Phil Grossfield's Blog

Goodbye To One Of Our Own
Brant Gniewek was a funder at Interbank…he was calm and patient with an entrepreneurial spirit. He inexplicably died just the other day at the young age of 30. Interbank is in mourning.

In 2009, the mother of Brant’s best friend died of Cancer. From that time until his untimely death he volunteered for fundraising. Brant’s legacy will be his efforts to raise money to help cover the cost of early detection. He came up with the idea to run 52 races to help 52 people. Brant ran his first-ever marathon in 2011 and another in 2012…

In December, the Windy City Times ran a story about Brant in which he was quoted,

“I have been very passionate about fighting cancer, and beating it. As I was planning my races for 2013, I came up with the idea to run one race a week for one person to help raise money for them to fight and beat cancer. After playing around with the idea, I came up with 52 for 52 to fight Cancer. The original idea was to run 52 races and raise money, but that turned into starting my own charity: 52for52.org. My goal is to raise money to help cover the cost of early detection. This means covering the cost of any type of exam, full physicals, getting information out there for people to do self-exams, and more. This can be for anyone who needs an exam, cannot afford the exam, or does not have the health insurance to cover the cost. I will be looking to partner with hospitals and clinics as the charity grows.” – Brant Gniewek

Brant had run 18 races this year alone, and already was registered for 8 others. His family and friends will now continue his organization and run races in his memory. Donate to Brant’s 52-For-52 Fight Against Cancer.  Thank you Brant for your spirit…you will be missed….

My Schedule: Available until 4p and then DONE DONE DONE!

Market Watch:  Bonds Down – PRICES REMAIN. The 30-year bond is down this morning nearly -60bps but Interbank’s pricing is unchanged from yesterday. This is a great time to lock before they issue a mid-day reprice for the worse!
Don’t Let Your Locks Expire!  Bonds Will Eventually Come Back…. Read Me

Interbank is looking for an ASM – Area Sales Manager for AZ, NM, NV and UT.  This is a good opportunity…Interbank is one of the highest (if not the highest) producing bankers in the country. The position covers both wholesale and non-delegated correspondent lending.  Let me know if or someone you know is interested….

pgrossfield@interbankwholesale.com

Geek Villain In The Making Most of the big search engines, email providers, social media sites, and other security-enhanced websites have a bounty reward program for geeks that figure out a way to hack the site. The logic is it’s better to reward the geek-hacker for hacking the site than to have them impose damage…it makes sense to me. In fact, this has become a popular hobby for many computer geeks and can provide an additional source of income. Rewards can go as high as $20,000 or more depending on the… The Travel Mama’s Guide! My wife, the Travel Mama, has officially launched her book about Vacationing with Babies and Children AND STAYING SANE. ENTER TO WIN a copy of the book PLUS a $250 Residence Inn by Marriott gift card. Also, save 15% off when you order here through May 31 using this coupon code: DDTFQCU2. Starting in June you can buy the book at Amazon.com. Thanks!

…severity of the security breach. But PayPal is refusing to pay the computer geek who hacked their site and revealed a security breach. Why you ask? Because their geek-hacker reward policy requires the hacker be 18 years of age, and this hacker was only 17. Are you blanking kidding me?! Isn’t this how villains are created? This kid hacked PayPal…a financial institution and they are going to stiff him? They are just asking for trouble, am I right? If I was running PayPal I would throw money at this kid and then hire him to work for me. Watch out PayPal…you asked for it! Geek Villain In The Making.

My Schedule: I have an 11a meeting and another this afternoon around 1p.

My Market Watch: Bonds Up! The 30-year bond is playing in positive territory since yesterday and today…sweet! Yesterday we picked up nearly +60bps and today another +10bps so far. Moreover, as of right now the bond is trading above a previously established floor…the Lobby in my picture. This is good news because traders might look at this as an opportunity to continue to buy bonds…at least until it reaches the next floor up. If the bond continues to be bought we might even see a price improvement later….
Don’t Let Your Locks Expire! Bonds Will Come Back…. Read Me

Don’t Let Your Locks Expire. The Interbank Lock Desk is one of the best I’ve ever worked with. But with the market down this big in such a short period of time, don’t expect a whole lot of love. All lenders are now in a serious predicament on locked loans.
Make sure to:

1. Extend your locks – do not let them expire!
2. Upload your submission packages within 10 calendars days of your lock date.

If you let your lock expire, there will be no relief.

