6.16.26 Peace Time Bonds; TrustEngine's Dave Savage on Productivity; Warsh's First Meeting

Today’s episode includes reaction in bond markets to the peace deal in the Middle East, which is scant on details. Plus, Robbie sits down with TrustEngine’s Dave
Savage for a discussion on why the mortgage professionals who will thrive are those who obsess over delivering a modern, technology-enabled consumer experience, embrace AI to scale advice and efficiency, and focus on educating and advocating. And we close by looking at what is expected from the Fed meeting that begins today, the first under new Chair Warsh.

Thank you to Truework, the one verification solution to replace in-house waterfalls. Verify any borrower with a VOIE solution that automates the entire process to quickly deliver the most accurate and complete reports with broad GSE coverage.

The Chrisman Commentary is 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.

Transcript

Speaker 1 0:02

Welcome to the Chrisman Commentary, Daily Mortgage News Podcast. I'm your host, Robbie Chrisman. Topics on today's episode include what to look forward to from this week's Fed meeting, why markets are driven by an agreement that's really to be determined, and my interview with Trust Engines, Dave Savage, on why the mortgage professionals who will thrive are those who obsess over delivering a modern technology-enabled consumer experience, embrace AI to scale advice and efficiency, and focus on educating and advocating. Here, take a listen to a little preview.

Speaker 0:36

The last couple of years you and I have gotten together. First you were in Orange County. Now you're up in Oregon. There's trust engine, there's mortgage coach, there's first home IQ. You you bill yourself as a technologist. Where is your energy focus these days? And maybe it is across disparate things, and you have enough energy for that. But if someone said, Dave, what are you what are you up to? What are you working on? How would you answer that?

Speaker 2 0:58

Well, I I moved to Oregon to be closer to my adult kids. I've got a 24 and 27-year-old and loves Sunday dinners and just wanted to be close where I was cooking more Sunday dinners. But uh Trust Engine is an incubator, private equity backed. I'm the chief growth officer, and our flagship product is mortgage coach. So I mean, that is absolutely my day job, my obsession, my focus, and it is for-profit um company. And then and then first home IQ, I've spent this is my 40th year in mortgage, and I had told my wife several years ago that, you know, I turned 61, I'll be 62 this year, that in this next chapter, like, hey, I've been grinding hard to turn loan officers into mortgage coaches for almost three decades. I go, I want to do something where we get to the consumer first, you know, where we're we're like turning the consumers and we're educating consumers around financial literacy, and we're we're changing how they get into debt from within the consumers. So that's a nonprofit. I'm uh on the board of directors. Kristen Messerly is the executive director. It is a 501c nonprofit, and it's my nonprofit, my side gig that I'm very obsessed with as well.

Speaker 1 2:17

Thank you to TrueWork for sponsoring this week's podcast. TrueWork is the one verification solution to replace in-house waterfalls. Verify any borrower with a VOIE solution that automates the entire process to quickly deliver the most accurate and complete reports with broad GSC coverage. To learn more, visit TrueWork.com. Sure, we have a Fed meeting this week, but the Fed doesn't set mortgage rates. Will they all head off on vacation after this week? Perhaps. Given the increase in out-of-office replies I'm seeing and children in airports, summer vacation is in full swing. Apparently, families will change their spending habits to accommodate the run-up and fuel costs. My local gas station won't let me go above a hundred dollars per visit on my credit card. In an extreme example, the time management, the U.S. Congress has only 16 legislative days left on its agenda until the election. The rest of the time is vacation and campaigning to keep their jobs. In other words, don't look for much from Congress until January. Certainly, no politician wants to cut spending despite the deficit continuing to escalate. What would you tell their kids if their incomes weren't doing much, but they were ramping up their spending? The US and Iran announced an interim agreement to reopen the Strait of Hormuz and began 60 days of negotiations over Iran's nuclear program, though significant uncertainty remains as the details have yet to be finalized, and hundreds of vessels remain stranded in the Persian Gulf. Markets responded positively with oil falling to a three-month low, stocks and treasuries rallying on easing inflation concerns, and investors rotating back into risk assets. May's economic data pointed to a modest loss of momentum, with industrial activity flattening after a strong April, while manufacturing sentiment and home builder confidence both weakened, suggesting higher rates and economic uncertainty continued to weigh on growth-sensitive sectors. Remember, markets continue to view geopolitical developments and energy prices, not economic data, as the primary drivers of near-term treasury and risk asset performance. While a potential US-Iran agreement has supported risk sentiment and lower rates, caution remains warranted. Agency mortgage-backed securities appear inexpensive relative to investment grade corporates, but slightly rich to treasuries, with Fannie Mae 15-year and Ginny Mae 30-year pools offering some of the best relative value opportunities. Last week was a good one for borrowers who rates whose rates are driven by agency MBS. MBS generated 25 basis points of excess return, with every trading session finishing positive. Performance was led by Fannie Mae 20-year securities, while volatility fell to its lowest level since early May, and current coupon spreads tightened, with higher duration coupons benefiting from a five-basis point decline in the 10-year treasury yield within the sector. Investors are favoring higher coupon and longer duration exposure, though conventional six and a half have lagged due to role weakness. For today's interview, I wanted to welcome to the show Trust Engines Dave Savage to talk about why the mortgage professionals who will thrive are those who obsess over delivering a modern technology-enabled consumer experience, embrace AI to scale advice and efficiency, and focus on educating and advocating. He's founder of mortgage coach and chief growth officer of Trust Engines, with his goal being to build platforms to help tens of thousands of loan officers.

