8.21.25 Fraud Accusations; Optifinow's Linn Cook on Wholesale Products; Buyers Strike Fears

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 some of the latest accusations against Federal Reserve members. Plus, Robbie sits down with Optifinow’s Linn Cook for a discussion on the proliferation of non-conventional products in the wholesale channel and the ways the sales process is adapting to meet savvy brokers. And we close by going through what buyer demand has looked like at recent Treasury auctions.

Headquartered in Austin, Texas, FirstClose, Inc. provides fintech solutions to HELOC and mortgage lenders nationwide.  The company’s mission is to increase profitability and reduce cost for mortgage lenders. FirstClose makes this possible through offering systems and relationships that enable lenders to assist the lender’s borrowers more effectively, reduce closing costs, and ultimately shorten closing times. For more information, visit firstclose.com.

Transcript

“A dog accepts you as the boss. A cat wants to see your resume.” There were some job seekers last week at the Western Secondary, but it wasn’t a job fair, and I received this note. “Rob, last week was the California MBA’s WS. It is easy to see what was on the published agenda, but what were some of the informal hallway topics that you and Robbie heard?” Certainly, the increase in non-Agency lending: this is the time to shine for non-QM investors (more on that in today’s podcast), for example. Trying to hedge a pipeline in an era of tweet headlines is a concern, as is finding new executions. The trigger lead bill doesn’t take effect until six months after it is signed, but there is some question about whether it will impact servicing values. Hedging builder business is always a treat. Other hallway subjects were how bid tape pricing can be used in setting rate sheets, how granular pricing should be, how the FICO/Vantage tumult might impact the secondary markets, and how mortgage pricing is always “sticky” when rates are going down versus going up. Oh, and let’s not forget FHA versus VA pricing shifts: FHA loan sizes tend to be smaller, the VA program doesn’t have the False Claims Act history, but these loans prepay faster on average… all of which can impact values. (Today’s podcast can be found here and this week’s is sponsored by FirstClose. FirstClose provides fintech solutions to HELOC and mortgage lenders nationwide, increases profitability, and reduces costs for mortgage lenders through systems and relationships that enable lenders to assist borrowers more effectively and ultimately shorten closing times. Hear an interview with Optifinow’s Linn Cook on the proliferation of non-conventional products in the wholesale channel and the ways the sales process is adapting to meet savvy brokers.)

LO comp webinar, CD workshop, and a transition

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Ron Gapp, Founding Partner at Brody Gapp LLP, will host a complimentary webinar on Tuesday, September 9, at 10:00 AM PT titled “Loan Officer Compensation in 2025: Compliance, Litigation Trends, and Strategic Planning.” Ron notes: “Attendees will learn the latest LO comp rules, litigation signals, and strategies to design compliant, competitive plans that withstand audits.” Click here to register or contact Ron at (909) 952-3076. Also, if you missed Brody Gapp LLP’s prior webinar, titled “2025 Annual Regulatory Roundup,” with the firm’s Managing Partner, James Brody, click here for a complimentary copy of the PowerPoint.

STRATMOR Group’s Consumer Direct Workshop is back, live in Charlotte, NC, November 5–6, 2025. Designed specifically for lending executives in the Consumer Direct channel, this workshop goes beyond theory with peer-to-peer discussions, benchmarking, and practical strategies you can implement right away. Learn from peers and STRATMOR experts about what’s working now in sales execution, comp structures, marketing channel allocation, technology adoption, and more. The format is interactive, candid, and collaborative, a rare opportunity to learn directly from industry peers and STRATMOR experts. Registration is open now, and seats are limited. Learn more and secure your spot here.

Out of San Luis Obispo, California, comes news that Land Gorilla, the leading construction loan management software platform, announced that Ben Sizemore has joined the company as chief information officer. With nearly three decades of enterprise technology experience, Sizemore will guide Land Gorilla's technology strategy, drive innovation and ensure the scalability of its platform to support the company's ongoing expansion.

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 tools for lenders and brokers

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“Fragmented systems can make it difficult to execute even basic customer outreach campaigns effectively. At ICE, we’ve focused heavily on foundational work to support the deep connectivity between our origination and servicing platforms to make it easier for our clients to build and maintain strong and efficient customer pipelines. Our unified ecosystem eliminates the need to rely on multiple vendors to deliver a seamless end-to-end experience for your borrowers. By unifying originations and servicing, ICE helps provide greater efficiency, faster execution and long-term scalability, without the complexity of stitching together multiple vendors. Read the recent interview with Matt Dowd, VP of Product Management at ICE, as he shared how ICE is bridging the gap between origination and servicing.”

When one FI wanted to bring first-time homebuyer mortgages in-house, they trusted MeridianLink® Mortgage to handle the job. 60 days and $10M+ in applications later, the results were clear: the institution was finally reaching more new buyers. And with a personalized, educational approach to homeownership, those same buyers were quickly becoming trusting, long-term customers. That’s the MeridianLink® difference at work. Read this institution’s success story to learn more about their journey.

