AI Document, Broker, U/W, QC Tools; Lender/Investor Earnings; Credit News; LO Retention Examined

The MBA believes that 2027’s production will be 5 percent less than 2026’s and be below $2 trillion. “Rob, are you hearing that, with volumes down (units and volume), lenders are once again examining keeping entire loan originator workforces?” Indeed I am. At the most basic level, as we move through autumn and into winter with no sign of greatly improved rates and the spring “home buying season” five months away, lenders are asking, “Is the LO carrying him/herself?” Lenders are moving LOs to part-time status, cutting benefits when possible, or suggesting they “find success elsewhere.” Many are shifting. RETR reports that from January through September 9, 2026, independent mortgage bankers lost roughly 100 net loan officers, representing approximately $1.8 billion in production, while the non-delegated, broker and wholesale channels gained 327 net loan officers and nearly $7 billion in production. Technology-enabled platforms make it easier to move production into operating models with lower costs and more efficient fulfillment. (Today’s podcast can be found here. This week’s ‘casts are presented by nCino, the platform for agentic AI in mortgage lending. nCino is helping mortgage lenders deliver a faster, simpler path to homeownership. Today’s has an interview with SF Realtor Arrian Binnings on how real estate agents and mortgage originators build effective partnerships and how AI may change their work.)

Lender and Brokers Products, Services, and Software

Home equity demand is surging, and the lenders who verify fastest are the ones winning that volume. Truework, a Checkr company, automates income, employment, and asset verification across every source in one platform, so you can verify 97 percent of U.S. workers faster and more accurately, at up to 50 percent lower cost. Don’t let manual verification processes cost your borrowers while they wait. Learn more.

loanDepot and HomeSmart have joined forces to expand mortgage options and support for agents and homebuyers nationwide. The agreement connects HomeSmart’s 25,000-plus real estate agents with loanDepot loan officers, an expansive product suite and dedicated service for a variety of borrower needs. “At loanDepot, we believe strong relationships create better outcomes for homebuyers,” said loanDepot President of Retail Lending Tom Fiddler. “By combining our lending expertise with HomeSmart’s real estate leadership, we’ll be able to deliver more financing options and a more seamless experience for buyers across the country.” Added Carol Perry, HomeSmart’s Chief Business Development Officer, “Our goal is to equip agents with the resources they need to best serve their clients. loanDepot offers the reach, products, and service capabilities we’re looking for in a lender. We believe this relationship will create meaningful value for both our agents and the consumers they serve.” Learn more here.

Is DTI taking a bite out of your pipeline? Reverse mortgage eligibility requirements are designed around the financial realities of retirement rather than employment income and traditional DTI models. That could give you more ways to solve borrower’s needs that HELOCs, home equity loans, or cash-out refinancing may not. Finance of America partnered with HousingWire on a white paper that explores how broadening your product strategy could help keep business from walking away. Download it now. Finance of America | NMLS 2285.

In 1628, Sweden's magnificent new warship Vasa sank just 20 minutes into its maiden voyage. The warning signs were there, as a pre-voyage stability test had revealed serious problems, but officials sent the ship sailing anyway. Nearly 400 years later, the lesson still holds: catch problems before leaving port. Friday Harbor's Safe Harbor QC applies that logic before closing, reviewing eligibility, salability, and regulatory compliance while defects can still be corrected. Unlike costly, slow outsourced QC services, Safe Harbor QC delivers faster, more consistent reviews at a fraction of the cost, with sensitive loan data kept onshore. Better yet, qualifying loans are eligible for an insurance-backed warranty from a global insurer rated A+ by AM Best. Make sure every loan is shipshape before it sails. Request a demo.

Ask a room of originators how they get paid and you'll hear one answer. Ask how the math actually works and the room goes quiet. LO comp sounds simple: close loans, get paid. Then come Reg Z, team splits, recruiting overrides, expense accounts, and the fine print buried in every comp agreement. Leaders from three platforms, Canopy Mortgage, Loan Factory, and Equity Smart Home Loans, walk through how they structure comp and why their MLOs love working there. Ron Gapp of Brody Gapp LLP, one of the industry's leading LO comp attorneys, covers the Reg Z traps and litigation trends blowing up companies right now. Then break out for private time with each platform's leaders. Join the NMP Ignite event "The Good, Bad, And Ugly Of LO Comp" on Tuesday, October 20 at 9AM PT. Bring the questions you'd never ask on a recruiting call. Register here.

Automate the Repetitive. Elevate the Human. Your expertise belongs where it matters most. The future of mortgage underwriting isn’t coming. It’s here, and Gateless is already ahead of it. Gateless Smart Underwrite® combines mortgage expertise, production-proven AI, and intelligent automation to deliver underwriting outcomes lenders can act on with confidence. Smart Underwrite® processes real loan files in minutes, not hours, automating repetitive tasks so teams can focus on judgment, complex scenarios, and borrowers. The proof is in the numbers: 1.2M+ applications. 230K+ closed loans. ZERO buybacks. Now, Gateless and AZP Insurance Specialists bring together mortgage technology, independent risk assessment, and insurance expertise. AZP’s Platinum Certification recognizes Smart Underwrite® at the highest level of its AI Mortgage Technology Certification. Eligible Gateless outputs are insured, providing an additional layer of financial protection against defined losses tied to reliance on erroneous automated outcomes, subject to policy terms. Automate intelligently. Scale confidently. Keep human expertise where it matters most.

