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(link to paper) MBA’s Attack Plan For The Return Of Private Capital To The Mortgage Industry - by MortgageOrb.com – … According to the MBA, one solution is to require Fannie Mae and Freddie Mac to offer risk-sharing options to lenders at the point of sale, rather than at the back end with loans already on the balance sheets. Doing so would allow for “deeper private credit enhancement to the GSEs in exchange for lower fees charged to borrowers and lenders,” the MBA states in a new paper titled “Up-Front Risk Sharing: Ensuring Private Capital Delivers for Consumers.“ This, in turn, would shift the risk back to the private sector and away from taxpayers. …

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Fannie Mae Sees U.S. Economic Growth Accelerating – Dow Jones Newswires – FOX Business.com 
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(OCC guidance slows late stage foreclosures) Report: Wells Fargo, JPMorgan Chase and Citigroup “nearly halt foreclosure sales” – by Bill McBride – Calculated Risk 
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(has list) 14 American Housing Markets Struggling With Foreclosures – Mamta Badkar – One in every 905 U.S. homes received a foreclosure filing in April, according to the latest foreclosure data from RealtyTrac. Foreclosure filings were down 5% from March, and 23% from a year ago. – Business Insider 
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(Rex is back again) Investing in Home Equity Via Downpayments – Bonnie Sinnock – WE’RE HEARING some institutional investors like a home equity sharing product that serves as a partial downpayment for consumers in return for a share of the home’s appreciation over time. “There are limited capital market opportunities for exposure to single-family real estate” and “investors like the idea of buying residential real estate assets right now,” James Riccitelli, co-CEO of FirstREX, told this publication. – more – National Mortgage News
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Southland home prices surge in April as inventory tightens – Homes in Southern California sold at the fastest clip for April in seven years. The median price for the region reached its highest level since June 2008. – By Alejandro Lazo, Los Angeles Times

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Josh Rosner on How Dodd Frank Institutionalizes Too Big to Fail – Yves Smith – … testifies before a subcommittee of the House Financial Services committee today …, but (DF) also has managed to entrench the megafirms’ advantaged position. … Rosner has good company here; the BIS and the international bank lobbying group the IIF reached the same conclusion. Rosner stresses that he’s not advocating the repeal of Dodd Frank but describing what is flawed so it can be remedied or replaced,  – Naked Capitalism
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(timelines matter) Report: Long Cure, Foreclosure Timelines Cause High Delinquency Rate – BY: ESTHER CHO – … but the delinquency rate would actually reflect normal levels seen 10 years ago if cure or foreclosure timelines were shortened. According to TransUnion, the first quarter national mortgage delinquency rate (60-plus delinquencies) was 4.56 percent, which is more than double the pre-crisis norm. However, when aging, 180-plus delinquencies were taken out of the equation, a new TransUnion analysis found the delinquency rate would actually be around 1 percent. – more – DS News

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(introducing Trulia Bubble Watch) Trulia: Home Price Recovery Not Shaping into Another Bubble – BY: TORY BARRINGER – … Trulia reassures “bubble-phobes” that they can rest easy in its latest report. The company tossed its two cents into the bubble debate with the release of Trulia Bubble Watch, a report that compares various price indexes (including Trulia’s own Price Monitor) to per-capita income and rent data obtained from government releases. … – DS News 
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(feature) Borrowing Against The House, Once Again – Welcome back, home equity lending! – By Nora Caley – MortgageOrb

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(trust me) Cordray: Avoid lending fears, good underwriting is enough – Consumer Financial Protection Bureau director Richard Cordray continues to reassure lenders that they should continue to make traditional well-underwritten loans, an article in National Mortgage News reported. – Housingwire
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Distressed Market Has Peaked, but Opportunities Remain – George Yacik – If you’re looking to buy a distressed or real estate owned property at a cheap price, you better move quickly—and be prepared to pay a lot more than you did a year or so ago – National Mortgage News 
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(covered bonds) Former Freddie Mac Chief Economist Says Housing Finance Model Can Be Found Outside The U.S. – By Maureen Cavanaugh, Patty Lane, Amita Sharma – KPBS.org