Speaker 5:42

You and I spoke offline a little bit and you mentioned the phrase helping lenders be more successful. It's obviously a very broad phrase. When I say that back to you, where does your mind go?

Speaker 2 5:59

Would I say say it again?

Speaker 6:03

Helping lenders be more successful.

Speaker 2 6:07

The thing that is most obvious, most powerful, and it's also a big divide between the loan officers that are winning today and going to win in the future is the obsession over the consumer experience, which is not a new idea. I mean, a lot of people talk about, you know, let's focus on customer experience. But when you really analyze the customer experience that most loan officers deliver at scale, it's pretty average. And a lot of the things that they're doing date back to the 90s. The lenders that execute at scale on that are winning, they're growing, they're highly profitable. And the lenders that aren't are, you know, are struggling. They're marginally profitable. I could go down the list.

Speaker 6:52

Well, how do we get those struggling lenders back to the top? What's the difference between an originator that's doing well today and originate and an originator of the future that's going to be successful?

Speaker 2 7:02

This has always been the case, although the kind of the tactics within what I'm going to say, the the loan officers and lenders that do the best, they consistently execute best practices beyond just a transactional experience. Now, today, that means they're they're using AI. That means they're using a digital mortgage experience. Uh, these are all tools of the trade of the best possible consumer experience. But the the lenders and loan officers that are that are winning, they just consistently, systematically deliver that at the point of sale. And a mortgage coach presentation is just a perfect example of that because mortgage coach presentation, it's a link. It's interactive, it's smart, it knows if you're on a desktop or a mobile device or an Android device. It's got video integrated into it. It's got consumer AI, like the consumer can interact with AI. Like these are all fairly well-known things. It's just that the the lenders that are winning most, they have the most loan officers using it and doing this with every consumer.

Speaker 8:09

I know with you, when you get your mind on something, you're almost you're like a bulldog to a chew toy. You know, it's hard, it's hard to shake you off. But where your focus these days on on where you can apply your powers to really help those originators out there.

Speaker 2 8:24

Yeah. So from my perspective, I've you know, I've had this mortgage coach YouTube channel for over 15 years. It's a tool. And you know, the the tool is I look for loan officers that are winning right now in this market in a way that's future-proof. And I I talk to them like just like you're talking to me. And and so that's definitely call it Dave Savage. It's like, let's find the best of the best, let's document what they're doing, let's distribute and share that. Uh, but at the highest possible level, my my focus as chief growth officer of of Trust Engine is adoption at scale. Like, like one of the biggest challenges we've had, lenders have had, is that some loan officers will do it, most loan officers won't. And so whether it's um updating our product so that an AI prompt can create a mortgage coach, like lowering the learning curve, lowering the workflow friction uh through product, and then me teach, train, and share that at scale.

Speaker 9:32

What have you learned about adoption at scale and what works well? Because you can lead a horse to water, but you can't make them drink necessarily. And so I'm I'm wondering what trials and tribulations, what you wish you knew about this several years ago, kind of where your head is now.

