10.3.25 Shutdown Economics; California MBA's Paul Gigliotti on Leadership; No Payrolls Data

The Chrisman Commentary Daily Mortgage News Podcast delivers timely insights for mortgage lenders, loan officers, capital markets professionals, and anyone curious about the mortgage and housing industry. Hosted by industry expert Robbie Chrisman, each weekday episode breaks down mortgage rates, lending news, housing market trends, capital markets activity, and regulatory updates with insightful analysis, expert perspectives, and conversations with top professionals from across the mortgage industry. Stay informed, gain actionable insights, and keep up with developments in mortgage banking and housing finance. Learn more at www.chrismancommentary.com.

In today’s episode, we go through the economic impact of a government shutdown. Plus, Robbie sits down with new California MBA CEO Paul Gigliotti for a discussion on his goals while in the role and how state and national organizations can work together for the greater good of the mortgage industry.  And we look at the what is moving markets without normal economic reports.

This week’s podcasts are sponsored by Spring EQ, one of the nation’s leading non-bank home equity lenders, giving partners more ways to serve customers. Known for speed, service, and innovation, Spring EQ makes tapping into home equity easier.

Transcript

Here in Telluride, CO, after learning of my capital markets background, yesterday someone bluntly asked me, “Can one person slow or stop the United States economy, or the world economy?” I was taken aback by the question, but it isn’t totally off-base: no one is saying a shutdown helps GDP. In eight months, we’ve learned not to underestimate the changes that can be made by the current administration. We had been talking about the government’s shutdown, impacting several areas of residential lending (see below). As previous “on the record” statements made by President Trump circulate and are being used against him about the role of the president in situations like this, there is plenty of blame to go around. But the U.S. government shutdown is strengthening expectations for additional Federal Reserve rate cuts, which is exactly what Trump wanted, with markets fully pricing in an October move and giving an 88 percent chance of another in December. Delays and risks to the labor market from 750,000 furloughs make it more likely Chair Jerome Powell will push for further easing, even as inflation pressures from tariffs remain a concern. Remember when all we fretted about were tariffs? (Today’s podcast can be found here and this week’s are sponsored by Spring EQ, one of the nation’s leading non-bank home equity lenders, giving partners more ways to serve customers. Known for speed, service, and innovation, Spring EQ makes tapping into home equity easier. Hear an interview with new California MBA CEO Paul Gigliotti on his goals while in the role and how state and national organizations can work together for the greater good of the mortgage industry.)

Employment and transitions

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“Primary Residential Mortgage, Inc. (PRMI) is thrilled to announce the addition of three seasoned Division Presidents, underscoring our commitment to strategic growth nationwide. We welcome Eduardo Paras who has over 20 years of mortgage expertise and will operate from Chicago, IL. He joins PRMI from his previous post as a Regional Manager at a national lender. Pete Roeske, with nearly 30 years in the industry, is based in Southern California and most recently served as Managing Director of Retail Lending at a national lender. And Paul Fitch adds 40 years of experience from New Jersey, coming to PRMI from his post as a Regional Manager. Their leadership and market insight will accelerate PRMI’s expansion and reinforce our commitment to exceptional service and opportunity for borrowers and mortgage professionals alike. Interested in growing with us? Contact us to explore opportunities.”

“Evergreen Home Loans Relaunches Security Plus Seller Guarantee™ at $10,000! Evergreen Home Loans™ has relaunched its flagship Security Plus Seller Guarantee™, raising the seller guarantee from $5,000 to $10,000 effective October 1, 2025. Introduced in 1989, Security Plus has long given Evergreen-financed buyers a competitive edge in dynamic markets while providing sellers added confidence in closing. With the new $10,000 guarantee, eligible buyers can present stronger offers backed by Evergreen’s proven promise to deliver On Time and As Promised®. Evergreen continues to expand its footprint nationwide, now licensed in 30 states and actively growing into new markets. With more than 56 branches and a wide variety of loan programs, including FHA, VA, Conventional, Jumbo, USDA, refinancing, and construction loans, Evergreen is well-positioned for continued growth. We’re hiring. Evergreen is seeking experienced loan officers and branch managers to join our award-winning culture. Learn more.”

