After over 40 years in this industry and capital markets, I've learned that the best conversations are… with people. For example, a flyer could have been sent out yesterday instead of having a press conference to cover the VantageScore & FICO 10T news, but they chose to talk about it rather than tweet it. People! Next month, we're putting some of them on camera regularly. Four new shows are coming to the Chrisman network, covering the biggest topics in mortgage right now with the Capital Markets Wrap moving to Wednesdays. Registration is open for these live, monthly, and free shows: The AI Show (a monthly panel on AI in mortgage... What's working, what's coming, and what you need to know, first episode May 6 sponsored by JazzXai), Credit Committee (bureau leaders, credit strategists, and data experts on camera together talking about what's changing in credit, first episode May 20 and sponsored by Equifax), Recapture Wars (the recapture fight in mortgage servicing… Who's winning, who's losing, and what the smartest shops are doing differently, first episode May 27), and The Hill: A Marketing Show (starting Tuesday, May 12, one thesis per episode about mortgage marketing, one guest in the room to prove it or fight it, one hill worth dying on... the first editorial podcast in mortgage, hosted by Bri Lees). (Today’s podcast can be found here and this week’s ‘casts are sponsored by Experian Verify, a comprehensive income and employment verification solution for mortgage lenders. By uniting instant payroll data, permissioned access, and research verification in one seamless experience, Experian Verify helps lenders reduce friction, accelerate decisions, and confidently verify every U.S. worker. Today’s has an interview with Paddington Capital Management’s Paul Musson on how policymakers are repeatedly propping up asset prices at the expense of long-term economic health and fairness.)

Lender and Broker Products and Services

Heading to MBA Secondary & Capital Markets in New York? Meet with Planet’s Correspondent team to explore how non-agency, business purpose, and expanded credit products can drive new volume. As this part of the market continues to grow, Planet helps sellers compete with the same strong liquidity and pricing they rely on across agency and niche programs, including renovation and manufactured housing. That combination of breadth and consistency is supported by deep capital markets expertise, predictable execution from lock to funding, and full co-issue backed by consistent MSR pricing and fast funding, helping you open new paths to profitability. Connect with SVP Correspondent Sales Jason Mac Gloan (843-625-6869 or visit here to schedule your MBA meeting.

“As we enter Q2, Citi Correspondent Lending continues on a path of responsible growth and actively creating new opportunities for our sellers. So far this year, we've introduced several key enhancements, including expanded credit parameters and reduced suspense fees for our Non-Agency Jumbo program and acceptance of attorney opinion letters for Agency transactions. Just last week, we announced our acceptance of UAD 3.6 and Fannie Mae’s Value Acceptance + PDC and Freddie Mac’s ACE + PDR. Interested in learning more? Whether you're a current client or considering becoming an approved Correspondent, reach out to the Account Executive supporting your area. If you’ll be at the upcoming Secondary and Capital Markets conference, schedule some time with us! Prospective clients can also complete and return our Prospective Client Questionnaire. We look forward to sharing details about the opportunities Citi offers now and what’s on the horizon!”

“Newrez Correspondent continues to invest in enhancements that support your business and strengthen our partnership. For early adopters of UAD 3.6, announced earlier this month, we are now accepting submissions in the new format. In addition, we’ve streamlined the Non-Delegated Smart Series submission process by eliminating requirements that previously caused delays. Coming soon, we will begin accepting crypto assets for qualification on eligible Smart Series programs, launch an enhanced web portal to improve efficiency and roll out a direct lock feature with a key vendor to help save you time and money. We encourage you to connect with your Regional Sales Manager to learn more about these updates and more or schedule a meeting with us at the MBA® Secondary Conference in New York via the Conference page on our Correspondent website. Thank you for partnering with Newrez Correspondent, we greatly appreciate your business.”

With nearly half of hedged pipelines now carrying spec-eligible collateral, the spread between a standard TBA execution and a truly optimized pool delivery has a real margin cost. In MCT's newest blog post, MBS Pool Optimization 101, Paul Yarbrough and Jessica Visniskie explain how specified pay-ups work across loan balance, geography, LTV, and FICO attributes, detailing why volume constraints and waterfall logic make manual optimization nearly impossible at scale. The post introduces MCT's next-generation Pool Optimizer, which evaluates millions of assignment combinations in seconds to find the highest-margin execution path for every loan. As competition for originations tightens and lenders push to pass more value through to the consumer, spec execution is becoming a front-line margin tool. Join MCT's newsletter to stay current with the latest secondary market strategies and mortgage capital markets education.

