It’s hard to believe that the COVID pandemic was six years ago with its increase in deaths. For our biz, we switched to “work from home,” among other changes. Along those lines, I received this note: “Rob, are you hearing about a concern among lenders about the liquidity of the non-QM sector? As in a repeat of March 2020 when many non-QM lenders suspended their programs due to volatile market conditions caused by the COVID-19 pandemic, hurting the ability to submit, underwrite, lock, or fund non-QM loans?” Personally, I don’t foresee that, but liquidity should always be discussion topic. In my 40+ capital markets years, I’ve never seen anyone hedge credit risk. Hedging a non-QM pipeline is a complicated question. If you think about the risk-free baseline, Treasury securities come to mind. For Agency loans, let’s say QM loans, there’s a spread above Treasury securities based on credit risk and prepayment risk. For non-QM loans, there’s another spread above QM loans, primarily based on credit but also loan size, geography, etc. Be careful out there! (Today’s podcast can be found here and this week’s ‘casts are sponsored by Optimal Blue. The only end-to-end capital markets platform built to power performance, precision, and profitability. Modern. Proven. Optimal Blue. Hear an interview with economist Elliot Eisenberg on trends seen across economic data and how high the bar has become for the Fed to justify easing if headline resilience persists.)

Products, Services, and Software for Brokers and Lenders

Prudent AI has launched Upfront Income, ending the income silo problem that's forced lenders to juggle separate tools for agency and non-QM loans. One platform now calculates qualified income for any loan type with same-day certainty. FHA, VA, USDA. Non-QM investor guidelines. Bank statement programs. Custom overlays. Upload any income document and get qualifying income instantly. You know at intake which loan products fit each borrower, not at closing. No app-hopping between systems. No reconciling results. No income surprises on day 28 that kill deals after you've invested resources. For agency loans, the platform auto-populates calculator fields for DU submission. For non-QM, it calculates to investor-specific guidelines at identical speed. Same workflow. Same accuracy. This means you process agency and non-QM applications with equal velocity. You serve complex borrowers without operational constraints. You scale without adding headcount. The difference: certainty at intake instead of surprises at closing.

Who actually owns your loan data? If you're on a legacy LOS, the honest answer is, “Not you.” Want to add a field? Submit a ticket. Update an integration? Budget for development. Change a screen layout? Get in line. Elphi gives you back LOS control. Manage your own data, workflows, integrations, and page layouts… no tickets, no vendor queue, no waiting. Lenders on Elphi have cut closing times by 50 percent, increased productivity by 40 percent+, and saved 8,000+ hours a year. "With Elphi, we are achieving record pull-through rates and cycle times." (Chris Wilhoit, Senior Director of Operations, Lima One Capital.)

HomeTrust Bank, a 100‑year‑old community lender, set out to solve a challenge familiar to many lenders: staying efficient amid fluctuating mortgage volumes. By targeting high‑ROI operational improvements, the team identified opportunities to streamline manual processes, improve access to loan data, and reduce repetitive tasks across operations. Through a phased strategy, HomeTrust adopted Encompass automation to eliminate manual service ordering, expanded remote access for loan officers through Encompass Web and introduced task‑based workflows to help processors and underwriters work more efficiently. These enhancements accelerated file reviews, strengthened consistency, and freed employees to focus on higher‑value work. The results speak for themselves: faster turn times, improved borrower responsiveness, and stronger staff scalability. HomeTrust’s experience shows how lenders can drive meaningful transformation by starting small, iterating often and empowering teams with the right technology. Read the full story here.

LoanCraft, a leading provider of income and asset-analysis technology for lenders, has been designated by Fannie Mae as an authorized Technology Service Provider for Income Calculator. The designation allows lenders using LoanCraft’s integration with the Fannie Mae Income Calculator to qualify for Fannie Mae’s Rep and Warrant Relief, reducing the risk that loans will be repurchased due to income calculation errors. LoanCraft’s integration combines its patented data-capture technology and warranty coverage with Fannie Mae’s calculations, embedding the Fannie Mae Income Calculator Findings Report within LoanCraft’s comprehensive income report. The LoanCraft system provides lenders with clarity on both warranted and potential additional income, while extending accuracy and compliance beyond the scope of the Fannie Mae income calculation. Fully integrated with Encompass and other loan-origination systems, LoanCraft’s proven technology streamlines data retrieval, validation, and documentation, helping lenders reduce risk, improve efficiency, and accelerate confident lending decisions.