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(making bets on what gov’t will do) Why the Fannie Bet Faces Long Odds – Hedge funds and other investors are betting on the recovery of Fannie Mae FNMA and Freddie Mac, but political analysts say that this investment faces long odds. Here’s a primer on what has to happen for these investors to see their bets redeemed – WSJ Moneybeat

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David H. Stevens For President? – BY PHIL HALL – Progress in Lending 
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Fed hawks call for retreat from mortgage stimulus – By Kristen Hays and Francesca Landini – (Reuters) – A trio of hawkish regional Federal Reserve officials are calling for the U.S. central bank to stop buying mortgage-backed bonds, citing the recent improvement in the housing market 
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Report: Foreclosure Timelines Lengthen with Higher Loan Amounts – BY: KRISTA FRANKS BROCK – … This appears to be a relatively recent anomaly, according to ForeclosureRadar’s findings. … Perhaps the difference lies in the fact that more affluent homeowners have the means to tap into resources to help delay foreclosure, or that larger loans on expensive homes are more complex and take longer to disentangle,” ForeclosureRadar stated in its report. … – DS News

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(2000 more pages waters down swaps regulation?) Regulators issue more than 2,000 pages of Dodd-Frank rules – by Megan R. Wilson – The Commodity Futures Trading Commission on Thursday moved forward on more than 2,000 pages of Dodd-Frank rules. Federal regulators voted to approve regulations that aim to increase transparency around swap transactions, which trade risk from one entity to another in the estimated $700 trillion derivatives market. – The Hill 

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After Bernanke’s QE Sent Stocks To Record Highs, Will Fed Tapering Collapse The Market? – Agustino Fontevecchia, Forbes

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Sam Zell says sell – By Stephen Gandel – Fortune.com

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Freddie Mac speeds up availability of streamlined loan mods – By Kerri Ann Panchuk – … Loans also must be at least 12 months old and satisfy all eligibility criteria. … – Housingwire 
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New FHFA head pick increases odds of HARP date change - By Christina Mlynski – Housingwire 
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Freddie Mac: Financial Assets Can Be Used as Qualifying Income – BY: KRISTA FRANKS BROCK – Freddie Mac is hoping to spread information about a rule that allows people to leverage financial assets such as retirement accounts as qualifying income when applying for mortgage loans. Individual Retirement Accounts (IRAs), 401(k)s, distributions from retirement accounts, and funds acquired from the sale of a business can all contribute to a potential borrower’s qualifying income, according to Freddie Mac. – DS News

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TransUnion: Credit quality of mortgage borrowers nationwide has improved -  Study shows that at end of March, 2 percent of loans in Chicago area written in 2009 and later were delinquent – By Mary Ellen Podmolik, Chicago Tribune

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Private Equity Residential Landlords Rushing to Cash Out via IPOs – Yves Smith – Naked Capitalism 
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(nice graph) Fannie, Freddie, FHA REO inventory declines in Q1 2013 – by Bill McBride – The combined Real Estate Owned (REO) by Fannie, Freddie and the FHA declined to 189,5291 at the end of Q1 2013, down from 192,720 in Q4 2012, and down 9% from 209,077 in Q1 2012. The peak for the combined REO of the F’s was 295,307 in Q4 2010. – Calculated Risk

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(Legacy loans) 62% of delinquent loans are more than 90 days past due - OC Housing News 
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(getting a leg up on rental buyers) Owner occupants get first crack at buying Fannie, Freddie, HUD foreclosures - Kathleen Pender – .. “People looking for foreclosed homes are having to compete heavily both with investors and other owner occupants,” says Eric Will, senior REO sales director with Freddie Mac. “This gives them an opportunity to get in and compete without competition from investors.” He adds that Freddie is “getting at or above list price for most of our homes.” Potential buyers can search for homes in these programs at www.hudhomestore.com, www.homepath.com (Fannie Mae) and www.homesteps.com (Freddie Mac). … – SF Chronicle 
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(Bernanke will speak this week) Bulls Will Be Driving Market, But Bernanke Is Steering in Week Ahead – By: Patti Domm – CNBC 
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Defaulting on your home now includes automatic enrollment into a loan modification program – OC Housing News 
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What Will The U.S. Do With Fannie And Freddie? Take Their Money, Of Course - by Nick Gwiazda – International Business Times 
vs.
Senators want to move forward with Fannie Mae, Freddie Mac reform – By Vicki Needham -  A bipartisan group of senators want to largely eliminate Fannie Mae and Freddie Mac as part of an overhaul of the mortgage finance market. … A more likely outcome would see Fannie and Freddie replaced with a new entity that is smaller and more contained, but that would still allow government guarantees on some loans. A few different plans being discussed on Capitol Hill move in that general direction. … – The Hill

