2.3.25 Tariff Alerts; Mike Russell on Foreclosures; What to Watch

Thank you to Optimal Blue. Optimal Blue bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform, helping lenders maximize profitability and operate efficiently so they can help American borrowers achieve the dream of homeownership. 

Transcript

Where should we begin this week? There’s President Trump making good on one of his campaign promises over the weekend, and it wasn’t ending Russia’s attack on Ukraine or bringing down the price of gas and eggs. He checked off announcing planned tariffs. Sure, you’ll probably pay more for avocados for your guacamole for the Super Bowl party (or switch entirely to salsa), but no one cares, right? More importantly for the inventory of housing, the move will impact builders, real estate, and local economies. To start, Trump tariffs on Canadian lumber will be problematic for the Lahaina, Carolinas, and California’s disaster recovery… or any builder that uses wood. Who is Maine’s largest trading partner? Canada. Economists expect auto parts, oil, tequila, etc. prices to rise, and U.S. farmers gird for retaliation on their prices for soybeans, corn, and wheat… At least those are the predictions. There are potential advantages: certain products’ manufacturing may shift from other countries to here, helping our economy. With unemployment already low, we shall see! (Today’s podcast can be found here and this week’s is sponsored by Optimal Blue. OB bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform, helping lenders maximize profitability and operate efficiently so they can help American borrowers achieve the dream of homeownership. Hear an interview with Mike Russell on foreclosures and how mortgage companies can work with borrowers to avoid the process.)

Employment, transitions, and some tragic car crash news

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“US Mortgage welcomes Alana Dorbandt to lead its Southwest expansion! US Mortgage Corporation, a nationwide direct lender with over 31 years of experience, is excited to announce Alana Dorbandt as Vice President - Division Lending Manager will spearhead our Southwest Region expansion. With 24+ years in mortgage lending, Alana most recently served as Regional Sales Leader at Lower, LLC (formerly Thrive Mortgage) for over 15 years. She excels in building high-performance sales teams, strategic growth, and leadership development. Alana shared, “I’m honored to join US Mortgage. Their ‘You & US’ culture fosters collaboration and gives everyone a voice. I look forward to leading our expansion in the Southwest.” With Alana’s leadership, we’re poised to set new industry standards. Interested in joining our team? Contact Michelle Molina, Director of Strategic Growth at (631) 230-0665.”

Are you an Account Executive navigating the challenges of mergers and acquisitions but seeking a stable and fulfilling career? FLCBank invites you to leverage your skills and client base in a supportive environment at our privately owned, nationwide boutique bank, where mortgage production is exclusively through mortgage brokers and non-delegated correspondents. We are looking to expand our experienced sales team, led by industry veterans Bob Eisendrath and Andrea Lefebvre, who have been with FLCBank for 15 to 17 years. Our offerings include agency and government loans, as well as unique products like bridge loans and competitive jumbo loans. Plus, you'll have the opportunity to sell our warehouse lines to non-delegated correspondents. If you're tired of being shuffled around and want to make a lasting impact, reach out to Bob Eisendrath, Strategic National Account Manager, at 414-350-3986. Join us at FLCBank and become part of our legacy. FLCBank is an Equal Opportunity/Affirmative Action Employer. 

Don’t forget that the major private mortgage insurance companies have job sites: MGIC, Enact, Essent, Arch, National MI, and Radian. So do Freddie Mac and Fannie Mae, as well as regulators like the Consumer Finance Protection Bureau.

There’s the tragic news that Serene Vernon, President of LoanStream Mortgage, a dba of OCMBC, being arrested for DUI in a crash that killed a man.

(As a reminder, anyone searching for employment can post their resume at no charge at www.lendernews.com, and potential employers can view all resumes for several months for only $75.)

Broker and banker products, software, and services

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“Simplify home equity lending with Corporate Settlement Solutions (CSS). Our seamless integrations with leading LOS platforms, including Encompass and MeridianLink, allow lenders to streamline title ordering, reduce manual data entry and enhance loan processing efficiency. From property reports to title insurance, CSS delivers fast, accurate title solutions tailored to underwriting requirements. Reduce risk, improve borrower experience, and keep transactions moving smoothly. Partner with CSS for a more efficient, compliant lending process. Contact us today to get started.”

