8.4.25 Payroll Fallout; Longbridge Financial's Chris Mayer on HELOCs; Evolving Sentiment

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 review the impact of Friday's payrolls miss and the firing of the BLS head. Plus, Robbie sits down with Longbridge Capital's Chris Mayer to discuss HELOC lending. And we close by looking at what payrolls missing estimates means for future Fed rate cuts.

Thank you to Total Expert, the purpose-built customer engagement platform trusted by hundreds of modern financial institutions. Total Expert turns customer data into actionable insights that help lenders engage and guide consumers through complex financial decisions.

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How can we be on the waning days of summer already? Didn’t the school year just end? Here in Central Michigan at the Michigan Mortgage Lenders conference, and next week at the California MBA’s Western Secondary (with over 600 registered), an important topic is our Federal Reserve being in the crosshairs of the current president. One Federal Reserve District President resigned on Friday, rumored to be because of pressure. Is Jerome Powell right to ignore the clamoring? In the latest Thought Leadership piece, it is suggested that, “The irony is that in refusing to be the central banker everyone wants, Powell may be fulfilling the role the economy actually needs.” There is good news, however, in the abusive trigger lead front: H.R. 2808, the "Homeowners Privacy Protection Act," is set to go before Trump. But it may not be the cure-all originators are hoping for. There are criteria (see below) so your legal team should read it before you stop advising clients to enroll in the “Do not call” list. (Today’s podcast can be found here and Sponsored by Total Expert, the purpose-built customer engagement platform trusted by hundreds of modern financial institutions. Total Expert turns customer data into actionable insights that help lenders engage and guide consumers through complex financial decisions. Hear an interview with Longbridge Financial’s Chris Mayer on HELOCs for seniors and how the mortgage industry can better serve aging homeowners.)

Employment; IT vet available

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“You are invited to join Integrity Mortgage Group for a virtual anonymous event, designed to showcase what sets us apart from other lenders and explore the many benefits of being part of our team. Whether you're a Loan Officer or a Branch Manager, this session is a fantastic opportunity to learn how we can support your growth and success in the industry. We’ll share insights into our superior processes that enable us to achieve CTCs in under 24 hours and close loans within 7-10 days, among other benefits. Don’t miss this chance to see if IMG could be the right fit for your mortgage career! Save this link and tune in tomorrow, August 5th, at 3 PM EST: IMG Discovery Day Zoom Link, Passcode: 685902.”

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“Non-QM is taking over the mortgage world! The oldest Non-QM lender, ACC Mortgage just rolled out our Non-Del platform and the Fab 5 of product offerings Big Deal - July - ACC Mortgage. More surprises and changes are on the way! ACC is always strategically looking for talent that wants stability, support, and training to be successful. This past article talks about ACC’s approach and philosophy to help make non-QM easier for brokers and the entire team at ACC Mortgage. Big Deal - June - ACC Mortgage. Send resume for confidential interview.”

The Chrisman Job Board is the go-to platform for employment opportunities across the mortgage industry. For employers, adding a job listing is easy. Simply create an account and drop in your existing application link, or forward the details to our team and we’ll take care of it for you. For job seekers, joining our Talent Community is completely free. Upload your resume to be visible to hiring companies across the industry and stay connected to new opportunities as they go live.

Products, services, and software for lenders and brokers

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August means it’s time for the California MBA’s 2025 Western Secondary Market Conference! As a key sponsor of this year’s conference, Western Alliance Bank’s Specialized Mortgage Services Group looks forward to seeing the industry come together Aug. 11-13, 2025, at Terranea Resort Palos Verdes, CA. And as hosts of the All-Attendee Party on the first night of the conference, the Western Alliance team and their colleagues at Western Alliance Bank’s wholly owned subsidiary, AmeriHome Mortgage, invite you to join them on Monday, Aug. 11, from 6-9 p.m., on the 4th Floor Terrace. Additionally, the team extends its deepest appreciation to California MBA CEO Susan Milazzo and everyone at California MBA for their advocacy for the mortgage banking community. To learn more about how Western Alliance Bank can tailor solutions to help drive profitability, reach out to the Specialized Mortgage Services Group or meet them at the conference. Western Alliance Bank, Member FDIC.

