4.16.25 Fed Activity Play; Economist Elliot Eisenberg on Tariffs; Preliminary Prepayment Prerogative

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 some of the Fed's ongoing calculus between activity and inactivity as it pertains to monetary policy. Plus, Robbie sits down with economist Elliot Eisenberg to discuss the true impact of tariffs on industrialization and how people can cut through the noise in the news cycle to understand what is actually happening with both the economy and mortgage market. And we conclude with a look at the prepayment speed landscape.

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

“Every morning, I get hit by the same bicycle… It's a vicious cycle.” Double meanings aside, seasons and the earth’s rotation are cyclical, and Anchorage is picking up nearly six minutes of sun a day. Did you know that the University of Alaska spans four time zones? (Zones are smaller up there.) The readership of this Commentary spans seven time zones across North America and into the Pacific, all of which have been abuzz with changes at FHFA, Fannie Mae, and Freddie Mac. It wasn’t that long ago that the “off with their heads” happened at Freddie Mac as the CEO, COO, and head of HR were fired, and Fannie’s board was changed by Bill Pulte. This month’s piece is titled, “Love Them or Leave Them? The Ongoing Saga of Fannie and Freddie.” (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. Hear an interview with economist Elliot Eisenberg on the true impact of tariffs on industrialization and how people can cut through the noise in the news cycle to understand what is actually happening with both the economy and mortgage market.)

Employment & transitions

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“Boost your production with Axos WCPL (NMLS# 524995). We closed March with the highest funding volume we’ve had in over two years. Our non-QM products, and Jumbo Portfolio ARMs are priced aggressively. See for yourself by pricing your next loan today with our Quick Pricer tool. We just reduced our bridge-to-sale rates by a full 1.00%, making this a great time to help your borrowers buy their next home before completing the sale of their current residence. 

Big news: Axos WCPL now offers Jumbo and Super Jumbo portfolio construction loans. Starting at amounts of $1 million or more, our tailored construction products are available as construction to permanent (owner-occupied and second homes) and investor purpose loans (spec construction/professional real estate developers). Want to join a winning team? Axos is expanding with two open National Account Executive positions. If you’re an experienced AE ready to grow your business and career, apply today.”

“At Logan Finance, we eliminate the obstacles that slow salespeople down. Our sales-support driven model means you spend more time selling and less time on admin work. With state-of-the-art market intelligence, high-impact marketing, and an expert back-office team, you’ll be free to focus on winning more business and building stronger client relationships. We’re hiring Non-QM Account Executives nationwide. Contact us to learn more about joining Team Logan today!”

“Exciting news from Highland Mortgage! We are deeply honored to welcome two exceptional mortgage professionals to the Highland team: Julie Beaty, Producing Branch Manager, and Sue Hamilton, Sr. Mortgage Banker, in Atlanta, GA. Julie and Sue are not only top producers and perennial MBAG Award winners at the highest production levels. They are trusted professionals, respected leaders, and beloved by their clients and peers alike. With decades of experience and deep roots in the Georgia market, their decision to join Highland is incredibly meaningful to us. “Julie and Sue represent the very best of this industry, “said Mickey Schilling, Highland’s Chief Strategy Officer. “We’re humbled they’ve chosen Highland as their new home. Their presence strengthens our culture and inspires us all.” Want to find out why top producers choose Highland? Contact Mickey Schilling or visit www.highlandcareers.com for more info.”

First American Financial Corporation announced a number of leadership changes, most prominently that Chief Financial Officer Mark Seaton has been appointed CEO, replacing departing CEO Ken DeGiorgio. In addition, Treasurer Matt Wajner has been promoted to CFO and Chairman of the Board Dennis J. Gilmore will move to Executive Chairman of First American.

