AI Governance, License Renewal, Servicing Transfer, SOC Products; Fannie Earnings

The other day I went to Costco, and for $5.99 bought a pumpkin pie the size of a hubcap. What inflation? Costco’s hot dog/soda combo or the rotisserie chicken are loss leaders, but actual gasoline, beef, lettuce, restaurant meals, goods from overseas, and other items’ price changes have kept inflation in the headlines and impacted mortgage rates. (Other headlines include Fannie Mae earning $4.2 billion in the 3rd quarter; more below.) What about water prices and availability… are they important to homeowners or potential buyers? What happens when you combine something like clean water with a private supplier? How about “a problem.” I am not saying that this is similar to private companies investing in mortgage-backed securities, but in the Navaho Nation, mostly in Northeast Arizona, a large percentage of residents don’t even have running water. Hawai’i was hit with a hurricane which has shut down water service on the Big Island. One community’s water and sewer needs are served by a utility that is not insured, has no money secured for repairs, and no timeline for restoring service. What does that do to the value of mortgage servicing rights in that area? (Today’s podcast can be found here. This week’s ‘casts are presented by FICO. As the industry's most predictive credit score, FICO Score 10T combines proven performance with deeper insight into borrower behavior to help support a stronger and more resilient housing finance system. Today’s has an interview with Steve Richman on mortgage-market conditions and how industry professionals can adapt through continued growth, education, and customer-focused differentiation.)

Lender and Broker Products, Services, and Software

“2027 Starts Now. While the mortgage industry continues to navigate affordability challenges, compressed margins, and an uncertain market, forward-thinking IMBs and warehouse banks are already focused on next year's strategy. The organizations gaining an advantage today aren't waiting for market conditions to change but investing in operational efficiency, automation, and stronger partner connectivity. Through OptiFunder's Genesis and Greyhound platforms, we've worked with IMBs and warehouse providers to streamline funding workflows, improve visibility, reduce manual processes, and strengthen the secure exchange of critical data. As year-end approaches, now is the time to finalize technology evaluations, complete contract discussions, and prepare for implementation. Whether you're looking to modernize warehouse lending operations, enhance the client experience, or build a more scalable foundation for growth, the decisions made today will help shape success in 2027. OptiFunder can help position your organization to capitalize when the market accelerates. Learn more at OptiFunder.com.”

“Buy Before You Sell: make it easy and close fast with the Symmetry Piggy-Back Option! Your borrower can bridge gap between Jumbo or Agency High Balance with a lower first mortgage and rate. This is designed as a lower cost option vs. a bridge loan, and we can use your appraisal from the first mortgage for all line amounts as well as title from the first mortgage for 2nd mortgages $250k or less. If you have LP or DU findings, Symmetry can use them for income documentation. All we need is to have 2 forms submitted with the loan package from the first to get started. If you have a bridge loan program listed on the primary or the bridge company has a contract to buy the home, we can omit PITI from the listed property. If you have a rental property, we can take a 12-month signed lease at 75% plus receipt of deposit to additionally offset the PITI. Help your borrowers pay down their 2nd mortgage HELOC after the existing property sells to give borrowers future access to their available equity. Call your Symmetry Area Manager today! For Mortgage Professional Use Only/Not for Distribution to the Public.”

EBOOK OUT NOW: Get more mortgage borrowers to “Yes,” faster. Lenders are accelerating the path to approval for qualified mortgage applicants, and they’re doing it without sacrificing control, compliance, or the human relationships at the center of their business.  In this eBook, MeridianLink® shares three distinct lender stories (from an IMB, credit union, and bank) and how each is tackling friction in the mortgage lending experience. Take a closer look at the strategies driving results through sustained borrower momentum (keep applications and communications focused and consistent from first click to final funding), fewer time-consuming tasks (reduce manual checks, handoffs, rekeying, and other internal items that slow application progress and decisions), and deeper data insights (easily surface workflow bottlenecks, borrower behaviors, and opportunities that guide and adjust strategy). Get to “Yes” faster. Get to growth faster. Download the free eBook.

Your SOC examination shouldn’t feel like just another compliance exercise. The right approach can help uncover control gaps, strengthen your organization, and build trust with the customers and stakeholders who rely on you. Richey May delivers tailored SOC readiness, SOC 1 and SOC 2 services backed by experienced assurance professionals who understand the financial services industry. Whether you’re approaching your first examination or looking to improve your next cycle, our team can help you navigate the process with greater confidence. Ready for a better SOC experience? Connect with Richey May at info@richeymay.com.