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Bankers: College debt bubble mimics housing bubble – Meghan Foley, Wall St. Cheat Sheet – USA Today 
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(Schneiderman does not like DeMarco?) Obama’s underwater rescue – A single bureaucrat stands in the way of widespread foreclosure relief – BY ERIC T. SCHNEIDERMAN / NEW YORK DAILY NEWS 
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INVESTMENT CUBISM: Here’s The Awesome Presentation Jeff Gundlach Gave To The Exclusive Sohn Conference - Sam Ro – Business Insider 
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(HAMP) On the House: Too many defaults on modified mortgages – By Alan J. Heavens- Considering the hoops that too many borrowers have to go through to obtain mortgage modifications, the news from the Treasury Department wasn’t encouraging. In an April 24 report to Congress, the Office of the Special Inspector General for the Troubled Asset Relief Program, or TARP, reported that homeowners whose mortgages had been modified under the federal Home Affordable Mortgage Program were defaulting “at an alarming rate.” – Philadelphia Inquirer 
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Is the Fed Afraid to Regulate the Big Banks? – By Simon Johnson – … Ahead is a great battle over the future of our financial system that could have more profound consequences than the Dodd-Frank legislation of 2010. The battleground is the hearts and minds — and fears — of the seven people who make up the board of governors of the Federal Reserve System. The critical contest will be about bank capital and how large financial institutions should fund themselves. The fog of war has masked the terrain … -  Bloomberg 
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REO, Short Sale Fraud Continue to Evolve – BY: KRISTA FRANKS BROCK – Most mortgage fraud takes place in the short sales and REO space, according to Rob Hagberg, associate director of fraud investigations at Freddie Mac. “This area is ripe with fraud,” he said during a webinar hosted by CoreLogic. – DS Report 
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(kinder, gentler) The Mellowing of Maxine Waters - Rep. Maxine Waters, D-Calif., has been an outspoken critic of the financial industry over her more than two decades in Congress. However, after she became the ranking Democrat on the influential House Financial Services Committee, Waters’ stance toward the industry appears to have softened. – The New York Times  
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House prices nearing affordability limits in many markets – OC Housing News

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10 Misconceptions About Your Mortgage – Alison Paoli, Zillow

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BILL GROSS: Bonds May Never Enter A Bear Market – Matthew Boesler – Business Insider

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Why Not Just Leave Fannie And Freddie Alone? - by Michael Bates – MortgageOrb

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Can a housing market rally by sustained with fewer homeowners? – OC Housing News

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(gov’t guarantee for borrower stupidity?) AARP: HUD Should Repay Reverse Mortgages for Non-Borrowing Spouses – by Alyssa Gerace – AARP is renewing its challenge against the Department of Housing and Urban Development (HUD) for failing to protect surviving spouses who are not named on a reverse mortgage loan, supporting an appeals court’s suggestion that HUD should take the loss on those loans. – Reverse Mortgage Daily 
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Hope Now: 245,000 loan mods completed in 1Q – By Kerri Ann Panchuk – … Of those completed mods, 42,157 involved borrowers who went through the government’s (HAMP). Since 2007, Hope Now has documented 6.32 million loan modifications, with more than 5 million of those mortgages handled through servicers’ proprietary programs. Another 1.2 million loans went through the government’s HAMP program over the course of the past six years. … – Housingwire
and
(HOPE NOW data) Loan Mods, Short Sales Outpace Foreclosure Sales 2-to-1 in Q1 – BY: ESTHER CHO – DS News 
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Failing the Mortgage SATs – WE’RE HEARING there is a discipline that is completely lacking in the mortgage industry—we have no test to answer the most critical question that any service business can ask—“How satisfied are the customers?” – National Mortgage News