“Wintrust Mortgage Warehouse Lending: Different Approach, Better Results®. At Wintrust, we know every mortgage business is unique. For decades, we’ve provided mortgage bankers with more than just warehouse lines and deposit solutions; we deliver robust, customized strategies backed by industry experts. Our proprietary platform is built for maximum efficiency, requiring minimal documentation for rapid funding, especially critical during high-premium, month-end periods. In an industry that moves fast, we prioritize stability and consistency. You’ll work with seasoned professionals who offer a steady hand and a long-term perspective, ensuring you have a reliable partner to help you navigate market shifts and scale with confidence. Connect with our experts, Robert Marr, or Kevin Mitzit, today!”

Independent mortgage banks spent an average of $10,936 to originate a loan in Q2 2026, almost $3,000 above the historical average. LenderLogix’s free eGuide, 7 Places Mortgage Lenders Lose Borrowers, Time and Margin, shows where unnecessary effort hides across the process, from the first click to closing. You’ll learn why abandonment tends to happen in the first few application questions, how static pre-approvals slow buyers down, and where manual handoffs quietly drive up cost. You can’t control rates or inventory but you can control how hard it is to do business with you! Access the free eGuide here.

“Hey Rob, I’m hosting a session at NAMB National on October 18 at 9:45 AM in Las Vegas. Mike Kortas and Mike Fawaz are joining me on stage for what I expect to be one of the most candid conversations at the conference. These two have shaped some of the biggest debates in wholesale mortgage lending. They've challenged each other, changed positions, and in some cases gone from competitors to collaborators. Let your readers know they can attend NAMB National and my session for free using the code FREEDOMFREE, courtesy of NAMB. Lastly, I’m hosting Freedom Mortgage Wholesale’s upcoming “Solve the Puzzle of Getting More Loan Approvals” webinar on November 12 at 12 PM ET. NewFi Wholesale and Wholesale Reverse Mortgage are joining us. Mortgage brokers can attend to get new strategies that can help drive more loan approvals.” (Allen Middleman, Executive Director – Corporate at Freedom Mortgage)

“The Future of Mortgage Operations Is Here: CLARAA at MBA Annual 2026. The mortgage industry is navigating lower volumes, leaner teams, rising compliance demands, and pressure to do more with less. At MBA Annual, one message was clear: modernization must deliver measurable operational value. Stellar Innovations was excited to showcase CLARAA at the Tech Hub, demonstrating how AI-powered document intelligence, data extraction, reconciliation, and configurable workflows can help lenders streamline fulfillment while maintaining governance, controls, and compliance. Recently recognized as a MISMO Certified Product, CLARAA supports interoperability through the iLAD format, helping bridge intelligent automation and standardized mortgage data. MBA reinforced what we believe at Stellar Innovations: technology alone isn’t the answer. Better data, intelligent workflows, and the right controls turn AI into meaningful business outcomes. Thank you to everyone who stopped by the Tech Hub to see CLARAA in action. The future of mortgage operations is being built now.”

Discussion on Credit from “The National” in Chicago

FHFA Director Bill Pulte skipped the MBA’s National Conference entirely, leading many to wonder if he knows the value of the MBA, and Fannie Mae, and Freddie Mac, and/or just prefers to tweet changes in policy.

This week’s Capital Markets wrap addressed credit changes in terms of investor acceptance. “The mortgage industry is treating alternative credit scoring as a cost-saving opportunity, but the harder question is whether lenders and investors can confidently evaluate the risk behind the score. Matching loan-level price adjustments between FICO and VantageScore may create a more level playing field on paper, but equal pricing does not prove that borrowers with the same numerical score have the same likelihood of default. A borrower with a (weighted, adjusted, whatever you want to call it) 720 VantageScore may not perform like a borrower with a 720 FICO score, and lenders still need evidence that connects those scores to actual loan performance.

“The problem extends beyond the scoring model: if a lender originates a loan using VantageScore but only a fraction of its potential investors accept that model, the lender has less flexibility to sell the loan. Until investors, rating agencies and aggregators can evaluate alternative credit profiles consistently, introducing competition into credit scoring could create new execution risks even as the industry tries to lower costs.”

Many will say that Vantage 10-T offers the best quality picture of a borrower’s credit. No credit report can predict a job loss, of course, and that is why the losses for lenders and servicers occur. There is similar data across the Bureaus, but occasionally differences come up often due to the companies reporting information to the three Bureaus. How are lenders going to prevent gaming the system? Loan officers are still going to want all the scores, and that will drive up costs. It continues to be a hodgepodge in terms of offerings, quality, prices (and price change), dependability, various company offerings, and investor acceptance.

