5.7.25 Incentivicing Borrowers; Bob Simpson on Anti-Money Laundering; Actual Fed Decision Day

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 how potential home buyers are being incentivized. Plus, Robbie sits down with Bob Simpson to discuss the evolving anti-fraud landscape, emerging threats in 2025, best practices for risk and anti-money laundering compliance, and some unforgettable stories from the front lines fighting fraud. And we close with a look at what is expected of the Federal Reserve and Fed Chair Jerome Powell today.

Thank you to HomeEQ, the fully digital HELOC from Arc Home, which empowers brokers to quickly provide borrowers with easy access to their home equity. With fast, hassle-free funding in just days, HomeEQ offers a user-friendly platform that simplifies the entire process. Brokers can benefit from competitive compensation, along with comprehensive training and a complete marketing plan designed to help them re-engage former clients and grow their business. Discover how HomeEQ can enhance your offerings by visiting homeeq.archome.com/chrismanpod.

Transcript

Most good loan originators are keenly aware of demographics in their area. Aren’t you tired of talking about a lack of inventory and builders’ supply lagging demand? Builders report that the number of unsold homes is the highest since 2009, and in Sunbelt MSAs, new homes are facing a lot of competition from existing homes coming on to the market. AIE writes that active listings are up 34 percent year-over-year. Per the Wall Street Journal, homebuilders are increasing the use of incentives to entice buyers. Meanwhile, for those U.S. citizens who enjoy living in cramped quarters and who are tired of being squeezed by sky-high rents, city dwellers are turning to "micro-apartments" (ultra-compact units under 441 square feet) for major savings, often slashing rent by half in pricey markets like San Francisco and D.C. Western metros are leading the charge, with micro-units dominating new builds in cities like Seattle and Boston, while places like Reno and Minneapolis are quickly catching up. Meanwhile, the South and Mountain West are holding out, with cities like Enterprise, NV, offering rentals nearly twice the size of their coastal counterparts. (Today’s podcast can be found here and this week’s are sponsored by HomeEQ, the fully digital HELOC from Arc Home, which empowers brokers to quickly provide borrowers with easy access to their home equity. Brokers can benefit from competitive compensation, along with comprehensive training and a complete marketing plan designed to help them re-engage former clients and grow their business. Hear an interview with Bob Simpson on the evolving anti-fraud landscape, emerging threats in 2025, best practices for risk and anti-money laundering compliance, and some unforgettable stories from the front lines fighting fraud.)

Free coaching & resume posting for displaced workers

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“Calling all Coaches! The work that you do as coaches has never been more important. As some of you may have heard, the Dept. of Health and Human Services has eliminated 10,000+ jobs, including many in the Administration of Children and Families (ACF). Entire offices, specifically San Francisco, NY, Boston, Chicago, and Seattle, have all been shuttered at ACF, and of course USAID and many other agencies are impacted as well. There is an opportunity to make a difference: The Coaching Collaborative is spearheading an effort to provide pro-bono coaching services to federal employees who have been laid off. If you have any bandwidth or inclination to help, please sign up to learn more. If you know someone who has been impacted by the recent government lay-offs, let them know they can access pro bono coaching here.”

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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Mortgage originators have transformed their funding process with OptiFunder’s automated warehouse management system - eliminating tedious tasks like wire checks, collateral tracking, and purchase advice reconciliation. Warehouse lenders can also modernize their operations with Greyhound WMS, a powerful, cloud-based platform purpose-built for their side of the funding lifecycle. Highly configurable, Greyhound automates advance requests, wire processing, collateral management, paydown requests, client account oversight, and more. With real-time insights, seamless integrations, and robust risk management controls, Greyhound replaces outdated systems with greater speed, accuracy, and scalability. Warehouse lenders are amazed at how easy it is to reduce errors, scale faster, and gain transparency with Greyhound. Originators and warehouse lenders ready to automate funding and streamline operations with a true technology partner should connect with OptiFunder at the MBA Secondary Conference. Don’t miss your chance to see why more leaders are choosing OptiFunder for warehouse management.

Verus Mortgage Capital is confident that 2025 will be a big year for non-QM lending. Following a strong Q1, the company expects its total share of total mortgage originations to grow 30% and is estimating that the overall market for non-QM loans to increase to 6.5%. The growth is fueled by high margins, volume growth, and strong demand from borrowers who don’t fit the strict requirements for agency loans. As the country’s largest non-agency securitizer, Verus is playing a critical role in the sector’s expansion, providing financing solutions for established self-employed business owners/workers, those with non-traditional income, and many other creditworthy consumers. Find out more by reading Verus’ latest blog, “Why Non-QM Lending Is Booming—and Where It’s Headed Next.” For additional information, meet with us at the MBA Secondary & Capital Markets Conference or contact Jeff Schaefer, EVP of National Sales or 202-534-1821.