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Newark’s Terrible New Foreclosure Fix Idea – Activists in the city think eminent domain can save their neighborhoods – BY DAVID DAYEN – The New Republic

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DeMarco targets two approaches for luring private capital – By Christina Mlynski – Housingwire 
1. The issuer-based approach is associated with a financial institution guaranteeing principal and interest repayment to investors.
2. In the securities-based approach — as opposed to credit risk being absorbed by the equity of the securities issuer — credit risk would be absorbed through capital markets, DeMarco stated.
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Lower credit scores disappear from housing market: Fed governor – by Brena Swanson – Originations for borrowers with credit scores below 620 mostly disappeared in recent years, eliminating low credit scores from the housing market, Elizabeth Duke, member of the Board of Governors for the Federal Reserve System, said while speaking at the Housing Policy Executive Council -Housingwire

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Canada’s Housing Market: The Next Big Short? – By: Matt Clinch – CNBC.com http://www.cnbc.com/id/100726168
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Foreclosure Filings Drop to 74-Month Low, Judicial State Auctions Rise – BY: KRISTA FRANKS BROCK – DS News 
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NAR: National Median Price Posts Greatest Increase Since 2005 – BY: TORY BARRINGER – The latest quarterly report from the National Association of Realtors (NAR) shows home purchasing power remained high in the first quarter even as median prices continued their upward trend. Nationally, the median existing single-family home price was $176,600, up 11.3 percent year-over-year—the strongest yearly price increase since the fourth quarter of 2005, … – The M Report 
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(has 6) Reasons for the latest US dollar rally – Sober Look Blog

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The renting generation – homeownership rate for those 35 and younger continues to decline. Overall homeownership falls in spite of rising affordability. – Dr. Housing Bubble 
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2 excellent examples of ZIRP consequences from Sober Look Blog
1. Bernanke signals the Fed is uneasy with “reaching for yield” 
2. Americans are giving up on certificates of deposit
ZIRP is Zero Interest Rate Policy at the Fed.
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(grow the FHLBs) DeMarco: FHLBanks should grow involvement in secondary market – By Christina Mlynski – … “Importantly, these programs demonstrate one approach to lender risk retention in mortgage lending and the credit performance of these loans was better than most other segments of the market the past several years,” DeMarco explained. He added, “Several FHLBanks participate in the MPF Xtra program aggregating loans from originators and passing them on to Fannie Mae for securitization.” … – more – Housingwire

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(securitizing servicing) Ocwen-backed HLSS bundles up new Homeward Residential assets – By Jacob Gaffney – Home Loan Servicing Solutions, which purchases some mortgage business from sister company Ocwen Financial, is bringing a mortgage servicer advance receivable to the market. The asset-backed securitization will be collateralized by Ocwen serviced mortgages, comprised of former Homeward Residential Holdings paper. – Housingwire 
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UH-OH – this better not happen in the US!!
(look at charts QE not working in Japan) JGB yields spike in spite of all the BOJ bond buying – Sober Look Blog 
and
(despite buying 70% on new issuance) Stress Indicators: Is Japan showing us the end of Bernanke’s put? - Steen Jakobsen, Chief Economist & CIO, Saxo Bank – TradingFloor.com
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(look at the chart) Core PCE measure gives the Fed green light to proceed with its program – Sober Look Blog – (DB) The relative importance of “core” components of CPI inflation has dropped by about 2 percentage points since 2010, while remaining steady in PCE inflation. This has the effect of increasing the relative importance of housing prices in core CPI. 
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Quelle Surprise! Banks Whining About Cost of Breaking New California Homeowner Bill of Rights – Yves Smith – During the protracted negotiations over what was to become the 49 state/Federal mortgage settlement, New York attorney general Eric Schneiderman was hailed as a progressive leader and California’s Kamala Harris was characterized as an opportunist. Turns out the opportunist cut a much better deal for her constituents than the supposed true believer. – Naked Capitalism

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Failing the Mortgage SATs – WE’RE HEARING there is a discipline that is completely lacking in the mortgage industry—we have no test to answer the most critical question that any service business can ask—“How satisfied are the customers?” – National Mortgage News
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(favorable light) Who is Mel Watt? – posted by Jean Braucher – …  So who is this eleven-term congressman and what does he care about most? … – Credit Slips Blog

