6.23.26 Road To Housing; HELIX’s Carl Markman and Frank Perugini on New Product(s); Agency MBS Performance

Today’s episode includes reports on the 21 st Century ROAD to Housing Act moving along. Plus, Robbie interviews HELIX’s Carl Markman and Frank Perugini on improving borrower and loan officer experiences, accelerating loan processing, and growth in some of the fastest-expanding segments of the mortgage industry. And we close with a look at why Agency MBS posted modestly negative performance last week.

Thank you to Equifax, a global data, analytics, and technology company, helps mortgage lenders gain the borrower and market insights they need to improve efficiency and make accurate decisions. Access differentiated consumer credit data, powerful consumer and market insights, and income and employment data from The Work Number.

The Chrisman Commentary is 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.

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Speaker 1 0:02

Welcome to the Chrisman Commentary, Daily Mortgage News Podcast. I'm your host, Robbie Chrisman. Topics on today's episode include the 21st Century Road to Housing Act, JP Morgan Chase addressing housing supply, in my interview with Helix's Carl Markman and Frank Perragini on improving borrower and loan officer experiences, accelerating loan processing, and growth in some of the fastest expanding segments of the mortgage industry. Here, take a listen to a little preview. When we talk about AI or technology, and when we talk about humans, how have you two arrived at the what you feel like is the proper intersection of those two? Everybody wants the the industriousness of AI and they want the the touch and the creativity of humans. How do you how do you find the right intersection point?

Speaker 0:51

That's a really good question. And I think what we've done is we've pretty much hit hit a failsafe. We want to limit and reduce the variation that you that you see in an experience, whether you're the the automation is working, or you have someone who works at a small mom and pop shop and and they're they can't connect to their payroll provider or something like that. A human underwriter needs to get in and kind of put that thing back on track and clear it. And we want to give everyone the optionality. So you want to leverage the technology, you want to leverage even AI from a support perspective, then absolutely you run for it. But when it doesn't work, you have that fail-safeme mechanism to make sure that it just doesn't fall off the track and stay there. It's still a consistent process and it's almost seamless, whether you need that human element or not. Want to make sure that the experience is always going to stay consistent.

Speaker 2 1:54

And like Frank said, we're not hiding behind anything. So if you go on the platform, the platform actually flows very easily through. And every single screen, there's an ability to reach out to someone to get some help. So along the way, there's help available at any time the borrower or loan officer need it.

