5.1.25 May Day Economy; CreditXpert’s Mike Darne on Qualifying Borrowers; Freddie Earnings

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 whether the U.S. economy is growing or shrinking. Plus, Robbie sits down with CreditXpert’s Mike Darne to discuss ways lenders and originators can help borrowers improve their credit scores and qualify for more mortgage programs and products. And we close with a review of Freddie Mac's quarterly earnings.

Today’s episode is sponsored by CreditXpert—the credit optimization platform that helps today’s top mortgage originators and more than 60,000 mortgage professionals qualify more applicants, make more competitive offers, reduce LLPA premiums and close more loans. Download your free copy of the credit optimization playbook today at creditxpert.com/chrisman. 

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May Day… whether you celebrate today as “about” halfway between the Northern Hemisphere's Spring equinox and Midsummer solstice associated with maypoles, or a day that commemorates the historic struggles and gains made by workers and the labor movement, mostly associated with communist Russia (which has never been our ally in 80 years), it’s up to you. So, let’s stick with the seasons. As we approach summer, many in the Western U.S. are gearing up for forest fires. Despite the growing threat of them, many Americans continue to move into high-risk areas. A LendingTree study found that 27 of the 29 metros with the highest wildfire risk had more people moving in than out, with Flagstaff, Arizona leading in both in-migration and out-migration, indicating high population turnover. Meanwhile, only Redding, California, and Wenatchee, Washington, experienced net population declines, and metros like Los Angeles and Fresno showed stable populations with modest net gains. With a lack of available homes in certain areas and certain price points, it is understandable: The rental vacancy rate ticked up to 7.1% in the first quarter, according to the Census Bureau. The homeownership rate was flat at 65.1%. (Today’s podcast can be found here and this week is sponsored by CreditXpert, the credit optimization platform that helps today’s top mortgage originators and more than 60,000 mortgage professionals qualify more applicants, make more competitive offers, reduce LLPA premiums and close more loans. Hear an interview with CreditXpert’s Mike Darne on ways lenders and originators can help borrowers improve their credit scores and qualify for more mortgage programs and products.)

Consulting co. available and retail employment

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“Q Consulting Group (QCG) is a premier financial consulting and capital advisory firm specializing in real estate finance, structured debt solutions, and mortgage banking. With deep expertise in mortgage lending, servicing, and capital markets, QCG assists mortgage lenders in securing warehouse lines, term debt, and liquidity facilities to drive growth and maximize profitability. Beyond mortgage banking, QCG provides strategic financial consulting, including treasury management, M&A advisory, and operational efficiency improvements. Our team leverages decades of experience in financial services to help businesses navigate complex financial challenges, optimize balance sheets, and secure tailored capital solutions. Whether you need assistance in structuring debt, managing financial risk, or enhancing profitability, QCG offers customized solutions to meet your goals. Visit here to learn more and schedule a call or in person meeting at the MBA Secondary with Majed to explore how QCG can provide strategic financial leadership tailored to your needs.”

For 15 years, Kevin Roller has set the standard for excellence at LeaderOne Financial, consistently ranking among the company’s top producers. In addition to an outstanding performance in personal production, he is a growth leader and team builder who has helped his loan officers achieve amazing successes of their own, many of whom were celebrated in person on the company’s recent LeadersClub Summit. Kimberly Palmer, COO of LeaderOne, highlighted his impact: “Kevin is such a team player! His innovative mindset makes him a valuable sounding board for operational innovation leading to constant improvement. His forward-thinking feedback is always appreciated and shows the partnership that defines our community.” President Randell Gillespie added, “With our combination of teamwork and framework, Kevin proves why leaders win at LeaderOne!” If you’re seeking a workplace where collaboration and innovation drive success, reach out to Staci Ann Thompson to explore available opportunities and discover the LeaderOne difference!

(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.)

Software, products, and services for lenders & brokers

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Are you looking to take your home equity lending operations to the next level? Are you attending MeridianLink LIVE next month? Let’s connect! Corporate Settlement Solutions is fully integrated within MeridianLink Consumer’s LOS, making it easier than ever for home equity lenders to order valuation, title, flood and recording services, all without leaving the MeridianLink platform. Stop by booth 34 or schedule a meeting to learn how seamless ordering and real-time data can help you close loans faster and improve the borrower experience. Let’s talk about how CSS can help you streamline your home equity lending process.

Max out May with Carrington Mortgage Services, LLC and its exclusive special: 25 bps off all DSCR loans locked in May. In addition, Jeff Massotti, VP of National Sales, will be at the California Mortgage Expo on May 7th in Irvine looking to talk with experienced Account Executives with Non-QM experience. Take advantage of this opportunity to grow your career! Finally, Carrington will attend the New York MBA Secondary and Capital Markets Conference on May 18-21. Meet with the Carrington Team to discuss how they can help grow your non-QM business, including information about the new delegated offering. It’s Non-Stop Non-QM at Carrington…Make sure to be a part of it!