“Are you tired of the same old solutions that over-promise and never deliver? It’s time for something better… It’s time for Lenderful Solutions. Once again, Lenderful Solutions, a division of national title agency Mortgage Information Services (MIS), delivers a robust, affordable PoS solution that meets market demands and enhances borrower experience and lender efficiency. Our new Loan Officer Portal allows the lender to review the file before it is delivered to the LOS system. Our latest solutions, Purchase Turbo, ReFi Turbo, and Home Equity Turbo, have this optional feature. Lenderful is also excited to announce our partnership with Truv. With this addition, lenders can gather VOIE and VOA during the application process, saving valuable time and increasing loan closures. Your customers deserve better, your lending team deserves a solution that actually works, and you deserve an affordable solution with proven top-line growth. Contact Paul Lehnert to ‘Digitize Processes and Humanize the Experience.’”

“Thinking About Switching Your LOS? Don’t Miss This Must-See Webinar! Making the leap to a new Loan Origination System (LOS) can feel overwhelming… But it doesn’t have to be! Join ACUMA and Byte Software for a live webinar where we’ll break down the process and give you the inside scoop on what to expect. Get an exclusive behind-the-scenes look at a real LOS implementation and hear firsthand experiences from lenders who have successfully made the switch. Discover expert strategies to ensure a smooth transition for your sales and operations teams, so you can go live with confidence! February 12th at 1 pm CT: Reserve your spot now! Register here.”

Fill up Your Pipeline this February with Heartwarming Specials from LoanStream! Up to 60 BPS Price Improvement, combine our February Special with our Select Specials, check our rate sheet for Select Specials on qualifying loans. February Special 25 BPS Price Improvement on Government (FH, VA, and FHA DPA), Non-QM, Closed End Seconds, FHA/VA 37.5 BPS Price Improvement. Valid 2/1/25 through 2/28/25. Restrictions apply. Plus, don’t miss DSCR Unplugged! The ultimate DSCR webinar where we’ll uncover game-changing insights on Short-Term Rentals, 5-8 Unit properties, Closed End Seconds and more! Register now: Webinar Registration LoanStream Wholesale - Wholesale Mortgage Lending.

Research reveals decision-making, and having confidence in those decisions, is affected by microgravity, a condition that threatens astronauts during space missions requiring split-second decisions. Luckily for us Earth-dwellers, we’ve got the AIVA Assist Income and Asset Skill from Dark Matter Technologies to help us make faster, more accurate underwriting decisions, with confidence, in any gravitational environment. By automating document review and analysis, AIVA reduces the use of skilled resources on mundane tasks, improves consistency, and frees your resources to focus on using their earthbound skills to make the right loan decisions. Integrated seamlessly into the Empower LOS, the AIVA Assist Income and Asset Skill updates data and conditions in real time so records are always current and accessible. Not on Empower? Ask about integration options tailored to your LOS.

Super Bowl Sunday is big. But for mortgage executives, the real game starts the Monday after. Everyone’s gearing up for the Super Bowl showdown next week but, for mortgage executives, the real action begins the day after. Many people miss the fact that the Monday after the Super Bowl sees the highest number of mortgage applications started. Is your lending business built to capitalize on the demand? Maxwell empowers lenders with the technology, fulfillment, and secondary market solutions needed to increase loan volume, improve efficiency, and scale profitably, without adding costly overhead. With Maxwell, lenders close more per month, shave 13+ days off cycle times, and transform costs into per-loan expenses with scalable fulfillment. Super Bowl Sunday is one day, but winning in mortgage lending happens all year. See how Maxwell turns mortgage executives like you into champions. 

Conventional conforming news

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Where would Freddie Mac and Fannie Mae programs be without private mortgage insurance? Quarterly, Milliman analyzes key trends in the PMI industry and summarizes management comments discussing market dynamics/outlook. The Private Mortgage Insurer (PMI) market trends and highlights, 3Q 2024 report includes a summary of NIW (new insurance written), a summary of IIF, volume, policy count, and persistency, performance, summary of capital markets ILN issuances, structure enhancement, excerpts of earnings calls, and new notices and claim rate assumptions.

The U.S. private mortgage insurer (PMI) market is made of up six insurers: Arch, Enact, NMI, Radian, MGIC, and Essent. As part of their financial disclosures, the PMIs summarize new insurance written (NIW) during a given reporting period, the size and performance of their insurance in force (IIF), and other financial items.