Speaker 1 2:16

Thanks to Equifax for sponsoring this week's podcast. With Equifax's suite of mortgage solutions, mortgage lenders can use trusted, independently verified consumer and financial data and analytics to reduce manual processes, accelerate loan decisions, improve accuracy, manage risk, and enhance the borrower experience from initial application through ongoing loan servicing. To learn more, visit Equifax.com slash business slash mortgage. For the most part, the mortgage conference scene quiets down somewhat with summer, but hats off to old Republic title in escrow. At last week's event in Honolulu, the team handed out readers 1.5 and 2.0 at their booth. Apparently that's reading glasses for old people. So much more useful than squishy balls or hand sanitizer. They know their audience. The glasses were a hit. Also a hit seems to be the U.S. Senate passing a bill to lower housing costs and restrict Wall Street from buying homes. The bipartisan legislation, the 21st Century Road to Housing Act, was crafted in both chambers and must now pass the House. It seeks to build more homes and prevent large investors from outbidding families. It was passed by a large bipartisan vote, setting the stage for the final House passage as soon as later this week. Recall that differing versions of the housing package passed both chambers of Congress twice over the past year and a half, but this looks more promising with many in Congress trying to keep their jobs at the midterm elections in November. And a new policy brief from JP Morgan Chase argues that addressing the nation's affordability crisis will require not only zoning, permitting, and land use reforms, but also broader adoption of innovative construction methods such as manufactured, modular, panelized, and other factory-built housing. Drawing on examples from states and localities across the country, including zoning reforms in Texas, housing production initiatives in California, manufactured housing policies in Maryland, factory-built housing codes in Colorado, modular housing efforts in Cook County, and permitting streamline in South Bend and Kalamazoo, the report highlights how industrialized construction can reduce building costs by an estimated 20 to 30% and shorten timelines by 30 to 50%. The brief identifies inconsistent zoning, building codes, inspections, and financing structures as major barriers to adoption, and recommends three policy priorities. Creating regulatory frameworks that treat factory-built and site-built housing equally, expanding public incentives, and financing support to create predictable demand, and investing in workforce training, implementation capacity, and research to build confidence in innovative housing solutions, and accelerate market adoption. For today's interview, I wanted to welcome to the show Helix's Carl Markman and Frank Perigini to talk about improving borrower and loan officer experiences, accelerating loan processing, and growth in some of the fastest expanding segments of the mortgage industry. Homebridge Financial Services has signed an agreement to merge with an affiliate of Saluda Grade, creating a larger platform focused on expanding its presence in the growing non-QM and HELOC markets while retaining existing leadership and personnel. As part of the transaction, Homebridge and REMN wholesale will launch Helix, a new digital mortgage platform designed to integrate first lien and home equity lending through enhanced automation, data transparency, workflow efficiency, and risk detection capabilities. The combined strategy aims to improve borrower and loan officer experiences, accelerate loan processing, and position the company for growth in some of the fastest expanding segments of the mortgage industry. With where we are in the current market cycle, obviously non-QM has made a huge rise. HELOC is at the forefront of everyone's minds, or the HELOC space is at the forefront of everyone's minds. And so I'm very excited to have both of you on the show today to talk about Helix, which is uh build is the future of digital mortgage lending. And before we get into the product in earnest, can we talk about what digital mortgage lending means to you? Because offline a little bit, we we were talking background, and I mentioned I worked at SoFi in the early 2010s, and our whole goal was that we're going to have this end-to-end mortgage, digital mortgage, the digitalization of mortgage. And frequent listeners of this podcast will have heard me say this a lot, but we're still not fully there with adoption across the industry. Obviously, there's platforms like yours that are that have made great strides, and maybe we are there. But just thoughts on what a digital mortgage, fully digital mortgage means, what the industry is still missing for the large part and where this is all heading.

Speaker 6:45

Robbie, you could probably attest to this. Is our our industry is pretty adverse to change over the last 35, 40 years, right? And all of a sudden, with with the onset of global technology, things have started to evolve. And you know, I think the mortgage industry is finally kicking off the growing pains of moving forward into a new digital space for the platform. So it's nice to see the direction we're going as an industry over the last five or six years, which has really been phenomenal. And we've seen the growth, and we've been there directly uh with the HELOC space through a couple of different platforms, and we've kind of seen it evolve. But one of the pieces is we've gone through, you notice technology is getting you there and faster and faster. And the goal is to make the life of a loan officer and a borrower pretty straightforward and close faster, not chase down things the way that we've done it for the last for the last couple uh several decades. But we've also, in certain instances, we've lost that human element and that human touch. And in the mortgage space, I feel, especially in the loan officer world and the broker world, relationships are still critical to how we can be successful at the loan officer level. So we've maintained that trajectory of highly advanced technology to keep that speed of closing loans quickly, keeping the loan officer engaged, but also not having to be bogged down and chasing things and looking for what the problems are. But at the same time, we still want to go back to the roots of what has made us successful over the years, which is introducing or maintaining that human element at the lender level with the loan officer, so that the loan officer and the borrower always have somebody to go to when you don't get that perfect automation, right? Not every loan is created equal. So there are people in the space that it's very, for lack of a better term, black and white. You either work or you don't. And then you have your other more traditional experiences where it's just the slow path of getting from point A to point C. We're trying to bridge that gap and provide uh a truly fast digital platform without losing that human element and that relationship between the loan officer, borrower, and lender.