“At Quontic Wholesale, we’re simplifying non-traditional lending with our Lite Doc program! Borrowers can qualify using just a profit and loss (P&L) statement (prepared with a valid PTIN) and our simple 5-question VOE form. No tax returns, no bank statements, no hassle. This flexible program is available for primary residences, second homes, and investment properties, with options for both first and second lien positions. Whether your clients are self-employed entrepreneurs or seasoned investors, Quontic offers a streamlined path to homeownership and portfolio growth. Unlock faster closings and easier documentation today! Learn more here.”

How can AI tools revolutionize the way mortgage lenders build lasting customer relationships? If you’re attending the CMBA Mortgage Innovators Conference in Huntington Beach, don’t miss the panel discussion, "Data to Loyalty: How AI Tools Shape Lasting Customer Relationships." Optimal Blue is proud to sponsor this event, where on Thursday, May 8, Kevin Foley, director of product management at Optimal Blue, will be live on stage with other industry leaders, revealing how technology is reshaping mortgage lending. Learn how AI and modern technology can empower originators to build strong, lasting relationships with clients, driving customer loyalty and business success. This is your chance to gain valuable insights from leading mortgage technology experts and executives. Connect with the Optimal Blue team at MIC25 and discover how our new innovations are helping lenders maximize profitability and stay ahead in the ever-evolving mortgage landscape.

With fluctuating rates and a rapidly changing housing market, what may be an opportunity one day could be gone the next. To compete, it’s critical to have the tools and processes in place to nimbly react to and capitalize on market shifts as they happen. Explore ICE’s new customer acquisition resource library for actionable insights and proven strategies to drive mortgage leads and strengthen customer retention. With expertly crafted knowledge articles, in-depth research, insightful industry conversations, and real-world customer success stories, you’ll gain the tools to boost production volumes, minimize customer attrition and achieve measurable efficiency gains.

Conventional conforming news, incl. Freddie’s earnings

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As noted in yesterday’s Commentary, Fannie’s net worth continues to grow on the path to privatization, and the company had $3.7 billion of first quarter 2025 net income, with net worth reaching $98.3 billion as of March 31, 2025.

Freddie is “in the black” as well. Freddie Mac reported a net income of $2.8 billion for the first quarter and saw its net worth rise to $62 billion. “Freddie financed 224,000 mortgages, with 51 percent of eligible loans affordable to low- to moderate-income families. First-time homebuyers represented 52% of new single-family home purchase loans. Freddie financed 89,000 rental units, with 92% of eligible units affordable to low- to moderate-income families.”

Under the category of “wish list,” I heard from a veteran broker. “I was actually thinking about the down payment factor with products like MyCommunity & HomePossible through the Agencies. Some investors cap LTV/CLTV at 85 percent on most programs, or lower if the borrower has a lower FICO. There is no opportunity for MI, so borrowers must come up with the down payment. Hopefully things don’t change too much at the Agencies, as it will just hurt lower income borrowers.” [Editor’s note: the amount of empathy that the current Administration, including the FHFA’s Bill Pulte, has toward lower income borrowers remains to be seen.]

Check out Freddie Mac April updates to Loan Selling Advisor®.

Freddie Mac and Fannie Mae (the GSEs) announced the June 14, 2025, release of the refreshed Uniform Collateral Data Portal® (UCDP®) user interface (UI). The new UI is designed to enhance the overall user experience and streamline navigation within UCDP. This update introduces several improvements and removes some outdated features for a more intuitive and efficient experience.

Desktop Underwriter® (DU®) has transformed automated underwriting over the past three decades. Its holistic risk management approach has enabled lenders to confidently originate and sell loans to Fannie Mae, while also introducing new enhancements that have improved the mortgage lending process. Streamlined appraisals, trended credit data, digital validation of borrower data, and allowing rent payment history when assessing borrower eligibility are just a few of the advancements that DU has made possible. Learn More About DU’s Impact.

Pennymac updated Conventional LLPAs effective for all Best Efforts Commitments taken on or after Wednesday, April 23, 2025, view Pennymac Announcement 25-45.

Effective May 1, 2025, AmeriHome is revising its policy related to Mortgage Loans delivered to Fannie Mae and Freddie Mac into an MBS SWAP Transaction and that payoff within 120 days of the funding date or settlement date. See 20250405-CL product announcement for details.

Take action through the MBA’s MAA

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MBA’s annual Mortgage Action Alliance (MAA) Action Week is coming up, May 12-16! Sign up today and promote the importance of advocacy within your company or state association. This industry-wide campaign allows ALL of us to take part and engage in the legislative and regulatory process on issues that directly impact real estate finance professionals. Membership in MAA can make a difference in how YOU and your company drive positive change by adding your voice to our collective efforts. Remember, you do not need to be an MBA member to be a part of MAA.

