as long as this continues and there are no serious problems, such as a melt-down in Europe, we should see more of the same. 

The State Regulatory Registry, LLC (SRR) and the Nationwide Mortgage Licensing System (NMLS) have issued an Annual Report for 2011. The report notes that 2011 was the first year that all state mortgage regulatory agencies utilized NMLS to manage mortgage loan originator (MLO) licenses on the system.  In addition, in January the NMLS Federal Registry became fully operational.  By the end of the year the Federal Registry contained active registrations for 11,081 institutions and 375,654 registered MLOs.

According to the report, for the first time almost all of the nearly half-million individual mortgage loan originators (MLOs) along with their license or registration status and other information are now available to the general public on-line through NMLS Consumer Access. 

By the end of 2011 NMLS had registered 17,121 companies holding 22,124 active state licenses.  There were 11,081 depository institutions and subsidiaries registered, and 116,991 individual MLOs holding 226,010 active state licenses in addition to the federally registered MLOs noted above.

Licensing and registration trends show that the number of active companies, institutions and MLOs in NMLS gradually increased throughout 2011 but decreased significantly in January 2011 and January 2012 as entities surrendered or failed to renew by the year-end deadline.  The number of MLO state licenses reached a high of 226,023 on December 31, 2011 but had declined 18.4 percent to 184,345 licenses by the end of January 2012.

As shown in the table below, institutions and MLOs in the Federal Registry represent institutions regulated by five federal entities and a few privately insured credit unions.

The report says that under state supervision, loan origination is still very much a local small business activity.  The vast majority of MLOs, 90,000 or 77 percent, operate in a single state; 13,300 are operating under two state agencies.  Less than 7,000 are operating in more than two states but 3,100 of those are operating in 11 or more jurisdictions.

Companies within the state-supervised mortgage industry conduct a wide range of activities and most employ only a small number of MLOs.  Here is a breakdown of company activities among state-licensed companies.

Realtors® massed on the Washington Mall on Thursday to show their strength in a year in which their trade organization, The National Association of Realtors (NAR) seems anxious on several levels.  An estimated 15,000 Realtors gathered at the foot of the Washington Monument to, in the words of NAR President Moe Veissi "protect the American Dream of homeownership."

According to a press release regarding the Rally to Protect the American Dream as the event was characterized, "Realtors® are working to ensure that people who want to own a home or invest in real estate and can responsibly afford to do so will continue to have the opportunity to do that."

NAR is currently concerned about discussions to include a requirement for a 20 percent downpayment in the proposed definition of Qualified Residential Mortgage and proposals being floated to  eliminate or limit the current tax deduction for home mortgage interest.  The association also wants reform of the secondary market and improved liquidity in both commercial and residential lending.

The rally also helped NAR demonstrate its political clout.  The association, at one time the largest trade group in the country before the housing collapse drove many of its members out of the business, has been concerned about its influence especially since the Supreme Court ruled in the Citizens United case.  Last year it raised the political action portion of its dues by $40, a move that did not sit well with many members, citing  the need to compete against the millions in soft money for political advocacy the ruling was expected to unleash.  NAR hoped to raise $80 million with the increase.

According to the Center for Responsive Politics NAR is number four on its list of "Heavy Hitters" with 41.9 million in political donations since 1989.  They were a major force in electing Isaacson to the Senate in 2004 and in his 2010 re-election.

Those who attended the rally heard from former Realtor and Senator Johnny Isaacson (R-GA) and Representative Steny Hoyer (D-MD).  Isaacson told the crowd that homeownership has always been part of the American dream, "It is my hope that this rally encourages Congress and the president to move forward with policies that are supportive of housing, which is vital to job creation and the recovery of our economy," he said.

Hoyer said, "Stabilizing the housing market remains a central issue for Democrats, who understand we will not have robust economic growth without a vibrant housing market and that access to homeownership remains a critical component of the American Dream."

For the second time in a week a national housing trade organization has shown that purchasing a home is now within the reach of a record number of Americans.  On Tuesday the National Association of Realtors® (NAR) published its affordability index indicating the purchasing power of American households had broken through 200 on its index for the first time in its history.  Today the National Association of Home Builders (NAHB) and Wells Fargo released their Housing Opportunity Index (HOI) which showed that 77.5 percent of all new and existing homes sold in the first quarter of 2012 were affordable to families earning the national median income.  This is up from 75.9 percent in the fourth quarter of 2011.

While NAR used a national median income of just under $61,000 the one used by the NAHB was $65,000, however each study primarily gauged affordability by measuring local home prices against local  prevailing incomes.  

"Homes in this year's first quarter were more affordable than they have been at any time in more than 20 years, yet many potential sales are not happening because of overly tight lending conditions that are keeping hardworking families from obtaining a suitable mortgage," said Barry Rutenberg, chairman of the NAHB. "Without this significant hurdle, the housing and economic recovery could be proceeding at a much stronger pace." 