(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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Transform the way you manage your loans held for sale. By automating funding through loan sale, OptiFunder streamlines warehouse funding to boost efficiency, reduce risk, and increase profitability like never before. Managing $10 billion per day in loans held for sale for clients, OptiFunder has grown far beyond its beginnings as a warehouse line optimization tool. Today, its comprehensive warehouse management platforms are transforming how both originators and warehouse lenders operate. By connecting key third-party systems like LOS platforms, custodians, eVaults, fraud prevention tools, investors, and more, OptiFunder consolidates your processes into one seamless, scalable solution. Whether simplifying operations or improving efficiency, OptiFunder helps you stay competitive and build stronger relationships across the lending ecosystem. We’re not just optimizing anymore: We’re redefining warehouse management. Visit optifunder.com to learn more, or connect with us at upcoming events to see how we’re driving the future of warehouse lending.

Market volatility can make execution challenging, but Agile’s limit order functionality puts traders in control by allowing them to set specific price levels instead of engaging in an open-ended bid process, providing greater confidence, efficiency, and price certainty. “Limit orders are very useful on the fringe coupons that are not as liquid to build up price certainty and prepare for origination activities at the low or high end of the rate range,” said Greg Vacura, president at Agile. “Developing limit orders in collaboration with our lender and dealer clients is another area were Agile is helping meet the needs of the mortgage TBA ecosystem on a fast, efficient, and extremely accurate Request for Quote (RFQ) platform and has led to a rewarding win-win.” Discover how Agile’s limit orders can sharpen your strategy. Contact Agile to learn more or schedule a meeting with their team at the upcoming MBA Secondary Conference.

“No tariffs on our Helocs. At Symmetry, we try to keep your life calm with no surprises. We have world class service, competitive pricing and speedy closings. We offer a variety of HELOC options including a non-owner occupied Heloc. As always, No Prepayment Penalty to your Borrower and No EPO. Oh, and did I mention: No tariffs!! A HELOC is a smart option. 

Quontic Wholesale's HELOAN Lite Doc: A Game-Changer for Equity Lending! Quontic Wholesale has introduced a HELOAN Lite Doc program that offers brokers a powerful solution for clients seeking to tap home equity without the hassle of full income documentation. This program supports primary residences, second homes, and investment properties. Use our proprietary P&L that allows for 1 year self-employment or our 5 question VOE and help those clients with more challenging income to tap into home equity. To learn more about this program, join us on 4/17 for our HELOAN webinar. Register Link.

Spring Into Action: Modernize Your Tech Stack This Season! Spring is finally here, and many dive into their spring-cleaning rituals. But why should they have all the fun? Lenders, it's time to take a fresh look at your technology stack for Loan Origination Systems (LOS) and Servicing. Does your current system have DNA from 25, or even 60, years ago? If so, you're missing out on the capabilities and efficiency that modern solutions can offer. Here's what you're leaving behind by clinging to legacy systems: Cloud-Based Efficiency (Enjoy clean, rules-driven, open-source data that flows seamlessly throughout the process; Best of all, you own it: no costly paywalls to access your own information), Built-In Compliance (Stay ahead of evolving regulations with compliance delivered automatically and effortlessly for the life of the loan), and Open API Connectivity (Modern solutions leverage screen-level exposable APIs, giving you unparalleled flexibility and functionality for every step in your process). This season let’s redefine what "modern" really means for LOS and Servicing. Contact John McCrea.

Correspondent and Wholesale news from around the biz

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Usually, investor and lender news fits into buckets like conventional conforming, or government, or non-QM. Sometimes it doesn’t, and let’s see who’s doing what out there.

“Join eRESI in May at these upcoming Events! Let's connect at the MBA Secondary & Capital Markets Conference in New York, NY, from May 18-21. Don't miss the opportunity to schedule a meeting with us at The Westin New York at Times Square to discuss how our Non-QM solutions can drive growth for your business. Additionally, we'll be at the CMBA mPower Women's Event on Friday, May 9th, in Huntington Beach, CA, where eRESI's Lisa Schreiber will provide insights while on the Women Leaders in Technology panel. We look forward to engaging in meaningful conversations and discovering new opportunities together. To connect with our team at either event, please email sales@eresimortgage.com or contact your eRESI Representative.”

