7.16.26 Consumer Interactions; Polunsky Beitel Green on 50 Years; Data Data Data

Today’s episode begins with an overview of the ways consumers are interacting with originators. Plus, Robbie interviews Polunsky Beitel Green’s Allan Polunsky, Jay Beitel, and Marty Green on the evolution of the mortgage industry from a legal perspective over the past five decades, and the legal and regulatory challenges lenders face today. And we close with retail sales and jobless claims figures.

Thanks to Zillow Home Loans, Zillow’s in-house mortgage lender, for sponsoring this week’s podcasts. By integrating Zillow’s real estate platform with financing, Zillow Home Loans helps buyers move from dreaming about a home to holding the keys. With tools built for modern lending, Zillow Home Loan’s loan officers can focus on guiding buyers with care and confidence. Zillow Home Loans is an equal housing lender. NMLS #10287.

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.

Transcript

Speaker 3 0:03

Welcome to the Chrisman Commentary, Daily Mortgage News Podcast. I'm your host, Robbie Chrisman. Topics on today's episode include the ways consumers are interacting with originators, my interview with Polunsky Beitel Green's, Allan Polunsky, Jay Beitel, and Marty Green on the evolution of the mortgage industry from a legal perspective over the past five decades and the legal and regulatory challenges lenders face today. And after inflation data earlier this week, we've moved on to some labor market indicators. I'll share those with you. Thanks to Zillow Home Loans, Zillow's in-house mortgage lender, for sponsoring this week's podcasts. By integrating Zillow's real estate platform with financing, Zillow Home Loans helps buyers move from dreaming about a home to holding the keys. With tools built for modern lending, Zillow Home Loans loan officers can focus on guiding buyers with care and confidence. Zillow Home Loans is an equal housing lender, NMLS number 10287. Nearly every lender is at least learning about AI, but on the flip side, there are things like New York's ban on data centers. Lenders and vendors are not the only ones riding the tech wave, and no LO wants to be behind their client in tech knowledge. Consumers are now researching affordability, neighborhoods, and monthly payments long before contacting a lender. So the next competitive advantage in mortgage lending lies in engaging buyers earlier through real-time affordability tools, personalized insights, and integrated financing experiences that build trust before rate shopping begins. In today's purchase-driven market, where monthly payment matters more than purchase price, lenders that help consumers make informed decisions from the outset are better positioned to win business and improve outcomes for borrowers, agents, and loan officers alike. Put another way, the future belongs to lenders that combine advanced technology with human expertise, earning consumer trust early and serving as trusted advisors throughout the entire homeownership journey, rather than simply processing mortgage transactions. Yes, artificial intelligence is beginning to move beyond basic productivity tools and into core mortgage operations, with the most promising applications emerging in voice automation, document intelligence, and pre-underwriting rather than replacing loan officers or underwriters. AI agents are increasingly qualifying leads, handling inbound and outbound borrower communications, reviewing loan files, identifying missing documentation, and automating as much as 80% of repetitive underwriting tasks, reducing loan review times from roughly four hours to under one hour, while allowing staff to focus on higher value work that requires human judgment. Forward-thinking lenders are also connecting front and back office workflows, enabling AI to immediately identify documentation deficiencies and contact borrowers within minutes, significantly shortening loan cycle times and improving the borrower experience. Despite the rapid pace of technological advancement, industry adoption remains in its early stages, with many lenders still limited to general purpose AI tools rather than production ready mortgage applications. For mortgage executives, evaluate AI vendors based on proven production deployments rather than polished demonstrations, prioritize providers with deep mortgage expertise, capable of handling complex regulatory and underwriting scenarios, and make data security, privacy, and model governance non-negotiable, ensuring borrower information is never used to train public or competing AI models. Ultimately, the greatest competitive advantage may not come from AI itself, but from lenders willing to rethink traditional workflows, accelerate borrower engagement, and use automation to enhance, not replace, the human expertise that remains central to successful mortgage origination and servicing. Turning the interest rates and therefore the bond market, a second consecutive downside surprise in inflation data, PPI decreased 0.3% month over month in June, reinforced the bond market's conviction that the Fed is unlikely to hike rates later this month, allowing agency mortgage-backed securities and U.S. Treasuries to rally yesterday, led by shorter maturities. Treasury prices also benefited from moderating oil prices, and comments from New York Fed President Williams suggesting inflation may have peaked. Agency mortgage backed securities outperformed treasuries as spreads tightened and higher coupon securities led gains despite light summer trading volumes. At the same time, unusually wide TBA bid-ask spreads highlighted the importance of discipline in a market where traders should rely on multiple pricing sources, actively negotiate with dealers, and cultivate strong counterparty relationships rather than passively accepting quoted levels in a seasonally illiquid environment. On the Fed front, Chair Warsh's Senate testimony offered no new policy signals, leaving markets focused on incoming economic data. The latest page book portrayed an economy that continues to expand at a modest pace, despite persistent cross currents with consumer spending, manufacturing, construction, health care, and professional services supporting growth even as higher fuel costs, tariffs, and geopolitical uncertainty weigh on discretionary spending and profit margins. Labor markets remain stable with modest hiring and wage growth, while inflation pressures are still elevated, but generally moderating as price increases slowed or held steady across all districts despite rising input costs. Overall, the report reinforced a steady but cautious tone. One of resilient growth, gradually easing inflation, stable financial conditions, and a Fed likely to remain patient as it monitors evolving risks. For today's interview, I wanted to welcome to the show Plunsky Bidalgreens, Alan Plunsky, Jay Bidal, and Marty Green to talk about the evolution of the mortgage industry from a legal perspective over the past five decades and the legal and regulatory challenges lenders face today. Plunsky Bidal Green furnishes mortgage lenders with the peace of mind that comes from having provided timely, accurate, and compliant closing documents and more than five million residential loan transactions. That unprecedented volume of work results from their single-minded focus on serving residential mortgage lenders since the firm's founding half a century ago. I want to start this interview with a big congratulations to Polunsky Beitel Green on their 50th anniversary. Y'all have been a great partner with Christman. Y'all have a sterling reputation in the industry. I can't say enough kind of things about you. And I guess I want to start this interview with Alan. We have Marty and Jay as well. But Alan, when we look at the past 50 years of the mortgage industry, can you speak to its evolution as well as the evolution of Polunsky Beitel Green?