Mega deals and industry consolidation have dominated headlines over the past two years, but one story hasn’t been told: the role Covius’ NTC solution has played in nearly every major servicing transfer and whole loan transaction in the industry. Known as the leader in lien releases, NTC has quietly built a Transactional Services Group that now accounts for roughly a quarter of its business. In the latest NTC Coffee Talk blog, Covius CRO Danny Byrnes and NTC EVP-Operations Jimmy Walby go behind the scenes on deals involving portfolios from a few thousand loans to hundreds of thousands, with teams of 30 to 50 associates working on 30-to 60-day timelines. They cover collateral reviews, assignment chain fixes, title policy retrieval and how NTC helps buyers, sellers and investment banks close with less risk. Read the full article here.

Something is lurking in your compliance calendar, and it isn’t a ghost. It’s NMLS renewal season, and it’s creeping up fast. Wait until the last minute, and you could be scrambling over continuing education, missing documentation, and state-specific requirements. Missed deadlines and incomplete filings? Now that’s scary. Firstline Compliance’s dedicated renewal specialists work alongside your team to monitor license status, manage MLO continuing education, review filings before submission, flag issues early, and coordinate final attestations, so nothing comes back to haunt you. No tricks, just smooth renewals. Start early, and you’ll have time to fix problems before they become a nightmare. Contact Ashley Bradford or 469-717-4232 to get started.

“Your AI governance policy is only the beginning. When AI acts inside a mortgage workflow, your team still needs clear answers: Was it authorized? What was it allowed to do? Which authority applied? And where is the proof? Crittora controls AI at the moment it acts. Crittora’s CAAB solution evaluates whether an AI action is within defined authority before it reaches a tool, API, or mortgage system. Crittora Mortgage GSE Governance aligned Packs help turn those decisions into audit-ready proof. Control AI before action. Evidence after action. Less time chasing proof at audit. Crittora is the only AI security company with 100 years of combined mortgage experience. We are FRAME certified by MISMO, and ready to help you move your governance policy to production. Learn more at https://www.crittora.com/.”

The next Chrisman Demo Day is November 19 and 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 Chloe Murray 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.

STRATMOR on Mergers

The mortgage M&A market is heating up, and fast. STRATMOR Group says its phones are ringing off the hook. The mortgage advisory firm reports roughly double the number of sellers it had just a few months ago, yet it’s seeing something like four times the number of qualified buyers raise their hands. Buyers are hungry, and sellers who come to the table prepared are in a position of real strength. Whether you’re exploring a sale, a merger, or simply want to understand what your company is worth in today’s market, now is the time to start the conversation. To see what buyers value most, read STRATMOR’s recent article: “Mortgage M&A Value Drivers: The 10 Factors that Create Premium Valuations”. Contact Amanda Gibson com to start a conversation.

Lenders, Borrowers, and Communication

As AI makes mortgage information more accessible, loan officers must deliver more than answers. In his latest CX Tip, STRATMOR Group Customer Experience Director Mike Seminari explores how lenders can strengthen borrower relationships through proactive communication, personalized guidance, and a more intentional approach to building trust. Discover how lenders can turn the human side of the mortgage experience into a competitive advantage. Read the latest CX Tip: https://www.stratmorgroup.com/when-ai-has-the-answers-how-do-loan-officers-build-trust/.

In-Person Events

A good place for longer-term conference planning is to start is here for in-person events in the future. For organizers to post their events, click on the link and then “submit a conference.” Book those flights in advance… they’re not cheap and have been going up given the war in the Middle East. Lenders and vendors are casting a critical eye on ROI (return on investment) given how much it costs to send an individual thousands of miles away, week after week. Don’t forget the LTV ratio: Lender to Vendor.

On 11/18, in St. Louis, we have the Mortgage Bankers Association of St. Louis annual luncheon, along with other events throughout the year.

The MBA of Eastern PA is hosting, on November 18 at the Conshohocken Marriott, its annual President’s Banquet featuring an evening of networking, dinner, and an engaging keynote address. It’s a great opportunity to bring your team or clients and connect with mortgage industry leaders and executives from throughout the region.

On 11/19, in Kansas City, there is the annual MBAKC luncheon.

Join ALFN on Thursday, November 19th, at 8:00 AM – 6:00 PM CST for its 15th Annual INTERSECT (FC+BK) Conference, where foreclosure, bankruptcy, servicing, investor, and legal professionals come together for one day of practical education, strategic insight, and meaningful industry collaboration.