First American DataTree is celebrating its 10th anniversary, a decade of innovation, growth, and success. Since it's inception, DataTree has grown, learned, and innovated from just 30% county coverage in 2015 to an impressive 92 percent nationwide today. As the leader in document image geo-coverage, record transactions, assessor data, plat maps, and more, DataTree has made a lasting impact on the industry. This milestone is only the beginning. With a commitment to service, solutions, and mutual success, DataTree looks forward to the next decade of continued mutual success. Experience the difference that a decade of progress makes.

Through its Intelligent Verification platform, Xactus360, Xactus works with lenders to eliminate unnecessary steps, reduce data waste, and deliver the right information at the right time. It’s a smarter, more strategic approach to verification, built around lenders’ workflows, not against them. Xactus isn’t just a vendor… It’s a partner. From reducing costs to accelerating decisions, Xactus collaborates with lenders to get more from every loan file. That same collaborative approach extends beyond lenders to its partners, helping bring new solutions to market faster. As a leading fintech, Xactus was the first to bring the FICO® Score Mortgage Simulator to market, a tool now available in Xactus360 that helps lenders model credit scenarios with FICO® Scores and algorithms built for mortgage. Learn more, download the Intelligent Verification white paper or email sales@xactus.com.

“Everyone takes notice when the biggest lender in the industry announces it is bringing servicing in-house. It is a model that every lender should consider. MortgageFlex can help any size lender move into servicing their customers. Our simple cost structure allows smaller servicers to thrive. Our modern cloud-based system makes training employees much easier than other options because of automated tasks, intuitive screens, simple navigation, and the system's familiar web interface. Plus, since all transactions are real-time, you eliminate many complexities and workarounds required in older systems that rely on overnight batch processing. Customers get problems resolved quickly (mostly in our dynamic customer-facing portal or with one call), and corrections are made in real time instead of waiting days for their information to be updated in overnight processes. Plus, solving problems in real-time is much easier and requires less effort and experience than older overnight batch-based systems. To learn more, please contact me, John McCrea, SVP MortgageFlex.”

“Replace buzzwords with genuine innovation. Choose unmatched pricing accuracy and proven infrastructure to maximize your profitability. Amid constant industry innovation talk, Optimal Blue stands out by solving lenders’ real-world challenges. We listen to our clients and build solutions that address their direct needs. Our commitment to flexibility, transparency, and purposeful innovation means timely, value-driven enhancements at no additional cost. With tools like Ask Obi and CompassEdge Ratesheet generator, we use AI technology to connect front-end with back-end pricing and surface actionable insights to enhance strategic decision-making. Optimal Blue solutions are trusted, built on modern technology, proven scale, market expertise, and unrivaled accuracy. The Optimal Blue team is headed to MBA’s Secondary and Capital Markets Conference in New York this month. If you are interested in meeting with us, please reach out to your Optimal Blue sales contact and join our happy hour at Carmine’s on May 19. RSVP today.”

You can catch our friends from Down Payment Resource, the OG of down payment assistance, at MBA’s Secondary and Capital Markets Conference & Expo, May 18-21 in New York. DPR’s comprehensive suite of lender tools and integration with the Encompass® LOS platform are the talk of the town, enabling lenders to search 2,500+ assistance programs offering an average benefit of $18,000 in assistance and being able to lower a homebuyer’s LTV ratio by 6 percent. Plus the Encompass integration brings company-approved DPAs to life inside the Encompass LOS, with program availability alerts and a unique loan officer and underwriter interface. It’s like having a personal DPA concierge to the more than 2,500 DPA programs nationwide, minus the velvet ropes and mandatory tip. Heading to New York? Give DPR a whistle.

STRATMOR Technology Survey is underway

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The 2025 STRATMOR Technology Insight® Study is now underway. The first part of the study (the Lender Intelligence Survey) is live and focused on how lenders really feel about the tech they use every day. From LOS and CRM systems to underwriting automation and servicing platforms, this is the only independent study capturing lender experiences with mortgage tech systems and vendor support. Lenders who complete the survey will receive a summary report of 2025 Technology Insight® Study results at no cost. This is actionable intel to help guide tech decisions in today’s competitive environment. Take the survey and help shape the future of mortgage tech. The survey is open to lenders only. Questions? Reach out to STRATMOR’s Technology Insight team for details: technologyinsights@stratmorgroup.com

The 1st quarter was rough, and UWM was not spared

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Do you remember United Wholesale’s CEO Mat Ishbia purportedly saying, "I’ll lose money just for fun,” to brokers during a conference call about a month ago, reacting to the Rocket-Mr. Cooper alliance? Be careful what you wish for, or even say, especially when stockholders are involved.

