Verification, U/W, PPE, Margin Mgt. Tools; Webinars; MISMO and FRAME Offer; Buydown breakdown
We’re waist deep in conferences (click here to view or add events), and every week I receive a half a dozen invitations to mortgage golf events centered around a conference. How about coming up with something where you can see and talk to more than three other people for 3-4 hours? Group hikes? Make-a-bear? Mini-golf? Bowling? Croquet? Pretzel making? Axe throwing? Perhaps we’ll see companies and state organizations shift their fund raising away from golf outings toward pickleball and bocce ball. Are President’s Award trips on their way out? There is no doubt that we should all celebrate successes. But does anyone ask the top (fill in the blank) what they would like? There seems to be a growing opinion that, “Maybe our top crew doesn’t want to go on vacation with co-workers, so let’s give them some extra vacation so they can spend it with their families.” In the past, some companies (Wells Fargo correspondent jumps to mind) would have awards trips for their ops staff. That is a fine idea. (Today’s podcast can be found here. This week’s ‘casts are presented by Gateless, intelligent Automation that gives you the competitive edge. Gateless solutions reduce costs, deliver a superior borrower experience, and mitigate risk by automating tasks and decisions historically made by people. Today’s has an interview with Falcon Capital Partners’ Sam Valverde on the general importance of the bond market, an analysis of recent rate hikes, future fixed-income projections, and the potential downstream risks to the housing market.)
Lender and Broker Products, Services, and Software
Margin Management is one of the most difficult topics for mortgage lenders, especially in a difficult mortgage market. Retail Channel lenders, in particular, struggle to determine their optimal go-to-market price position while controlling for the incidence and severity of price exceptions given to borrowers. Am I priced too high and missing out on loans? Are my price exceptions the “rule” rather than the “exception”? Are my corporate interests aligned with my sales team’s success? For CEOs, CFOs, or Heads of Production and Secondary Marketing, these questions are hard to answer but are crucial for success. Fortunately, MCT’s Margin Management Advisory service is available for those executives who want an independent assessment of their pricing strategy and lending performance. Connect here to schedule a conversation or a meeting at the MBA Annual Conference. Reach out to John Sayre.
The newly launched 2026 ServiceLink Loan Officer Report reveals a disconnect between borrower expectations and lender perceptions. For the first time, ServiceLink surveyed more than 500 loan officers (in addition to 1,500 recent homebuyers) to gain valuable insight into the housing market from both perspectives. The research found that today’s homebuyers are looking for a faster, more streamlined digital mortgage experience than many lenders realize. The findings also highlight that there is opportunity for originators to provide greater transparency, innovative technology, and in-depth education, ultimately giving borrowers the ease and guidance they desire. To learn how lenders can better meet borrower expectations and improve their experience, download the full report.
Manual pricing processes cost more than just time. ICE PPE, built natively for Encompass, automates pricing from search to lock, so your team can compare rates across investors and programs, get alerted when loan details change and configure products without development support. Watch the video to see what ICE PPE can do for your team.
Underwriting at the Speed of Now. The future of mortgage underwriting isn’t coming. It’s here, and Gateless is already ahead of it. Gateless Smart Underwrite® combines speed, precision, and intelligent automation to deliver underwriting outcomes lenders can act on with confidence. Smart Underwrite® processes a real loan file in minutes, not hours. Documents are processed rapidly; income is calculated with precision, and the results demonstrate a level of speed and accuracy that raises the bar for automated underwriting. The proof is in the numbers: 1.2M applications. 230K closed loans. ZERO buybacks. 99.9 percent accuracy. While others are working to catch up, Gateless is pushing the technology forward, automating more of the underwriting process and giving lenders the capacity to move faster without adding headcount. The standard is changing. Gateless is setting it. Gateless Smart Underwrite®. Automate Intelligently. Scale Logically.
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.
Newfi and Addy AI announce partnership! Newfi and Addy AI today announced a collaboration focused on the continued evolution of artificial intelligence in mortgage lending. Addy AI builds artificial intelligence specifically for the mortgage industry, working with lenders to bring new AI capabilities into their organizations. Newfi has built innovative lending products and a modern approach to the mortgage market. As the industry evolves, the company continues to explore new technologies that can support its teams and customers. Both companies see significant potential for AI to play a growing role in the future of mortgage lending and are excited to work together as the technology continues to evolve.
Sponsored Webinars and Webcasts
New Non-QM Webinar: Strengthen Your Business Purpose Loans and TRID Strategies
Join Pennymac TPO on September 29th at 10AM PT / 1PM ET for our live Non-QM Deep Dive, “Business Purpose Loans and TRID Requirements.” We will walk through the core TRID criteria for Business Purpose loans, documentation requirements, and strategies to keep your pipeline moving forward. Register today, contact your Pennymac TPO Account Executive, or become a partner to learn more. We hope to see you there! (Equal Housing Lender, NMLS #35953)
Mortgage has no shortage of opinions. Rich Swerbinsky brought 30 minutes’ worth. In last week's webinar, Get Rich Quick:30 Minutes of Hot Takes from Rich Swerbinsky, LenderLogix CEO Patrick O’Brien sits down with Rich Swerbinsky for a fast-moving conversation on the headlines, debates, conference culture, regulation, and industry chaos everyone seems to have a take on, including the latest Better Mortgage drama and what could come next. If you missed it live, the full webinar is now available on demand. Watch here!
