The FHFA announced that Fannie and Freddie will remove ‘certain’ homeowners insurance requirements which may reduce costs. But what are people saying about where their industry-facing priorities are? Both are focused on leveraging technology and reminding lenders of their existing products. For example, Fannie offers a construction to perm program, as does Freddie Mac, and has “MH Advantage” for manufactured homes; Freddie has something similar. Both have the problem of educating the market about their products. Undisclosed debt and occupancy fraud are still issues, and appraisal automation and moving to UAD 3.6 are big deals. Both have very good ARM prices for the first time in a business cycle… ever? Certainly our industry goes through business cycles, and on today’s The Big Picture at 3PM ET Bill Cosgrove, CEO of Union Home Mortgage, discusses leadership through changing market cycles, maintaining discipline, managing margins, and positioning lenders to stay competitive as the market evolves. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Ocrolus. Ocrolus is transforming the mortgage industry with AI-powered data and analytics, featuring cutting-edge tools for automated indexing, income analysis, and now automated conditioning. Ocrolus helps mortgage teams move at the speed of automation with the precision of human oversight. Hear an interview with Storable’s Holly Fiorello on how mortgage rate "lock-in" is reshaping housing mobility, borrower expectations, workforce relocation, and the future of homeownership, while examining whether new lending products could unlock significant pent-up housing demand.)

Products, Services, and Software for Brokers and Lenders

Less back-and-forth. More first-time-right verifications. Truework replaces manual verification waterfalls with a single automated platform, so underwriters, LOs, and ops can cut down the document chasing, conflicting numbers, and last-minute corrections. Lenders see up to 50 percent cost savings on verifications, with faster turn times, higher accuracy, and stronger R&W relief. Trusted by 4 of the top 5 lenders in the U.S., Truework gives your team verification results they can rely on. Learn more.

“Navigating today's market hasn't gotten any easier. In a market where margins are razor-thin, you can’t afford to let compliance be a "revenue-thief." Every hour your leadership spends wrestling with vendor oversight or shifting compliance regulations is an hour stolen from your bottom line. That’s where MQMR steps in as your operational shield. We don't just do audits. We act as an extension of your team, providing the exact expertise you need to get out of the weeds and focus on growth. By taking the heavy lifting of internal audits, servicing QC, and compliance oversight off your plate, we turn regulatory hurdles into a competitive edge. Stop managing daily headaches and start managing your future. Download the MQMR services overview to see how we can help your business move forward.”

“AI-NATIVE vs. AI-ENHANCED: In 2026, the main mortgage tech debate is about the role of AI. Do you rip and replace core systems with AI-native systems? Or can you find smart ways to enhance your current stack with AI? Our CI&T team helps lenders do BOTH successfully, whether it’s replacing/integrating an LOS in record time; augmenting a servicing system of record with voice AI to optimize call center teams; or using already approved/deployed MS Teams as an AI delivery engine for hundreds of LOs to run pipelines hands-free with their voices. AI opens up options for lenders at all growth and budget stages, so you DON’T have to overhaul core systems to innovate fast for your teams and customers. The AI era is much more iterative than that, and we’d love to share proven scale IMB and bank examples with you. Please reach out to Tim Von Kaenel or Dawn Svedberg to talk shop.”

“Is a standing call with your servicer enough for proper oversight? What does proper oversight entail? Ultimately, you are responsible for overseeing your subservicer, so you must understand what is expected of you and the key actions you need to take to maintain oversight and comply with regulations. Proper oversight includes an annual review and testing of the subservicer’s processes and procedures. Tune in to this video series, where the experts at Richey May answer the most frequently asked questions about subservicer oversight requirements. Whether you need a review or assistance navigating the general complexities of oversight, Richey May’s mortgage compliance experts can help. To learn more about our review process, check our 2026 schedule, or to sign up, contact us today!”