Speaker 2 6:37

Well, the evolution of Polunsky Beitel Green has been uh somewhat staggering from where we began to where we are now. Back in 1976, we had one selectric typewriter, and that was our technology. And actually one employee. And it was uh by today's standards uh very prehistoric as to how the process was effectuated. Uh, but it was effectuated nonetheless. We built the firm from day one on client customer service, giving the client you know what they needed in a timely manner and supporting them in all their needs in the mortgage industry. And uh, we've continued to do that for the last 50 years. Of course, the industry has evolved itself over the last half century. Uh, it is much more complex now, as one would expect, much more regulated, much more sensitive to uh outside influences and such, uh, certainly rates. Rates have always driven uh the industry in the more global way, but uh that hasn't changed uh in in the larger sense. The way we do it is different, but the industry, industry we serve and the way we serve that industry is pretty much the same 50 years later. And we're proud uh that uh we have kept that philosophy and uh it served us well and hopefully it served our our clients well as we've gone along.

Speaker 8:20

Jay, anything to add well in in terms of the industry and its evolution, as Alan's mentioned, it's gotten a lot more complex. But we've seen the uh change in in particular in federal law that affects mortgage residential mortgage lenders nationwide with respect to it. Is 1974 they implemented the Real Estate Settlement and Procedures Act, which for the first time implemented a standardized closing statement that was to be used nationwide. And then as time progressed in 2015 they changed from the Real Estate Settlements and Procedures Act for residential transactions into uh a combined with truth and lending law disclosure requirements and came up with a combined combined set of disclosures in 2015. We call those uh the threat amendments, and those are still in effect today. So and that also affected the uh the uh lenders' uh means of producing those disclosures. They had to update their systems and so forth. So from 74 to now, uh there's been quite an evolution uh in terms of what what residential margin lenders have to do in compliance with federal law.

Speaker 1 9:45

Marty? Yeah, I think that's the biggest big change in the last 50 years is just that regulatory compliance burden that everyone, all of our lenders have have seen and and seen it evolve, and just the stack keeps getting deeper and deeper, is kind of what we've seen over time. So I think that's uh that's the biggest change in the last 50 years. I think the other evolution that we've kind of seen is who the mortgage lenders are, who are the principal people making residential mortgage lenders in terms of entities, where it used to be more of a savings and loan model, kind of if you think back to even, you know, the building and loan from It's a Wonderful's life. It was there when we the firm first started in terms of the principal thing of the savings and loans. And they're still present today to some extent, but it's much more of an independent mortgage banker model today than what it what it was then. And there was a long period where the banks were much more evolved, uh much more involved than they are today, as they've seen their kind of market share shrink a little bit deliberately in many instances by a lot of those institutions. So it's been interesting watching that. And we've had to evolve along with it as to who the clients are, but also how do we best assist them in terms of navigating that regulatory environment, which has gotten increasingly complex. The other thing that I think has changed is as Alan said, uh, the Selectric that we used initially, or he and the firm used initially, which we, by the way, still have, is still there, but the technology needs have just grown astronomically as that compliance burden has increased. And we've needed to be responsive to that in terms of making sure that our systems were assisting the client in terms of getting things done in a compliant manner and a timely manner. And that's where I think we're going to continue to see that evolution in the future is how that technology continues to evolve to make that easier and easier for our clients to do business with us and to navigate those regulatory waters that can continue to be somewhat troubled from time to time.

