TPO Non-QM, Vendor Strategy, Cybersecurity Tools; NY Conference Talk; Fed Raise Coming?
Here in New York, as over a thousand of us head to airports (hopefully avoiding manholes… tragic), the mood has been pragmatic. Not overly optimistic, not somber, just realistic. No one is arguing that the war hasn’t driven up worldwide oil prices, impacting inflation and borrower psychology, impacting lending. The Mortgage Bankers Association now predicts a Federal Reserve rate hike to arrive in 2027, so any lenders or originators hoping for lower rates, well… At this point there isn’t a lot of reason for rates to drop unless higher oil prices slow the economy further. We knew that a second Trump Administration would impact the economy and regulatory environment, and along those lines… SCOTUS Justice Kennedy built a constitutional protection into fair lending disparate impact doctrine for mortgage lenders in a 2015 case and then accidentally ensured it would never work. Read attorney Brian Levy’s latest Mortgage Musing to find out about fair lending compliance in the second Trump term and sign up for free on Substack to get Levy’s Musings delivered directly to your email box. (Today’s podcast can be found here and this week’s ‘casts are sponsored by TransUnion. Discover how data-driven mortgage intelligence is helping lenders identify in-market borrowers, strengthen portfolio performance, personalize outreach, retain customers, and drive smarter growth in an increasingly competitive housing market. Today’s has an interview with LendingTree’s Rob Bhatt on how home insurance costs are rising far faster than both inflation and household income growth nationwide.)
Lender and Broker Products, Software, and Services
Home equity demand is strong, but if your team is still coordinating vendors manually, chasing conditions and watching closings drag past three weeks, you're not just losing time, you're losing deals to lenders who've already solved this. FirstClose built an on-demand webinar specifically for lenders tired of scaling headcount just to scale volume. In under 30 minutes, you'll see how lenders are cutting closing timelines, reducing manual processing costs, and improving borrower experience without adding staff. The lenders figuring this out now will own the next cycle. The ones who don't will spend it catching up. Register here.
Less back-and-forth. More first-time-right verifications. Truework replaces manual verification waterfalls with a single automated platform, so underwriters, LOs, and ops can cut down the document chasing, conflicting numbers, and last-minute corrections. Lenders see up to 50 percent cost savings on verifications, with faster turn times, higher accuracy, and stronger R&W relief. Trusted by top lenders in the U.S., Truework gives your team verification results they can rely on. Learn more.
SettlementOne: The Credit Score Transition Is Real. Execution Is the Differentiator. As homebuying season gains momentum, mortgage lenders are contending with the most significant shift in GSE credit scoring requirements in nearly three decades. The FHFA’s move to accept VantageScore® 4.0 alongside Classic FICO® scores open real opportunities: broader scoreable populations, trended data, rent payment history. But the path from policy to closed loan runs through investor alignment, LOS configuration, LLPA frameworks, and compliance review that most lenders are still working through. SettlementOne systems already support FICO Classic, FICO 10T, and VantageScore 4.0. With more than 30 years of experience helping lenders navigate exactly this kind of credit complexity, Cheryl Kenney, SVP of Sales and Marketing at SettlementOne, is ready to help your team build a transition plan that holds up in the real world. Contact Cheryl to start a conversation.
“With over 40 years of experience in mortgage banking, Richey May knows the industry from every angle. Many of our team members are credentialed industry experts who dedicate significant time to developing other industry experts. From this expertise, we’ve created a wealth of services and products to help lenders stay ahead: audit and tax services, robust cybersecurity solutions designed to protect company assets and sensitive borrower information, business intelligence to enhance your operations...you name it! Whether you're leveraging our innovative platforms or having us work as your extended team for outsourced internal audit or accounting services, get ready to tackle challenges faster with some serious firepower on your side. Everything you need… Contact our experts today!”
Onboarding is just the beginning. It's ongoing support and communication that makes or breaks a tech stack. Informative Research (IR) clients gain access to live trainings designed to deepen their AccountChek® expertise, sharpen workflows, and optimize verification. IR's next session is May 27 at 1 pm Eastern, focusing on maximizing the value of AccountChek within Encompass Partner Connect (EPC). Attendees will explore automation, VOA/DVOE ordering, borrower experience, and strategies for achieving validated outcomes. New AccountChek users and experienced veterans alike will receive practical guidance from the experts. A great technology partner doesn't disappear after go-live. IR clients benefit from regular product updates, quality customer support, and insights into the news and regulatory shifts reshaping mortgage lending today. Register for the training to discover how Informative Research helps clients build lasting confidence with AccountChek.
In case you missed it, checkout MQMR’s latest and greatest TMC partner webinar! The recording for Taming the Third-Party Web: AI, Spreadsheets, and Vendor Blind Spots, is now available! Scott Weintraub and Joseph Rhodes broke down actionable strategies to help you stop vendor mistakes from becoming a compliance headache. If you are ready to properly manage your complex tech stack and protect your Seller/Servicer status, this replay is exactly what you need. You will learn how to stop wasting compliance resources on low-risk vendors, ditch manual spreadsheets for continuous oversight, and tackle the hidden regulatory dangers of vendor Shadow AI. Grab a coffee and watch the full MQMR replay at your own pace to get all the practical insights and tools to streamline your vendor oversight. Watch the recording here!