Most AI in mortgage automates individual tasks but doesn’t change how work actually moves between roles - keeping costs high and transformation stagnant. The bottleneck isn't inside any one step, but is in the handoffs, the exceptions, and the decisions that span the entire loan process. JazzX AI digital assistants don’t just automate steps, they coordinate complex decisions end-to-end across processing, underwriting, QC, and servicing. Every finding is reasoned against your guidelines and overlays, continuously reassessed as new information arrives, and cited to the specific policy that produced it. Meaning, your team stays in control. The result: lower cost per loan, faster decisions, and higher loan quality. Book a demo to see how JazzX AI optimizes mortgage execution from end-to-end.

“How to buy tech and build differentiation! As a lender, does this sound familiar?: Buy the tech you need, try to build differentiation but get snagged because it’s still too hard to iterate most systems fast (esp systems of record), and when you do swap or iterate systems, it breaks other parts of your tech stack. At CI&T, we’re solving this with specialty AI projects. For scale lenders, we build integration layers over tech stacks with 100+ vendors to ensure fast iteration and vendor swaps. For nimble lenders who want to consolidate vendors, we build custom AI tools that replace select sales, underwriting, and customer experience software. And we do it all in record time because we specialize in mortgage tech. We’d love to share proven examples with you. Please reach out to Tim Von Kaenel and Dawn Svedberg to talk shop.

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.

Freddie Mac spread the word that it has begun accepting VantageScore 4.0 and that any lenders interested in using VantageScore 4.0 should contact their Freddie Mac representative or Customer Service at 800-FREDDIE. See the Credit Score Models and Credit Reports Initiative Playbook for more information. Fannie, on its part, recommended seller servicers check out the additional information and resources are available on Fannie Mae’s Credit Score Models and Reports Initiative page and FHFA’s Credit Scores page.

Truework’s Ethan Winchell on Lender’s Responsibilities

“The modern homebuyer is navigating a market defined as much by hope as by math. Recent survey data underscores just how central mortgage rates have become to the decision-making process; and more notably, how many buyers are anchoring their plans to the assumption that they will eventually refinance. It’s a mindset that feels increasingly common in everyday conversation: people are willing to stretch today because they believe tomorrow will offer relief. More than half of prospective buyers now expect to refinance into a lower rate, a signal that even modest rate declines can reignite optimism.

“But there’s a tension embedded in that optimism. Those who have spent years in the industry understand that refinancing is not a guaranteed solution; closing costs, timing, and the uncertain path of rates can easily erode the perceived benefit. And yet, the persistence of demand (despite a market where renting is often cheaper than owning) speaks to something deeper: the enduring pull of homeownership and the willingness of buyers to take calculated risks to achieve it. “That reality places a clear responsibility on the industry. If buyers are stretching financially and betting on future outcomes, lenders and institutions have an obligation to make the process as efficient, transparent, and affordable as possible. One of the most impactful ways to do that isn’t through headline-grabbing innovations, but through operational discipline. Specifically, reducing the manual friction that still defines much of the mortgage process. Behind the scenes, too many resources are consumed by chasing verifications, correcting errors, and reworking incomplete files. These inefficiencies don’t just burden lenders; they ultimately show up in the form of higher costs and more stressful experiences for borrowers.

“By automating income, employment, and asset verification, and embedding those capabilities directly into existing workflows, lenders can materially reduce costs, accelerate timelines, and improve accuracy. The result is not just a better process, but a more competitive offering: lower rates, faster closings, and a smoother path to ownership.

“This is where the conversation shifts from technology adoption to true integration. The industry does not lack tools; it lacks cohesion between them. When systems fail to communicate, they create duplication, delays, and unnecessary expense. But when verification processes are seamlessly integrated into loan origination and point-of-sale systems, the impact is immediate and compounding. Early-stage automation, such as verified preapprovals, gives lenders greater confidence in loan quality and pull-through while providing borrowers with clarity and credibility in competitive markets.

“More broadly, a unified, ‘waterfall’ approach to verification (focused not just on data retrieval but on delivering complete, usable information) can transform a historically fragmented process into a streamlined, cost-efficient engine. The implications are significant: meaningful reductions in operational expense, measurable improvements in completion rates, and ultimately a more sustainable model for supporting homeownership. In a market where buyers are already taking a long-term view, the industry’s role is to ensure that the systems supporting them are just as forward-looking.” Thank you, Ethan.