Speaker 3 11:40

That's a great way of putting it. Compliant and timely probably will never go out of style. And so you mentioned kind of the the change of originator types. You mentioned uh the increase of technology, but but I want to go back to you, Marty, here and I'll ask in terms of client needs today, what is what is the the modern mortgage law firm provide? What are clients asking, and what is a good modern mortgage law firm providing?

Speaker 1 12:06

You know, the the primary thing obviously is getting their documents and certainly in the in the Texas sense where we we have a regulatory requirement that they be reviewed and or prepared by a Texas lawyer, having that done quickly, having that done expeditiously, and having that done accurately is at the core of what we do every day. I think the value add, though, is in terms of the compliance assistance and other things that we do along the way in terms of helping them, either by being a sounding board of how they deal with certain issues and maybe how some of our other clients have navigated those same issues and sharing that as a kind of a clearinghouse of information that they can rely on is one of the ways I think that we add significant value. I think in general, just uh also just general business advice about how they might best navigate some of these regulatory uh changes that have come about over the last several years is one of the ways that the firm really distinguishes itself in terms of providing trusted advice to those clients.

Speaker 2 13:04

Alan? I would agree with Marty. It's really, you know, going back to the beginning, the inception, revolving around the regulatory uh layers that have been added again and again and again over the last 50 years, it's just really uh mind-boggling how in those days the package that we would provide to our lenders for the borrowers to sign probably was no more than three, four pages. Now it looks like the Manhattan telephone book, if there was still a Manhattan telephone book. And then it, you know, I it's it's graphic uh proof of how things have evolved and how the bureaucracy has become so interwoven into the process, and all the additional boxes that need to be checked and done correctly in order for the loans to be correct, uh, right, saleable. It's just a lot more that needs to be done in order to be successful in providing the paperwork to close a loan transaction.

Speaker 1 14:24

Yeah, I think, Alan, that's a great point in terms of just uh how it's sort of expeditiously grown, and some of that has just been or exponentially grown. And part of that, I think, is just the overlay of the state and the federal regulations because now you have it in multiple layers, multiple areas. Some of even localities have tried to impose some restrictions on various things. So I think that's become a lot of of just uh of what we do is helping clients navigate that minefield that has a lot of overlays with it. And then you have investor requirements on top of that. So there's just a lot of different layers that we have to assist clients in unpeeling to make sure that they have a saleable loan at the end of the day.

Speaker 2 15:02

And that's somewhat what differentiates us from most other law firms that are in this space, so to speak. You know, we have the depth, we have the people that do this. Uh, and in some cases, people in this firm uh have been together for over 40 years, certainly over 30 years in other cases and such, but not a situation where, to put it in in polite terms, a rubber stamp. I mean, we we do deep dives into every one of these files to make sure that are done correctly. And when we do that, then our client will have the level of confidence that uh the transaction uh is going to be papered correctly and that there should be uh absolutely no issues, problems, or revisiting uh once the transaction is is closed.

Speaker 15:57

In addition to the regulatory issues that Alan and Marty have addressed, we also advise them in the system in dealing with the uh collateral property issues when a title commitment is issued and there are encumbrances or things that show up in a title commitment or on a survey. We assist the client in navigating which of those are problematic, which are not, and answering questions for them on how they can deal with those types of legal issues, dealing with the real estate itself.

Speaker 1 16:32

Yeah, and Jay, that's a great point you make. And one of the things that I think Jay really brings to the table is great creativity in terms of solving those real estate-related problems in a way that allows the client to go ahead and move forward with the deal where others might not have seen that solution. So that's one of the ways that I think the breadth and depth of what we have in terms of our talent pool really does shine every day for our clients.

Speaker 3 16:54

What do you feel like is on the horizon for the industry from a legal perspective? And maybe more importantly, for the firm. I know that Mr. Peter Idzyak was just announced as a partner, and that's obviously a big deal and going to help the firm move into the future. Jay, I want to start with you on this one.