Bonds have now been on a significant downward spiral for the last 6 trading days in a row. Today alone we lost -134bps. What’s more is there is no floor of support even in sight. What I mean is traders usually look to the past performance of bonds to help them decide when to buy. These indicators are called moving averages and when the bond is heading down they are called “floors of support.” They are referred to as floors of support because when the bond reaches the floor, traders usually look to buy…this makes the price of bonds increase and betters rates/pricing. But right now there is no floor…that’s why the bond just keeps selling off and down down down down down it goes.  What we need is a statement by someone at the Fed to reaffirm QE so we can reverse the trend….

Yes, Bonds Will Come Back…. Why do I think bonds will come back?  Because things are setting up for it in my opinion. Stock gains can’t last forever and eventually traders will start taking profits and selling off. Moreover, and again this is just my unprofessional opinion, the next negative economic report will have a bigger than usual impact because traders are looking for a reason to sell. And here’s the kicker…Bernanke and the Fed have not completely abandoned Quantitative Easing. They are still committed to buying mortgaged-backed securities for the remainder of the year. All that Bernanke said thus far is they are going to begin reducing the amount of buying…that’s a far cry from ditching it. I predict Bernanke will make a statement soon that reaffirms that commitment and when he does, bonds will sell like popovers at a Passover celebration. The big question is when, and to that I have no answer my friends. But I hope it’s soon!

THANK YOU! You helped my family to raise nearly $1,000 to fight Cystic Fibrosis and my team raised nearly $10,000! I am deeply grateful, thank you! Pictured above is my family with Ashton and Lola (on the sides), our two neighbor friends who both have CF. Behind my wife is Sara, our neighbor friend who expressed her love by sticking her tongue out…you gotta love it! We’re at the CF Great Strides Walk in Del Mar last weekend. If you still want to donate, click here, thanks! THE TRAVEL MAMAS’ GUIDE! My wife, the Travel Mama, has officially launched her book about Vacationing with Babies and Children AND STAYING SANE. ENTER TO WIN a copy of the book PLUS a $250 Residence Inn by Marriott gift card. Also, save 15% off when you order here through May 31 using this coupon code: DDTFQCU2. Starting in June you can buy the book at Amazon.com. Thanks!

My Market Watch: Yes, Bonds will come back…. Why do I think bonds will come back? Because things are setting up for it in my opinion. Stock gains can’t last forever and eventually traders will start taking profits and selling off. Moreover, and again this is just my unprofessional opinion, the next negative economic report will have a bigger than usual impact because traders are looking for a reason to sell. And here’s the kicker…Bernanke and the Fed have not completely abandoned Quantitative Easing. They are still committed to buying mortgaged-backed securities for the remainder of the year. All that Bernanke said thus far is they are going to begin reducing the amount of buying…that’s a far cry from ditching it. I predict Bernanke will make a statement soon that reaffirms that commitment and when he does, bonds will sell like popovers at a Passover celebration. The big question is when, and to that I have no answer my friends. But I hope it’s soon!

Bonds are now down -88bps as I type but it looks like traders are starting to buy bonds and so we might see some relief yet today…let’s hope so. As of now, I do not know where the next floor of support is…without this reverse in trading there is no way for me to know where the bleeding stops….

My Schedule: Available all day….

The Travel Mama’s Guide! My wife, the Travel Mama, has officially launched her book about Vacationing with Babies and Children AND STAYING SANE.

ENTER TO WIN a copy of the book PLUS a $250 Residence Inn by Marriott gift card. Also, save 15% off when you order here through May 31 using this coupon code: DDTFQCU2. Starting in June you can buy the book at Amazon.com. Thanks! 🙂

My Schedule: I have a meeting in Carlsbad this morning at 10:30 and another meeting this afternoon.

Spock Versus Spock. Yeah, I’m a Star Trek geek…you got a problem with that? This new Audi commercial starring Leonard Nimoy (the old Spock) and Zachary Quinto (the new Spock) is awe…wait-for-it…some…AWESOME! You’ve got two Spocks talking smack to each other, cursing by Leonard Nimoy, and an impromptu rendition of the “The Ballad of Bilbo Baggins.” Old Spock Versus New Spock In The Greatest Car Commercial Ever.

My Market Watch: Bond Blood Bath! Bonds are DOWN…AGAIN…HOLY BLOOD BATH BATMAN. Yesterday some lenders repriced for nearly 1.000 worse. Interbank adjusted only 0.250 so our pricing was still competitive by comparison. But this morning with more negative bond activity our pricing dropped another 0.375. In my graphic below you can see how the bond tried to climb early this morning and then dropped all the way to the garage where it finally stopped and retreated slightly. Lord help us if the bond sells below the garage…the next floor down could create another huge drop in pricing.