Speaker 2 9:00

And what uh what Frank is saying is that Helix is a brand new platform, but not brand new to us. We've closed uh probably close to 50,000 units, and with this platform comes with experience and experience with not just the digital aspect, because in the mortgage business, we all know things go sideways, and when it does, you have to someone has to take charge and fix the problem, and that's where this new platform is going to shine.

Speaker 1 9:25

We were talking offline a little bit, and you mentioned that since 2021, y'all have been on two platforms. Now you built one platform from scratch. I would love some more details on the reason for this, the process, and maybe some trials and tribulations from along the way.

Speaker 9:47

We've had the the luxury of firsthand experience of what worked, what didn't work. Everything that we've built was from the voice of the consumer. And by consumer, I you know I mean the borrowers and the loan officer community. I was front and center managing the support teams and also managing the operations for these last platforms. I've heard it all. And then on top of it, my wife's a loan officer. So even when I'm not working, I hear all of her complaining from all the other lenders and everybody else out there and what's working and what's not working. So I've gotten a lot of experience of what people want to see in a platform. So we've had the luxury of of taking that feedback and really building it from that perspective, not from ours. So we didn't build something saying this is what I think the community wants, took firsthand feedback from the community and incorporated it into what we're doing in our platform.

Speaker 2 10:40

And Robbie, I'll give you a couple of examples. One example is one of the platforms, it's a digital HELOC, and with the digital HELOC comes debt relief. And um, when paying off the debts, there's a lot of times that we'd be sending out just checks in the mail, and it takes up to 30 days to get there. And a lot of times those addresses weren't even correct, so we had to cancel the checks and send out new ones. Uh, with this new platform, we listen to the bars, we listened to our loan officers, and they said, This is crazy. Why not just why can't you just electronically pay off these debts? That's one of the pieces that we've solved. So these the debts will be paid off electronically immediately. Brokers will get paid immediately once the loan funds as well. Uh, another thing is that you know, a borrower calls, and on these platforms, they're not even allowed to call it. Like Frank said, it's it's either it goes or it doesn't go. They'll be able to speak with our representatives, and our representatives will actually be able to share their screens and point to where the bro or the borrower or the loan officer needs to press on a button. This is a full service process, but primarily a digital HELOC. So if it goes digitally, these are going to close in a matter of days. But if the consumer or the loan officer needs a little bit of help or hand holding, we'll be able to do that for them.

Speaker 1 11:57

There are a lot of people I speak to on this podcast that are designing these new products, and I'm always intrigued as to there's obviously a utopian vision of what things can be, and there's a practical intersection of where people are actually going to use it. And and Carl, you touched on some of it in that answer. I'm hoping we can elaborate on just what do people expect from a modern lending experience? Where are you meeting? Where do you feel like that intersection is that you're actually meeting people?

Speaker 2 12:23

That's a great question because uh you know, a lot of times we spoke to speak to loan officers and they're asking, well, what LOS are we supposed to be on? Um, my processor, are they supposed to upload the documentation? A lot of them don't understand how quick and easy this is. It is in our system, if it's a second home or investment property, these literally can be applied and closed and funded the same day, which is incredible. People use digital HELOCs to get the money fast. They don't have four, six, eight weeks to go through a credit union or a bank to get their money and be able to wait and try and find that lowest rate. This is for people who just want the money quickly. And it's proven it's tens of thousands of consumers every single month that that close on these loans because they need the money quickly. What the expectation is, if a loan officer hasn't used a digital HELOC platform, they really don't know what to expect. They're in awe on how fast the process moves. Um, sometimes we get after the loan closes, wait a second, what what just happened? What do I what do I need to do? I just got notification the loan closed and funded already. That's impossible. And it happens every single day. But like I said, in the mortgage business, 30, 40% of those loans go through digitally, and it's amazing. But so many times the borrower just doesn't understand or it or may not be tech savvy and be able to use the computer because that's what they use to go through this process. They don't know what to do. So they need that hand holding and loan officers because they might not be familiar, they don't know. That's where Frank and his whole team comes into play, uh, or the help desks that we have that can actually speak to or walk people through the process. And that's the piece. It's not just a digital piece because there's a lot of digital platforms out there. The difference with Helix is it's the digital piece plus the people behind the scenes that are experienced to get this done.