“A mid-sized privately owned mortgage bank located on the West Coast is in search of a new Head of Underwriting. The current Head of Underwriting has decided to retire after 40 years in the Mortgage industry and over a decade with the company. With one of the lowest rates of repurchase in the nation and some of the shortest average days on the line, the foundation is already set. We’re looking for a dynamic Underwriting Executive who is proficient with Encompass, seasoned at responding to pre-and-post purchase file reviews, has prior management experience, and a deep understanding of Non-Agency, Non-QM, Agency, and Government guidelines. If you’re looking for a unique opportunity to finally have a seat at the table, flexibility to work remote, and use your talents to shape the next chapter at a company, please contact Chrisman LLC’s Anjelica Nixt to forward your confidential note.”

Congratulations to industry vet Len Patton, CMB who is Cenlar’s new Vice President of Business Development. Len will primarily be tasked with sourcing and signing new clients in the subservicing channel.

And congratulations to Amber Jervis, promoted to Kind Lending’s SVP Of Marketing!

Yesterday the Commentary noted the retirement of the California Mortgage Bankers Association (California MBA)’s Susan Milazzo, and the appointment of Paul Gigliotti as her successor. The note didn’t have his new work email; if you’d like to send him an email, here you go!

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.

Services, products, software, and tools for lenders and brokers

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“Marr Labs builds expert AI agents that streamline the mortgage lifecycle for both originators and servicers. Our human-like voice agents engage borrowers the moment a lead comes in, qualify them instantly, and keep loans moving by handling repetitive, compliance-heavy tasks that overwhelm call centers. Founded by the team behind the speech technology that powered the first Siri app and Samsung’s S-Voice, Marr Labs brings proven expertise in deploying AI at scale. Today, we’re helping top lenders cut origination costs, speed up borrower response, and strengthen retention with seamless, 24/7 borrower engagement, empowering originators and servicers to close more loans at lower cost while delivering a better borrower experience.

“MSR Sellers: Looking for a win in Vegas? You don’t need luck, just better execution and liquidity that you’ll receive from Mission Servicing Residential, a leading MSR purchaser with best-in-class customer experience, flexible execution options and operational efficiencies. As a growing flow and bulk investor, Mission Servicing Residential offers a comprehensive suite of products, including Fannie Mae SMP and Freddie Mac CIX, with GNMA PIIT on the road map. We are one of only a few MSR purchasers that are Freddie Mac CIX All-In-Funding enabled, so set up a meeting at the MBA Annual with Richard Dybel, Managing Director of Business Development, and discover how Mission Servicing Residential can help you win.”

“Keeping borrower's loyal starts with servicing that’s accurate, efficient, and built to scale. LERETA delivers tax servicing solutions that simplify complexity and strengthen customer relationships. Whether you’re managing unique portfolios or navigating complex business rules, we simplify specialty servicing and deliver true SLA transparency for high-demand customers. With our AI-driven technology, we streamline and optimize tax processes to deliver unmatched accuracy, scalability, and efficiency, helping you reduce risk, strengthen your business continuity plan, and focus on growth. Download our latest eBook to learn about the hidden costs of tax servicing; how to stay ahead of changing regulations; and responsible and cost-effective ways to leverage AI technology.”

Pathways Home Unveiling: Request Your Demo at MBA Annual! This is not your typical “swing by the booth” demo. Pathways Home is MMI’s new homeowner intelligence platform, the tool that flips post-close engagement on its head. Borrowers see equity, market shifts, and refi or move-up opportunities every day in a sleek app that carries your brand, not ours. It’s the difference between being forgotten after closing and being the lender they never let go of. hHere’s the deal: demo slots are capped. Once the limited schedule fills, that's it. Everyone at MBA will be buzzing about this launch. The only question is… will you be the one who saw it live, or the one who heard about it afterward? Request your Pathways Home demo now.

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.

