4.15.25 Economics, Regulation, and Spec Pools; BeSmartee's Tim Nguyen on Automation; Sentiment and Bank Earnings

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 explain what go around the mortgage landscape: economic lessons of late, regulation and compliance chatter, and how tariffs are impacting specified pools. Plus, Robbie sits down with BeSmartee’s Tim Nguyen to discuss how evolving economic pressures, borrower expectations, and advances in AI are reshaping point-of-sale solutions, redefining the role of loan officers, and unlocking new opportunities to streamline the mortgage experience. And we conclude with a look at consumer sentiment and bank earnings.

Thank you to BeSmartee, which is transforming mortgage lending with Bright Connect, its native mobile app designed to boost loan officer productivity, speed up referrals, and simplify the borrower experience.

Transcript

Here in San Diego at the CU:REALM event, Cotality’s Chief Economist Dr. Selma Hepp noted that consumer and business sentiment has already dropped and that has led to less spending. Less spending leads to a slower economy and lower rates, which is good, but nervousness has crept into consumer’s thinking and, given that 70 percent of U.S. GDP comes from the consumer, estimates of improving gross domestic product have vanished. Yet Cotality believes 30-year mortgage rates will chop around the 6 percent range this year and next. Another impact that the Trump Administration is having on lenders is in the regulatory arena. On today’s Regulation Central the panel of legal and regulatory experts is joined by former CFPB attorney Richard Horn. The recent filing by the CFPB to unwind the Townstone consent order has raised a lot of eyebrows and questions about fair lending enforcement going forward. Mr. Horn was one of the attorneys that represented Townstone. Other topics will include the state of fair lending, Townstone, and what in the heck are those CFPB people doing now. (Today’s podcast can be found here and this week’s are sponsored by BeSmartee, transforming mortgage lending with Bright Connect, its native mobile app designed to boost loan officer productivity, speed up referrals, and simplify the borrower experience. Interview with BeSmartee’s Tim Nguyen on how evolving economic pressures, borrower expectations, and advances in AI are reshaping point-of-sale solutions, redefining the role of loan officers, and unlocking new opportunities to streamline the mortgage experience.)

Employment & transitions

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“Earn 75 bps in commission as a non-QM Wholesale Account Executive with NewPoint Mortgage. No tiers. No territories. Work from home. We have the technology, programs and culture to make you the go-to expert your referral partners want. With over 10 years in non-QM, our operations staff understand how to support you in closing your difficult deals. Please contact Mike Fernandez to take advantage of this opportunity.”

Class Valuation, a leading real estate appraisal management company, has appointed Chris Flynn as chief data officer effective April 1, 2025. With over 20 years of experience in real estate, fintech and data strategy, Flynn brings exceptional expertise to accelerate the company's data-driven innovation. Previously heading product and strategy at First American Data & Analytics, Flynn will now lead Class Valuation's enterprise data strategy, overseeing advanced analytics, AI capabilities and automation to enhance valuation accuracy, speed and transparency. This strategic appointment reinforces Class Valuation's commitment to standing apart from traditional AMCs through a smarter, more agile valuation platform that combines automation, deep data insights and trusted human expertise. Read the full press release to learn more about how Flynn will help Class Valuation continue to innovate and lead the property valuation industry through data intelligence and client-focused solutions.

(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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Make it happen. Is your loss mitigation strategy designed to meet the full scope of your needs? Many current technology solutions fall short of addressing the demands of today's environment. Loss mitigation requires responsive and dynamic solutions that automate the complex requirements for waterfalls, workout options, and stringent timelines while also being adaptable to ongoing changes. Our latest blog, "Make Efficiency a Reality in Loss Mitigation," offers the solution for navigating the evolving default servicing landscape. We've also shared verified results experienced by our valued clients, highlighting their achievements in higher productivity, operational efficiency, and demonstrated scalability through CLARIFIRE®. Now more than ever, it's essential to utilize best-in-class proven automation with an experienced team to implement loss mitigation complexities with ease. Don't wait… drive results, efficiency, and innovation with CLARIFIRE®, truly BRIGHTER AUTOMATION®.