Speaker 1 14:18

Why hasn't the first lean space been combined with the HELOC space like this until now? It obviously seems like a no-brainer, especially in the age of companies trying to offer more products to keep everybody in-house to retain those clients. What is I mean, maybe the answer was so obvious to y'all, and that's why you did it. And I'm not, I guess I'm asking why it wasn't so obvious to other people. Maybe.

Speaker 2 14:42

That's a good question, too. I mean, there is a lot of talk about adding some products. You know, I'll give you an example of a DSCR. Um, they're they're out there that are on a platform similar to this, and I think everyone's talking about it and trying to get this done. But it's a it's investors, it's you know, it's the purchasers of these loans, they may not understand this. These loans move so quickly through the process. The title's different, the appraisal process is different. So there is some differences. But wouldn't it be great if every loan went through this process on the on these platforms?

Speaker 15:13

We're real excited to give all of the loan officers the opportunity to kind of let the product do what it can do for them, right? Not every loan officer is created equal. And you know, some want to be very detailed and want to be involved in every step of the process for their borrower on behalf of their borrower. Some just want to let the system kind of do its thing and I'll check in when you need me. Um, you know, they dictate the level of their involvement with this platform, and we don't want to exclude anyone out. And and what we've realized too is in one thing we wanted to be sure of was that we didn't cut the loan officer out of this platform. And some of the other instances, you know, it really was almost a direct-to-consumer first type of system and loan officer relationship almost an afterthought. And that's that's okay because that was, you know, it was a fledgling experience in the industry. But we've been working in the MLO and broker community for for a very, very long time. And we wanted to make sure that we weren't going to cut them out of the relationship when when they want to be, right? So they can absolutely help on behalf of their borrowers. They can be involved, they can see what's happening. We've provided, we've we've made the system so that it's transparent. So the loan officer is never caught off guard. If the borrower calls them and asks them a question, they can go right into their system and see exactly what's going on, what's needed, where we're at, what do we need to do to close, so that the loan officer always is prepared and looks good to their borrowers as well, right? We want everybody happy. We want the borrowers happy, we want the loan officers happy. And usually that means a nice, smooth, fast closing. But to Carl's point before as well, not every borrower is tech savvy, and that's okay. And that's why we built the structure around the system with the human element and that support, live screen sharing, real-time chat to answer any questions that we could possibly can, in addition to maximizing the AI to the maximum of its ability when it comes to just answering general questions and quick support. Some people just want to get in and out fast, but we're never gonna hide our human beings and our agents behind this AI wall where it's gonna ask you 50 questions until finally you give up and maybe you get a human. You want a human, you click a button, and you're getting somebody and you're gonna get to talk to them.

Speaker 1 17:27

Yeah, very cool to hear. Well, today is launch day. Congratulations. What has the lead up been like? What do you hope from launch and and here in the the short term to accomplish?

Speaker 17:39

We're super excited to present this to everyone, me personally, just because I I know that it's built based on the feedback and what everybody's been looking for and asking for. So I'm very excited to kind of share it with the entire community. The feedback that we've gotten so far has been really, really positive. And we just want to provide something in the space that people are looking for, and we want to deliver it and want to deliver it for them to the best of our ability.

Speaker 2 18:07

And Robbie, I'll just add, uh, from a sales perspective, constantly we're getting complaints about the platform that we just moved from, that uh there's no one to help, there's no one to reach out to. It's pretty frustrating, and their bars get frustrated, and sometimes people give up. We're really hoping uh with a lot of the presentations we've been doing with a lot of loan officers recently, they are really excited about this new platform when we walk them through it. So we're we're really excited about this. We think that volume is gonna increase significantly. Um, you know, Frank and I, we've been with the company, I'm going on 18 years. Frank's probably right about the same time I've been here. We've got incredible tenure at our divisions with Remnant Wholesale and Home Bridge Wholesale. So we're just looking out for the future. We think this is gonna be just an amazing, amazing platform.