Yesterday UWM Holdings Corporation (UWMC) announced a quarterly loss of $0.23 per share versus the Zacks Consensus Estimate of $0.06. A loss is a loss, and in UWM’s case it was primarily due to a $388 million reduction in the fair value of its mortgage servicing rights (MSR) portfolio. (Obviously if rates drop, servicing is worth less since those loans are more likely to refinance.)

UWM posted a net loss of $247 million, or -$0.12 per share, for the quarter ended March 31, 2025, missing the analyst consensus estimate of $0.05 per share. Revenue came in at $613.37 million, surpassing expectations of $545.77 million and rising 4.8% YoY from $585.5 million.

UWM’s loan origination volume reached $32.4 billion in Q1, up 17% YoY but down 16% from the previous quarter. Purchase originations totaled $21.7 billion, relatively flat compared to $22.1 billion in Q1 2024. The company’s total gain margin declined to 94 basis points from 108 basis points a year ago.

UWM shares have lost about 18.7 percent since the beginning of the year versus the S&P 500's decline of -3.9 percent. Yesterday the price per share hit an all-time low. Mat Ishbia, Chairman, CEO and President of UWMC, commented, "The first quarter marked another win for UWM. We executed with precision and broker market share grew…”

Capital markets: mortgage apps have a nice jump

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Agile, a groundbreaking fintech bringing mortgage lenders and broker-dealers onto a single electronic platform, today announced a major upgrade to its Mortgage-Backed Securities (MBS) platform, delivering a fully transformed end-to-end workflow for MBS pool bidding. Created in collaboration with dozens of dealers and lenders, Agile’s new functionality eliminates the legacy inefficiencies of manual, disjointed processes and introduces a seamless, intelligent process for streamlined MBS pool bidding execution. This powerful enhancement is tailored for lenders who actively trade on-the-run pools or hold Fannie Mae, Freddie Mac, or Ginnie Mae tickets, offering them unprecedented visibility, automation, and control across the entire pool bidding process. Read the full press release or register for Agile’s upcoming webinar, Outsmart the Chaos: How Top Firms Are Fixing MBS Pooling, on May 28th at 11AM PT learn more about MBS pool bidding.

For those of us watching the economy, the markets doubt that the Fed pre-emptively cuts because there’s a forecast of a slowdown: The Federal Open Market Committee will actually need to see it in the tangible data, in particular the labor market. So far labor’s doing okay.

Yes, it’s Fed decision day. Traders are dialing back expectations for interest rate cuts by the Federal Reserve this year, anticipating that solid economic performance will delay easing until later. As the Fed prepares to announce its latest policy move, markets now foresee three quarter-point cuts in 2024, down from earlier projections, and a sharper round of reductions likely beginning in 2026, the most aggressive outlook for that year so far in this cycle.

Our central bank appears committed to keeping interest rates elevated until clear signs of economic weakening emerge, suggesting that even continued progress on inflation alone won't trigger rate cuts. If this holds, political pressure is likely to intensify, especially from President Trump, who may criticize the Fed for easing under President Biden when economic conditions were (arguably) less dire. Historically, the Powell-led Fed has been cautious to act, but swift once convinced by the data.

Today’s economic calendar kicked off with mortgage applications increasing 11.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending May 2. Today’s highlight, however, will be the latest decision from the FOMC, which will be released at 2PM ET, followed by Fed Chair Powell’s press conference; market participants will be interested to hear further about the committee's thoughts on tariffs and a potential trade war. After the Fed, consumer credit for May will be released, with consensus seeing an increase of $4.0 billion after a decrease of $0.8 billion in April. Treasury Secretary Bessent returns to Capitol Hill again today after yesterday saying that some trade deals could be announced as early as this week, that up to 90 percent of deals could be completed by the end of the year, and that he expects the contractionary reading of Q1 GDP (-0.3 percent) to be revised up. We begin the day with Agency MBS prices worse than Tuesday’s close by a tick or two, the 2-year yielding 3.82, and the 10-year yielding 4.33 after closing yesterday at 4.31 percent.

A Sunday school teacher of preschoolers was concerned that his students might be a little confused about Jesus Christ. He wanted to make sure they understood that the birth of Jesus occurred a long time ago, that he grew up, etc., so he asked his class, "Where is Jesus today?" Steven raised his hand and said, "He's in heaven!"

Mary was called on and answered, "He's in my heart!"

Little Johnny, waving his hand furiously, blurted out, "I know! I know! He's in our bathroom!"

The whole class got very quiet, looked at the teacher, and waited for a response. The teacher was completely at a loss for a few very long seconds. He finally gathered his wits and asked Little Johnny how he knew this.

Little Johnny replied, "Well, every morning my father gets up, bangs on the bathroom door, and yells, ‘Jesus Christ, are you still in there?’”

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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