The Chrisman Marketplace is a centralized hub for vendors and service providers across the mortgage 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.

Correspondent Investor Changes

Discover your path to Correspondent performance with Planet Correspondent. From renovation and manufactured housing to USDA and co-issue with consistent MSR pricing and fast funding, Planet delivers the products and execution sellers need in today’s market. Our lineup includes best effort, mandatory AOT, delegated, and non-delegated delivery options, backed by responsive underwriting and operational certainty. Meet us on the road this spring at the Connecticut MBA’s Northeast Mortgage Summit, Feb. 25–26 or NJMBA’s Regional Conference of MBAs in March. Connect with Danny Hughes (203-981-5743) or Jim Bopp (518-369-8242) to set up a meeting. Let’s talk about how Planet can help you grow in 2026.

“Newrez Correspondent continues to raise the bar, delivering meaningful value to our partners through an expansive, competitive product lineup built for today’s market. In 2025, Newrez achieved a 198 percent increase in non‑QM production. Non‑Agency volume, including CES and Jumbo products, remains a major focus for both us and our partners, and we are committed to strengthening our pricing and programs to meet our ambitious goals for 2026. Our dedication to this segment is designed to help you grow production, increase revenue, and exceed your business objectives. On the Agency side, Newrez Correspondent delivered impressive results as well, with Co-Issue Volume increasing by 181 percent, and we’re not slowing down. Whether you’re focused on Agency or Non-Agency opportunities, we have the solutions you need to succeed. To learn more, become an approved partner, or explore ways to deepen your relationship with us, we invite you to connect with our team at one of these upcoming events: TX Southern Secondary Conference | February 23–24 | The Westin Houston Memorial City, Houston, TX (Tom Winston), Northeast Mortgage Summit | February 25–26 | Foxwoods Resort, Mashantucket, CT (Amanda Johnson, Chris Nobile), Iowa Mortgage Association Spring Conference | March 24–25 | The Coralville Hyatt, Coralville, IA (Sarah Johanns) #MakingHomeHappen.”

“Citi Correspondent Lending’s commitment remains steadfast in 2026: to continue fostering opportunities for our Sellers’ business growth and expand our shared market reach. Recently we announced the first in a series of planned 2026 enhancements: expanded credit parameters to our Non-Agency Jumbo program, which include increased maximum loan amounts for both primary and second home transactions and an increased cash-out limit for refinance transactions. These enhancements are a direct result of our dedication to adapting our offerings to your needs and the evolving market landscape. We believe these changes will enable you to better compete and capture more opportunities in the Non-Agency Jumbo space. Connect with your Account Executive to learn how these changes, along with Citi’s comprehensive suite of lending solutions, align with your unique business goals. New clients are invited to complete our questionnaire. We look forward to sharing more on Citi’s 2026 initiatives with you soon!”

STRATMOR on Managing Expectations

In today’s market, the mortgage process doesn’t have to break down completely to damage the borrower experience. Often, it’s the moments of strain (delays, surprises, unclear communication) that leave the strongest impression. In STRATMOR Group’s latest CX Tip, Customer Experience Director Mike Seminari explores a critical question for lenders: when things get difficult, what will your borrower remember? The answer has direct implications for referrals, repeat business, and long-term brand equity. Seminari outlines why managing expectations, communicating with confidence, and guiding borrowers through friction points matter more than a flawless closing. For lenders focused on strengthening customer experience and protecting future growth, this is a timely and practical read. Read the full CX Tip here.

Fed Proposal: How Will It Impact IMBs?

Nonbank (non-depository) lenders now handle most U.S. home loans. Many big banks stopped focusing on mortgages after the 2008 financial crisis, because new rules essentially required them to set aside more money to cover potential losses from mortgages. Recall that in 2008, banks originated around 60 percent of mortgages and serviced about 95 percent of mortgage balances. As of 2023, banks originated 35 percent of mortgages and serviced 45 percent of mortgage balances, according to the Federal Reserve. But that could change “as Washington aims to get banks back into the mortgage market.”

Michelle Bowman, the Federal Reserve’s vice chair for supervision, outlined a plan that would reduce the amount of money banks are required to set aside to originate and hold mortgages. The plan would let banks hold less money to cover losses if a borrower puts down a bigger down payment. It would also change how mortgage-servicing rights are treated on a bank’s balance sheet, freeing up money for banks to grow their mortgage businesses.