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“Accelerate Your Growth with MAXEX’s Expanded Non-Delegated Program! MAXEX is unlocking significant liquidity for non-delegated origination by expanding our Non-Delegated Program across all available flow programs and buyers. Experience fast pre-close underwriting, effectively manage risk, and capitalize on diverse market opportunities including Jumbo, Agency-eligible, Non-QM, and DSCR programs. Join our upcoming webinar, “Unlocking Expanded Credit: Proven Strategies for Growing Your Non-QM and DSCR Business,” on Thursday, August 7 at 2pm ET. Gain practical insights, explore winning scenarios, and learn about comprehensive origination options designed to propel your business forward. Register Now for the Webinar or Learn More about MAXEX’s Non-Delegated channel.”

The Chrisman Marketplace is a centralized hub for vendors and service providers across the mortgage industry to be viewed by lenders in a very cost-effective manner. We’re adding new providers daily, so check back often to see what’s new. To reserve your place or learn more, contact us at info@chrismancommentary.com.

Trigger lead and credit news never stops

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Six months after enactment of the Bill (when President Donald Trump signs the legislation into law), trigger leads will be permissible under the Fair Credit Reporting Act only in limited circumstances during a real estate transaction and only to provide a firm offer of credit. 

A credit reporting agency (“CRA”) would not be able to furnish a trigger lead to a third party unless the third party has certified to the CRA that either the consumer explicitly consents to such solicitations, the third party has originated the current residential mortgage loan of the consumer, the third party is the servicer of the current residential mortgage loan of the consumer, or the third party is an insured depository institution or insured credit union and holds a current account for the consumer.

Meanwhile, the head of Fair Isaac was on CNBC talking credit with Jim Kramer. If he is accurate, he’s making the FHFA (which oversees Freddie and Fannie) look foolish and wrong. According to him, and remember the source, Vantage is barely better than FICO classic. Per him, FICO 10T is 18 percent better at finding defaults before FICO classic. Vantage, as you recall, is owned by Experian, TransUnion, and Equifax.

Freddie Mac is enhancing Loan Product Advisor® (LPA®) to help maximize your origination opportunity by considering positive rent payment history from credit reports in the risk assessment, automatically retrieving income submissions from the Freddie Mac Income Calculator for representation and warranty relief eligibility and more.

Yes, the FHFA is considering the use of Vantage credit scores to qualify for a mortgage instead of FICO scores. On July 8, 2025, U.S. Federal Housing (FHFA) announced that lenders will be able to use the VantageScore® 4.0 credit model or Classic FICO® via the tri-merge credit report requirement. Fannie Mae and Freddie Mac (the GSEs) are working closely with FHFA on the next steps and remain committed to a smooth transition for industry partners. Additional implementation and timing details will be provided as soon as they are available and reflected in an updated version of the Partner Playbook. Learn more and read FHFA’s FAQs. View the Credit Score Models and Reports Initiative page.

Many will tell you that a Vantage credit score is a lot cheaper to pull than a FICO score and uses a broader-based model to derive a score. This means that Vantage scores are generally higher than FICO scores. From the Urban Institute: "We find, on average, VantageScore 4.0 scores are higher than Classic FICO scores, especially for refinance loans and for investor properties and second homes."

Credit scores in general have been supported because of the student loan suspension and the exclusion of buy now pay later loans. Over the next few months, these items will become reflected in FICO scores which should generally pull scores down. We will see if the change in credit scoring from FICO to Vantage will cause an increase in defaults as marginal buyers begin to qualify for a mortgage loan. FHA loans have always been there for borrowers with low credit scores however few lenders will extend loans into the lower tiers.

These changes will take time to roll out, if they are indeed rolled out, and impact lenders and investors, big and small. For example, the August 3Points video with UWM’s Mat Ishbia can be found here and this month he discusses VantageScore 4.0 being accepted by the GSEs (along with housing inventory reaching the highest it’s been since 2020 and growing opportunity with investment properties.)

The Mortgage Bankers Association, American Bankers Association, Housing Policy Council, and Structured Finance Association had this to say about the Federal Housing Finance Agency's (FHFA) recent announcement on credit scores. "FHFA Director Pulte’s July 8 directive to the GSEs to adopt a modernized credit score, VantageScore 4.0, was a promising first step to our shared goal of a more efficient, more transparent, and more competitive credit scoring system that serves as many creditworthy Americans as possible.