Discover What’s Driving the Housing Market Shift. “It’s back to reality for national house price appreciation,” says Mark Fleming, Chief Economist at First American. With affordability constraints, economic uncertainty, and homeowners reluctant to trade in low mortgage rates, demand is cooling, even as inventory grows. This evolving supply-demand dynamic has slowed annual home price growth for the eighth consecutive month in July. Stay ahead of the curve with the latest insights from the First American Data & Analytics July Home Price Index (HPI). This comprehensive report delivers up-to-date analysis of home price changes across national, state, and metropolitan CBSA levels, essential for anyone navigating today’s real estate landscape. Whether you're a buyer, seller, or industry professional, understanding the trends is key. Don’t miss your chance to access the most current data shaping the housing market. Download the July HPI Report.

The tides are changing in the world of servicing. Are you getting left on a sandbar? The days of a three-day window to do a simple payment reversal are gone, and if you are a servicer struggling with tech built 50-plus years ago, it may be prudent to start looking at modern options. You demand it on the origination side, why have you not given your employees and most importantly your borrowers the same courtesy? A top lender that signed with Flex for our stand-alone default solution stated the following: you provide open APIs to build our own integrations, free data access, and a workflow-driven solution with pre-delivered 50-state default templates that servicers can change themselves. It's time to bring servicing to the modern era. Flex can help. Contact John McCrea.

Trigger leads are ending, and the advantage now belongs to you. The clock is ticking on trigger leads, and for many lenders, it feels like losing a long-relied-on tool overnight. But this shift isn’t the end of borrower monitoring. It’s a reset, and an opportunity to win. While inquiry alerts will be restricted, MonitorBase keeps you ahead with predictive alerts, equity alerts, listing alerts, and MMI-validated origination data. These tools let you identify borrowers weeks before they apply elsewhere, prove relationships quickly, and retain past customers with less noise and more compliance. In fact, most borrowers who once triggered an inquiry alert also triggered a Predictive Alert in the months leading up to it. That means you’re already in front of the right opportunities before competitors ever know. Get the facts. Get ahead. Learn more today. Read Louie Zitting’s article (free registration required) or read the MonitorBase Blog post.

“Planet delivers exceptional sub-servicing for residential and commercial assets, combining expertise, transparency, and tailored solutions. Our S&P and Fitch-rated platform supports agency and non-agency portfolios with precision and care. From onboarding through payoff, REO, or sale, we deliver the execution and oversight investors trust to protect performance and minimize risk. Connect with Planet: subservicing@planethomelending.com.

Xactus Receives ICE Platinum Partner Status! Xactus, the leading verification innovator for the mortgage industry, has been named an ICE Mortgage Technology Platinum Partner. This recognition highlights the company’s commitment to delivering Intelligent Verification solutions through its proprietary platform, Xactus360. By integrating directly with Encompass, Xactus360 provides lenders with seamless workflows, dynamic data delivery, and greater efficiency. The platform enables clients to reduce costs, minimize waste, and make faster, more accurate mortgage decisions while ensuring compliance and improving the consumer experience. The Platinum Partner designation underscores Xactus’ role as a trusted fintech partner, advancing the modern mortgage through technology designed to optimize lender performance and drive measurable results. Learn more here.

Credit unions already have member loyalty. So why are most mortgages still going somewhere else? LenderLogix is helping credit unions close that gap with tools that deliver the modern mortgage experience borrowers expect. At Affinity Plus, 33 percent of pre-approval letters were generated after business hours using QuickQual (powered by LenderLogix). No loan officer involvement. No missed opportunities. Just smart automation that lets members move forward anytime they’re ready. If your credit union is still relying on 9 to 5 workflows in a 24/7 world, LenderLogix is definitely worth looking into.

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.

Mortgage fraud accusations

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Federal Housing Finance Agency Director Bill Pulte has accused Federal Reserve Governor Lisa Cook of mortgage fraud, referring her to the attorney general for potential criminal prosecution. In a letter posted on social media, Pulte claims Cook falsely represented both a Michigan home and an Atlanta condo as her primary residence to obtain more favorable mortgage terms, an act that could violate federal statutes. While there is no indication she defaulted on either loan, the allegation centers on inconsistencies in property use declarations, including the later listing of the Atlanta condo as a rental. This development comes as President Trump seeks to reshape the Federal Reserve with governors more aligned with his economic agenda, particularly those favoring interest rate cuts. Trump publicly demanded Cook’s resignation, and sources told The Wall Street Journal that he is weighing firing her for cause. Cook, appointed by President Biden in 2022 and the first Black woman to serve on the Fed Board, has typically supported dovish monetary policy, ironically, a stance consistent with Trump’s current preferences. The accusation against Cook is part of a broader pattern: Pulte has used his powerful role in the housing finance system to target perceived political adversaries, including Sen. Adam Schiff and New York Attorney General Letitia James.