Yesterday’s decline was due to Fed Chairmen Ben Bernanke’s comments about tapering off Quantitative Easing as soon as next month. quantitive Easing is the Fed’s policy to buy mortgaged back securities and this practice has maintained our low rates for a long time. Put another way, QE has created our artificial market for low rates we’ve all enjoyed. Up until yesterday Bernanke had been unwavering in his commitment to QE…he had been saying forever that the Fed would maintain its policy to purchase MBS through 2013. This gave traders on Wall Street good reason to buy bonds which kept the price low. Low bond prices is why we’ve had low rates and great pricing. Only a month ago he mentioned the Fed might start scaling back the buying. Now, for the first time, he has stepped out onto the ledge. To be fair, Bernanke said as early as next month they would begin reducing the amount of buying, not eliminate it. But all traders heard was a statement contrary to Bernanke’s traditional gospel…let the blood bath begin! My graphic below illustrates what has been happening this morning…bond prices started out high as traders tried to take profits from yesterday’s bath. But then the bond started selling off again dropping the price to the garage…thank goodness for the garage because traders starting buying bonds again. We’re now trading between the Lobby and Garage and we must all pray to the Universe the bond doesn’t fall below the garage…I’m not sure where the next floor is below the garage. The bottom chart highlights the latest market down-trend, courtesy of MBS Highway.

The Travel Mama’s Guide!  My wife, the Travel Mama, has officially launched her book about Vacationing with Babies and Children AND STAYING SANE.

ENTER TO WIN a copy of the book PLUS a $250 Residence Inn by Marriott gift card. Also, save 15% off when you order here through May 31 using this coupon code: DDTFQCU2. Starting in June you can buy the book at Amazon.com. Thanks!  🙂
Natural Born Killers.  A tornado is not a natural born killer…it is not mindful of what it does…it does not have a conscience…the victims simply got in its way. My thoughts and prayers are still focused on those victims. In my visits yesterday and several phone calls throughout the day, the topic of the Oklahoma City tornadoes and victims was heart-heavily discussed. Such tragedy. One discussion I thought was particularly interesting was the concept of Mother Nature, in the form of a tornado like in Oklahoma, as a natural born killer designed to destroy. Don’t misunderstand the discussion…never was it suggested that it was by design people were killed so please don’t take offense. My colleague only analogized that Mother Nature can be a devastating destructive force, and this is a natural thing. The discussion then turned to the topic of the Quentin Tarantino movie Natural Born Killers in which a psychotic pair played by Woody Harrelson and Juliette Lewis go on a killing spree. In the movie Harrelson’s character compares himself to a lion who kills a zebra…it doesn’t feel bad about it…it’s natural. Of course, the lion is killing for food and a tornado doesn’t kill at all. Rather, it is simply a form of nature that carves out a path. What I found interesting was the argument that a child brought up in a hateful environment, like in Al Qaeda families, is trained to hate and bring violence upon the hated. Hate recycles hate. She argued that a man brought up in this environment doesn’t feel bad about killing…he is the lion or like Woody in the movie. I suppose that was the whole point of Tarantino’s movie. At least a lion kills and the death has meaning…it provides sustenance. And a tornado’s destruction has positive effects on the land over time…it is function of nature. But no such argument can be made for human killers…I argue there is nothing natural about it…it is pure weakness. As I said, my discussions yesterday were intense and heavy…but the focus was always on the victims and their families…I continue to pray for them….

My Market Watch:   LOOK OUT BELOW!  Bonds are down again. At first I thought bonds would do well this morning as they started out climbing…I was stoked. But then it started dropping fast, presumably as a result of Bernanke’s statements. From what I am digesting this morning his statements were not clear on his commitment to quantitative easing (the Fed’s policy of continued massive purchasing of bonds) and that was enough to motivate traders to sell off. So, traders that bought bonds at a low price yesterday took the profits this morning and sold at the highest price they could get. As a result of all the selling the bond price has dropped down -90bps on the day already. This in turn has moved our pricing to where it was yesterday morning…up 0.250 and now down 0.250. And the bond is continuing to drop now falling below the floors of support…I wouldn’t be surprised to see a mid-day reprice for the worse very soon…if my Mom asked if I should lock today I would say yes. We need something to turn it around…somebody throw us a bone please!

My Schedule:  I have a meeting in Carlsbad this morning at 10:30 and another meeting this afternoon.

The Travel Mama’s Guide!  My wife, the Travel Mama, has officially launched her book about Vacationing with Babies and Children AND STAYING SANE.