Earnings Can Tell a Tale

The most recent United Wholesale Mortgage earnings, at this point several weeks ago, left the industry wondering about the long-term health of the company. Continued great service and products for brokers, but analysts agree that the servicing packages that the company is selling off don’t match the valuation on the books.

Redwood Trust (RWT) reported preliminary third quarter results indicating continued operating capacity and relatively stable liquidity, with more than $8 billion of loans distributed through securitizations and whole-loan sales and approximately $190 million of quarter-end cash despite significant bond market volatility. But sharply declining debt prices and common shares trading below 50 percent of tangible book value suggest persistent market concerns over the company’s capital position, notwithstanding its recent refinancing activity and ongoing commitment to opportunistic debt repurchases. Analysts think that a dividend cut will occur in order to deal with approximately $173 million of 7.75 percent convertible notes due in June 2027. One wrote, “Given the already depressed valuation and elevated 23.6 percent dividend yield, we see limited incremental downside from a reduction. Shares could react positively if investors view the move as a proactive step toward improving financial flexibility and addressing liquidity concerns.” JPMorgan and Wells Fargo’s third quarter results showed mortgage origination volumes declining approximately 10 percent quarter-over-quarter, broadly in line with industry expectations, although the results leave open whether banks are maintaining share gains against nonbank originators. Profitability signals were more mixed: JPMorgan’s gain-on-sale (GOS) margin fell sharply by 56-basis points to 0.29 percent, compounded by a decline in higher-margin retail mix from 61 percent to 54 percent as retail volumes fell 17.9 percent and correspondent volumes rose 10.6 percent.

However, potential pipeline hedging losses and other one-time factors make it difficult to interpret the margin decline as an industry-wide trend. Wells Fargo no longer discloses GOS margins, limiting broader comparisons, while JPMorgan’s mortgage servicing rights (MSR) valuation increased modestly to 1.50 percent, consistent with the rise in mortgage rates during the quarter.

Overall, the results suggest origination volumes are tracking expectations, but JPMorgan’s margin compression introduces uncertainty around near-term profitability for mortgage originators, particularly if weaker retail mix persists; nevertheless, it should be a broadly neutral market reaction given the difficulty of extrapolating from a single bank’s margin performance, although sector valuations remain depressed following the year-to-date selloff.

Capital Markets

U.S. Treasuries and Agency MBS staged a sharp “safe-haven rally” yesterday that extended their rebound, holding yields at three-week lows despite hotter-than-expected September PPI data (which surged 1.3 percent versus 0.5 percent expected and core PPI rose 0.7 percent) and crude oil climbing toward $100 per barrel, as investor concerns over heavily indebted AI related equity valuations and data-center companies fueled a flight to quality.

The investor move toward defensive assets has seen the 10-year Treasury yield sharply reverse from its recent 20-year high of 5.36 percent to as low as 5.03 percent. With inflation stubborn, economic data resilient, and oil prices elevated, the rally may reflect technical mean reversion and short-covering rather than a durable shift in fundamentals. In the near term, technology-driven equity volatility is likely to exert greater influence on Treasury yields than incremental inflation data, with safe-haven demand currently outweighing persistent inflationary pressures. Despite hotter-than-expected inflation data and elevated oil prices, MBS prices gained 3/8 to more than a point yesterday, although production coupons lagged and spreads remained mixed amid roughly $90 billion in trading volume. While attractive entry levels, short-covering, and flight-to-quality demand have reinforced the rally, persistent inflation and shifting expectations for Fed tightening remain significant headwinds, with markets pricing a 29 percent probability of an October rate hike and an 88 percent probability by December.

For what it’s worth, Fed officials are yet to signal any immediate urgency to raise rates. Consequently, sustaining the rally will hinge on whether continued market turbulence supports defensive flows, or if stabilization in tech stocks, rising energy costs, and renewed concerns over inflation and the Fed’s tightening trajectory ultimately reverse the move. It’s tough times for U.S. housing affordability and mortgage credit risk, as elevated home prices and borrowing costs strain household budgets, even as the housing market cools, with home values declining 0.6 percent month-over-month in September and annual appreciation slowing to 1.1 percent. Meanwhile, record mortgage debt of $14.8 trillion and persistently elevated borrower debt-to-income ratios underscore growing vulnerabilities, particularly among Ginnie Mae borrowers with DTI ratios of 45 percent or higher, whose serious-delinquency rate reaches 5.1 percent, compared with 3.2 percent for those below that threshold. It’s important to prioritize borrowers’ cash-flow resilience and repayment capacity over home equity alone when assessing credit risk. Elevated mortgage rates, affordability constraints, and seasonal weakness are expected to keep purchase and refinance originations subdued in the near term.

Today’s economic calendar is already underway with September Import and Export Prices. Later today brings September Industrial Production and Capacity Utilization. We begin the day with Agency MBS prices little changed from Thursday’s close, the 2-year yielding 4.75, and the 10-year yielding 5.10 after closing yesterday at 5.09 percent.