HELOC, AI Processing Tools; STRATMOR on Subservicing; MISMO Role; RESPA Thoughts
What are folks talking about here at the Western Secondary? Small things and big things. There’s a brand-spankin’ new private MI company: Anza. (Contact Melissa Gemma with questions.) Lenders are doing interesting things to help communities: for example, here’s Fairway Independent not leaving a dry eye in the house. That UWM has filed a lawsuit in federal court regarding the Two Harbor/CrossCountry deal is no surprise, although $500 million is attention-grabbing. China unleashes $28 trillion (yeah, with a “t”) capital markets to challenge the United States. We’ve heard about profitability, but volume is also important. According to Curinos proprietary application index, July 2026 funded mortgage volume was flat for the year but was -7 percent M-o-M. The average 30-year conforming retail funded rate in July 2026 was 6.42, 8bps higher than June 2026 and 33bps lower than the same month last year. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures and drills into this data further here. (Today’s podcast can be found here. This week’s ‘casts are sponsored by Optimal Blue. Optimal Blue’s Profitability Center unifies pricing, hedge performance, pipeline activity, profitability, and market intelligence into one personalized dashboard, giving mortgage lenders faster, more complete insights to make better capital markets decisions. Today’s has an interview with Redwerk's Konstantin Klyagin on how AI in mortgage lending must be governed as an entire decision-making system, requiring rigorous testing of data, integrations, permissions, escalation, edge cases, and audit trails.)
Lender and Broker Software, Products, and Services
NFL training camps are open, and teams are already deep in the data, breaking down film, tracking performance metrics, and using analytics to build their game plans. Mortgage lenders should be doing the same. Optimal Blue's latest Market Advantage mortgage data report shows just how quickly the field can change: a mere 26-basis-point increase in the 30-year conforming rate pushed July purchase volume 12 percent below June's pace. But knowing what happened only gets you so far. New this month, a 12-month forecast powered by Virtual Economist projects where rates and spreads could be headed, while three new capital markets metrics provide added visibility into pipeline composition, hedge alignment, and servicing strategy. Better information makes it easier to call the next play. Get the full report.
“Heading into ACT Tech Summit in Dallas? Be sure to catch the JazzX AI team live on stage Wednesday, August 12 at 9:45 AM as we demonstrate how mortgage lenders are moving beyond disconnected AI point solutions to governed enterprise intelligence. If you'll be in Dallas, we'd also welcome the opportunity to connect during the conference to discuss how lenders are operationalizing AI across the enterprise while delivering faster, more consistent, and explainable decisions. Reach out to schedule a meeting… We look forward to seeing you at ACT.”
As servicers are figuring out how AI fits into their technology stacks and workflows, regulators have made it clear they won’t be left out of those conversations. New guidelines from Fannie Mae and Freddie Mac now require servicers to document their AI tools, designate an internal overseer, and demonstrate responsible use on demand. But that doesn't have to mean slower adoption for servicers if they have the right technology partner. ICE is building AI with configurable controls, conversation transcripts and traceable outputs so clients have the infrastructure to support compliance from the start. Read the blog to learn how ICE is helping servicers embrace innovation with the visibility and controls they need to manage risk responsibly.
Your customers may not be moving, but their equity is. With trillions in tappable equity available, and many homeowners locked into low-rate first mortgages, HELOCs are becoming a core driver of lender growth. Before selecting a subservicer, ask the questions that matter. Do they offer specialized HELOC expertise, predictive risk modeling, fraud controls built for draw activity, transparent reporting, and seamless digital integration? Can they support portfolio growth while improving the customer experience? LoanCare's HELOC Subservicer Checklist outlines the key capabilities lenders should consider. Read LoanCare’s latest article and download the checklist to learn what to look for in a subservicing partner positioned to support your growth.
