4.9.25 Inventory Tidbits; Rob Chrisman on Tariffs; Trump Whims

Welcome to The Chrisman Commentary, your go-to daily mortgage news podcast, where industry insights meet expert analysis. Hosted by Robbie Chrisman, this podcast delivers the latest updates on mortgage rates, capital markets, and the forces shaping the housing finance landscape. Whether you're a seasoned professional or just looking to stay informed, you'll get clear, concise breakdowns of market trends and economic shifts that impact the mortgage world.

In today’s episode, we look at the "piles and piles" of unsold homes out there. Plus, Robbie sits down with Rob Chrisman to discuss the rising volatility out there as a result of President Trump's tariffs. And we conclude with a chat about if Treasuries are still a safe haven.

Thank you to Figure. Figure is shaking up the lending world with their five-day HELOC, offering borrower approvals in as little as five minutes and funding in five days. Figure has hundreds of partners in the Banking, Credit Union, Home Improvement, and of course, IMB space embedding their technology. Lenders, give your borrowers an experience they will rave about. Learn more at figure.com.

Transcript

How ‘bout some good news? Last week’s apps skyrocketed, and… Builders are sitting on a pile of unsold homes and are slashing prices and offering mortgage rate deals! It sure is hard to have a “steady as she goes” environment in real estate and lending. Word continues to simmer about IMBs (independent mortgage banks) and the Community Reinvestment Act. Even though the CRA is a Congressionally approved law at the federal level, states like Illinois and New York have put rules in place, despite IMBs not accepting deposits. Some states can be more restrictive than the Federal government, but they don’t want to do anything that is unconstitutional. In addition, regulators, it can be argued, use archaic measures to analyze business practices. What difference does it make where the branch is, given that so many LOs work from home? Questions have come up about the CFPB and Justice Department enforcing Fair Lending. How will Fair Lending be enforced, if at all? Ask any LO: Lenders are taking every loan they can get, so claims of redlining are highly suspect. Every lender out there is trying in every way to qualify any borrower. Certainly, inventory shortages in some areas shouldn’t be held against lenders. (Today’s podcast can be found here and this week’s is sponsored by Figure. Figure is shaking up the lending world with its five-day HELOC, offering borrower approvals in as little as five minutes and funding in five days. Lenders, give your borrowers an experience they will rave about. On today’s hear a discussion between Robbie and Rob Chrisman making sense of all the volatility we have seen as a result of President Trump’s tariffs.)

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Verus Mortgage Capital, the nation’s leading non-QM loan securitizer, is growing, and looking for experienced sales professionals with established non-delegated relationships to join its dynamic team. If you have a proven track record in non-QM sales, an active book of business, and the drive to excel, Verus wants to hear from you. As the undisputed leader in non-agency, Verus is 100% focused on the non-QM space, bringing unmatched professionalism, stability, and industry expertise to everything we do. This is your opportunity to elevate your sales career and thrive in a fast-moving, high-potential market with a company that’s setting the standard. Interested? Reach out to Jeff Schaefer, EVP of National Sales or 202-534-1821 to learn more.

On the opposite side of the coin from hiring, yesterday the U.S. Federal Housing Finance Agency (FHFA, overseer of Freddie and Fannie) and Fannie Mae announced, “In President Trump’s housing market, there is no room for fraud, mortgage fraud, or any other deceitful act that can jeopardize the safety and soundness of the housing industry,” said William J. Pulte, Chairman of the Board of Directors of Fannie Mae. “Since my swearing-in, we fired over 100 employees from Fannie Mae who we caught engaging in unethical conduct, including facilitating fraud, against our great company. Anyone who commits fraud against Fannie Mae does so against the American people.”

Fannie toed the line. “I would like to thank Director Pulte for his empowering of Fannie Mae to root out unethical conduct, including anyone facilitating fraud. We hold our employees to the highest standards, and we will continue to do so,” said Priscilla Almodovar, President and Chief Executive Officer of Fannie Mae.

(As a reminder, anyone searching for employment can post their resume at no charge at www.lendernews.com, and potential employers can view all resumes for several months for only $75.)

Products, software, and services for lenders

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Robbie Chrisman reports from DC

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There are other things for 500 mortgage bankers to talk about rather than Kenneth DeGiorgio, CEO of First American Financial Corp., facing federal charges after allegedly assaulting a fellow passenger by grabbing his throat and tackling him on board a cruise ship bound for San Juan, Puerto Rico, how much an Apple iPhone would cost if manufactured in the U.S., or how Elizabeth Warren is charismatic but appeared anxious to move off the stage.