Capital Markets

Traders have been increasingly betting on reduced bond market volatility, as a two-week ceasefire between the United States and Iran has kept Treasury yields stable, with the 10-year yield trading within a 16-basis-point range. Analysts at JPMorgan have cautioned that the decline in volatility may be excessive, considering ongoing risks to inflation, the job market, and the ceasefire. Investors are showing resilience in the face of the ongoing U.S.-Iran war, with major stock indexes surpassing prewar levels despite potential energy shocks and geopolitical instability. The "buy the dip" mentality has driven significant market gains, particularly in tech stocks, and professionals note that near-term threats seem less significant alongside the strength of the U.S. economy and energy production. Some analysts warn, however, that the market's current momentum may be disconnected from reality.

Investors are increasingly grappling with the question of whether higher energy prices will drive sustained inflation or trigger demand destruction. In this environment, financial markets have settled into a cautious, range-bound posture, with 10-year Treasury yields anchored near 4.25 percent and volatility sharply lower following March’s turbulence.

Despite the broader “wait-and-see” stance, Wall Street has pushed to record highs on the back of strong earnings and geopolitical relief, even as investors largely looked past weakening consumer fundamentals and labor market concerns. The indefinite extension of the U.S.–Iran ceasefire, paired with a continued blockade of the Strait of Hormuz, has removed clear timelines or catalysts that investors had previously used to anchor expectations. Ultimately, as long as oil remains contained below more extreme levels and consumption holds steady, markets appear content to absorb the uncertainty.

While the absence of active military escalation limits immediate damage to energy infrastructure, the prolonged closure of a critical shipping route introduces persistent supply uncertainty, keeping oil prices elevated. This has reshaped expectations for the Federal Reserve, as earlier projections for rate cuts have diminished and attention has turned to whether weakening consumption and growth could ultimately force policy easing. With limited economic data and a Federal Reserve firmly on hold, (expectations were further muted after Kevin Warsh’s confirmation hearing), attention has shifted to equity performance and consumer strength, which continue to show resilience in the face of uncertainty. With oil still elevated and key risks unresolved, the market appears stuck in a range-bound environment, awaiting clarity on inflation, economic slowdown, or a meaningful geopolitical breakthrough.

The mortgage market has become increasingly driven by purchase activity and, more specifically, first-time homebuyers, who now account for a historically large share of issuance. This is particularly notable in Ginnie Mae pools, where they represent roughly two-thirds of purchase loans and nearly 70 percent of recent production, with conventional loans also seeing elevated first-time buyer participation. While credit profiles between first-time and repeat buyers are not dramatically different (especially in conventional space) performance outcomes diverge meaningfully over time, as first-time buyers exhibit higher rates of serious delinquency.

This is particularly notable in Ginnie Mae pools where the gap is both immediate and persistent, reflecting lower financial resilience and less housing equity experience. For investors and capital markets participants, these behavioral differences matter: repeat buyers tend to offer better credit performance and higher early curtailments (especially in conventional loans due to home sale proceeds), while pools concentrated in first-time buyers may reduce early prepayment risk but introduce greater long-term credit uncertainty, underscoring the importance of borrower composition in pool selection and pricing strategy.

Recent policy efforts, including executive actions from Donald Trump and commentary from Federal Reserve Governor Michelle Bowman, reflect growing concern over the structural shift in the mortgage market from bank to nonbank dominance, with banks now originating just 35 percent of mortgages and servicing 45 percent of balances compared to 60 percent and 95 percent, respectively in 2008.

Today, nonbanks control the vast majority of servicing (roughly 83 percent of conventional UMBS and 94 percent of Ginnie Mae pools) often concentrating in higher-risk borrower segments, which has heightened regulatory scrutiny. However, despite their diminished presence, bank-serviced loans remain highly valuable to investors due to their consistently slower prepayment speeds across rate environments and loan ages, offering meaningful prepayment protection and driving persistent pay-ups in specified pools; in contrast, nonbank-serviced loans exhibit faster and more variable speeds, reinforcing the scarcity and strategic importance of bank-serviced collateral in today’s MBS market.

Today’s economic calendar kicked off with jobless claims (214k, as exected, 1.821 million continuing). Later today brings the Flash S&P Global U.S. Manufacturing PMI and Services PMI, as well as Treasury activity that will be headlined by a 5-year TIPS auction. We begin the day with Agency MBS prices slightly worse than Wednesday’s close, the 2-year yielding 3.80, and the 10-year yielding 4.30 after closing yesterday at 4.29 percent.