Changes in borrower behavior

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A growing body of evidence is dismantling the early 2025 narrative that tariffs would have little impact on consumer behavior, with revised GDP data and detailed spending figures now clearly pointing to a more significant economic drag than initially assumed. While markets have fixated on the trade-related hit to Q1 GDP, a more subtle but crucial story is unfolding in consumer spending, particularly in discretionary categories. Revisions to inflation-adjusted spending reveal that initial estimates vastly overstated consumer strength: Q1 consumption was revised down from 1.8 percent to just 0.5 percent, and services spending from 2.4 percent to 0.6 percent, highlighting the weakness that coincided with eroding consumer confidence. Now, as tariffs bite, households are pulling back on discretionary services like dining out, recreation, and especially transportation, with air travel down 4.7 percent year-over-year and auto maintenance and rideshares also seeing notable declines.

Even the strongest discretionary segments are showing weakness; services spending overall has dipped 0.3 percent, a trend rarely seen outside of recessions. Meanwhile, on the goods side, the data show a clear pull-forward of purchases ahead of tariff hikes, particularly in big-ticket items like vehicles and appliances, with the latter seeing price spikes reminiscent of the last major tariff wave. Yet, broader inflation has remained surprisingly tame, largely due to businesses stockpiling goods pre-tariff and drawing on those inventories to buffer immediate price impacts. This has delayed, but not eliminated, the eventual cost pass-through to consumers, as inventories are finite and prices will likely climb once they are depleted. Tariff-induced inflation remains somewhat hidden for now, but consumer behavior is already shifting in anticipation. Despite assertions to the contrary, consumers are feeling the pressure: they’re cutting back, reallocating spending, and revealing signs of budget strain. The illusion of tariff immunity is fading fast, replaced by growing signs that households are adjusting in ways consistent with past pre-recessionary behavior, even if headline inflation data hasn’t yet fully reflected the underlying stress. The biggest spike in wholesale inflation in three years provided the latest sign that companies have begun to raise prices to offset rising input costs. Some Fed officials have voiced concerns that Trump’s trade war will influence prices well into next year.

Capital markets

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Mandatory loan sale delivery is often the next stage of growth for lenders, unlocking greater execution and profitability with a typical 10–50 basis point pickup over best efforts when managed effectively. In MCT’s blog post, Introduction to Mandatory Loan Sale Delivery, Senior Trader Ron Happell explains the risk management frameworks, hedging strategies, and precise pull-through rate calculations that protect lenders from market and fallout risk while driving higher margins. "Factors like inconsistent pull-through, renegotiations, and other issues, what we call 'leakage', can reduce the pickup over best efforts," describes Happell. This post also covers the differences between best efforts and mandatory delivery, how to hedge with TBAs, and the operational adjustments needed for success. Read the practical guide for lenders evaluating the move to mandatory delivery as part of your strategic risk management plan.

We’ve truly reached the dog days of summer. Without much in the way of economic and news developments yesterday (a few central banks released their latest policy statements, but only Bank Indonesia surprised markets by announcing a 25-basis point cut), bonds ended yesterday near their starting levels. The U.S. Treasury sold $16 billion in 20-yr bonds to okay demand, though foreign interest was on the light side once again, and the market slowly backtracked through the release of the FOMC Minutes from the July meeting, which showed a discussion about persistent inflation. On the auction front, buyers’ strike concerns have faded, evidenced by the muted reaction to the trio of tails at the 3-year, 10-year, and 30-year auctions earlier this month. There was the potential that another tailed 20-year refunding yesterday would trigger a sharp selloff: recall that it was the 1.1-basis point tail at May’s 20-year new-issue that contributed to a spike in rates and added fuel to fears of a buyers’ strike in U.S. Treasuries.

The minutes from the July 29-30 FOMC meeting (no change to rates) indicated that only Governors Bowman and Waller preferred a rate cut. Interestingly, most Federal Reserve officials highlighted inflation risks as outweighing concerns over the labor market at their meeting last month, though President Trump’s tariffs fueled a growing divide within the central bank’s rate-setting committee. There was a focus on the apparent slowing in the labor market, with dueling risks on both sides of the Fed’s mandate and tariff-related inflation still a big topic of discussion, but the majority of the 18 policymakers in attendance “judged the upside risk to inflation as the greater of these two risks.” Their statement at the time characterized the labor market as “solid” but said inflation remained “somewhat elevated.”

Today’s economic calendar kicked off with weekly jobless claims (235k, higher than 225k expectations) and Philadelphia Fed manufacturing. Later today brings S&P Global flash PMIs, existing home sales, leading indicators for July, Treasury announcing month-end supply (consisting of $69 billion 2-year, $70 billion 5-year, and $44 billion 7-year notes and $28 billion reopened 2-year FRNs) before auctioning $8 billion reopened 30-year TIPS and conducting a buyback (liquidity) in 20-year to 30-year bonds for up to $2 billion, Freddie Mac’s Primary Mortgage Market Survey, and remarks from Atlanta’s Bostic. Today is also Class D 48-hours. We begin the day with Agency MBS prices roughly unchanged from yesterday, the 2-year yielding 3.76, and the 10-year yielding 4.31 after closing yesterday at 4.30 percent.

“To whom it may concern”

-boring

-cliché

-devoid of real meaning

“To whom it’s about to concern”

-exciting

-innovative

-a call to action

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, “Servicing: What’s All the Fuss About?” The Commentary’s podcast is available on all major platforms, including Apple and Spotify.

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