United Wholesale Mortgage (UWM) and Google Cloud have announced a “strategic partnership aimed at accelerating digital transformation in the home financing process. The collaboration will leverage Google Cloud’s advanced AI and data analytics capabilities alongside UWM’s expertise in innovative lending technical solutions to create a faster, more intuitive and streamlined process.

“Through this agreement, UWM will integrate Google Cloud AI and machine learning tools into its lending platform, enhancing underwriting automation, streamlining document processing and improving client support with AI-driven chat experiences. UWM is one of the first to leverage Google’s Gemini Flash 1.5 model to enhance underwriting automation, with underwriters already increasing their capacity from underwriting six loans a day to 14. The partnership will also explore the use of Google Cloud infrastructure to improve scalability and security, ensuring a seamless and expedited mortgage experience for 50,000 mortgage brokers and their borrowers.”

Speaking of UWM, it has once again extended its “60bps for 60 Days” program, providing independent mortgage brokers with a significant 60 basis points pricing advantage on loans. This pricing incentive remains applicable to eligible conventional or government loans for borrowers with a FICO score of 720 or higher. It will be available to all UWM clients through April 30 and can be extended through May 31 for those who achieve PRO Elite 100+ status in March or April.

PHH Mortgage issued a Credit Policy Update Announcement regarding the Homeowners Insurance cancellation notification.

Kind Lending is teaming up with the Association of Independent Mortgage Experts (AIME), the foremost trade organization supporting mortgage brokers in the wholesale lending channel. Reinforcing Kind’s position as a champion for independent mortgage brokers, providing the tools, expertise, and support they need to thrive in an ever-changing market. With industry-leading Account Executives, averaging over 20 years of experience, Kind provides real market insights and hands-on guidance to help brokers succeed. Unlike generic broker incentives, Kind Lending's Top Dog Program rewards brokers in a fresh, fun, and unique way- because recognition should be as bold as the brokers earning it.

Citi Correspondent Lending Bulletin 2025-04 provides credit policy updates on Non-Agency Employer Assisted Housing Programs, Agency Retirement Assets Used as Qualifying Income, Recurring Debt related to Alimony/Maintenance & Child Support for DU Agency & Community Lending, and Future Income in Agency & Community Lending. Restricted Stock on LPA Agency Jumbo, Military Income in DU Validation Service and Medical Information in Credit Eligibility (Reg V) in Non-Agency transactions.

Last fall, Citi Correspondent Lending introduced a Lender Paid Grant feature that is available on HomeRun and Special Purpose Credit Program-HomeRun loan plan transactions. This feature allows Correspondents to provide down payment assistance of up to 2% of the purchase price of a primary residence, which can be an impactful benefit to offer your borrower. Take a few minutes to review the information provided in Citi's Lender Paid Grant Feature announcement, including terms and documentation requirements. 

Mergers & acquisitions mean sales and retirements

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Robert Wagnon, CEO and Founder of Houston’s 31-year old Republic State Mortgage Co. (Republic), a full-service mortgage banker, announced the sale of his controlling interest in Republic to Andrina Valdes, CEO of Temul Capital and Alta Home Lending. Paulina McGrath, a recognized and active leader in the mortgage banking industry and 26-year vet at Republic, will remain with Republic as President, Chief Financial Officer, and shareholder.

“Ms. Valdes brings more than 26 years of leadership experience in the mortgage industry. She and her team have an established track record of building high-performing, culturally-aligned organizations that shape the growth of the mortgage industry. With this acquisition, Ms. Valdes will continue to support Republic’s award-winning culture and strategic initiatives, reinforcing the company’s commitment to delivering exceptional service, building community, and expanding access to home ownership.”

For those keeping track, with Andrina’s buy-out of Mr. Wagnon, Republic is now a woman-owned mortgage company and predominately a woman-led mortgage company, a welcomed rarity.