Getting wholesale AEs on video doesn’t require a production budget, a content team, or a viral moment, it requires the right framework and a manager willing to enable it. NMP’s Winning Wholesale webinar, Reframing Video for Wholesale Lenders, features Red Button Media’s Mike Faraci and Radiant Wave Media’s Christy Mindell walking through the simple, practical steps AEs can take to build a personal brand on video, and what leadership can do to support them without losing control of compliance or quality. Join us Tuesday, September 29 at 1:00 PM ET / 10:00 AM PT. The 10 best questions win a free copy of The Power of Video for Business and Sales. Register here
AI Governance That Lenders Can Put to Work
Brian Vieaux, CMB and the President of MISMO, has some thoughts on how lenders, small and big, can put some guardrails in place, and FRAME.
“For a smaller lender, AI governance cannot mean building another department, hiring a team of specialists, or creating a hundred-page policy that sits on a shelf. It has to work inside the business. Where are you using AI today? Who owns each use? What information should you receive from your technology partners? Which uses create greater risk? Who is responsible for oversight? What happens when something changes?
“Those aren't theoretical questions anymore. And governance has to be rigorous enough to matter while still being practical enough for a lender to sustain. That is exactly the problem MISMO's Framework for Responsible AI in the Mortgage Ecosystem, FRAME, was built to help solve.
“FRAME doesn't operate your AI governance program for you. The lender still has to do the work. What FRAME provides is a place to start and a structure to build from. The Governance Policy template helps establish accountability and decision-making processes. The AI System Inventory helps you identify where AI-enabled tools are being used, what they're being used for, and who owns them. The System Risk Assessment provides a consistent way to evaluate individual systems, including information obtained from vendors. The Implementation and Getting Started Guides help turn those individual pieces into an actual sequence of work.
That sequence doesn't have to be complicated. Identify the most consequential AI-enabled tools already in use. Assign an owner. Ask the right questions of your vendors. Assess the risk. Document the oversight and the decisions being made. Then repeat.
“FRAME is designed to fit into existing governance processes and let organizations scale controls based on risk. It isn't intended to create governance theater. It is intended to help lenders maintain something they can use and continue improving.
“For the final three days of MISMO's fiscal year, any lender that is not currently a MISMO member can join for $500 with immediate access to FRAME. Three days. September 28, 29, 30. If your company isn't already a MISMO member, join us. Get FRAME. Designate someone inside your organization to own the work. And start. Email me for the $500 membership link.” Thank you, Brian.
Capital Markets
Despite a brief Friday rally, the Treasury selloff increasingly looks like a permanent shift in rates. Any buying, like we had on Friday, appears driven more by cheaper valuations than conviction that the selloff has ended. Treasury yields surged to nearly two-decade highs last week, with the 10-year above 5.20 percent and the 30-year near 5.50 percent due to hawkish Fed communication, resilient economic data, persistent inflation expectations, weak technical support, and a lack of willing buyers. That volatility has spilled directly into mortgages, where wider basis spreads, weaker specified pools, and higher primary rates have increased extension and liquidity risks, even as production coupons began to attract bargain hunters. The implied probability of an October rate hike has risen to roughly 70 percent. Just how much economic weakness is the Fed willing to tolerate before changing course? What happened from 2022–23 suggests that the Fed may/will tolerate considerable stress in housing, equities, and other rate-sensitive sectors before easing if inflation remains its priority.
There’s also a competing argument that current inflation is being driven less by excess domestic demand and more by temporary supply-side forces (i.e., tariffs, geopolitical energy and food shocks, and the AI investment buildout) while wage growth is slowing and housing-price gains remain modest. If so, further rate hikes could/would do little to address the underlying inflation drivers while increasing damage to interest-rate-sensitive parts of the economy. The market is therefore searching for the point at which restrictive policy finally produces visible economic cracks, because until those cracks emerge, 5 percent-plus Treasury yields may be increasingly difficult to dismiss as merely a temporary spike. Buydown mortgages have become an increasingly important tool for navigating today’s affordability crunch, particularly in FHA and VA lending, where they now represent $45 billion, or about 2 percent of the Ginnie Mae II single-family universe. The product is less about permanently making a mortgage affordable than temporarily reducing the borrower’s rate for one to three years, with sellers, builders or lenders absorbing the cost. That structure tends to attract stronger-credit borrowers, with average FICO scores around 20 points higher than comparable loans, while also providing some early-life prepayment protection. FHA accounts for roughly two-thirds of current buydown issuance, and although the loans prepay more slowly during their first 18 months, that protection begins to fade as the temporary rate steps toward the borrower’s full note rate, making buydowns an increasingly interesting pocket of the MBS market as lenders and sellers look for ways to bridge the gap between elevated home prices, high mortgage rates, and strained affordability. U.S. consumers are on increasingly fragile footing, with the University of Michigan’s September sentiment index falling to a four-month low as one-year inflation expectations jumped to 4.6 percent and longer-term expectations rose to 3.4 percent, their highest since May. Energy inflation tied to the Iran conflict, particularly record diesel prices, could intensify the cost-of-living squeeze by raising transportation and production costs across the economy.
This week markets will focus on core PCE inflation, consumer income and spending, JOLTS, ADP, ISM manufacturing and, most importantly, Friday’s employment report, with payroll growth expected to slow to roughly 95k jobs created in September while unemployment holds near 4.1 percent. Spending and income remain relatively strong, even as consumer confidence deteriorates and inflation expectations rise. We begin the week with Agency MBS prices worse .125-.250 from Friday’s close, the 2-year yielding 4.91, and the 10-year yielding 5.23 after closing last week at 5.16 percent (up 16 bps for the week).