At the Mortgage Bankers Association’s National Advocacy Conference, attendees enjoyed a full day of sessions covering the evolving political, economic, and legislative landscape impacting the mortgage industry. The day began with an overview of the current political climate in Washington, followed by key insights on GSE reform and the Tax Cuts and Jobs Act. Participants received guidance on effective lobbying strategies in preparation for Hill meetings and gained exclusive updates on the early trajectory of the Trump 2.0 administration.

Newly confirmed HUD Secretary Scott Turner addressed federal housing affordability and supply initiatives, while MBA Chief Economist Mike Fratantoni provided an in-depth market and economic outlook. Legislative priorities across the residential and commercial/multifamily sectors were thoroughly briefed, equipping advocates with talking points for upcoming congressional meetings. The afternoon featured bipartisan perspectives from Representatives Lisa McClain and Ritchie Torres, and Senators Elizabeth Warren and Mark Warner, all sharing their housing policy priorities. 

Builders’ Are Not Immune from Housing Policy

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Housing policy is moving fast, and builders need to be ready. With new opportunities on the horizon, including streamlined permitting, affordable housing incentives, and a push for faster construction financing, major shifts are coming. Rich Swerbinsky breaks down the critical changes builders must prepare for in Housing Policy is Moving Fast – Builders, Get Ready. Don’t miss out on how the government is addressing the affordable housing crisis—and what it means for your next project. Read the full article now!

Conventional conforming news in the news

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Until they price themselves out of the market, or narrow their product guidelines, Freddie and Fannie are still the predominant products in the residential marketplace. Who’s doing what?

To help you prepare for the upcoming Uniform Appraisal Dataset (UAD) and Forms Redesign mandate, we’ve published the Freddie Mac Collateral Feedback Messages: Loan Collateral Advisor® and Uniform Collateral Data Portal® (UCDP®) for UAD 3.6.

Freddie Mac introduced a number of enhancements to the Single-Family Seller/Servicer Guide (Guide) website. Finding information and related sources is easier and faster, with more comprehensive results. Combined with ongoing content refactoring, you'll find better results in a format that’s easy to skim, scroll and read.

Single-Family Seller/Servicer Guide (Guide) Guide Bulletin 2025-4 announced the new Freddie Mac Income Calculator, Flood insurance premium used for qualifying, Uniform Loan Delivery Dataset (ULDD) delivery instructions, and Guide refactoring.

Freddie Mac and Fannie Mae (the GSEs) announced the publication of the updated Uniform Closing Dataset (UCD) v2.0 Initiative Timeline, UCD Critical Edits Matrices and Technical Resources. To help prepare you for UCD v2.0, read the joint GSE announcement, Loan Closing Advisor® will also be updating its login procedures for users to navigate to the tool through a new entry point.

In April, Fannie Mae’s Selling Guide, described in SEL-2025-02, has been updated to combines Desktop Underwriter® (DU®) and Condo Project Manager™ (CPM™) technology, clarify how to calculate the loan-to-value ratio when determining the mortgage insurance for transactions on co-op properties in New York State, clarify the use of Income Calculator and calculations for rental income reported on Schedule E, and other miscellaneous updates.

Find out how recent housing and economic developments could affect home sales, mortgage originations, and other activity in Fannie Mae’s ESR Group’s latest forecast.

Pennymac Announcement 25-37: Pennymac is aligning with the changes announced in Freddie Mac Bulletin 2024-16 regarding the use of restricted stock (RS) and restricted stock unit income (RSU) to qualify for a mortgage. These changes may be implemented immediately but are effective with note dates on or after April 1, 2025.

Pennymac Announcement 25-38: Pennymac will update Conventional LLPAs effective for all Best-Efforts Commitments taken on or after Monday, April 07, 2025.

Training and webcasts in the next five business days

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All from the comfort of your own La-Z-Boy with your slippers on.

Looking for more in-depth commentary on weekly mortgage news? Register here for Wednesday the 2nd at 11AM PT "Mortgage Matters: The Weekly Roundup” presented by Lenders One! This week’s has Steve Landes from Optifunder.

Thursday will be another episode of The Big Picture at 3PM ET. Rich Swerbinsky hosts a variety of guests. You can click here to register for Thursday’s 3 PM ET show which features The Mortgage Collaborative’s Jodi Hall!

Friday the 4th on Last Word, Brian Vieaux, Christy Soukhamneut, Kevin Peranio, and Courtney Thompson discuss the recent decision by the Federal Housing Finance Agency to end Fannie Mae and Freddie Mac's down payment and closing-cost assistance programs for first-time homebuyers. They'll explore the potential impact on affordability, the housing market, and the future of government-backed homeownership support.