The most affordable major housing market in the first quarter was Indianapolis-Carmel, Ind., where 95.8 percent of homes sold during the period were affordable to households earning the area's median family income of $66,900.  Other major markets ranking high in affordability were Dayton, Ohio; Lakeland-Winter Haven, Florida and Modesto, California.  New York City and surrounding areas in New York and New Jersey ranked as least affordable for the 16^th consecutive quarter.  Just 31.5 percent of homes sold during the quarter were affordable with the areas' median income of $68,200.  Other largely unaffordable areas were the San Francisco area, Honolulu, and Los Angeles.

There were substantial improvements in delinquency rates during the first quarter of 2012 according to the National Delinquency Survey for the period released this morning by the Mortgage Bankers Association.  At a conference call for media accompanying the release, Jay Brinkmann, MBA's Chief Economist and Senior Vice President of Research and Education said that the combined percentage of loans in foreclosure or at least one payment past due was 11.33 percent, a 120 basis point (bp)  decrease from last quarter and 98  from one year ago.  This was the lowest that this measure has been since 2008.

This improvement was driven by a 62bp  decrease in the rate of loans that were 30 days or more delinquent.  Brinkmann said that the first quarter generally experiences a decline in 30-day delinquencies for seasonal reasons but this year the decrease was even larger and that rate, in fact, has returned to historical norms at 3.13 percent.

There was also a decrease in seriously delinquent loans, down 29bp, and this was not accompanied by an increase in foreclosure starts which, in fact, decreased 3bp on a non-seasonally adjusted basis.  Brinkmann said, looking at the two figures together leads to the assumption that a lot of very delinquent loans are being resolved in a manner other than foreclosure. 

The overall delinquency rate decreased to a seasonally adjusted rate of 7.40 percent, down from 7.58 percent in Q42012 and 8.32 percent in the first quarter of 2011.  Loans 90+ days delinquent were at a rate of 3.06 percent versus 3.11 and 3.62 percent.

Nationally the percentage of loans in foreclosure rose slightly but Mike Fratantoni MBA's Vice President of Research and Economics said the top-line figure covers up a couple of trends.  "First, the percentage of loans in foreclosure is up for prime and FHA loans.  The percentage of subprime loans in foreclosure continues to fall as the subprime loans age and the problems loans are resolved one way or the other.  However, the percentage of loans in foreclosure for both FHA loans and prime fixed-rate loans are climbing and are just below all -time records." 

"The problem continues to be the slow-moving judicial foreclosure systems in some of the largest states," Franantoni said.  While the rate of foreclosure starts is essentially the same in judicial and non-judicial foreclosure states, the percent of loans in the foreclosure process has reached another all-time high in the judicial states, 6.9 percent.  In contrast that rate has fallen to 2.8 percent in non-judicial state, the lowest since early 2009."

The difference in the rates is even more disturbing in certain states.  In Florida the percent of loans in foreclosure is now 14.31 percent.   New Jersey and Illinois are trailing Florida substantially but  still have rates of 8.37 percent and 7.46 percent and, Brinkmann said, their rates are increasing.  Ten judicial states have rates above the national average of 4.39 percent.  On the other hand, among the 29 states using a non-judicial process, only Nevada has a higher rate of loans in foreclosure (6.47 percent) than the national average.

Five state now account for over 52.4 percent of all foreclosures in the country while accounting for only 32.1 percent of the loans services They are Florida, California, Illinois, New York, and New Jersey.

This judicial/non-judicial dichotomy is beginning to play out with FHA loans as well.  The foreclosure inventory for FHA loans is 3.83 percent, an increase of 29bp from the previous quarter.  The rate in judicial states, however is 5.59 percent compared to 2.69 percent.  Fratantoni indicated that this was somewhat the case for  VA loans as well.  "You have to ask yourself, " he said, "who is going to bear the costs of this differential foreclosure rate?  They are being passed on to all FHA borrowers in the form of higher across-the-board increases in insurance premiums, and ultimately to the taxpayers if the FHA insurance fund develops a shortage.

Another problem FHA is encountering is the result of the sharp increase in loan volume they experienced in the 2008-2009 period when other credit dried up.  Those loans are now entering the period in their life cycle most when delinquencies commonly occur.  Right now, while that vintage of loan accounts for 15 percent of all delinquent loans but represents 47 percent of FHA delinquencies.

In answer to a question during the conference call, Brinkmann said that he had seen little impact from the recent settlement agreement with servicers from five major banks.  He said the foreclosure inventory might have built a bit in anticipation of it, but "we know it didn't affect the 90 day bucket."  Any impact now that the agreement has been signed might not be noticed as it would have to differentiate itself from everything else that is going on in the system and it would also be felt largely on a state by state basis rather than nationally.

Brinkmann summed up the NDS report saying,  "Overall it has good news about where  we are going but the bottom line is we are still dependent on the economy."  As the job situation has improved so have delinquency figures and as long as this continues and there are no serious problems, such as a melt-down in Europe, we should see more of the same.