4.17.25 Industry Tidbits; Luxury Mortgage's David Adamo on Non-QM; Desensitized Bond Markets

Welcome to The Chrisman Commentary, your go-to daily mortgage news podcast, where industry insights meet expert analysis. Hosted by Robbie Chrisman, this podcast delivers the latest updates on mortgage rates, capital markets, and the forces shaping the housing finance landscape. Whether you're a seasoned professional or just looking to stay informed, you'll get clear, concise breakdowns of market trends and economic shifts that impact the mortgage world.

In today’s episode, we look at the latest news from around the industry that will help keep mortgage originators and vendors up to speed. Plus, Robbie sits down with Luxury Mortgage’s David Adamo to discuss the strategic advantages of non-QM loans, with David providing insights on how they can help lenders stand out, diversify their portfolios, and navigate today’s competitive lending landscape. And we conclude with a look at how bond markets are beginning to ignore market volatility in the face of tariff uncertainty.

Thank you to BeSmartee, which is transforming mortgage lending with Bright Connect, its native mobile app designed to boost loan officer productivity, speed up referrals, and simplify the borrower experience.

Transcript

A week from today is “Take Your Child to Work Day.” Something tells me that it won’t be observed in U.S. Government offices. While we’re on family issues, I received this note. “Rob, have you heard of originators sponsoring SPCA pet adoption days, since sometimes when a family welcomes a dog, it is a precursor to moving from an apartment into a house? And the LO wants to be in front of pet owners.” Yes, indeed I have, and it’s a good cause. There is talk that the traditional chain of, “College, job, marriage, children, home, pets” may be shuffled a little for starter families and starter homes for people in their 20s. Nearly everyone knows where the equator is, but polls indicate that 89 percent of people in the United States couldn’t identify Syria, Ukraine, or Gaza on a world map. Okay, I just made that statistic up, but I bet it is not far off. Hopefully they know where Omaha is, or at least Nebraska, since lenders may want to have a branch there because it is a fine place for people in their 20’s to afford a home. (Today’s podcast can be found here and this week’s are sponsored by BeSmartee, transforming mortgage lending with Bright Connect, its native mobile app designed to boost loan officer productivity, speed up referrals, and simplify the borrower experience. Hear an interview with Luxury Mortgage’s David Adamo on the strategic advantages of non-QM loans, and insights on how they can help lenders stand out, diversify their portfolios, and navigate today’s competitive lending landscape.)

Employment; attorneys wanted

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MCT is hiring two Senior Capital Markets Technology Advisors. MCT is revolutionizing how mortgage assets are priced, locked, hedged, traded, and valued. From architecting modern best execution loan sales to launching the largest marketplace for mortgage-related assets, clients benefit from MCT’s stewardship and technology. We’re looking for two seasoned professionals to join our team as Senior Capital Markets Technology Advisors: Client Success Group – Guide lender clients in maximizing performance with MCTlive! tools and technology for pipeline management and best execution strategies. Investor Services Group – Advise institutions to ensure our data and technology solutions drive efficient and transparent transactions for buyers and sellers in the MCT Marketplace. Must have 10+ years of experience in Secondary Marketing and 5+ years Hedging/Trading Experience, particularly with pricing and pooling. Learn more and apply.

“Boost your production with Axos WCPL (NMLS# 524995). We closed March with the highest funding volume we’ve had in over two years. Our non-QM products, and Jumbo Portfolio ARMs are priced aggressively. See for yourself by pricing your next loan today with our Quick Pricer tool. We just reduced our bridge-to-sale rates by a full 1.00%, making this a great time to help your borrowers buy their next home before completing the sale of their current residence. Big news: Axos WCPL now offers Jumbo and Super Jumbo portfolio construction loans. Starting at amounts of $1 million or more, our tailored construction products are available as construction to permanent (owner-occupied and second homes) and investor purpose loans (spec construction/professional real estate developers). Want to join a winning team? Axos is expanding with two open National Account Executive positions. If you’re an experienced AE ready to grow your business and career, apply today.”