Technology and innovation in residential lending are the focus of Now Next Later next Monday at 1pm ET.

Tuesday the 15th at 11AM PT, origination concerns and issues are the focus with Mortgage Pros as Audrey B. and Kevin C. address issues facing residential originators. Today’s has Selma Happ, economist from Cotality (CoreLogic).

There’s the National MI April 2025 webinar sessions with “Status Sells” Marketing for Loan Officers with Dr. Bruce Lund, April 10 at 1 pm ET, and “Prospect Consultatively and Create Value Instantly” with Kendra Lee, April 15 at 1 pm ET.

Melissa Langdale has “assembled an incredible team of mortgage professionals to join me on April 16th to talk about the future of our industry and what’s possible. We’ll cover the future of mortgage manufacturing, high-touch and high-tech solutions that drive customer loyalty and engagement, the risk, reward and real ROI with AI, the future of mortgage regulation, maximizing tech adoption, and preparing companies for the next generation of home buyers and the next generation of mortgage professional. 

Capital markets: are Treasury securities still a safe haven?

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President Trump’s recent imposition of sweeping tariffs on many of America’s trading partners has driven U.S. tariff rates to their highest levels in over a century, prompting debate over whether this move is a strategic bargaining tactic or a long-term shift in economic policy. Unlike most economic disruptions (e.g., financial crises or public health emergencies), this one is largely self-inflicted, with Trump having both initiated the tariffs and holding the power to lift them. While there is cautious optimism that some of these tariffs may be rolled back, particularly for countries other than China, significant uncertainty remains.

Meanwhile, the broader economic climate continues to show signs of strain. In March, the NFIB Small Business Optimism Index dropped for the third straight month, falling below its historical average, driven by declining economic expectations and weaker sales forecasts. Labor quality remains the top concern among small businesses, and although there was limited evidence of price increases directly tied to tariffs, the percentage of firms planning price hikes in the near term reached its highest point in a year.

In March's prepayment report (reflecting the April 2025 factor date), aggregate Fannie Mae 30-year speeds increased 31 percent from the prior month, with the overall 1-month CPR rising from 5.0 to 6.6, the fastest pace since November. However, this acceleration came despite mortgage rates holding steady at around 6.6 percent and the MBA refinance index declining by 10.4 percent, signaling that the uptick in prepayments is more about turnover than a surge in refinances.

A detailed look at the conventional universe, specifically Fannie Mae 15- and 30-year coupons, reveals that while differences in prepayment speeds among servicers remain relatively narrow, especially in deep out-of-the-money coupons, top performers like Rocket/Quicken and loanDepot continue to dominate. Rocket appeared among the top five fastest servicers in eight of twelve 30-year coupons, maintaining its lead for a seventh straight month, while Bank of America consistently lagged, ranking in the bottom five across most buckets. The data underscores the importance for investors to monitor servicer behavior closely, as performance differences, though subtle, remain meaningful in a still-muted prepayment environment.

Last week’s news that Rocket plans to acquire Mr. Cooper has stirred up the mortgage bond market. With the two companies set to manage a massive $2.1 trillion in servicing, investors are worried Rocket’s strong ability to refinance and keep clients (an 83 percent recapture rate compared to the industry’s 28 percent) could lead to faster-than-expected mortgage payoffs. This has already caused a dip in prices for certain Mr. Cooper-issued mortgage bonds, especially custom Ginnie Mae pools, as investors factor in the likelihood of quicker refinances. While the impact doesn’t apply to multi-issuer pools, it does raise concerns for lenders selling bonds tied to a single issuer, and some may look to shift servicing to other partners if pricing continues to drop. This situation echoes past lessons from Ginnie Mae’s PIIT program, reminding the market that a change in servicer can significantly affect bond values.

Today’s economic calendar kicked off with mortgage applications from MBA increasing 20.0 percent from one week earlier. Laissez les bons temps rouler! Later today brings wholesale inventories and sales for February, Treasury activity that will be headlined by an auction of $39 billion reopened 10-year notes, remarks from Richmond Fed President Barkin, and the minutes of the March 18/19 FOMC meeting. We begin the day with Agency MBS prices worse .250-.50, depending on coupon, the 2-year yielding 3.78, and the 10-year yielding 4.37 after closing yesterday at 4.26 percent.

What’s the difference between a good lawyer and a great lawyer?

A good lawyer knows the law. A great lawyer knows the judge.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. This month’s piece is titled, “Mergers and Acquisitions Aren’t Going Away, and In Fact…” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.ChrismanCommentary.com. Copyright 2025 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)