2nd Lien Reverse, Conversion, Settlement Tools; Bill Cosgrove on Consolidation; Agency News

I don’t know where August went, but it went somewhere. We’re now two thirds of the way through the 3rd quarter of 2026. Lenders and vendors are adapting to a lackluster homebuying “season,” stubborn rates, and origination costs around $11k per loan. Lenders are trying to drive that cost down through higher pull through. Labor Day is next Monday, and “Talk Like a Pirate Day” is the 19th. Loan originators are watching demographics, people in their 20s, and are also following trends in the rental markets and with landlords. Along these lines, here are some great landlord stats (updated regularly). For stats about households, our Census Bureau puts out some good information. For example, in 2022, more than half of American households were childless: 29 percent were married households without children, and 28.9 percent were single households without kids. More than a quarter of households included parents: 17.8 percent were married households, while 8.1 percent were single-parent households. Certainly households are changing… does your product mix, originator base, and investor mix reflect that? (Today’s podcast can be found here. This week’s ‘casts are sponsored by Zillow Home Loans, Zillow’s in-house mortgage lender. With tools built for modern lending, Zillow Home Loan’s loan officers can focus on guiding buyers with care and confidence. Today’s has an interview with Zillow's Meg McGrath Vaccaro on Zillow Home Loans’ AI strategy: from helping buyers and automating mortgage workflows to enabling smarter pricing conversations, and how Zillow’s unique ecosystem could reshape the entire mortgage industry.)

Broker and Lender Products, Software, and Services

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.

Long cycle times don't just frustrate borrowers. They can impact pull-through, productivity, and profitability. FirstClose Order Management Services (OMS) helps lenders streamline the ordering and management of settlement services through a single platform, including title, valuation, flood, and more. By centralizing vendors, improving visibility, and reducing manual touchpoints, lending teams can eliminate bottlenecks and keep loans moving toward closing faster. The result is a more efficient operation, a better borrower experience, and stronger business outcomes. Learn how FirstClose OMS helps lenders close faster and operate smarter.

Rate-and-term refi is stalled. Debt-driven refinance isn't. Most homeowners are locked into rates far below today's market, so lenders assume refinance demand has dried up. But it didn't; it just shifted. Record highs for both tappable equity and consumer debt are driving debt consolidation, cash-out refi, and HELOC demand. And those opportunities are sitting inside the database you own. Total Expert Chief Lending Officer Dan Catinella breaks down why 20–30 average of the average lender's database is ready for that conversation right now, and how one top-10 lender used credit and debt enrichment to originate 450 HELOCs in two weeks, without a single new lead. Read "The 20–30 percent Opportunity Hiding in Your Database" on LinkedIn.

More professionals are looking at reverse mortgages to reengage clients with strong home equity who may be living on a limited or fixed income. What’s holding you back? HomeSafe Second, a second-lien reverse mortgage, gives you another way to help senior homeowners leverage their equity. Roughly 36 percent of homeowners aged 75+ are denied a HELOC. That represents a meaningful share of otherwise viable borrowers who may be turned away from traditional financing. If you’re running into deals that don’t fit traditional eligibility requirements, HomeSafe Second could help you capture volume that might otherwise be lost. Fill out this form to get a whitepaper on the $14.5 trillion senior home equity market. Finance of America | NMLS 2285

Strong lending operations are built on consistent knowledge and reliable tools. Informative Research (IR) supports both, giving clients access to live monthly training that reinforces best practices and helps teams get the most out of AccountChek® at every stage of the loan process. IR's next live session is September 2 at 1 pm Eastern, on mastering the AccountChek Dashboard. Attendees will explore automation best practices, VOA/DVOE ordering, borrower experience, and proven strategies for achieving validated findings, including AUS validation messaging, and ordering the DVOE in lieu of an updated asset statement for the final 10-day VOE. Whether onboarding new team members or sharpening skills across the organization, these sessions deliver actionable guidance from experts who know the platform and the industry. Register for the September 2 AccountChek Dashboard training and keep your team performing at its best.

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 Jake Perkins at 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.

Consolidation, Margins, and Balance Sheets

Mr. William Cosgrove has some thoughts on the current lender environment, especially relevant and timely given Union Home’s expansion and success.