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 Product News
“Pennymac TPO Non-QM: Start Saying “Yes” to More Deals! Your clients don’t always fit into a neat box, so why should their property choices? Traditional Agency guidelines often leave Non-Warrantable Condos behind, but Pennymac TPO’s Non-QM Product Suite is designed to capture the business others miss. Join our upcoming Non-Warrantable Condo Webinar on Tuesday, June 2nd at 10AM PT, to learn how to master financing for Non-Warrantable projects. We’ll show you how our flexible suite (including DSCR, Bank Statement, and Asset-Based programs) provides the key to closing these complex deals. From self-employed entrepreneurs to first-time and seasoned investors, our non-QM lineup (DSCR, A+, A, & A-) empowers you to say “yes” more often. Register for the free webinar here, contact your Pennymac TPO Account Executive or become a partner today to get started. (Equal Housing Lender, NMLS #35953)”
Arc Home is offering a 25 bps price improvement on eligible non-QM purchase loans through its Access DSCR and Bank Statement programs, available now through May 31st. The special applies across a broad range of purchase scenarios, creating more opportunities to improve pricing throughout your pipeline. If you have purchase deals that are close, stalled out, or worth another look, this may be an opportunity to improve execution before month end. Run a scenario through our Quick Pricer or connect with your Arc Home Account Executive.
Live From New York City!
The roasting temperatures turn to rain here in Manhattan as a thousand mortgage folks exit.
On today Credit Committee at 3PM ET, powered by Equifax, I will be joined by Equifax’s Joel Rickman for a discussion on the unintended risks of mortgage credit cost-cutting initiatives, examining how tri-merge data, credit scoring models, cybersecurity investments, regulatory pressures, and evolving bureau practices impact consumer access, lender repurchase risk, loan quality, and the long-term stability of the secondary mortgage market.
In terms of news coming out of the National conference here, various sectors are jockeying for attention in terms of relief from red tape: credit unions, IMBs, large banks, small banks, brokers, and many others. The MBA reminded those assembled that the best reforms will take the unnecessary burdens off every lender, regardless of size or business model, while retaining core consumer protections.
Remember the Basel III bank capital requirements, and its apparent lack of understanding of the U.S. mortgage world? The MBA reports that federal regulators have now unveiled a new proposal that’s far superior to the old one, “omitting the most excessive and burdensome capital requirements with a more balanced approach to risk mitigation. That’s no accident. The MBA played a central role in getting rid of the worst mandates. Put simply, we moved Basel III in a better direction.”
Capital Markets
Yields on government bonds have surged globally in recent weeks as the jump in energy prices has stoked inflation fears, and MBS have tagged along for the ride. The U.S. Treasury’s 30-year bond surged to 5.20 percent yesterday, reaching a level last seen on the eve of the global financial crisis. Investors are betting that central banks, including the Federal Reserve, will raise interest rates. Additionally, rising government deficits are prompting investors to demand greater compensation to own longer-maturity debt. Despite President Trump’s decision to postpone a planned military strike on Iran in favor of continued negotiations, investors remain unconvinced that a durable diplomatic resolution is imminent.
That skepticism has been reflected in Treasury yields continuing to rise, and the rising possibility of broader repricing across global risk assets. The market has become conditioned to treat geopolitical relief rallies as temporary unless accompanied by evidence of normalized energy flows and reduced global supply risk.
All of the above factors will define the early tenure of newly confirmed Federal Reserve Chair Warsh, who inherits a central bank confronting elevated inflation uncertainty, resolute economic activity, and heightened political scrutiny regarding the direction of monetary policy. Markets have steadily shifted toward a more hawkish Fed outlook, with front-end Treasury yields trading above the effective federal funds rate for one of the longest periods in decades and futures markets gradually pricing in the possibility that future rate hikes are more likely than near-term cuts.
Investors are now focused less on immediate policy moves and more on how Warsh may try to reshape the Federal Reserve’s balance sheet, communication strategy, forward guidance framework, and institutional transparency following years of highly publicized post-FOMC messaging under Jerome Powell. Your takeaway? Resilient labor markets and stable consumer spending continue to afford policymakers the flexibility to remain patient, even as elevated energy prices and geopolitical volatility challenge market conviction.
As expected, elevated rates and affordability pressures are suppressing activity across both existing and new home sales. Homebuilder sentiment remains deeply negative despite modest stabilization in some forward-looking indicators, such as weak buyer traffic, high financing costs, and ongoing geopolitical uncertainty weigh heavily on demand. In mortgage-backed securities markets, rising volatility and Treasury weakness drove the sharpest weekly underperformance in over a year last week, widening spreads and extending durations across both conventional and Ginnie Mae products. Although shorter-duration and higher-coupon securities have shown relative resilience, investors remain cautious amid elevated convexity risk and uncertain rate direction. The mortgage industry continues to grapple with the structural consequences of the “rate lock-in effect.”
After yesterday revealed Pending Home Sales for April were up 1.4 percent (missing expectations), today’s economic calendar kicked off with mortgage applications decreasing 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. Later today brings a 20-year bond auction from the U.S. Treasury, some Fed speeches, and the latest FOMC Minutes, which are expected to reinforce growing divisions within the Committee, particularly after several hawkish dissents tied to forward guidance and inflation persistence. We begin Wednesday with Agency MBS prices slightly improved from Tuesday’s close, the 2-year yielding 4.09, and the 10-year yielding 4.64 after closing yesterday at 4.67 percent.