Speaker 2 9:48

Yeah, it's funny because that's such an obsession. Personally, I'm always observing others, and I'm even always observing myself. Like, like I've had TSA um pre-check for a long time. And now there's this thing called touchless. And and I've known about it for a couple of months, and and I've even seen friends like, you know, we're standing in line together. Oh, see you later, Dave. I'm going touchless. And I'm like, and so like here I am, this technologist. You would think that the first time I heard of it, the first time I saw someone do it, I'd be like, I'm touchless. Uh, but I mean, it it took me two months until finally I was like, okay, this is it. I just watched the touchless line be nobody. I watched the TSA line take 15 minutes. I'm like, I gotta figure this out. It took me 30 seconds. Like I literally went to Alaska, boom, check. I'm touchless. So I think what I've learned is that adoption is a challenge for all human beings, even the simplest things that take 30 seconds to learn to do and actually do. We're human beings. We just we just we're creatures of nature. So I think as technologists, we've got to give people reminders, we've got to give people little Easter eggs. We need to turn everything into a prompt because AI in AI prompt is the new interface to technology. So it's it's no one thing, it's lots of things. And uh and and we all, even guys like me that adopt technology pretty rapidly at scale, like it's it's just a human, human challenge.

Speaker 11:27

So when we were spitballing ideas for this call, you threw out three winning things with first-time home buyers as as kind of a catchy way to say how how can we drive more loans in this market? Thoughts on on winning first-time homebuyers that what's going through your mind? Maybe you maybe you have three things on your mind.

Speaker 2 11:46

Yeah, yeah. Well, I'll just start throwing some things. I mean, first of all, I would push everybody watching this, do your own research on this, throw a prompt into whatever AI you use and ask it like how many people in America qualify to be a first-time home buyer right now and they they currently rent? Or or ask in your town, like what markets do you serve? And and what you're gonna find is there's a whole lot of people in America that qualify to buy a home. And every time rates go down a half a percent, like five, no, 2.5 million unlock. And and so, I mean, I think number one, be aware of the opportunity, understand that your database in your local market is full of consumers that can buy a home right now. And then I think as mortgage people, we talk in acronyms, we talk about products, we we talk mortgage talk, we don't talk consumer talk. And and so, I mean, I think it's it comes down to stories where you tell stories of consumers that I thought I couldn't buy because of down payment and misconception. And and so tell stories in your database of social media, when you're talking to realtors, be part of the first home IQ community. Like it's it's really a community, and then test people. Like one of the things that First Home IQ built is a 15 question, three to five minute quiz that if someone takes it and they don't own a home, one, they're gonna assess where they're at in that journey, and two, they're gonna learn something. So know the data, stop using acronyms and talking like a mortgage person, start telling stories and strategies, and and leverage the first home IQ quiz. It's free. You go to first home IQ, check it out. If you want to be an ambassador, you could get a you know, personally branded version of that. But those there's three things.

Speaker 13:44

I'm very glad you brought up the acronym thing because no borrower cares. Oh, I'm I have a non-QM loan. Oh, I have an FHN loan. They just want to be in a home. And so they it doesn't matter what's you know, they don't need a bunch of acronyms thrown out. They just want to know, do I qualify? Do you have a product that fits me or a program that fits me? So it's certainly good advice there. I'm glad you brought up first home IQ because I want to lean into that with you. How can how can I lean into that? How can we lean into that? How can more people in the industry lean into first home IQ? And and what are the the rewards to be reaped if done correctly?

Speaker 2 14:17

Yeah. So first of all, go to firsthomeiq.com, get on the mailing list, take the quiz. If you really want to um unlock your database and optimize all the first-time home buyers out of it, become an ambassador. And there's a link in a place, you know, there's weekly informational calls, there's lots of videos and content on it. But lean in, subscribe, get get on the list, follow the YouTube channel, listen to Kristen's. I can't remember who the most recent interview was, but she's always interviewing um super successful mortgage advisors. And then it's always about what are you doing right now to win with first-time homebuyers? And and then, okay, how are you doing that? Like, tell me some stories, tell me some strategies. So just lean in and participate.

Speaker 15:05

It was a super successful advocacy in Washington, D.C. First time ICU brought a bunch of loan officers out there. How do you how do you keep that momentum going? What's next?

Speaker 2 15:15

Well, we we had over 60 um mortgage people come as part of our delegate. Over 50 of those were actual producing active MLOs in their local market. We're gonna make that a year-round initiative on a state level. So every year we will take a big group to the national advocacy, but hopefully every month they'll there'll be a state or multiple states that are putting loan officers in front of legislators. And for any loan officer listening to this, your voice matters, numbers matter, and your brand matters. So be the loan officer that's not just complaining about affordability because it is an issue. Be the loan officer and create social media content around it. I've seen some just incredible content of loan officers walking in Washington, D.C. with the White House in the background or some monument in the background, and they're they're talking about how they're helping first-time home buyers. You'll get more loans and you'll be elevating the trust of your brand by being uh an advocate. So that's the goal year-round.