Speaker 1 18:52

Best next steps, people looking for more. Where should they go? Who should they reach out to?

Speaker 2 18:58

Sure. So uh the best way, obviously, if you're working with uh Remnant Wholesale or Home Bridge Wholesale, those are the two wholesale divisions that are out there with this HELUX platform, HELUX platform. Um so they can obviously first step is to go to their account executive. If not, they can go to the websites uh and reach out, and someone will respond to them very quickly. So it's the Remnant Wholesale and Home Bridge Wholesale sites. So, Robbie, we do have uh we'll be sending out uh through hundreds of thousands through our contacts and contact uh and constant contact for inviting them to a demo uh next Wednesday. We have two different demos going on, uh, one for each division that people can go on and actually see the uh the platforms themselves and ask questions.

Speaker 1 19:42

Good stuff. I really appreciate the time, guys. I wish you all the best of luck. It's it's always really enjoyable from my seat to see people pushing the industry forward, pushing the borrower experience forward. And so uh thank you for making the time for me.

Speaker 19:55

Cool. Thank you very much. Yeah, thanks so much.

Speaker 1 20:00

With negotiations between Iran and the US and Switzerland getting off to a rocky start, depending on reports, bond yields pushed higher to open the week. Outside of geopolitics, this week will be dominated by the Personal Incomes and Outlays report, which will contain the PCE price index. The Fed's preferred inflation gauge, PCE, is expected to reach its highest level in three years, due largely to a temporary energy price surge. The falling energy costs in June are likely to ease inflation ratings in the next report. The Fed may be perceived as increasingly hawkish, but despite tougher rhetoric and higher rate projections, it still has cut rates by 175 basis points since mid-2024. Some would call that a gap between policy messaging and actual monetary policy. Agency MBS posted modestly negative performance last week, with losses driven almost entirely by the market's reaction to the Fed's dot plot and perceived hawkish commentary from Chair Warsh, while spread movement remained largely unchanged, reflecting wait-and-see investor sentiment. Investors favored mid-stack coupons as higher duration securities lagged, and despite MBS appearing attractive relative to investment-greed corporates, market participants remained wary of geopolitical and rate-related risks. Today's economic calendar includes the latest ADP employment figures, Red Book Same Store Sales, Flash June SP Global U.S. Manufacturing PMI and Services PMI, Richmond Fed Services Revenues Index for June, and a Treasury auction of $69 billion of two-year notes. Recent Treasury auctions have shown softening demand, with the five and seven-year notes tailing in each of the last five auctions. Higher yields, particularly on the two-year note, may help attract buyers despite less overall enthusiasm. We begin the day with agency MBS prices slightly better than yesterday's close, the two-year yielding 4.19%, and the 10-year yielding 4.48% after closing yesterday at 4.51%. Let's wrap up with a joke and some housekeeping. There's a guy who lives in Ohio, and one morning he hears a voice in his head. The voice says, Quit your job, sell your house, take all your money, go to Vegas. He ignores the voice, and later in the day he hears the voice again. Quit your job, sell your house, take all your money, go to Vegas. Again, he ignores the voice. Soon he hears the voice every minute of the day. Quit your job, sell your house, take all your money, go to Vegas. He can't take it anymore. He believes the voice. He quits his job, sells his house, takes all his money, and flies to Las Vegas. As soon as he steps off the plane, the voice says, Go to Caesar's palace. So he goes. It says, make your way to the roulette table. So he goes to the roulette table. He says, put all your money on Red 23. So he does. The dealer spins the wheel and it comes up Black 17. The boy says, Damn. Thanks again to Equifax for sponsoring this week's podcasts. With Equifax's suite of mortgage solutions, mortgage lenders can use trusted, independently verified consumer and financial data and analytics to reduce manual processes, accelerate loan decisions, improve accuracy, manage risk, and enhance the borrower experience from initial application through ongoing loan servicing.