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Mortgage lending standards remain prudently restrictive – OC Housing News
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(commentary and charts) MBA: Mortgage Delinquency Rates increase in Q1, Foreclosure Inventory Down Sharply – by Bill McBride – Calculated Risk

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Speech: A View from the Federal Reserve Board: The Mortgage Market and Housing Conditions – Governor Elizabeth A. Duke – FR Board of Governors

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Reverse Jumbo Mortgages Are on the Rise for Seniors – By ANYA MARTIN – Some seniors with high-dollar homes are using reverse jumbo mortgages to raise cash without having to sell their property. … One New Jersey couple, both retired doctors in their early 80s, use their $5,000 monthly reverse-mortgage payments to cover home health-care costs, said Ms. Masucci, who works for Security One Lending. … – WSJ.com

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(Apps up) Mortgage Borrowers Are Finally Playing A Bigger Role In The Housing Recovery – Mamta Badkar – The early leg of the housing recovery has been credited to declining shadow inventory and strong demand from institutional investors. … Mortgage applications in April were up 4.6% month-over-month, rising in seven of the past eight months. In fact, “over the past year applications for home purchase have risen by 11.5% to stand at a three-year high,” writes Paul Diggle Capital Economics. … – Business Insider 
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(resentment?) Germans Splurge on Italian Homes Locals Can’t Afford – By Alessandra Migliaccio, Chiara Vasarri & Dalia Fahmy – Bloomberg 
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Bernanke’s Neofeudal Rentier Economy - Charles Hugh Smith – The Fed has directly created a neofeudal rentier economy and society. Federal Reserve Chairman Bernanke is a Reverse Robin Hood, robbing from the lower 95% and giving to the financier class. – Of Two Minds 
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  Nom de Plumber is a Nom de Plume.

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The Fed knows best? This is a follow up to a previous post:

Federal Reserve Stress-Testing Model Error–Nom de Plumber’s Thought of the Day
http://mortgagenewsclips.com/2013/03/11/federal-reserve-stress-testing-model-errornom-de-plumbers-thought-of-the-day/

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There seems a fundamental conundrum about regulatory expectations for
the management validation of CCAR stress models, market inputs, and
loss projections.

Stress scenarios inherently mean unexpectedly anomalous model breakdowns,
market behaviors, and asset losses, far surpassing historical experience or
plausible projections.  

This implies that those ex-ante validations conferred an overwhelmingly false sense of security—thereby questioning the very robustness of stress-testing infrastructures.

How can one model what cannot be modeled, and prove so in advance?
Nonetheless, new regulatory directives still require that to be done:
http://www.federalreserve.gov/bankinforeg/srletters/sr1107.htm
http://www.occ.treas.gov/news-issuances/bulletins/2011/bulletin-2011-12a.pdf

Yes, we have no bananas.

Thank you. 

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Flippers playing role in South Florida’s housing recovery – Flipping homes making a comeback in Florida – By Paul Owers, Sun Sentinel – Home flippers got a bad name during the housing boom. They sold properties for big profits in days or weeks, and the rapid price appreciation created a frenzy that led to the eventual bust. But today’s flippers are getting credit for helping the market recover. They’re taking time to add value, sprucing up the landscaping and putting in new floors and appliances.   
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Private sales of homes, known as ‘pocket listings,’ are surging – By Kenneth R. Harney – Top brokers in some highly competitive markets say pocket listings are becoming a significant factor in the business. – LA Times

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Fannie Mae Launches New Servicing Management Default Underwriter Tool – Fannie Mae has introduced its Servicing Management Default Underwriter (SMDU), a tool to help mortgage servicers work faster and more consistently with homeowners to prevent foreclosure.  This technology, a counterpart to Fannie Mae’s Desktop Underwriter for mortgage originations, breaks new ground by evaluating a homeowner’s financial situation and determining what options are available to prevent foreclosure. – more – National Mortgage Professional 
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Report: Homebuilding Employment Unlikely to Return to Boom Levels – BY: TORY BARRINGER – While Fannie Mae’s Economic and Strategic Research (ESR) Group … In the latest in its Transition to “Normal” series, … Even though housing starts are expected to double over the next four years as the recovery brings us back to even keel, the group is doubtful that employment in the industry will see the same rebound. … – The M Report