“It seems especially important now, as the mortgage industry confronts a combination of compressed margins, elevated operating costs, weak housing supply, difficult economics, and technological change that is forcing companies to decide whether they are built to endure or merely built to grow. The industry cannot count on the gross margins of the past returning, so the path forward is to fundamentally change the economics of originating a loan (using technology, including AI, and operational discipline to cap and eventually reduce the cost to close).

“In this environment, consolidation is not simply about getting bigger; it becomes a mechanism for finding scale, talent, technology, and balance-sheet strength in a market where being merely average operationally is becoming increasingly difficult to sustain. Now is the time to be aggressive, but only for companies that have earned the right to be aggressive.

“Union Home’s acquisition strategy is less about collecting volume than finding good companies that have found it’s time to find alternatives an extraordinarily difficult operating environment and offering them ‘higher ground.’ It is a fundamentally different conception of consolidation: not financial engineering for its own sake, but a flight to quality in which strong balance sheets, experienced management, healthy cultures, and disciplined operations become increasingly valuable precisely because so many competitors lack them.” Read the complete piece here in the Chrisman LLC Thought Leadership section.

Fast Approaching Webcasts

The Advisory Angle is today at 11AM PT. Presented by STRATMOR Group, STRATMOR Senior Advisor Sue Woodard and Principal David Hrobon explore how mortgage leaders and solution providers can get more from conference season, how to prepare with purpose, have more meaningful conversations, build lasting relationships, and turn conference connections into real business opportunities.

Tomorrow at 11AM PT, Mortgage Matters, presented by Lenders One, the crew is joined by Laura Hopkins, SVP of Membership, Meetings and mPower at the Mortgage Bankers Association, for a conversation on leadership, industry engagement, the evolving mortgage landscape, Laura's career journey, what motivates her work across the mortgage industry, and the trends and opportunities shaping the industry's future.

The AI Show is tomorrow at noon PT. Presented by JazzX AI, the panel goes behind the scenes of AI pilots, pivots, and hard stops. Not every implementation goes according to plan, and that's exactly where some of the most valuable lessons emerge. The conversation explores what happened when AI initiatives stalled, what led organizations to change course, and how teams are learning from the decisions that worked, the ones that didn't, and the unexpected outcomes along the way.

This Thursday at noon PT, The Big Picture has Ryan Grant, President of NEO Home Loans, and a conversation on leadership, growth, the evolving mortgage market, how lenders are adapting to changing market conditions, building resilient organizations, and positioning themselves for the opportunities ahead.

Freddie and Fannie Changes

Borrowers, income, and properties are changing. Some say that Freddie and Fannie’s guidelines have been passed by, and that the Agencies don’t have an answer for many of these borrowers or scenarios. Critics of Freddie Mac and Fannie Mae have plenty to criticize, but there are also plenty of things to laud. Despite layoffs, changes, and questions about their future, the two still see the majority of residential loans in the U.S. Who’s doing what out there?

Recall that Fannie Mae reported a net income of $4.0 billion for second quarter of 2026 and filed its Second Quarter 2026 Form 10-Q with the Securities and Exchange Commission. The filing provides condensed consolidated financial statements for the quarter ending June 30, 2026.

Freddie Mac reported net income of $3.8 billion for the quarter ended June 30, 2026, a 61 percent increase from a year earlier, as net revenues reached $6.0 billion and a $0.9 billion benefit for credit losses replaced a prior-year provision.

Get timely insights, compare your performance relative to your peers, and drive improvements for your servicing portfolio. Request access to your organization’s Servicer Total Achievement and Rewards™ (STAR™) Scorecard in Fannie Mae Connect™ and subscribe to email notifications for the latest updates.

Freddie Mac Bulletin 2026-10 overhauls Guide Section 5307.1. The division factor drops from 240 to 180, the 80 percent LTV ceiling is removed, every occupancy type becomes eligible, and a new $30,000 minimum applies, alongside 12-month seasoning rules with balance-variance tests that did not exist before.

Explore Freddie Mac’s latest Single-Family technology enhancements that help you simplify processes, improve efficiency, and stay competitive in a changing market. Visit the Technology Releases webpage for release notes, product updates, and feedback messages all in one convenient place.