ENTER TO WIN a copy of the book PLUS a $250 Residence Inn by Marriott gift card. Also, save 15% off when you order here through May 31 using this coupon code: DDTFQCU2. Starting in June you can buy the book at Amazon.com. Thanks!  🙂
 

Oklahoma City. I remember the fear of huddling in the basement with my Mom and sisters…I grew up in Minneapolis, Minnesota and we had our fair share of tornado scares. My Dad was a traveling salesman and was gone 5 days a week so I have no memories of him in those experiences. My Mom was the protector of tornadoes…she did her best to make me feel protected in the corner of our  basement laundry room with a blanket over us……I remember being scared but also wanting desperately to go outside and look at the storm. I have vivid memories of the drama. My experiences are but a fraction of what the people in Oklahoma City have endured. I cannot imagine what they went through or how they are feeling now. Mother nature can be so brutal. My prayers….

My Market Watch:  Bonds are up BIG! This morning after the initial rate sheet was published bonds starting shooting higher after negative economic recovery news. Bonds are now almost +60bps higher than when rates were published this morning. Traders took this as an opportunity to take gains from stocks and invest in bonds. As a result, the price of bonds has been shooting up…when this happens rates/pricing improve. I have not seen a mid-day reprice yet but I’m expecting a reprice for the better soon! If you were planning to lock, I’d hold off and wait to see if pricing improves. Notice how the bond dropped down earlier and touched the Garage in my graphic. As soon as it hit the garage traders took this as a good sign to start buying…buy low and sell high, right? Also, and I hate to say this, but detrimental weather can also affect traders’ choices in buying and selling…typically bad for stocks and good for bonds. Keep an eye on things…sometimes these gains can be wiped away fast if traders decide to capture their gains and sell off at the higher price quickly….

My Schedule:  working from home…available all day.

It’s Here! The TravelMama’s Guide!   My wife, the TravelMama, has officially launched her book!  To say I’m proud would be a humongous understatement. She’s been working on this and her travel site for 7+ years. The book is about Vacationing with Babies and Children AND STAYING SANE. Please tell your spouse, your friends, your family, your acquaintances, your neighbors, your hair-stylist, your bartender, your Rabbi or Preacher, your cleaning lady, your boyfriend or girlfriend, your, your, your…I guess that’s about it.  Wait, tell your Facebook friends and LinkedIn friends too! 🙂  Whoohoooo, I’m so stoked!

BUY IT NOW at Amazon.com!

My Market Watch:  Bonds are down…again. This morning after the initial rate  sheet was published bonds starting dropping fast…I put out an Alert earlier in case of a mid-day reprice for the worse which I am almost certain will be issued. Since then traders have been buying enough to reverse the direction and we’re a little more stable right now. But the damage has been done and there is enough on the table to warrant a reprice for the worse…my guess is it’s coming. There are no reports today or tomorrow but Wednesday the Fed will be in the spotlight…this usually has a tendency to move the market. In the meantime, we’re focused on the buying and selling of stocks as bonds should react in the reverse.

My Schedule:  working from home…available all day.

Candice Wins American Idol!  I was right and rightly so! Even if you didn’t watch American Idol, in fact even if you hate American Idol, watch this performance…this encapsulates her talent.

Mortgage Fraud.
Believe it or not, even after all the issues our industry has endured, there are LOs and borrowers committing fraud. Interbank has discovered its fair share and I wanted to share a few examples:

• Case 1 – Occupancy. The broker submitted the loan owner-occupied but the borrower had a rent-loss insurance policy on the subject. When we confronted her about her rent-loss insurance policy she wrote us a detailed LOE explaining she moved in and “forgot” to remove the rent-loss from her policy. We discovered this was completely untrue. The nerve. 

• Case 2 – Employment. We verify employment on every file just prior to funding but when we called the borrower’s employer to verify she worked there we were given false information. In our investigation we learned from their CFO that the borrower had made arrangements with one of the other employees to falsely affirm her job. Lovely eh?

• Case 3 – Assets. The broker submitted a bank statement that was electronically altered. It was inflated by $20,000 which made the difference in getting the loan approved and funded. Unreal.

I’m sure you know any fraud discovered on a loan is reported to the authorities. Moreover, even if you had no knowledge or participation in the fraud, Interbank’s zero tolerance policy would result in termination of the relationship. I tell you this to give you some perspective…as the broker you bear a responsibility to determine the accuracy of the information you submit to the lender. Let me know if you want to discuss….

My Market Watch: Bonds are WAY DOWN this morning after the initial rate sheet was published. Interbank already issued a price worsening…I hope you got my warning earlier. THE ROLLER COASTER CONTINUES!! The simple explanation…reports came in this morning that gave traders the impression the bond market was a bad bet and to sell off bonds, take the profits from yesterday, and put their money into the stock market instead. When that happens, pricing worsens. Also, when the bond starting selling off it dropped below the Lobby and headed for the garage…this is probably the point in which Cap Markets pulled the trigger on the re-price. The bond is now trading just above the Lobby…we need it to stay above…if it falls below the Lobby it will head straight for the garage…we don’t want that…stay tuned….