MBA’s President and CEO Bob Broeksmit, CMB, noted, “For years, MBA has advocated for regulatory reforms that better align capital requirements with the actual risk profile of mortgage lending and servicing. We welcome Vice Chair Bowman’s remarks today outlining a path toward revitalizing bank participation in mortgage lending. Her recognition that aspects of the current capital framework have discouraged banks from competing for mortgage origination and servicing activity is an important step forward. A more appropriately calibrated approach, particularly with respect to mortgage servicing rights and mortgage loans, will strengthen banks’ ability to serve creditworthy borrowers while maintaining safety and soundness.

”The MBA is eager to review the forthcoming proposal and engage through the formal comment process, and we stand ready to work with the Federal Reserve and other regulators to advance a balanced framework that supports sustainable mortgage origination and warehouse lending, robust servicing capacity, and continued access to affordable home financing.”

Capital Markets

Mortgage rates are holding just above 6 percent, roughly 76 basis points lower than a year ago, and MSR values continue to show resilience despite rate volatility and broader economic uncertainty. MCT’s February 2026 MSR Market Update explains what this means for servicers, originators, and investors. The update covers trends in SRP pricing versus fair value, bulk MSR activity and consolidation, shifts in refinance and prepayments, and changes in non-QM and secondary mortgage markets. The post also provides updated fair value guidance and outlines what to expect as the industry moves toward the spring homebuying season. If you are evaluating MSR strategy, capitalization levels or portfolio performance in today’s market, this post offers timely insight to support your decisions. To stay up to date on recent MSR and market trends, join MCT’s newsletter.

With trading remaining subdued due to Lunar New Year closures in Asia (though Japan announced initial U.S. investments tied to its trade deal), Treasuries weakened yesterday after mostly stronger-than-expected U.S. data on housing, durable goods, and industrial production (there was also a weak $16 billion 20-year Treasury bond auction). Housing starts rose in November and December 2025, driven by gains in both single-family and multifamily construction, but overall activity was essentially flat for the year, down 0.6 percent from 2024. Permits, a better indicator of future activity, fell 7.4 percent annually, and multifamily permit growth lagged behind headline start gains. With mortgage rates treading water and builder confidence slipping again in February, a notable acceleration in construction appears unlikely in the near term.

Durable goods orders fell 1.4 percent in December due to a sharp drop in transportation equipment, but core orders excluding transportation rose a solid 0.9 percent, signaling steady underlying business investment. Business investment has appeared resilient over the past year largely due to a surge in AI and high-tech spending, which has masked weakness in traditional capital expenditures and non-tech output. However, this dynamic may be shifting. While the AI boom is expected to continue, there are early signs of broader investment stabilization as traditional capex and non-high-tech production begin to improve amid supportive tax incentives and expanding financing appetite. Accordingly, industrial production beat expectations with a 0.7 percent gain in January, driven by the strongest manufacturing growth since February 2025 and higher utility output.

The direction of monetary policy is very much up in the air after January FOMC Minutes revealed “several” policymakers suggesting the central bank is open to potential rate hikes if inflation stays above target. Since the January jobs report was stronger than expected and PCE inflation is forecast to hold above the Fed’s target, the central bank will likely hold rates steady until Chair Powell’s term ends in May. It could also put the Fed on a collision course with President Trump and his handpicked Fed Chair successor to Powell (Kevin Warsh). Conversely, if the Fed is much more aggressive with rate cuts than the market is currently pricing, heavy recent buying of call options on futures of the Secured Overnight Financing Rate and Treasury note and bond futures would profit from a rally.

Today’s economic calendar is already underway with the previously delayed advanced indicators, and trade deficit for December ($98.5 billion, imports +3.6 percent), as well as weekly jobless claims (206k, less than expected; 1.869 million continuing claims) and Philadelphia Fed manufacturing. Later today brings pending home sales for January, leading indicators for December, and Freddie Mac will release its Primary Mortgage Market Survey. Treasury then announces month-end supply consisting of $69 billion 2-year, $70 billion 5-year and $44 billion 7-year notes and $28 billion reopened 2-year FRNs before auctioning $9 billion 30-year TIPS and conducting a buyback in 5-year to 7-year coupons for up to $4 billion. And we will also receive remarks from four Fed speakers: Atlanta’s Bostic, Vice Chair for Supervision Bowman, Minneapolis’ Kashkari, and Chicago’s Goolsbee. We begin Thursday with Agency MBS prices roughly unchanged from Wednesday’s close, the 2-year yielding 3.47 and the 10-year yielding 4.10 after closing yesterday at 4.08 percent.