It turns out that the 3Q 2024 NIW market is tracking levels similar to 2023. IIF levels grew modestly, driven by high average policy size. New notices ticked up, prompting further discussion on reserving, delinquency, and cure trends. The first capital market insurance-linked note (ILN) issuance of 2024 occurred—pricing at the tightest levels since early 2022.

The following update highlights key trends Milliman identified during the most recent quarter. The PMIs reported third quarter (3Q) 2024 earnings in November 2024. NIW for the industry continues to be depressed—roughly in line with 2023 levels. Milliman outlines that the growth in NIW and IIF is largely driven by higher average policy size, as opposed to higher policy counts. New notices of default ticked up in the quarter, sparking conversations regarding underlying drivers on earnings calls.

Fannie Mae’s Economic and Strategic Research (ESR) Group expects existing home sales this year to stay near multi-decade lows, but there could be a silver lining for affordability. Find out why in their new outlook.

The Servicer Total Achievement and Rewards™ (STAR™) Program is a transparent and formal framework to recognize Fannie Mae servicing partners for competency, capacity, and overall performance. Discover how this program helps servicers evaluate the feedback and metrics established by Fannie Mae. Watch the eLearning: Servicing Metrics Powered by STAR.

Pennymac issue a reminder regarding Fannie Mae’s appraisal time adjustment requirements, effective for appraisals dated on or after March 1, 2025. View Pennymac Announcement 25-07 for details.

Pennymac Announcement 25-10: updating values on the ‘Fannie Mae Only Adjustments’ LLPA Grid effective for all Best-Efforts Commitments taken on or after Friday, January 24, 2025.

Capital markets: tariffs are all the talk

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Data released last week reaffirmed the U.S. economy continues to expand at a healthy pace as real GDP increased 2.3 percent in the fourth quarter and by 2.8 percent for 2024. Consumer spending, which continues to be supported by rising incomes, rose 4.2 percent in the fourth quarter. Recent consumer surveys hinted that expected higher prices due to new tariffs may have brought forward spending which may result in a future pullback in spending once the cost is passed on to consumers.

Business investment fell 5.6 percent during the quarter as spending on inventories eased, however core capital goods orders picked up steam in both November and December suggesting that investment may improve in the months ahead. Residential investment finally saw an improvement after two negative quarters. New home sales rose 3.6 percent in December as builders continue to incent buyers with price cuts, rate buydowns, and other offers to improve affordability. Housing will continue to face the same affordability challenges in the near term as the Fed indicated it is in no rush to move rates lower given the underlying economic data as well as the changing fiscal landscape of the new administration.

February kicks off with a slew of data, including updates on PMIs, construction spending, factory orders, trade, JOLTS job openings, ADP employment, productivity/unit labor costs, and culminating with the January jobs report on Friday, then Michigan sentiment, wholesale inventories and consumer credit after payrolls. Treasury supply is limited to bills, but the details of the Quarterly Refunding will be released on Wednesday morning, where no changes are expected. Several Fed presidents are currently scheduled to speak along with Fed governors Bowman, Waller and Kruger, and Fed Vice Chair Jefferson on Tuesday and Wednesday. Regarding MBS, Agency prepayments will be released after Thursday’s close and into the evening, with Class A 48-hours on Tuesday, February 11.

Today’s calendar starts with final January S&P Global manufacturing PMI and will be followed by the ISM equivalent for January, December construction spending, the release of the January to March borrowing estimate, ahead of Wednesday’s refunding announcement, and remarks from Atlanta Fed President Bostic, St. Louis President Musalem. We begin the week with Agency MBS prices better by about .125-.250 from Friday’s close, the 2-year yielding 4.23, and the 10-year yielding 4.49 after closing last week at 4.57 percent on the thinking that tariffs will slow our economy leading to lower rates.

Companies are paying $8 million for a 30-second commercial slot this year in the Super Bowl. Obviously, you can watch them for free. This week, instead of the usual jokes or trivia, how ‘bout some short clips of ads, some from Super Bowls and some not, some from the U.S. and some not?

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. STRATMOR’s current blog is “Leaders Don’t Wait for Markets”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2025 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)