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 and Wholesaler Products

“Newrez Correspondent is excited to share several updates designed to help your business and our partnership grow. Buydowns are now permitted on rate/term refinance transactions, adding flexibility to support borrowers seeking a reduced monthly payment. Closed End Second transactions are now available in Tennessee, expanding access in a growing market. The Agency VLIP program has returned, restoring a valuable option to your product mix, and a new Direct Lock feature through a pricing vendor is coming soon to streamline pricing and execution. We also look forward to connecting, in person, in the coming months. Meetings with our Regional Sales Managers can be scheduled through our Correspondent websites Conference page for the New Jersey MBA in March, the Wyoming MBA in April, and the MBA Secondary Conference in New York. We can’t thank you enough for being a valued partner with Newrez. #MakingHomeHappen”

Discover your path to correspondent performance with Planet. From renovation and manufactured housing to USDA and co-issue backed by consistent MSR pricing and fast funding, Planet delivers the products and execution sellers need in today’s market. Flexible delivery and execution across flow, bulk, and co-issue helps you adapt to shifting conditions and protect profitability. Heading to NJMBA Regional Conference of MBAs? Connect with Regional Sales Manager Danny Hughes (203-981-5743), VP National Renovation Lending Jim Bopp (518-369-8242) or visit our website to learn more.

Verus Mortgage Capital helps lenders originate non-QM loans with confidence by delivering predictable takeout backed by proven capital markets execution. In a market where rates shift quickly and capital sources can step back without warning, execution risk is real. Verus is built to remove that uncertainty. Its dedicated focus on non-QM lending, combined with an established securitization platform and deep capital markets relationships, provides reliable liquidity across a broad range of programs. That translates to consistent guidelines, dependable loan purchases, and the confidence to keep your pipeline moving, even when market conditions change. From DSCR to expanded non-QM solutions, Verus delivers the stability lenders need to originate and grow. When your business depends on knowing where your loans will land, execution isn’t just important – it’s everything. Reduce execution risk and originate with confidence. Partner with Verus today. For more information, contact Jeff Schaefer, EVP – National Sales, at 202-534-1821.

“Asset Based Lending (ABL) is helping brokers stay competitive in a market where timing and execution matter more than ever. As rate expectations shift, ABL is focused on the fundamentals: faster file reviews, DSCR-ready underwriting, and a process built to keep transactions moving forward. We built our process around your pipeline, because when we’re competitive, you’re competitive. This March, ABL is offering you a limited time incentive. Brokers who submit DSCR loans that reach Conditional Approval by March 31 will earn an additional 50 BPS commission. That’s on top of ABL’s existing broker compensation structure, meaning you can earn total commissions of up to 4.5%. For brokers looking to expand DSCR production while improving margins, March may be the right time to bring those deals to ABL. For more information about ABL’s March incentive, click here.”

Builders are leaning into ARMs. Data from the Mortgage Bankers Association presented at the Optimal Blue conference shows that ARMs now account for 23.8 percent of loans offered by builders for new home purchases. If you work with builders, are your partners taking full advantage of ARMs paired with down payment assistance? Click n’ Close SmartBuy Down Payment Assistance products are designed for today’s purchase market, where affordability and cash to close often determine whether a buyer moves forward. SmartBuy pairs competitive ARM options with flexible down payment assistance that can be applied toward down payment, closing costs or prepaids. The result can mean lower initial payments and less upfront cash for buyers purchasing new construction. For lenders supporting builder communities or operating builder-owned mortgage companies, combining ARMs with SmartBuy may help convert more prospects into qualified buyers. To learn more, connect with your Click n’ Close Correspondent Account Executive.

STRATMOR Survey on Subservicing Trends

Subservicing continues to play an increasingly important role in the mortgage industry. As more lenders evaluate subservicing as a viable option, and with recent M&A activity reshaping the market, STRATMOR Group is conducting a short survey to better understand lender perspectives. The survey explores several key questions, including which companies the market views as leading subservicers, what factors matter most when selecting a subservicing partner, and which capabilities and offerings lenders value most. Input is welcome from lenders who currently use a subservicer, as well as those who own MSRs or are considering retaining MSRs in the future. The survey takes less than 15 minutes to complete, requires no internal data, and responses will help inform a broader view of how the subservicing landscape is evolving. Participants will receive a summary of the findings once results are compiled. Take the survey.

Mergers and Acquisitions

“T-Mobile and Sprint have finally agreed to a massive merger deal. I tried to join the celebration, but there was no reception.” Yesterday rumors were confirmed when it was announced that CrossCountry Mortgage entered into an agreement to acquire Summit Funding, Inc., a privately-held mortgage banker and servicer headquartered in Sacramento, California. There is no reason to think that mergers and acquisitions among companies involved in residential lending will stop in 2026. In fact, yesterday I was speaking to Garth Graham at STRATMOR (who has been involved in a number of deals this year already) and he expects that the full year 2026 M&A market will see more deals than in 2025 or versus the previous two years. This is not an M&A market of only weak companies selling.