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Home Prices Are Climbing At The Fastest Pace Since March 2006 - Mamta Badkar – Nationwide home prices including distressed sales were up 10.5% year-over-year in March, according to CoreLogic’s latest home price report. On a monthly basis home prices were up 1.9%. This was the thirteenth straight monthly rise, and the fastest pace of increase since March 2006. Ex-distressed sales, home prices were up 10.7% year-over-year and 2.4% on the month – Business Insider  
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(shakedown) California Homeowner Bill of Rights blocks BofA foreclosure - By Kerri Ann Panchuk – A California man successfully halted a foreclosure sale on his property using the newly minted California Homeowner Bill of Rights to obtain a court injunction … For simply obtaining the HBOR injunction, the homeowner’s attorney is requesting $20,255 in legal fees and costs – a compensation request that is permissible under HBOR since the legislation allots borrowers reasonable attorneys fees and expenses for successfully obtaining an injunction. … – Housingwire 
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The last to the party: Investors and flippers competing for small amount of inventory. Home prices increasing at fastest rate since 2006. A case analysis of a Burbank investment property. – Dr. Housing Bubble

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Help the Fed Get Out of the Mortgage Business – Veteran Washington banking lawyer Jeremiah Buckley makes the case for a national housing finance commission. Such a body would serve as a “credible, galvanizing force to start the process in motion” of creating a new housing finance system that would not depend on the Fed’s swelling balance sheet. – American Banker Bankthink

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(on 620 and 680 FICO) Loan officers, banks tighten FICO standards – By Brena Swanson  – HousingWire 
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(on risk sharing and more) mREITs could boost the secondary market -by Christina Mlynski – Housingwire
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Ocwen: Untapped Reverse Mortgages Could be $1.9 Trillion Market – by Elizabeth Ecker – Upon reporting record quarterly earnings this month that more than doubled first quarter earnings in 2012, mortgage giant Ocwen Financial (NYSE: OCN) noted more reverse mortgage opportunity is still on the horizon. – Reverse Mortgage Daily

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A Legislative Lobbying Primer – by Phil Hall – MortgageOrb

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Lawmakers draft bill to extend foreclosure protections to more soldiers – Housingwire – …  introduced a bill Tuesday that would extend foreclosure protections to servicemembers who acquired homes after entering active duty. … rolled out H.R. 1842 – the Military Family Home Protection Act –on Tuesday. The bill picks up where the longstanding Servicemembers Civil Relief Act leaves off. – more details

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What Happens When The Investors Go? – BY MIKE WHEATLEY – Realty Biz News

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Bernanke’s Transparent Communication Policy Apparently Includes Leaking Info To The WSJ – Bruce Krasting – Business Insider
and
Everyone Will Be Debating The WSJ Story About The Fed Considering Ways To End QE
Is it for real this time? – Joe Weisenthal – Business Insider

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(quotes Ted Tozer) Secondary Market Preparing for Potential Volume Shift – By Bonnie Sinnock – … many housing finance indicators and forecasts suggesting a downshift in refinancing and a modest pickup in purchases on the way, market participants do not want to be caught unprepared. … This is among the reasons why Ginnie Mae is looking into whether it would be a good idea to … combine Ginnie Mae I and Ginnie Mae II securities programs. … – National Mortgage News 
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MBIA Settles Five-Year Fight Over Mortgages With Bank of America – Mary Childs, David McLaughlin and Chris Dolmetsch, Bloomberg News – … in a deal that will pay MBIA the equivalent of $1.7 billion and give the bank a 5 percent stake in the bond insurer. MBIA shares surged as much as 57 percent, the biggest intraday jump ever. – SF Chronicle 