“During MAA Action Week, MBA provides you with all necessary resources to make your campaign a success, including a communications plan, sample emails, social posts, and graphics in advance, making it an easy ‘copy and paste’ exercise for you and your designated staff. MAA unites all of our industry by allowing those who join to play an active role in advocating for our preferred public policy outcomes, both legislative and regulatory. You are the experts. Your voice is needed to play a role in conducting this vital work, especially with so many newly elected officials in the current Congress.

“Join MBA's Legislative and Political Affairs team for our next MAA Quarterly Webinar: Beyond the First 100 Days today, May 1, from 3:00-4:00 PM ET. This free virtual event will provide a recap of MBA's National Advocacy Conference, as well as an update on Congress and the administration, including key regulators – helping to define what it all means for our members. Learn how the MBA works with decision makers to support our public policy agenda. For more information, please contact Jamey Lynch, AMP at (202) 557-2818 or Margie Ehrhardt at (202) 557-2708.

Capital markets: the Fed is weighing a slowdown and inflation

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Unlock the power of industry-leading mortgage analytics with MCT’s aggregate mortgage database, delivering insights for both lenders and investors. While most data sources stop at originations, MCT goes deeper, capturing commitment, purchase, and securitization data that paints a complete picture of market activity. Aggregated from over 50% of correspondent lenders and 95% of buyers across 33,000 ZIP codes, MCT’s proprietary data empowers smarter decisions with visibility into the secondary mortgage market. Whether you’re benchmarking competitive performance, optimizing pricing, managing risk, or forecasting trends, MCT’s lender and investor analytics offer business intelligence to help traditional and non-traditional market participants identify opportunities to drive growth. Contact MCT or request the data dictionary to get started.

We learned yesterday that U.S. real GDP shrank by 0.3 percent in Q1 2025, marking the first economic contraction in three years and reflecting the disruptive effects of shifting trade policy rather than the onset of a full-blown recession. The contraction was largely driven by a sharp rise in imports, particularly goods front-loaded ahead of new tariffs, which created a surge in inventories and offset solid gains in consumer spending and private investment. Despite the headline GDP miss, underlying demand remained resilient, with personal consumption beating expectations and final sales to domestic purchasers rising. Labor costs increased modestly, easing wage pressures even as inflation anxiety rises.

A recession in 2025 remains a possibility, particularly if weak net exports continue to weigh on GDP even as domestic demand holds up, creating a challenge for the Federal Reserve amid sticky core inflation. While some investors, particularly in the bond market, view the Q1 GDP dip as a temporary distortion from businesses rushing to import ahead of Trump’s new tariffs, equity markets may be less forgiving of mounting signals that Trump’s second-term economic strategy is faltering. If growth continues to lag, the administration may ramp up trade pressure on key partners as a political tactic, despite recent softer rhetoric. Weak Chinese manufacturing data and declining imports further underscore the global impact of shifting U.S. trade policy, and with hopes fading for swift new trade deals, the ongoing trade war is likely to remain a persistent source of economic and market uncertainty.

The Fed faces a tough balancing act as economic data signals a slowdown while inflation pressures remain elevated, the combination of which will likely prompt the Fed to keep rates unchanged until it becomes clear whether inflation or recession poses the greater threat. Market participants are watching closely, with the potential for bond yields to decline further hinging on weak economic data or a favorable Refunding Announcement. Although Q1 real GDP showed a slight contraction due largely to trade-related distortions, the focus was on a rise in final sales to domestic purchasers, which presents a cleaner read on consumer strength. If trade disruptions persist and growth remains weak, expectations for a recession will grow more pronounced in the coming months.

Today brings another full slate of economic data ahead of tomorrow’s payrolls report, and kicked off with Challenger layoffs for April, as well as weekly jobless claims. “U.S.-based employers announced 105,441 cuts in April, down 62 percent from the 275,240 job cuts in March. It is up 63 percent from the 64,789 cuts announced in the same month last year.” Weekly jobless claims were 241k, an increase, 1.9 million continuing claims. Later today brings Final April S&P Global manufacturing PMI, ISM manufacturing PMI for April, construction spending for March, and Freddie Mac’s Primary Mortgage Market Survey. Also, earnings continue from Wall Street. We begin the day with Agency MBS prices a touch better than Wednesday’s close, the 2-year yielding 3.58, and the 10-year yielding 4.12 after closing yesterday at 4.18 percent (down 7-basis points over the course of April) after the employment data.

A woman said she recognized me from her vegetarian club, but I’d never met herbivore.

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.)