Speaker 17:10

Initially, hopefully, it's not going to change that much from where we are today. Hopefully, the regulator regulators and legislatures will leave well enough alone and not add more layers to it. But I think it's it's it the prospects are very good. I think we'll see uh increase in business for everybody. And I think our firm will continue to provide the services that we are doing now well into the future. Where we have the personnel in place that's gonna fill those roles and uh look forward to the future.

Speaker 2 17:43

Rob, if if I can jump in, uh to me and and I think collectively to the firm, technology is is the name of the game here. You know, we recognize that we have really from the beginning moving away from the Selectric way back in 1976. And we're committed to being on the cutting edge of technology here. Uh, we have some very bright people, uh, probably the brightest in the business, that are uh moving us forward in different areas so that we can address needs in a very timely and proper manner. If you're not attuned to what the world is evolving to in a technological way, then you're gonna be left behind. And uh we're not gonna be left behind. And I think we're very cutting edge.

Speaker 1 18:34

I agree with Alan. I think that technology is where things are gonna be moving at a rapid pace. I think with AI and other things, that's gonna continue to evolve and how mortgage companies do business, and we need to be evolving with them to make sure that we are uh being a very valued partner in terms of how they advance their techno technology stack and how we fit into it. And I think that's something that our team is paying uh, you know, keen attention to is making sure that we're walking step step by step and maybe a step by step ahead of many of our clients in terms of how they evaluate their technology and how they implement it. Any final thoughts? You know, what I would say is the one thing that hasn't changed about the mortgage industry since I've been in it is how it is just filled with great fun entrepreneurial people. And as it's that's one of the things that I love about it. It's been interesting sort of watching how that's evolved from entrepreneur people who may have worked at a bank to who may now work at an independent mortgage company or may have started their own over time. So that's been fun to watch. It's been fun to watch those success stories of companies that started very small with people sometimes who uh didn't have a whole lot of money behind them at the beginning, but they made great success at it. And being part of that great success has been one of the pleasures of my career, and I think Alan's and Jay's as well.

Speaker 2 19:51

Yeah, I I was sick of that, Marty. Truthfully, I didn't grow up wanting to be a mortgage-lending attorney, but I became one, and I am so glad that I did. It's the best thing, obviously, that ever happened to me, and I'm so grateful. And for reasons articulated by Marty and others, but the opportunity to meet the people in the industry and to become friends with them, which is what has taken place in many, many cases over the last 50 years, whether they be clients still or then, or in some cases never, I've had the opportunity to develop friendships and be involved in an industry that, as Marty mentioned, uh really goes back to the fundamentals of capitalism, where people can go out and get into a business and work hard and succeed and be very good at what they do and happy in doing it. I didn't plan on on being here 50 years later, but I'm so glad that I am. Yeah, okay.

Speaker 20:59

We haven't emphasized this, but I do want to mention before we leave, and that is that Allen's the moving force behind the firm. He had the vision of what he wanted this firm to be, and he's made that vision come true over the last 50 years. And uh, hats are off to him for what he's been able to accomplish in guiding this firm for the last 50 years.

Speaker 2 21:23

Chocolate cookies for you, Jay.

Speaker 3 21:28

Guys, this has been great. I can't tell you how how much respect I have for the firm. I hold you up there as a pillar in the mortgage industry, and and uh feel fortunate to have developed relationships with with all of you over the time I've been doing this podcast. And uh here's to more success in the future. So thank you very much.

Speaker 2 21:45

Thanks, Robbie. Thank you for the time. Thank you very much.

Speaker 3 21:51

Today's economic calendar kicked off with the July Philadelphia Fed Index, which came in optimistic, weekly jobless claims, which came in at 208,000, so the job market continues to be strong, and June retail sales, which were up 0.2%, excluding auto down 0.2% about as expected. Underlying consumer spending remained resilient, supported by solid gains in auto sales and other core retail categories. Later today brings May business inventories and the July NAHB Housing Market Index, June pending home sales, and Fed remarks from Dallas Fed President Logan, Kansas City President Schmidt, and Vice Chair for Supervision Jefferson. We begin the day with agency MBS prices slightly down or worse for Monday's close, the two-year yielding 4.16, and the 10-year yielding 4.58 after closing yesterday at 4.55%. Let's wrap up with a joke and some housekeeping. The policeman said to me, You're going to prison for forgery. So I slid him a $37 bill and asked, What about now? Thanks again to Zillow Home Loans, Zillow's in-house mortgage lender, for sponsoring this week's podcasts. By integrating Zillow's real estate platform with financing, Zillow Home Loans helps buyers move from dreaming about a home to holding the keys. With tools built for modern lending, Zillow Home Loans loan officers can focus on guiding buyers with care and confidence. To learn more, visit Zillow.com/slash home loans.