Borrower Retention, AI Governance, Jumbo Products; Borrower Recapture Trends; MLO Opportunity Thoughts
Around the country, originators seem less focused on the housing bill signing ceremony postponement than on “opportunity.” There are opportunities, but not for every LO. There is the opportunity (and goal) of senior management to make their company immune from economic and world political turmoil. There is the opportunity to anchor the business to things that you can control, not to things that you can’t… like rates. Yesterday at the Mastermind Summit, Ryan Grant observed, “MLOs have the opportunity to hand a potential borrower a pre-approval letter in minutes but then explain to that borrower, ‘Here’s why that’s not enough.’” There’s always the opportunity to look at other products. For example, a "Renovation HELOC Index" was launched. There are opportunities. (Today’s podcast can be found here and this week’s ‘casts are sponsored by 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. Today’s has an interview with Alston & Bird's Stephen Ornstein on all things RESPA, as well as how regulation needs to be improved for the modern times we live in.)
Broker and Lender Software, Products, and Services
Still working to understand what’s driving your margins in today’s volatile mortgage market? Optimal Blue’s CompassEdge hedging and loan trading platform is designed to bring more clarity to capital markets decisions, with embedded AI that helps teams interpret performance, identify potential risks, and surface next steps. Rather than relying on disconnected tools and manual workflows, your team can work within a more unified environment that connects pricing, hedging, and loan sale execution from lock through sale. Move faster, reduce manual work, and execute with confidence while capturing more value across every loan. With intuitive dashboards, automated processes, and real-time market alignment, CompassEdge can help you protect margins in any market. Ready to replace uncertainty with insight and turn decisions into consistent results? Discover how Optimal Blue CompassEdge can transform your execution today for your entire team.
“The Citi Correspondent Lending team extends our sincere appreciation to everyone who took the time to meet with us at the Secondary and Capital Markets conference last month. We value these opportunities to connect, exchange insights, strengthen relationships with our existing clients and industry colleagues and build new relationships with prospective clients. Citi’s Non-Agency Jumbo program consistently generated significant interest. We've introduced several key enhancements to this program over the first half of this year, designed to expand opportunities for your borrowers, which include expanded credit parameters, reduced suspense fees, and enhanced pricing. Whether you're curious to dive deeper into the specifics of our updated Non-Agency Jumbo program or explore the wide range of other opportunities Citi Correspondent Lending offers, please don't hesitate to reach out. Contact the Account Executive supporting your area; prospective clients can also complete and return our Prospective Client Questionnaire.”
There is a difference between deploying AI and governing it, and a loan file is the worst place to learn it the hard way. Dark Matter's new whitepaper, anchored by their Chief Risk and Information Security Officer, Mike Housch, makes the case that AI in loan origination is only as trustworthy as the monitoring around it. Set it and forget it does not hold up when an agent is touching borrower data, and a regulator may ask what it did. Mike walks through how to keep AI agents auditable, source-traceable, and watched continuously, backed by zero-trust access and 24/7 monitoring. Read it here.
The Chrisman Marketplace is a centralized hub for vendors and service providers across the 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.
Borrower Contact, Retention, and Processing Products
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 4 of the top 5 lenders in the U.S., Truework gives your team verification results they can rely on. Learn more.
Convert today’s not-yet-ready borrowers into tomorrow’s closed loans. MGIC’s Nurturing Borrowers to Homeownership Guide shows how you can support borrowers and stay engaged as they address readiness gaps, increasing the likelihood they return to you when they’re mortgage-ready. Download the guide today and start building your future pipeline.
Near Instant Title Decisioning. One Point of Access. Greater Borrower Satisfaction. Almost 86 million homeowners are sitting on record levels of equity, and lenders that can deliver a fast, seamless experience are positioned to win. Covius' Home Equity Product Suite brings together property reporting, valuations and title and closing services through a single point of access, helping eliminate handoffs and accelerate closings. With the integration of operations from Title365, Covius now completes thousands of home equity closings each month, bringing together proven operational expertise, nationwide coverage, and integrated technology to help lenders close loans faster. LoanScape HE provides near-instant title decisioning at the point of sale, enabling loans to close in as little as 7-10 days. With integrated technology, nationwide coverage, and a proven operational model, Covius helps lenders deliver the speed and certainty today's borrowers expect. Learn more & get in touch.
Acquiring new business has never been more expensive. That is one reason many lenders are shifting their attention back to the customers and referral partners they already have. In today's margin-conscious market, retention is becoming one of the most valuable growth strategies available. Borrowers still buy homes, refinance, move, and refer friends. The question is whether their previous lender remains part of the conversation when those moments happen. That shift is changing how lenders evaluate technology. Platforms like Usherpa are increasingly focused on helping originators identify opportunities within existing relationships instead of simply managing contacts. The lenders seeing the strongest long-term results are not just generating more leads. They are staying connected with the people who already know and trust them. In 2026, retention may be the industry's greatest competitive advantage. Reach out to learn how Usherpa is helping lenders strengthen retention.
Retaining and Recapturing Borrowers
Spend enough time around mortgage conferences and you'll hear impressive recapture numbers tossed around with surprising confidence. "We have a 70 percent recapture rate." "Ours is even higher." On the surface, those figures suggest the industry has largely solved borrower retention. Yet that conclusion starts to unravel as soon as you ask a simple follow-up question: How are you calculating it? In a recent discussion on Recapture Wars, that question turned out to be far more revealing than the percentages themselves because everyone seemed to be measuring something slightly different. The next time you’re talking to your staff, or your peers at a conference, know that part of the confusion stems from the fact that "recapture" has become a catchall term. Some lenders count only rate-and-term refinances. Others include streamlined government refinances. Some measure only borrowers who were actively shopping for a new loan, while others begin with every serviced borrower and work backward from there. Even the numerator and denominator change from company to company, which makes comparisons nearly meaningless.