Correspondent and wholesale products

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If your borrowers are stuck behind a home sale contingency or hitting DTI limits, Flyhomes, a leading wholesale lender specializing in Buy Before You Sell solutions, offers a fast and effective path forward. The Flyhomes Guaranteed Backup Contract gives your borrowers a bona fide purchase agreement on their departing home, allowing underwriters to exclude that mortgage from DTI calculations, helping borrowers qualify for up to 50% more and remove the home sale contingency when purchasing their next home. This nationwide solution requires no loan, offers a competitive flat fee, and can be ready in 24 hours. Over the past 10 years, Flyhomes has helped 5,000+ buyers move into their next home. On average, LOs close 1.2 more loans per month with Buy Before You Sell, now available nationwide. Bonus: Now through Oct. 31, get 50 bps off interest rate on all locks! Book a call today to learn more or sign up for the weekly open house for a live walkthrough and Q&A.

“Arc Home at NAMB and MBA Annual in Las Vegas! We are bringing something different to NAMB National on October 18-19 at Caesars Palace. Stop by our A’rc’ade for a full retro arcade experience and meet with our team of non-QM pros to talk scenarios, pricing, and the programs that help brokers win more business. Then, we shift over to the Fontainebleau for the MBA Annual, October 20-21, where Arc Home will host correspondent partners in our private suite. This is your opportunity to connect with us directly and explore how our Non-QM and Non-Agency programs can help you grow. Whether you focus on wholesale or correspondent, Arc Home will be on site in Las Vegas to meet you where you do business. For MBA meeting details, contact Elliott Grumer to schedule a time.”

Shutdown and government-related lender news

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If you need an example of the current administration intertwining residential lending and politics, you have no further to look than the USDA or HUD website statements.

News informally broke yesterday that the FHFA, led by Bill Pulte, would force the closure of Freddie Mac’s and Fannie Mae’s New York offices in “response to Attorney General Letitia James' "corrupt and dangerous business practices".

Speaking of Freddie and Fannie, alternative procedures were laid out for mortgage lenders to follow if the shutdown hinders their ability to gather standard employment or income verification, as well as temporary measures for flood insurance verification. The new guidance issued by Freddie Mac still requires flood insurance for at-risk homes but will allow mortgage borrowers to submit proof that they have applied for an NFIP policy, even if the policy hasn't been issued yet. When the shutdown ends, lenders will be required to verify that the borrower actually obtained flood coverage that meets standard requirements.

The new guidance states that for federal employees, lenders can waive verification of employment if they document the steps taken to verify employment and certify that the shutdown prevented them from obtaining verification. For federal workers, the temporary rules also waive the requirement that their pay stubs be dated no earlier than 30 days before the initial loan application.

The National Flood Insurance Program (NFIP)’s authority to issue new policies has lapsed, complicating an estimated 1,400 property transactions each day and leaving many buyers in high-risk areas without flood insurance coverage. The National Association of Realtors writes that, “Most existing policies remain active, include a 30-day grace period, and can be transferred to new owners. NFIP claims will continue to be paid, but uncertainty grows the longer the shutdown lasts, especially regarding how long buyers may go without coverage and how quickly FEMA’s claims paying funds could be depleted.”

NAR states, “According to NAR research, the NFIP supports roughly half a million home sales annually, generating 1 million jobs and contributing $70 billion to the U.S. economy.” For more on how a shutdown could affect real estate: NAR Letter to Congress Urging the Extension of the NFIP. Possible Government Shutdown: What You Need to Know. NAR Original Research on NFIP. NAR Mobilizes to Extend National Flood Insurance Program. What a Government Shutdown Means for REALTORS®.

Ginnie Mae announced that it will continue to perform all functions necessary to ensure that the market is not disrupted during a potential lapse in appropriations. These functions include granting of commitment authority, support for continued issuance of Ginnie Mae Mortgage-Backed Securities (MBS) (including related Pools Issued for Immediate Transfer (PIIT)) and Real Estate Mortgage Investment Conduits (REMIC), taking all actions necessary to ensure timely payment of principal and interest to investors, and continuing to manage servicing of extinguished Issuer portfolios. Single-family and multifamily loans will continue to remain eligible for securitization even in the event of a potential lapse in appropriations, so long as they meet requirements for insurance/guaranty of the insuring/guaranteeing agency when they are pooled and are in the process of being insured or guaranteed. For more information, including FAQs, see HUD’s Contingency Plan for a Possible Lapse in Appropriations. 