“Is a standing call with your servicer enough for proper oversight? What does proper oversight entail? Ultimately, you are responsible for overseeing your subservicer, so you must understand what is expected of you and the key actions you need to take to maintain oversight and comply with regulations. Proper oversight includes an annual review and testing of the subservicer’s processes and procedures. Tune in to this video series where the experts at Richey May answer the most frequently asked questions about subservicer oversight requirements, including some of the latest updates to the Bankruptcy Rule and VA loss mitigation. Whether you need a review or assistance navigating the general complexities of oversight, Richey May’s mortgage compliance experts can help. Contact us today!”
With homeowners sitting on record equity and clinging to low first-lien rates, offering a streamlined digital HELOC has become the single best strategy for originators to capture immediate volume and defend their client database. But tapping into that demand only works if you can actually close the loans, which requires a strong buy box, fast closing speed, and dedicated processing teams that fight to save complex files. When originators receive white-glove support for themselves and their borrowers, plus an integrated Client Success team focused on driving production, HELOCs turn from an operational headache into a primary growth engine. See how NFTYDoor elevates the home equity conversation here.
If your borrowers are asking ChatGPT, YouTube, TikTok, and three group chats about the mortgage process before they ever call you, the free recording of Originating in the Age of the Next-Gen Homebuyer is worth a watch. Featuring Patrick O’Brien, CEO of LenderLogix, and Kristin Messerli, Executive Director & Co-Founder of FirstHomeIQ, the conversation explores how Gen Z and Millennial buyers are researching earlier, why more information can create more overwhelm, and how lenders can use technology, education, and empathy to build trust without losing the human connection borrowers still need. Watch the free recording here.
Affordability pressure doesn't disappear when the loan closes. It comes back later as repurchase risk. Your borrowers are stretched, leaving less room for errors in the file. Truework, a Checkr Company, verifies income, employment, and assets before you close, replacing error-prone processes with fast, automated reports pulled directly from sources. Lenders see up to 50 percent cost savings on verifications, with faster turn times and higher accuracy. Learn more.
Chrisman Demo Day is a free perk for all Chrisman Marketplace members. If you're a technology or service provider and haven't joined the Marketplace yet, reach out to info@chrismancommentary.com to learn more.
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.
STRATMOR on Subservicing
When it comes to choosing a mortgage subservicing partner, price isn’t necessarily the deciding factor anymore. In the lead article in STRATMOR’s latest Insights Report, “Trust the Pass: Choosing the Right Mortgage Subservicing Partner,” Senior Partner Nicole Yung draws on survey responses from 68 mortgage lenders representing approximately 9.8 million loans, and reveals what lenders are really looking for in a subservicing relationship. Borrower experience now ranks ahead of pricing among lenders considering a provider change, 83.3 percent of lenders using a subservicer prefer a single partner, and more than 70 percent want a partner that isn’t also competing for future borrower relationships. Nicole offers a practical framework for evaluating partners – from finding the right operating model to balancing technology innovation with operational stability and looking beyond servicing fees to total cost of ownership.
RESPA Conjecture
No CFPB Director has ever offered their thoughts on RESPA, around since 1974, before going into that job (have any had any RESPA thoughts…?), until now. Brian Johnson, the administration’s nominee wrote a detailed RESPA Section 8 reform paper back in 2020. In his latest Mortgage Musings, Brian Levy uses Johnson's recent confirmation hearing and a special widely viewed Mortgage Law Today web show about RESPA reform to offer his own thoughts on Johnson’s paper, RESPA’s purpose, and reform.
There’s a Price for MISMO and With Good Reason
Brian Vieaux, the President of MISMO, recently sent some thoughts MISMO’s role in the residential mortgage biz.
“For the mortgage executives still referring to MISMO funding as a "donation," STOP! That mindset is exactly backwards. If your company is benefiting from standardized datasets, AI governance, appraisal modernization, eMortgages, the Mortgage Compliance Dataset (MCD), FRAME, or any of the countless standards developed through MISMO, all for 75 cents per loan, you're already consuming the output of an investment made by others. “The question isn't whether your company can afford to invest in MISMO, but whether you're comfortable letting your competitors invest to build the industry's infrastructure while you continue to benefit from it for free. I know what this industry is capable of when competitors collaborate on standards that reduce cost, increase interoperability, improve compliance, and accelerate innovation. If we are ever going to materially reduce the cost to manufacture a mortgage, it won't happen because one company builds a better mousetrap. It will happen because our industry adopts common standards, common datasets, and common governance at scale.” Thank you, Brian… Read the whole note here: #VieauxPoint.