Discover new, trending and on-the-go training resources that will help you do business with Freddie Mac. Check out What's New: Learning Paths – Built for Your Role.

The Uniform Appraisal Dataset (UAD) 3.6 and Forms Redesign team has released new Frequently Asked Questions (UAD 3.6 FAQs) as the industry moves toward the November 2, 2026, UAD 3.6 mandate. Freddie Mac’s additional FAQs provide answers to questions received regarding construction loans, the transfer of appraisals during the transition to mandate, and more.

Review Freddie Mac resources to learn more about the event-based default reporting timeline. Article on the now events-based default reporting, Guide Bulletin 2026-11, and Updated dataset guidelines.

Simplify how you navigate state and local requirements for FHA adjustable-rate mortgages. Beginning September 26, Fannie Mae’s Desktop Underwriter® will use your qualifying rate when you choose to provide one, with a new message confirming when your rate is used.

Reduce complexity, save time, make confident lending decisions, and learn how recent changes can simplify project reviews, clarify eligibility requirements, and remove outdated policies with Fannie Mae’s August Selling Guide Updates.

Get guidance on navigating the August 3rd retirement of Limited Review and transition to Fannie Mae’s Full Review for condo projects during office hours every Thursday this month.

Freddie Mac is informing clients of a new login process for Quality Control Advisor Plus insights and reports in ECO®. As a Seller or Servicer, you should use the new ECO Quality Control Advisor Plus link to view your reports.

Freddie Mac is transitioning from eBill, their electronic invoice tool that enables Seller/Servicers to view daily and monthly billing activity and statement invoices online to their new invoicing tool, eBilling.

Capital Markets

U.S. Treasury yields moved sharply higher to open the week as renewed U.S.-Iran hostilities pushed oil prices higher. The 10-year yield surpassed 4.75 percent for the first time since January 2025, and the 5-year reached its highest level since early 2025. 30-year yields broke above last week’s highs due to growing concerns about persistent inflationary pressures, geopolitical risk, and the sustainability of elevated U.S. borrowing needs following the country’s debt surpassing $40 trillion.

Investors received no notable economic data yesterday, but the rest of the week will bring some noteworthy reports, such as today’s August ISM Manufacturing Index. Markets are now pricing in more than a 60 percent chance of a September 16 Fed hike after Warsh’s hawkish Jackson Hole remarks, with resilient employment and sticky inflation making a hike increasingly likely unless upcoming payrolls, CPI, and PPI data provide a compelling case to hold.

Clearly, rates are highly sensitive to incoming data and the Fed’s evolving policy signal, particularly after the 2-year yield posted its largest one-day jump around a Jackson Hole speech in decades. With only two meetings remaining after September and the June dot plot already showing a modest 2026 hiking bias, upcoming reports that show sticky August inflation and/or solid employment could push the new dot plot toward signaling more additional tightening this year, reinforcing upward pressure on front-end yields and increasing the importance of the September decision for the broader “rate outlook.”

Mortgage servicing rights (MSR) pricing history shows that mortgage rates are the dominant long-term driver of MSR values, but the same mortgage rate can produce very different MSR valuations depending on Treasury yields, curve shape, mortgage basis, spreads, and liquidity conditions. Accordingly, MSR models calibrated to individual periods explain pricing far better than a single model spanning a longer time horizon. Put another way, valuation relationships themselves change over time. In today’s “higher for longer” environment, bulk MSR multiples appear elevated in absolute terms, but that may be less meaningful given historically high mortgage rates, while new-issue/SRP pricing has risen surprisingly little relative to primary rates, creating a noteworthy divergence between the two markets.

Today’s economic calendar has little to actually move rates: Final August S&P Global U.S. Manufacturing PMI, and will be followed by July Job Openings, July Construction Spending, and August ISM Manufacturing Index. Markets will also receive remarks from Fed Vice Chair for Supervision Barr. We begin Tuesday with Agency MBS prices slightly worse/down from Monday’s close, the 2-year yielding 4.38, and the 10-year yielding 4.78 after closing yesterday at 4.76 percent.