There’s a myth that MLO and branch recruiting slows down in Spring, but Planet Home Lending is seeing the opposite. With a delayed spring homebuying market, originators continue to explore their next move while waiting for rates to fall. Planet’s retail branches average up to an 88% recapture rate by reaching borrowers during refinance windows and identifying homebuyers upstream, before they connect with real estate agents. We’re built to scale, with award-winning analytics, on-demand marketing, and a best-in-class onboarding process that can get you originating in under a week. Ready to make your move? Connect with Candice McNaught (214-558-2675) or Brian Miller, SVP Talent Acquisition 214-223-9986.

“Drive Growth, Build Relationships, and Make an Impact: Join SG Capital Partners as a Correspondent Sales & Business Development Manager. As a leading non-QM lender, SG Capital Partners believes in providing innovative solutions for mortgage professionals and their borrowers who don’t fit the traditional mold. Our mission is rooted in partnership, flexibility, and delivering value with every transaction. We're passionate about helping our clients grow, and we’re looking for someone who shares that drive. We're on the hunt for a high-performing Correspondent Sales & Business Development Manager with at least 5 years of experience in the Correspondent channel. If you’re a strategic thinker, a relationship builder, and someone who knows how to generate results, this could be your next big opportunity. Contact us for more information. SG Capital Partners. Innovative Capital Solutions for the Changing Mortgage Market.”

FHA’s statement on Tuesday adopting new safeguards for their loss mitigation framework puts non-performing workflows back in focus for servicers as our industry’s legal professionals anticipate an increase in delinquencies. Sagent is helping servicers prepare by adding to its already-extensive network of default attorneys and consolidating default case management for all stakeholders with the new Dara Attorney Portal and is seeking a few forward-thinking lawyers to participate in a beta program in preparation for the launch of Dara, its end-to-end servicing platform that reduces cost per loan and streamlines compliance. Attorneys in the network are invited to join Sagent’s annual customer summit Ignite (for the first time ever), so please contact JoAnn.Goldman@sagent.com to register, get in on the beta program, or even see a demo of the Dara Attorney Portal (more info here).

Ginnie Mae has a new EVP and COO, Joseph M. Gormley, to oversee Ginnie Mae’s mission to support stability in the nation’s housing markets. “In a prior stint in federal government service, Gormley held several senior roles at the United States Department of Housing and Urban Development, including Deputy Assistant Secretary for Single Family Housing at the Federal Housing Administration (FHA) and Chief of Staff to the Deputy Secretary.”

(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.)

Products, software, and services for lenders

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Borrowers want to buy before they sell, but get stuck with contingencies, DTI hurdles, or trailing debt? Flyhomes, a wholesale platform focused exclusively on bridge lending, offers customizable Buy Before You Sell solutions to help your borrowers confidently secure their next home before selling their current one. With flexible financing tailored to each borrower’s unique situation, they can move just once, reduce their DTI, unlock equity from their current home, and make cash-like purchase offers at up to 95%-100% LTV in today’s competitive market. For the past 10 years, Flyhomes has been a pioneer and leader in innovative financial products, helping 5,000+ buyers purchase their next home and enabling LOs to close 1.2 more loans per month on average. Now through Q2, get 25 bps off origination fees on any Flyhomes Bridge Loan! (terms apply). Sign up for an upcoming webinar to get more product insights and promotion details. Book a call to learn more, or send us a live scenario to get started.

In today’s market, lenders are looking for ways to cut costs wherever possible across the mortgage loan lifecycle. One preventable yet common expense during loan origination comes from fee cures, which may significantly impact operational budgets. According to a recent study by ICE Mortgage Technology, one in three loans include a fee cure, adding an average of $1,225 to production costs per loan. Understanding the sources of fee cures is critical for lenders looking to cut unnecessary expenses. Richard Lombardi, EVP of Property Data Solutions & Data Strategy at ICE Mortgage Technology, shares his insights in a recent article, How you can reduce origination costs by identifying the four common sources of fee cures. Discover the most frequent causes of fee cures and how leveraging effective fee management solutions can help streamline loan origination processes and achieve cost savings. Take control of your loan production costs and reduce fee cures with the right strategies. Read the full article now.

The industry has long needed more options for Jumbo loans, and the good news is that liquidity is finally starting to flow into the market. One Jumbo investor worth checking out is Merchants Bank who recently announced they will be launching a Private Label Securitization platform, which will initially feature three products: Prime Jumbo, Agency High-Balance, and Second Homes. For more information about the Merchants Premium Program, reach out to Rob Wilson.