Capital Markets
30-year mortgage rates don’t necessarily track 30-year Treasury bonds, but long-end rates shot up sharply last month, with the curve bear steepening as an oil shock and the seventh consecutive interest rate hold by the Federal Reserve pushed inflation risk into forward expectations rather than the policy path. Rate markets are likely to keep testing the Fed's resolve, though the pressure on Agency MBS seems to be volatility driven. Agency MBS issuance remained resilient in July, with gross issuance totaling $110.9 billion (the fifth consecutive month above $100 billion and extending a 25-month streak of year-over-year supply growth) even as activity eased modestly from June.
The housing market continues to cool in an orderly fashion, characterized by low turnover and challenging affordability. Home price appreciation is slowing, but affordability remains strained as higher prices and elevated mortgage rates push household mortgage debt to record levels and keep borrower leverage elevated; Debt-to-income ratios have improved slightly from recent peaks, but remain well above pre-pandemic levels and are a stronger indicator of mortgage risk than LTV ratios, which can quickly deteriorate if home prices reverse. With household equity at record highs and refinance incentives gradually returning, cash-out refinancing activity has begun to recover. While today's mortgage market is fundamentally healthier than before the financial crisis, lenders should remain focused on borrowers' ability to service debt rather than the value of the collateral securing it. Recent regional disparities in home price developments appear to be largely a function of inventory, which has normalized, suggesting these regional differences might shrink in coming months.
July's prepayment data confirmed that the anticipated refinancing rebound has largely stalled as higher mortgage rates erased refinance incentives, leaving aggregate Fannie Mae 30-year prepayment speeds at a subdued 8.1 percent CPR despite seasonal factors that would normally support faster turnover. With refinance applications falling to their lowest level in more than a year and only about 3.6 percent of outstanding 30-year mortgages retaining a financial incentive to refinance, prepayment activity is expected to remain muted unless rates decline meaningfully. This dynamic supports mortgage servicing rights and specified pools, but continues to weigh on originators hoping for a refinance-driven recovery.
The bond market sold off to open the week as renewed optimism around sustained U.S. pressure on Iran pushed crude oil prices higher, lifting 5-year and longer yields to one-week highs while the 2-year reversed Friday’s rally. Despite repeated optimism from U.S. officials, negotiations over reopening the Strait of Hormuz have produced no tangible progress, leaving oil prices rising as geopolitical uncertainty has persisted. As a reminder, July’s unexpectedly weak jobs report (marked by the first negative payroll print of the cycle, sharp downward revisions, slowing wages, and falling labor-force participation) undermined the case for a September Fed hike, leaving this week’s inflation data as the key test for the Fed’s next move. CPI is expected to have remained temperate in July, with pressures becoming less widespread and more concentrated in specific sectors.
With the understanding that the Fed must allow the data to drive its decisions and communicate that any policy shift is a response to economic conditions rather than political pressure, U.S. agency MBS started August strongly, delivering the best weekly excess return since early April. Declining volatility and resilient prepayment expectations have supported the sector, with Fannie Mae 20-year and higher-duration coupons leading performance. Spreads remain attractive relative to Treasuries and modestly cheap to investment-grade corporates, particularly in Ginnie Mae 30-year and Fannie Mae 15-year securities, while select lower-payup and mid-coupon vintage pools offer relative value, although fallout from the ongoing Middle East conflict warrants continued caution.
Today’s economic calendar kicked off with July’s NFIB Small Business Optimism Index (99.8, its highest level since August 2025). Later today brings Redbook same store sales, July Existing Home Sales (expected at 4.07 million after a prior reading of 4.09 million), and results from a $58 billion 3-year Treasury note auction. We begin Tuesday with Agency MBS prices slightly worse/down from Monday’s close, the 2-year yielding 4.24, and the 10-year yielding 4.71 after closing yesterday at 4.70 percent.