Usherpa: Lightning-Fast CRM Implementation. Looking to implement a powerful, reliable mortgage CRM without headaches? Usherpa makes it easy. Their award-winning Smart CRM, built by mortgage pros for mortgage pros, understands the fast-paced, high-pressure nature of your business. Go Prime Mortgage shared they only did 10% of the implementation… Usherpa handled the rest. The Usherpa Navigation Onboarding System streamlines the setup with intuitive tools and hands-on support from a dedicated success team. No drawn-out timelines, no tech confusion… just immediate, measurable value and real results. And they stand behind their go-live dates—if they don’t meet a mutually agreed-upon date, the first month is on them! With Usherpa, you don’t just get software, you get a trusted partner committed to helping your loan officers close more deals. Thousands of mortgage professionals nationwide trust Usherpa to drive results from day one.

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For homeowners facing financial hardship, the threat of losing their home can be devastating, causing stress, anxiety and uncertainty about their future. But servicers can play a critical role in helping families find a way forward. The ICE Loss Mitigation solution helps you streamline processes and reduce risk, while providing you with the tools to connect struggling homeowners with available assistance options. Loss Mitigation also helps automate GSE decision and settlement steps with API integrations, track activities with rules-driven tracking, and more all from within a user-friendly interface for agents. Learn more about ICE Loss Mitigation so you can be ready to help homeowners when they need it most.

“AFR 2.0 is here, and we’re bringing serious value to today’s market. Our newly launched Correspondent Delegated Best Efforts Flow Channel is a game-changer for smaller to mid-sized mortgage bankers, especially for loan amounts under $350K. No need to hedge locks or work directly with the agencies, just streamlined solutions and strong support. We’re also boosting investor ROI with significantly lower rates on Conventional Non-Owner-Occupied loans, now a compelling alternative to non-QM DSCR loans. No prepay penalties, flexible terms, and the potential for higher returns. Pair it with NOO Renovation options to maximize value: purchase & renovate before renting or refinance & improve at lease expiration to raise rents and cash flow. Backed by new ownership, enhanced pricing, and expanded product offerings, AFR is helping clients invest smarter and compete stronger. Learn more: sales@afrwholesale.com, 1-800-375-6071, or www.afrwholesale.com. (NMLS 2826) Let’s grow together!”

Writing a Letter of Explanation shouldn't feel like applying to college. With LiteSpeed by LenderLogix, you can generate Letters of Explanation directly from Encompass® in just a few clicks. Your borrowers can knock out credit, job or deposit explanations right inside their dashboard. No formatting stress. No confusion. Just simple inputs and smooth approvals. Read more about LiteSpeed's LOE feature.

STRATMOR’s tech study results

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STRATMOR’s latest Insights Report breaks down key insights from the firm’s 2024 Technology Insight® Study Digital Innovations survey results, revealing the current state of digital adoption. The article highlights key trends in automation, artificial intelligence (AI), and overall digital capabilities. The results also uncover the challenges lenders face in leveraging digital innovations to enhance their operations. Be sure to read, “Laying the Foundation for a Seamless Digital Mortgage Experience” for actionable strategies to elevate your performance based on STRATMOR’s findings.

There are still ducats out there to be put to work

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Friday Harbor, an AI-powered platform that helps loan officers assemble complete and compliant loan files in real time, today announced the completion of a $6 million seed round. The round was led by Abstract Ventures, a San Francisco-based venture firm with $1.5 billion in assets under management and a track record of backing breakout companies including Rippling, xAI, Hebbia, Brigit and Hippo (NYSE: HIPO) and Mischief, an early-stage venture VC fund co-founded by Plaid CEO Zach Perret. Also participating in the round were Wischoff Ventures, a VC firm founded by Blend (NYSE: BLND) alum Nichole Wischoff; and the AI2 Incubator, a technical incubator born from the Allen Institute for AI (AI2). “With Friday Harbor’s platform, lenders of all sizes can leverage AI to read and interpret borrower documents, generate a borrower-specific needs list, underwrite files and flag potential conditions, all in real time. Each flagged issue includes a suggested resolution, enabling loan officers to take action with a single click. By compressing what typically takes weeks of back-and-forth into just minutes, Friday Harbor reduces downstream friction and accelerates time to close.”

Friday Harbor was founded by Ellis and Jesse Collins (CTO) and launched in 2024 with support from the AI2 Incubator and CoFound Partners. The $6M seed round will support the growth of Friday Harbor’s engineering team and support integrations with leading mortgage LOS and point-of-sale platforms—paving the way for more lenders to automate file setup, accelerate underwriting and compete directly with the largest lenders in the country.