Speaker 16:24

Year 40, Dave, in the mortgage industry. Looking at year zero or year one or year two, Dave in the mortgage industry. What do you what do you wish Dave from year zero or one knew where you could tell him? And what what do you wish that the year 40 Dave, like what do you what kind of youthful wisdom do you think year zero wave could impart upon year 40 Dave?

Speaker 2 16:45

Well, first of all, I don't wish I would have known it because my ambition to be successful, my fear of not achieving a certain level of financial success, like if you work hard, if you work smart, if you put the best interest of your consumers there and you just obsess over that, it's all gonna be good. Like I didn't know it would like like there's a formula, there's a code to win in this business. And if you play the game and you execute the code, you win. Now, you know, are you gonna make a half a million dollars? Are you gonna make the kind of money that an F NFL running back makes? Like that has to do with a lot of different things. But for anyone who's new, like, man, win by noon, be a mortgage coach, uh, be someone that goes beyond the transaction, and and you're gonna make an incredible living in the mortgage industry. And I I don't know, but by the way, if you do the wrong things or you don't do the right things, you don't prospect daily, you don't win by noon, you can make minimum wage in this job and you know, and and and struggle. Those those are some some thoughts. And then by the way, I do have a uh a new loan officer playbook that I put out in LinkedIn recently. So check out one of my recent newsletter. It's uh it's called New Loan Officer Playbook for all you new LOs. If you just want to get a free my thoughts on how to how to how to get after it as a new guy.

Speaker 18:16

Is the code changing at all? Is the game changing at all? What's what's the the newest version of all this in the age of AI?

Speaker 2 18:24

Well, yeah, the the code is is absolutely changing. And so a couple thoughts is AI won't simply eliminate jobs, it's it's reshaping economic value of human expertise. I think if you do this right, AI won't just automate the commodity or the commodity experience. It'll trigger an emergence of just a whole new opportunity to be a great human being. You know, like my least favorite thing about being a loan officer was taking a loan app. And back in my day, it was a handwritten app that had to be typed. And then for decades, a loan officer had to take the app. A lot of the things that are the least like calculating income was a thing I did not enjoy. I made mistakes. I watched a lot of other human beings make mistakes. I mean, embrace the fact that uh calculating income, taking mortgage apps, underwriting loans, a lot of things. By the way, your mortgage coach total cost analysis can be created with AI and a technology. So, like a lot of these things that I didn't like doing, you you don't have to do. You just need to use them. And uh, and if you use them, life's like being a loan officer is gonna be bitching.

Speaker 19:41

Sounds like it will be. Dave, I really appreciate the time, man. You know that. And uh always a pleasure talking to you. Hopefully, I'll see you out there soon. Right on, bro.

Speaker 2 19:48

Appreciate the time together.

Speaker 1 19:52

All eyes are on Kevin Warsh as he leads his first Federal Reserve meeting this week, with markets expecting rates to remain unchanged, but closely watching his guidance on inflation, future policy, and the Fed's independence. Stronger job growth and elevated inflation have strengthened the case for tighter policy, but the Fed is expected to signal patience as much of the recent inflation pressure stems from energy prices and tariffs. The FOMC is also expected to maintain a wait-en-cy stance on future rate moves. Updated economic projections are likely to show higher inflation expectations, a slightly lower unemployment outlook, and a slight shift toward the possibility of future rate hikes. Today's economic calendar kicked off with May housing starts and building permits, which came in at 1.41 million and 1.17 million, respectively, both slightly below expectations. We've also received May import prices and export prices, which were in at 1.9% and 1.3% month over month, lower than expected, which is good news in this case. Housing data was always expected to be mixed with starts and building permits expected to hold on trend and point to subdued building this summer. Later today brings an auction for $13 billion of 20-year U.S. Treasury bonds. And we began Tuesday with agency MBS prices slightly improved from Monday's close, the two-year yielding 4.05, and the 10-year yielding 4.44 after closing yesterday at 4.47%. Let's wrap up with a joke and some housekeeping. I burnt my Hawaiian pizza last night. I should have cooked it at a low hot temperature. Thanks again to this week's podcast sponsor, TrueWork, the one verification solution to replace in-house waterfalls. Verify any borrower with a VOIE solution that automates the entire process to quickly deliver the most accurate and complete reports with broad GSC coverage. To learn more, visit Truework.com.