Capital markets: waiting for the next grenade of volatility

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Remember when all we talked about was what the Federal Reserve was going to do? “The Fed” doesn’t determine tariff policy, nor can it directly control inflation caused by tariff policies. Fed futures are pricing in 3-4 rate cuts in 2025 with Fed speakers all emphasizing that there is no need for the Fed to cut under present conditions sticking to Powell’s “no rush” policy to guard against tariff-induced inflation becoming permanent. For example, Atlanta Fed President Raphael Bostic stated, “The specific place that the economy will land depends critically on the details of where policy lands…Because we don’t know that now, again, that’s another reason why I feel like moving too boldly with our policy in any direction wouldn’t be prudent at the moment.”

Trade tensions have shown little sign of easing this week, with the latest salvo being Trump administration officials signaling that most tariffs imposed on the EU will remain in place. Amid this (toxic) uncertainty, markets have been forced to recalibrate expectations, with heightened volatility now redefining what constitutes a "normal" trading session. While no major economic data was released yesterday, corporate earnings helped stabilize sentiment somewhat, as Bank of America and Citigroup reported strong quarterly results. However, it’s probably an understatement to say that the broader environment remains unsettled, with conflicting messages from the Trump administration leaving both companies and trading partners unsure of how to proceed.

Economic concerns are mounting around the resilience of the U.S. consumer, who appears increasingly ill-equipped to absorb the pass-through effects of rising tariffs. Early 2025 data suggests a slowdown in spending growth, with personal consumption unlikely to contribute meaningfully to GDP this quarter. This dynamic, coupled with rising import prices, points to a demand-driven recession risk. The (toxicity uncertain) situation escalated further with reports that China has instructed its airlines to halt Boeing deliveries in retaliation for steep U.S. tariffs. I wrote about consumer sentiment the last couple of days, but it is worth noting that a Bank of America survey revealed that investor sentiment has fallen to a 30-year low, with 82 percent of fund managers expecting tighter financial conditions.

Mortgage pricing is based on supply and demand, with supply being influenced by early payoffs and refinances. According to the preliminary outlook on April prepayments, FN30 and FN15 speeds are seen increasing 18 percent and 20 percent on average versus 14 percent in GNIIs. Improving turnover seasonals and increased refinancing activity are seen driving the move, with day count remaining steady at 21 days. Gross issuance at $56.7 billion MTD is currently running ahead of last month.

There are two big highlights on today’s economic calendar, which is the last full trading session of the week: remarks from Fed Chair Powell and retail sales. However, the day kicked off with mortgage applications decreasing 8.5 percent from one week earlier, according to data from the Mortgage Bankers Association. We have also received March retail sales, +1.4 percent, as expected; ex-auto +.5 percent. Later today brings industrial production and capacity utilization for March, business inventories for February, the NAHB Housing Market Index in April, and Treasury activity that will be headlined by $13 billion reopened 20-year bonds and a buyback in 1-month to 2-year coupons for up to $8.5 billion.

This week’s $13 billion 20-year Treasury auction will serve as a key test of investor demand following strong interest in last week’s 10- and 30-year offerings, despite ongoing concerns about global appetite for U.S. debt amid growing deficits. Although recent auction results eased fears that Trump's trade policies would trigger a sell-off of Treasuries by foreign holders, skepticism remains around whether such retaliation is actually occurring. Markets will also receive remarks from Fed Chair Powell, Cleveland Fed President Hammock, Kansas City Fed President Schmid, and Dallas Fed President Logan. After the retail sales number, Agency MBS prices are roughly unchanged from Tuesday’s close, the 2-year yielding 4.81, and the 10-year yielding 4.33 after closing yesterday at 4.32 percent.

My daughter Marie teaches 7th grade in the Bay Area. Recently she told her class, "A single dolphin can have two hundred offspring!"

A little girl gasped, "How about the married ones?"

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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(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.)