FundingShield, the market leader in wire & title fraud prevention, released its Q1-2025 report showing 46.8% of transactions had deficiencies. During Q1-2025, a record high 10.9% of transactions had CPL Validation issues, 47.7% had CPL issues, 8.4% had wire/bank account related findings. Decision ready, live, source data-based verifications with remediation are needed to manage risk and lower costs. “Cybersecurity, data security, and credit concerns are rising in the market. Many of our Fannie seller clients underwent MORA audits during Q1 and were asked to demonstrate transaction-specific controls to confirm closing agent compliance and recourse to rated title insurance firms. FundingShield’s transaction-level reviews of license, good standing, insurance, loan-data, bank data, title system checks and more are essential for managing these risks effectively and demonstrating compliance in such audits,” shared Ike Suri, CEO. Contact Sales@fundingshield.com for demos and free trials, Meet us at the CMBA Mortgage Innovators (largest Mortgage-Tech conference of 2025, lender clients/contacts of FundingShield attend free), Texas MBA Annual or MBA Secondary NYC.

First American Data & Analytics has served the industry for more than a century and is continuing to set the standard for property and mortgage data. Its commitment to providing unmatched property data, AI-powered analytics, and deep mortgage and real estate expertise is unwavering. Since 1889, it has been your trusted data provider, continually innovating with tech-enabled solutions to deliver the most timely and accurate data in the industry. You deserve a partner who's ALL IN! Explore First American’s premier data.

For homeowners facing financial hardship, the threat of losing their home can be devastating - causing stress, anxiety, and uncertainty about their future. But servicers can play a critical role in helping families find a way forward. The ICE Loss Mitigation solution helps you streamline processes and reduce risk, while providing you with the tools to connect struggling homeowners with available assistance options. Loss Mitigation also helps automate GSE decision and settlement steps with API integrations, track activities with rules-driven tracking, and more all from within a user-friendly interface for agents. Learn more about ICE Loss Mitigation so you can be ready to help homeowners when they need it most.

As the world turns in the wholesale world…

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The wholesale/broker world took note yesterday that RocketPro is now on Anthony Casa’s platform ARIVE, which is available to almost 50% of the broker community. Apparently, according to the jungle drums, talks between ARIVE and Rocket have been active for months. It is a safe guess that Katie Sweeney, a former CEO of both ARIVE and AIME, had a hand in getting Rocket on the platform in her current role. ARIVE is most closely associated with United Wholesale. Now that Rocket is also on the ARIVE platform, will more brokers send it loans? The Rocket vs. UWM contest continues.

On top of that, per National Mortgage Professional, another piece of news was “Equity Smart Home Loans is cutting ties with its long-time lending partner, United Wholesale Mortgage (UWM), to join Rocket Pro’s ever-growing ecosystem. It’s a move of epic proportions for the mega brokerage that currently employs 435 loan officers, per the NMLS… Rocket Pro is gaining Equity Smart, which originated more than 1,600 loans in 2024, according to Modex.”

The cost of hedging

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Ever wondered what it really costs mortgage bankers to hedge their locked loan pipelines? In "What’s the Real Cost to Hedge a Mortgage Pipeline?", author James Hedvall breaks down the complex, and often misunderstood, factors that go into protecting lenders from volatile interest rates. From extensions and renegotiations to the pitfalls of oversimplified hedge models, Hedvall offers a sharp, behind-the-scenes look at how timing, execution, and market swings can make or break profitability. Read on to discover why this isn’t just a finance question… It’s a strategic imperative.

Capital markets: Trump threatens Powell’s job, again

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While market volatility appears to have moderated somewhat, it's worth considering whether this perceived stability reflects actual calm or simply a growing desensitization within the bond market (read: a kind of psychological callus forming among participants). The uncertainty remains palpable. Fed Chair Powell, whose job President Trump threatened again, said yesterday that continued market turbulence is likely, raising concerns about the sustainability of running significant fiscal deficits during periods of full employment without incurring long-term economic consequences. The Fed chair said he expects inflation to rise because of Trump’s tariffs, which will likely also put the labor market under pressure. Powell and other Fed policymakers have expressed support for holding rates steady as they try to sort out the impact from the Trump administration’s scattershot policies. He also acknowledged the unpredictable nature of tariff-induced inflation and suggested it may compel the Fed to reconsider or deviate from its traditional policy frameworks, an admission that has clearly unsettled many in the pricing community.