The MBA offers up Accounting and Financial Management!, November 18-20 in North Carolina.

The Mortgage Collaborative will be in New Orleans February 21-23!

Make sure Lenders One’s Summit 2027 is on your can’t-miss list. More industry leaders. A reimagined main stage. The new L1 Summit Tech Connect Showcase. And, for the first time, registration is open to L1 members and non-member lenders. Join us March 7–10 at the Omni PGA Resort in Frisco, Texas, for the insights, solutions, and connections you’ll want to be part of in 2027. Early bird pricing ends 10/31. Prices increase 11/1, so make plans to join us now. Register now.

Capital Markets

Mortgage bankers can’t think about capital markets without including Fannie Mae. This morning the company announced that it had earned $4.2 billion in net income in the third quarter of 2026. (Freddie’s earning news is set for tomorrow.) Fannie’s net worth is now nearly $120 billion. But take it from me… from the “horse’s mouth” there’s the Press release 3Q 2026 financial results, Fannie Mae's Form 10-Q for the quarter ended September 30, 2026, 3Q 2026 Earnings Presentation, 3Q 2026 Financial Supplement (PDF), and 3Q 2026 Financial Supplement (XLS).

Despite persistent inflation, strong manufacturing activity, and rising oil prices, bond markets remained range-bound ahead of today’s FOMC decision, with 10-year yields near 5.0 percent and 2-year yields around 4.7 percent, as investors weighed a likely October rate pause against an approximately 80 percent probability of a December hike. U.S. business investment remained resilient in September, with durable goods orders rising 1.8 percent and core capital goods orders increasing 0.5 percent for a third consecutive month of growth. In contrast, new home sales slipped 0.6 percent to an annualized 676k pace and fell 5.3 percent year-over-year, as rising mortgage rates continued to constrain affordability despite lower home prices, while home price appreciation remained modest at 2.7 percent annually. Consumer confidence rebounded sharply in October, supported by improvements in current conditions and expectations of easing gas prices.

Markets broadly expect the Federal Reserve to hold rates steady today while maintaining a hawkish bias. Chair Warsh’s preference for meeting-by-meeting decisions and limited forward guidance has increased uncertainty and pushed real yields higher, although greater confidence in the Fed’s collective decision-making could eventually ease some of that risk premium. With markets pricing roughly 71-basis points of additional hikes through September 2027, the debate has narrowed to the scale of future tightening. Keep in mind that if inflation is primarily driven by supply-side pressures, higher rates may have limited effectiveness in addressing its underlying causes. Warsh’s messaging will therefore be critical as persistent inflation competes with labor-market risks, weak Treasury auction demand, AI-related financing concerns, European debt pressures, geopolitical tensions, and midterm election uncertainty, leaving Treasury yields and the flattening yield curve vulnerable to continued volatility until the Fed’s policy trajectory and the outlook for the neutral rate become clearer.

The Federal Reserve appears committed to returning to an all-Treasury balance sheet, but the gradual runoff of its Agency MBS holdings (down 30 percent from their March 2022 peak of $2.7 trillion to $1.89 trillion) means the process could take nearly 11 years at the current pace, particularly as its predominantly low-coupon, deeply out-of-the-money securities continue to prepay slowly. Although active MBS sales could put additional pressure on mortgage spreads, such a move is not expected, and higher mortgage rates have further limited refinancing and accelerated prepayments. Meanwhile, renewed inflation concerns have pushed Treasury yields and mortgage rates higher, reinforcing the likelihood that runoff will remain slow and predictable. The Fed’s experience with large-scale MBS purchases and their association with elevated home prices and worsening affordability makes a return to targeted MBS buying unlikely, meaning we should anticipate a prolonged transition toward an all-Treasury portfolio.

Mortgage applications rose 3.4 percent for the week ending October 23, driven by a 4 percent increase in seasonally adjusted purchase applications and a 3 percent gain in refinancing activity, signaling a modest improvement in near-term borrower demand. However, purchase applications remained 18 percent below year-ago levels and refinance applications were down 61 percent, revealing persistent weakness in housing affordability and the limited refinancing opportunities available to homeowners.

In addition to apps we’ve also received advanced indicators which pales in comparison to the Fed news later. Later today brings weekly crude oil inventories and the aforementioned October FOMC Decision, where the range is expected to be unchanged at 3.75-4.00 percent. We begin the day with Agency MBS prices roughly unchanged from Tuesday’s close, the 2-year yielding 4.75, and the 10-year yielding 5.00 after closing yesterday at 4.99 percent.