Lender Q4 Profits

MBA VP Marina Walsh and the Mortgage Bankers Association told the industry that IMBs (independent mortgage banks) and mortgage subsidiaries of chartered banks reported a pre-tax net production profit of $674 on each loan they originated in the fourth quarter of 2025, compared to a net production profit of $1,201 per loan in the third quarter of 2025. “Net production profits averaged 17 basis points in the fourth quarter of 2025, an increase from losses of 4 basis points in the fourth quarter of 2024. Combining both production and servicing operations, 68 percent of mortgage companies in MBA’s sample posted overall profits in the fourth quarter of 2025, a modest increase from 61 percent one year ago.

"A rise in mortgage servicing rights (MSR) markdowns and amortization from payoffs also negatively impacted overall profits across production and servicing business lines in the final three months of 2025."

The average pre-tax production profit was 17 basis points (bps) in the fourth quarter of 2025, compared to a profit of 33 bps in the third quarter of 2025. The average quarterly pre-tax production profit, from the first quarter of 2008 to the most recent quarter, is 39 basis points. Total production revenue (fee income, net secondary marketing income, and warehouse spread) decreased to 340 bps in the fourth quarter, down from 359 bps in the third quarter. On a per-loan basis, production revenues decreased to $11,776 per loan in the fourth quarter, down from $12,310 per loan in the third quarter.

Total loan production expenses (commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations) decreased to 323 basis points in the fourth quarter from 326 basis points in the third quarter. Per-loan costs were about $11,100 a loan, the same as in the third quarter. (From the first quarter of 2008 to last quarter, loan production expenses have averaged $7,846 per loan.)

Servicing net financial income for the fourth quarter (without annualizing) was $13 per loan serviced, down from the $29 per loan serviced in the third quarter. Servicing operating income, which excludes MSR amortization, gains/loss in the valuation of servicing rights net of hedging gains/losses, and gains/losses on the bulk sale of MSRs, was $90 per loan serviced in the fourth quarter, down from $92 per loan serviced in the third quarter.

Unfortunately, including all business lines (both production and servicing), 68 percent of the firms in the report posted pre-tax net financial profits in the fourth quarter, down from 85 percent in the third quarter.

Capital Markets

Rates moved higher yesterday as a stronger-than-expected February PPI report and renewed volatility in oil reinforced inflation concerns just as Fed Chair Powell acknowledged that rising energy prices will add near-term price pressures. That combination has pushed rate-cut expectations further out, particularly as higher fuel and diesel costs begin filtering through transportation channels and into consumer prices, with history suggesting those effects tend to linger even after energy shocks fade. Sticky inflation and softening growth makes for a “stagflationary” mix, pushing yields higher and keeping sentiment cautious.

The Federal Reserve echoed that caution at its meeting, holding rates steady at 3.50 percent to 3.75 percent while offering little guidance on the timing of future cuts and emphasizing optionality in the face of heightened uncertainty. Updated projections to the dot plot reflected a modestly more inflationary outlook than previously, with PCE forecasts ticking higher and a growing share of policymakers expecting one, or no, cuts this year, even as growth and labor expectations remained largely intact. Powell struck a measured tone in his press conference that avoided signaling urgency. Your takeaway? The Fed remains firmly in wait-and-see mode as it balances sticky inflation with a gradually cooling economy.

Today’s economic calendar kicked off with weekly jobless claims (205k) and Philadelphia Fed manufacturing. Later today brings leading indicators for January, (previously delayed) new home sales, wholesale inventories and sales, Treasury announcing month-end supply (consisting of $69 billion 2-year, $70 billion 5-year, $44 billion 7-year notes, and $28 billion reopened 2-year FRNs) before auctioning $19 billion reopened 10-year TIPS, a buyback operation by the New York Fed in 20-year to 30-year coupons for up to $2 billion, Freddie Mac’s Primary Mortgage Market Survey, central bank decisions from the BoJ, Sweden’s Riksbank, SNB, BoE and ECB (all are expected to keep rates unchanged like the Fed and Bank of England just did), an open meeting by our Federal Reserve to discuss the proposals to revise bank capital requirements, and today is also 48-hour notification for class D MBS. We begin Thursday with Agency MBS prices worse .125-.250, the 2-year yielding 3.92, and the 10-year yielding 4.31, after closing yesterday at 4.26 percent.