Capital markets: spec pool pricing is impacted

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Not only are the tariff fluctuations increasing volatility in the general stock and bond markets, and securities backed by mortgages, but also with specified pools. As a reminder, these are packages of loans that share attributes such as low credit scores, low LTVs, or geographic areas, that make them appealing to investors and servicers. For example, a pool of loans done with low credit score borrowers may be on the books longer if they don’t improve their credit scores but continue making payments.

Investors “pay up” for these pools, driven by the “call protection” value of them. But bond traders will tell you that in a big sell-off, these payups can evaporate quickly. Traders are seeing investors not pay higher prices for them as they focus on their existing positions and work to tweak their valuation models and, in turn, levels that they will pay for new bonds if added. This shift directly impacts both lenders and borrowers, usually making mortgages more expensive.

Initial investor excitement surrounding President Trump’s clarified stance on electronics was reined in somewhat yesterday after Commerce Secretary Lutnick said that the exemptions will be temporary. President Trump added that he will soon announce a tariff rate for semiconductors. China has been publicly adamant that it won't back down, going so far as calling Trump’s tariffs a “joke.” In light of how dramatically the trade war between the U.S. and China has escalated, it’s hard to envision that President Trump has any intention of backpedaling tariffs or offering an olive branch to Beijing for the foreseeable future, unless there is another >10 percent downdraft in stocks. At this point, the levies on both sides are so high that trade between the world’s two largest economies is effectively about to halt. 

Rather than President Xi backing down, market expectations are that either Trump or Fed Chair Powell will blink in the near-term. However, intervention would require a larger selloff and/or another leg lower in the equity market. The President appears to be in wait-and-see mode in anticipation of Beijing reaching out to make a deal. Powell is in a very difficult position at the moment, as the Fed has the tools to calm the market but using them carries the risk of stoking inflationary pressures that are rapidly mounting. Not only are fundamentals contributing to inflationary potential, but monetary policymakers are undoubtedly worried that by stepping in at this point, the Fed would be effectively backing a trade war that could have serious negative ramifications for the U.S. economy. Additionally, the moves have been relatively orderly; Or at least the sharp swings haven’t brought in any systemic risk chatter from Fed officials. 

Recent consumer surveys reveal growing, but divergent, concern over inflation and the economy. The New York Fed’s latest Survey of Consumer Expectations, released yesterday, showing a notable rise in one-year inflation expectations to 3.6 percent. Three- and five-year outlooks held steady or slightly declined. In contrast, the University of Michigan’s Consumer Sentiment Survey that was released at the end of last week reported sharper increases, with one-year expectations jumping to 6.7 percent and five-year to 4.4 percent. The divergence between the two surveys underscores rising anxiety among consumers, largely driven by fears surrounding tariffs. Sentiment has dropped roughly 30 percent since December 2024, with most of the decline stemming from a gloomy outlook on future conditions rather than present financial stability. Notably, the number of respondents expecting higher unemployment reached its highest level since 2009, suggesting that while people may feel secure in their current jobs, they’re increasingly worried about the future.

Empire manufacturing for April (-8.1, better than expected) and import/export prices for March (exports were +2.4 percent y-o-y, much stronger than expected) led off today’s economic calendar. Later today brings Redbook same store sales, Treasury activity that will be headlined by a buyback in 5- to 7-year coupons for up to $4 billion, and Fed remarks from Richmond President Barkin and Governor Cook. On the bank-earnings front, Bank of America and Citigroup are both out with their latest earnings. We begin Tuesday with Agency MBS prices roughly unchanged from Monday evening, the 2-year yielding 3.83, and the 10-year yielding 4.37 after closing yesterday at 4.36 percent.

This pastor decided to skip church one Sunday morning and go play golf.

He told his assistant that he wasn't feeling well. He drove to a golf course in another city, so nobody would know him.

He teed off on the first hole. A huge gust of wind caught his ball, carried it an extra hundred yards and dropped it right in the hole, for a 450-yard hole in one.

An angel looked at God and asked, "What'd you do that for?"

God smiled and slyly replied, "Who's he going to tell?"

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, “Love Them or Leave Them? The Ongoing Saga of Fannie and Freddie.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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