A headline recapture percentage may sound impressive, but without understanding what loans were eligible, which borrowers actually completed a refinance, and how many simply sold their homes instead, the number tells us very little about operational performance. It becomes more of a marketing statistic than a management tool. Obviously, servicing portfolios have become significantly more complex than they were even a decade ago. Today's servicers have access to richer borrower data, better analytics, and more sophisticated ways of identifying customers who may benefit from a refinance, second lien, or home equity product. And borrowers themselves have become harder to categorize. Some are moving rather than refinancing. Others appear eligible until updated taxes, insurance premiums, or debt obligations change the economics of the transaction. Looking only at the loans that closed overlooks the much more valuable question: Were those the right borrowers to pursue in the first place? If the underlying opportunity set is misunderstood, even the best sales execution will produce misleading conclusions. That is why analytics increasingly sit at the center of the recapture conversation. The objective is no longer to contact every borrower whose rate appears out of market. It is to identify homeowners whose financial circumstances, equity position, and borrowing needs suggest there is a realistic opportunity to improve their situation. Servicing data has become far more than an operational record. It has evolved into a decision-making asset, allowing lenders to prioritize meaningful conversations instead of broad marketing campaigns. Ironically, the companies producing the strongest retention results may not be the ones making the most outbound calls. They may simply be asking better questions before they make them. Viewed through that lens, the industry's fixation on recapture percentages begins to feel misplaced. Retention has never been a contest to produce the highest number on a conference slide. It is an exercise in understanding customers well enough to know when a mortgage is no longer the right solution and when another product, or no product at all, better serves the homeowner. Until the industry agrees on how success should be measured, debates over who has the best recapture strategy will continue generating more heat than insight.
Capital Markets
For mortgage bankers still weighing the move from best efforts to mandatory, how does an increase of 28.5 basis points in total profitability in just over a year sound? In MCT's new case study, Think Mortgage's President and Founder, Anthony Focca, describes how he and his team transitioned from best efforts to mandatory delivery, starting with a fully managed lock desk to full pipeline hedging, and moving to Fannie Mae and Freddie Mac approval and AOT execution with the help of MCT. "We actually didn’t consider any other vendors before MCT. MCT's reputation speaks for itself, you’re the industry leader," Focca said. "Everyone I spoke to told me I should use MCT." The case study walks through MCT's onboarding model and the role of Lock Desk, MCTlive!, MCT Marketplace, and Lender Analytics in each stage of Think Mortgage's mandatory delivery journey. Read the case study for the full breakdown, or join MCT's newsletter to stay current with mortgage capital markets education and market commentary.
U.S. Treasuries and MBS extended their rally yesterday, supported by falling oil prices and strong demand for longer-dated bonds, pushing the 10-year yield to its lowest level in nearly seven weeks and the 30-year yield to its lowest since early March. While shorter-term yields also declined, they remained near 2025 highs due to ongoing sensitivity to energy-driven inflation concerns, and the market largely shrugged off a softer-than-expected $70 billion 5-year Treasury auction.
Tuesday’s $69 billion 2-year auction drew stronger-than-expected demand, stopping through by 0.3-basis points, but that strength did not carry over to yesterday’s $70 billion 5-year sale. The sale received a lukewarm reception, with investors demanding slightly higher yields than expected to buy the debt and dealers being forced to take a slightly larger share of the auction. Despite the softer auction results, the broader Treasury market barely reacted, suggesting investors viewed the outcome as disappointing but not alarming. 5-year Treasury auctions have shown a consistent tendency to tail (especially in June), though the current offering entered the market with attractive yields near the high end of this year’s range and favorable curve positioning. Your takeaway? Buyers are still willing to purchase U.S. government debt, but they are not rushing to do so.
On the data front, New home sales decreased 7.3 percent month-over-month in May to a seasonally adjusted annual rate of 580k, well below 627k expectations and a downwardly revised 626k in April. The level of sales in May is the second lowest over the last 12 months; on a year-over-year basis, new home sales were down 6.8 percent due to affordability constraints tied to rising mortgage rates. The West region, home to the highest-priced homes, saw the biggest hit to sales month-over-month. There was also weakness in the more affordable South region, which is the nation's largest homebuilding market.
The Federal Reserve's latest stress test reaffirmed the resilience of the U.S. banking system, finding that all 32 large banks maintained capital levels above regulatory minimums even under a severe recession scenario that included a 10 percent unemployment rate, a 30 percent decline in home prices, and a 39 percent drop in commercial real estate values. While banks were projected to absorb more than $708 billion in losses, including roughly $200 billion in credit card losses and $75 billion in commercial real estate losses, their aggregate capital ratios declined by only 1.6 percentage points, reflecting strong earnings power and balance sheet strength. The results suggest that major banks remain well positioned to continue lending through economic stress, providing a measure of stability for households, businesses, and the broader financial system even amid ongoing concerns about credit quality and economic growth.
Today’s economic calendar kicked off with May Personal Income (+.7 versus 0.3 percent expectations and a prior reading of 0.0 percent), Personal Spending (-.7 percent versus 0.3 percent expectations and a prior reading of 0.5 percent), PCE Prices (+.4 percent, +4.1 percent, as expected), Core PCE Prices (+.3 percent m-om, +3.4 percent, as expected), May Durable Orders, and weekly jobless claims (215k, lower than expected). Woof. Later today brings a Treasury auction of $44 billion 7-year notes. We begin the day with Agency MBS prices better than Wednesday’s close by about .125, the 2-year yielding 4.12, and the 10-year yielding 4.39 after closing yesterday at 4.40 percent.