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Larger Market Participants Still Elusive in Jumbo Securitization – Big players remain largely absent from the re-emerging private-label residential mortgage-backed securities market, RBS managing director Trez Moore told attendees at an industry meeting Monday. – National Mortgage News 
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U.S. News: Reverse Mortgages Turn Homes into “Pensions” – by Jason Oliva – Reverse Mortgage Daily 
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Dodd-Frank is finally being implemented. Will that be enough? – Posted by Mike Konczal – Washington Post 
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Warren Buffett: Federal Reserve Helped Stock Market Soar – By JOSH FUNK – Huffington Post 
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LPS: Homeowner Bill of Rights slows California foreclosure sales – by Kerri Ann Panchuk – The California Homeowner Bill of Rights is slowing the movement of distressed properties in the West Coast state, Lender Processing Services said in a report. – Housingwire
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(after unemployment benefits run out) 10,962,532: U.S. Disability Beneficiaries Exceed Population of Greece – By Terence P. Jeffrey – CNSNews.com

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Miami area home prices up 8.6 percent in March from year earlier - BY MARTHA BRANNIGAN –  … according to CoreLogic … Excluding distressed sales, home prices jumped 15.6 percent year over year in the metro area including Miami, Miami Beach and Kendall.   – Miami Herald
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(chart, of course) First Time In 7 Years: Both CoreLogic Home Price Indexes Had Double-Digit Annual Gains In March – Mark J. Perry – Carpe Diem Blog

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(partisan) House Moves To Gut Derivatives Regulations Again – By: DSWright  – FireDogLake

  Nom de Plumber is a Nom de Plume.

————
Regulator-mandated model controls are now so broadly stringent…..perhaps suppressing helpful cost-benefit trade-offs, independent ad-hoc judgment, or market practicality.

Until recent prescriptives, the validation scope would be only those models whose outputs
feed directly into reports for external constituents (regulators, auditors, investors, lenders).  If the front or back office built a model for discretionary and strictly internal analysis, but not mandatory for outside financial representations, it would not warrant validation. 
Model governance had rested on one key criterion: material relevance to accurate, transparent disclosure.

This boundary line of reasonableness has been erased, or at least greatly blurred.  Virtually every model must now validated.  This expanded compliance burden can inadvertently discourage the creative, trial-and-error analytical exploration which fosters innovation, growth, productivity, and even prudent risk management.  

Think of those on-the-fly models which some risk managers had urgently created for:

1. Restricting the ABS CDO warehouse in 2007 at one whale-sized bank, which then largely avoided 2008 ABS CDO losses
2. Alerting top management at one UK bank in 2007 about excessive super-senior credit exposure, before its 2008 collapse
3. Analyzing the risks and optimal workouts of complex Maiden Lane assets.

In this new world of model governance, none of them would have been allowed for critical immediate decision-making until formally validated beforehand, ironically putting institutions at more, not less, risk. 
 
Thank you.  

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How convenient for the politicians. The rate that Fannie and Freddie, now making money, are paying back the government, the $190 billion bailout will be paid back in no time. Fannie’s unexpectedly large payment to the Treasury gives politicians until Labor Day to avoid solving the sequester and budget problems. Check out the following 3 stories. The logjam lives on!  BC

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Lew Says Fannie Mae Delays U.S. Debt Limit Until September (2) – By Jennifer Ryan – U.S. Treasury Secretary Jacob J. Lew said a one-time payment from Fannie Mae confirms that the nation’s debt ceiling won’t be reached until September. “The one-time payment that Fannie Mae has announced makes it very clear that we’re not going to hit the effective deadline until at least Labor Day,” … Fannie Mae, … said yesterday it will pay the Treasury $59.4 billion after reporting a record quarterly profit driven by rising home prices and declining delinquencies. – Businessweek

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Lew says Fannie Mae payment helps delay debt limit until Labor Day – By Jim Puzzanghera – A nearly $60-billion dividend payment to the government by taxpayer-owned Fannie Mae will help push off the effective date on which the U.S. would hit its debt limit until at least Labor Day, Treasury Secretary Jacob J. Lew said Friday. – LA Times

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Fannie, Freddie, Zombie - By JIM MCTAGUE - The two profitable mortgage outfits will be the walking dead if the government takes their profits for another 10 years. An IPO? – Here’s the financial equivalent of the popular Twilight vampire franchise: Politicians are sucking the blood out of resurgent mortgage guarantors Fannie Mae and Freddie Mac rather than returning them in good health to the private sector, where they belong. Washington is using their money in its budget-cap games, leaving the duo in a state of perpetual weakness, like the living dead, imprisoned in the government’s ill-named “conservatorship” program. – Barron’s