Amid rising long-term yields and the 30-year bond experiencing its worst performance since the early 1980s, speculation has intensified over whether the Federal Reserve might intervene to stabilize the market. However, Fed officials such as Neel Kashkari and Susan Collins have recently emphasized that, despite observable market stress, current conditions remain orderly and do not yet warrant policy action. Investors, nevertheless, remain vigilant for signs of market dysfunction that could prompt a shift in the Fed’s stance. Some analysts suggest that Treasury yields may have already peaked, citing sustained foreign demand as a stabilizing factor.

A key metric reflecting market conditions is the spread between the 10-year Treasury yield and the 30-year fixed mortgage rate. Historically, this spread averages around 170 basis points when the Federal Reserve actively purchases mortgage-backed securities, and approximately 230 basis points in the absence of such intervention. Currently, the spread has widened to about 260 basis points, indicating heightened risk premiums and reduced investor appetite for mortgage-backed securities.

We learned yesterday that retail sales in March rose 4.6 percent year-over-year, maintaining positive growth even when adjusted for inflation, prompting debate over the underlying drivers of this strength. One prevailing interpretation is that consumers are front-loading purchases in anticipation of tariff-induced price hikes, particularly evident in the sharp rise in auto sales during March. While other retail categories likely experienced more modest gains, the overall uptick in spending suggests a temporary pull-forward effect rather than a sustained economic rebound (like, “this is one gigantic clearance sale” rather than genuine economic strength, with expectations of higher future prices motivating an accelerated pace of spending).

This view is corroborated by weak consumer sentiment data, which reflects growing anxiety about affordability, potential job insecurity, and future economic conditions. Conversely, the stronger-than-expected March retail numbers and recent employment reports hint that the economy may not be as fragile as widely assumed. Come to your own conclusion, as signs of strain persist.

Today includes an early close, and the economic calendar has already kicked off with weekly jobless claims (215k, 1,855,000 continuing claims, so the labor market is solid), Philadelphia Fed manufacturing (30.7, showing signs of inflation), and housing starts/building permits (-11.4, +1.6 percent, respectively). Later today, the Treasury will announce month-end supply consisting of $69 billion 2-year, $70 billion 5-year and $44 billion 7-year notes, and $30 billion reopened 2-year FRNs before auctioning $25 billion new 5-year TIPS. Freddie Mac will release its Primary Mortgage Market Survey, and one Fed speaker is currently scheduled: Governor Barr. Internationally, the ECB was out with its latest monetary policy decision, a 25-basis points cut. For the early close ahead of the Good Friday holiday, bonds will settle at 1:00pm ET and SIFMA recommends a 2:00pm ET close for cash bonds. We begin the day with Agency MBS prices roughly unchanged from Wednesday’s close, the 2-year yielding 3.78, and the 10-year yielding 4.28 after closing yesterday at 4.28 percent.

The CIA lost track of its operative Murphy in Ireland. The CIA director sent an operative to find him saying, “All I can tell you is his name is Murphy & he’s somewhere in Ireland.

If you think you’ve located him, tell him the code words, “The weather forecast calls for mist in the morning.”

If it’s really him, he’ll answer, “Yes, and for mist at noon as well.”

The operative went to Ireland & stopped in a bar in a small town. He said to the barman, “Maybe you can help me. I’m looking for a guy named Murphy.”

The bartender replied, “You’re going to have to be more specific because, around here, there are a lot of guys named Murphy. There’s Murphy the Baker who runs the pastry shop on the next block. There’s Murphy the Banker who’s president of our local savings bank. There’s Murphy the Blacksmith, who works at the stables. And, as a matter of fact, my name is Murphy, too.”

Hearing this, the operative figured he might as well try the code words on the bartender, so he said, “The weather forecast calls for mist in the morning.”

The bartender replied, “Oh, you’re looking for Murphy the Spy. He lives right down the street."

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. This month’s piece is titled, “Love Them or Leave Them? The Ongoing Saga of Fannie and Freddie.” 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.ChrismanCommentary.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.)