"The transition to a competitive market for credit scores raises a number of implementation questions and concerns that the GSEs will need to address before they can take delivery of loans that rely on new scores, including Vantage Score 4.0 and/or FICO 10T, for pricing or eligibility. Credit score standards are embedded throughout the mortgage ecosystem and the incorporation of Vantage into that ecosystem will require the GSEs to provide lenders, investors, and other market participants critical implementation guidance.”

Capital markets: will the bond market lead the Fed, again

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There is quite a lot to digest from last week. Midweek, the Federal Reserve held rates steady, with Chair Powell signaling no immediate plans for rate cuts, causing a sharp market selloff and a plunge in expectations for a September cut. That sentiment was validated after hotter-than-expected inflation data (core PCE rising 2.8 percent year-over-year) highlighted the Fed’s struggle to reach its 2 percent inflation target. However, July’s jobs report came in well below expectations, with just 73,000 new jobs and downward revisions erasing 250,000 jobs from prior months. The continued back month downward revisions would seem proper justification for the BLS head losing job, though employment figures are already a backward-looking reading. Additional red flags came from a disappointing Q2 GDP report showing weak consumer demand and a decline in residential construction. Accordingly, traders have grown more confident in the likelihood of a September rate cut, with odds rising significantly. President Trump has vowed to appoint a new Fed governor (Kugler resigned last week) and labor statistician promptly.

Friday's market reaction was a dramatic release of pent-up tension. The 10-year yield plunged to 4.25 percent, piercing key resistance levels and casting fresh doubt on (lofty?) equity valuations. Investors of long treasuries were finally rewarded, and the odds of a September rate cut soared from 40 percent to nearly 90 percent, with additional easing expected before year-end. Yields across the curve (2s, 5s, 10s) returned to their late-June levels, effectively erasing July’s volatility. While inflation data on August 12th still looms large, markets enter the second half of 2025 with renewed optimism. Notably, the yield curve is beginning to front-run the Fed, with the 10-year yield now sitting near the lower end of the fed funds target range, hinting at an inversion. For mortgage bankers, this signals some relief ahead, as lower rates come back into play.

The evolving tariff landscape is being treated more and more as a new and persistent reality, rather than a temporary disruption. While most import levies have now been formalized, with notable exceptions being China and Mexico, President Trump’s shifting deadline schedule is losing its market-moving power. The broader concern is no longer the specific structure of tariffs, but their lingering effects, now central to both investor sentiment and monetary policy considerations. As investors and central banks remain cautious amid ongoing uncertainty about the broader economic toll, overall restrained posture reflects both prudence and unease.

This week’s calendar sees a downshift from this week’s packed schedule, with quarterly refunding supply (Treasury auctions $125 billion in 3-years, 10-years, and 30-years tomorrow through Thursday) likely a potential market pop. Data is limited to factory orders, trade, vehicle sales, services PMIs, productivity/unit labor costs, and wholesale inventories. Following last week’s Fed events, only three Fed speakers are currently scheduled. Outside of the Fed, the Bank of England will be out with its latest monetary policy decision on Thursday, where it is expected to cut rates 25-basis points to 4.00 percent. Regarding MBS, the Agencies will release July prepayments late Wednesday and Class A net out is on Friday. The week gets off to a slow start, with the Employment Trends Index and June factory orders, both due out later this morning. We begin Monday with Agency MBS prices roughly unchanged from Friday’s close but better considerably from Thursday, the 2-year yielding 3.67, and the 10-year yielding 4.21 after closing Friday at 4.22 percent, down 17-basis points for the week.

I don’t understand why my credit score is so low.

Every time collectors call, they say my payments have been outstanding.

Visit www.ChrismanCommentary.com for more information on our industry partners, access archived commentaries, or subscribe to the Daily Mortgage News and Commentary. You can also explore the Chrisman Marketplace, a centralized hub connecting mortgage professionals with trusted vendors and solutions. If you’re interested, check out my periodic blog on the STRATMOR Group website. This month’s piece is titled, “The Tax and Spending Bill: The Impact on Borrowers.” The Commentary’s podcast is available on all major platforms, including Apple and Spotify.

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes, visit the Chrisman Job Board. This newsletter is intended for sophisticated mortgage professionals only. There are no paid endorsements by me. For the latest mortgage news, visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.ChrismanCommentary.com. Copyright 2025 Chrisman LLC. All rights reserved. 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.)