Capital markets: “Non-jobs Friday”

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The decision to hedge isn’t just about market timing. It’s about operational readiness, margin stability, and long-term strategy. Whether you’re still relying on best efforts or already exploring forward commitments, getting a solid grasp of the fundamentals can shape smarter execution. Vice Capital Markets’ new white paper, Hedging 101: A Mortgage Lender’s Guide to Managing Interest Rate Risk, explains what hedging is, how it works, and how lenders can implement it effectively. It’s a clear, lender-focused breakdown for those seeking to strengthen their secondary marketing approach. Attending MBA Annual in Las Vegas this October? Schedule time with Troy Baars to talk through the white paper. Or, if it felt a bit too introductory, dive into a more advanced “Hedging 201” discussion on modeling, analytics, and execution strategies.

With the government shutdown, the Bureau of Labor Statistics’ employment data that normally comes out on the first Friday of month, is delayed. So, traders are looking at the September ADP private-sector jobs report, which came out Wednesday. Based on data from employers who use  Automatic Data Processing, and covering over 26 million workers (19 percent of private-sector employment), showed the private-sector shedding 32,000 jobs. August was drastically revised down from +54,000 to -3,000. As Dr. Elliot Eisenberg put it, “These declines clearly show a slow and steadily weakening labor market, defined by very cautious hiring.”

But that’s not all. The ongoing U.S. government shutdown has delayed key economic data releases, including construction spending, jobless claims, and the September jobs report, creating a data void ahead of the Federal Reserve’s policy meeting at the end of this month. The Fed, for the time being, may rely on alternative indicators, to guide its decision-making. Case in point, yesterday the customary release of the weekly initial jobless claims report was not released, but the September Challenger Job Cuts report was, coming in down -25.8 percent year-over-year. The report is not known for getting a reaction from the market, but given the current lack of official employment data, the report received some attention.

If the government shutdown continues and deprives the Federal Reserve of key economic data, policymakers are still expected to follow through with the 25-basis point rate cut indicated in the September SEP, as one month of missing data is unlikely to alter the broader easing narrative. Labor market signals remain mixed, with stagnant job openings, low quit rates, and job cuts still elevated by historical standards despite a drop in September. As Congress remains at an impasse and the Senate in recess, the chances of a prolonged shutdown are rising, mirroring the 35-day closure in 2018–2019. Markets are responding accordingly: Treasury yields have fallen amid the absence of official data and soft private-sector indicators. The narrative right now is labor market fragility and fears of further disruption from potential mass federal layoffs.

Mortgage rates ticked up for the second week in a row after hitting the lowest levels since last October. For the week ending October 2, the 30- and 15-year mortgage rates in Freddie Mac’s Primary Mortgage Market Survey rose 4-basis points and 6-basis points, respectively, to 6.34 percent and 5.55 percent and remained higher by 22-basis points and 30-basis points from a year ago.

With no BLS September payrolls report, today’s data are the services PMIs from both S&P Global and ISM, both due out later this morning. Three Fed speakers are currently scheduled: New York’s Williams, Dallas’ Logan, and Vice Chair Jefferson. We begin the day with Agency MBS prices unchanged from Thursday’s close, the 2-year yielding 3.54, and the 10-year yielding 4.09 after closing yesterday at 4.09 percent.

(Warning: Adult content. No complaints please.)

A “lady of ill repute” standing outside a motel in a small town saw an elderly man walking past. She hasn't had a customer in a while, so she calls out to him, "Hey, would you like to have a fun time with me?"

The old man said, "But I won't be able to..."

"Aww... give it a try... "

Old man says okay. They go in. The old man strips down and performs like he hasn’t done in decades, and for 30 minutes!

When he's done, the “lady of the night,” all exhausted and tired, mutters, "But you said you wouldn't be able to...."

"...pay you." replied the old man.

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, “No Lender Wants a Government Shutdown, but Just in Case…”. 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.)