Yesterday I headed west from the conference while my son Robbie headed south to the nCino nSight event. But while in Manhattan Dawn S. asked me, “How do you know if there’s a vegan at your party?” Answer: “They’ll tell you.” It’s not hard to find someone to tell you why the “Sell America” trade is rampant in the financial markets, impacting rates and borrowers, and reminding us that politics and lending are indeed entwined. The U.S. should curb its "ever-increasing" debt burden, said Gita Gopinath, First Deputy Managing Director of the International Monetary Fund, in an interview with the Financial Times published Tuesday. Recall that Moody's downgraded the U.S. credit rating due to rising government debt and interest payments, and as fiscal analysts raise concerns over Donald Trump's proposal to extend and expand tax cuts. Gopinath noted that recent developments, including a truce on tariffs between the US and China and a US-UK trade agreement, are positive, but said "very elevated" trade policy uncertainty continues to affect the US economy. The IMF lowered its US growth forecast in April, citing trade tensions as a significant factor. The nation's growing debt reflects a persistent imbalance between government spending and revenue, with no clear reversal in sight: regardless of party, no politician seems to be able to say no. (Today’s podcast can be found here and this week’s is sponsored by Xactus and its commitment to the continued transformation of the mortgage verification industry. Pioneering a new class of technology, “Intelligent Verification,” Xactus is redefining how the industry originates and services mortgages. Today’s has an interview with Finance of America’s Ashley Smith and Ryan Schmidt on why reverse mortgages deserve more attention from the broader mortgage industry and what’s holding back adoption.)

Software, Products, and Services for Lenders and Brokers

“Integrity Mortgage Cuts Tech Costs by 82 percent after switching to CANDID! Integrity Mortgage Corporation of Texas just made a bold move, and it’s already paying off. After switching from a well-known POS to CANDID, they’ve reduced their Point of Sale (POS) costs by 82 percent. By replacing fragmented systems with CANDID’s built-in POS, part of a fully connected sales and marketing operating system, Integrity unified their borrower experience and brought their sales and marketing teams onto the same platform for the first time. The result? A leaner, more efficient tech stack, a smoother client journey, and newfound budget to reinvest in growth. For lenders still juggling disconnected tools and runaway tech costs, the message is clear: there’s a better way. And it starts with owning the entire client journey, from first click to lifelong loyalty. Check us out at CANDID or email our Head of Sales, Brad Bieber.”

Your Borrowers Are Nuts. Every year, squirrels bury thousands of nuts to prepare for winter… But they don’t remember where they put them. Instead, they find just a fraction by chance. Sound familiar? Most loan officers retain only 20% of their borrowers for refinancing, letting countless opportunities slip through the cracks. It’s time to stop relying on luck. MMI’s Refinder pinpoints when past borrowers are ready for a cash-out, HELOC, or refi, helping you increase refinance retention by 30–50%. Layer on MonitorBase to gain predictive borrower insights like credit and equity triggers, then let Bonzo deliver the right message at the right time through automated, personalized outreach via email, text, voicemail drops, and more. You’ve already done the hard work of winning your client; don’t lose them to chance. Beat the squirrels at their own game. Watch your personalized Refinder video to see what you’re missing.

ACES Q4/CY 2024 Mortgage QC Industry Trends Report finds quarterly defect rate falls to 1.16% as annual loan quality improves. Q4 2024 marks the second-lowest defect rate on record while full-year results reflect a 9.5 percent year-over-year improvement despite lingering compliance and eligibility risks. “Continued volatility across the Legal/Regulatory/Compliance and Insurance categories, as well as within the Income/Employment Eligibility subcategory, highlights the importance of ongoing diligence in quality control efforts,” said ACES Executive Vice President Nick Volpe. Notable findings include the overall Q4 2024 critical defect rate was 1.16%, reflecting a 23.18% decrease from Q3 2024, on a year-over-year basis, only Income/Employment and Assets saw declines, Q4 2024, Legal/Regulatory/Compliance emerged as the leading defect category, and refinance defect share increased modestly, while purchase defect share fell. Read the full report.

“The Citi Correspondent Lending team would like to thank each client and prospective client who met with us at the Secondary and Capital Markets conference earlier this week. Those face-to-face conversations are invaluable, and we appreciate each of those opportunities. One of the more prominent topics during conference meetings was Citi’s Community Lending platform. If you weren’t able to attend the conference but would like to learn more about Citi Correspondent Lending, including our Community Lending platform, we’re ready to answer all of your questions! Our Community Lending platform offers multiple products/programs that provide a variety of underwriting options, premium pricing for eligible loans, and features that include closing cost assistance, low down payment requirements and no mortgage insurance. Whether a current or prospective client, reach out to the Account Executive supporting your location to learn more. Prospective clients can also complete and return our Prospective Client Questionnaire.”

“Exceptional non-QM sub-servicing exists at Planet! Want to reduce EPD and DQ spikes on your NQM portfolio? Planet’s NQM Sub-Servicing provides proprietary tools to ensure your loans perform! We handle the complexity with a cost-efficient solution. Rated by Fitch and S&P, Planet’s deep expertise safeguards portfolio performance. Want to know more? Meet with us at the IMN NQM Forum, June 5–6 in Dana Point, CA, or connect now at subservicing@planethomelending.com.”

Did you know in April, house prices nationally reached another record high, but the annual growth rate has slowed to its lowest level since 2012, underscoring the ongoing rebalancing in the market? It's true! In case you missed it, First American Data & Analytics recently released its April Home Price Index (HPI) report where you can receive the most current insights into home price changes at the national, state, and metropolitan CBSA levels. In the report, First American Chief Economist Mark Fleming says, “Persistently high mortgage rates have tempered demand, while increased inventory has boosted supply, dragging house price appreciation down. This normalization follows the unsustainable price growth seen during the pandemic. Although affordability remains a challenge, slower price appreciation is encouraging for potential home buyers as it lets their income-growth driven house purchasing power increase.” Download a full copy of their report to learn more valuable insights.

Meet with HomeLend during the IMN Non-QM Forum 2025, June 5–6, Waldorf Astoria Monarch Beach, Dana Point, CA. HomeLend brings Non-QM solutions to sellers looking for speed, flexibility, and execution certainty. Its lineup includes Full Doc, Bank Statement, 1099, Asset Depletion, ITIN, Foreign National, and Doctor loans, designed for today’s diverse borrower needs. HomeLend also offers 2nd Liens, including Closed-End Seconds and HELOCs, giving originators new ways to serve clients and capture more volume. On the high-balance side, the Super Jumbo program offers loan amounts up to $5MM with Alt Doc flexibility, while the Prime Jumbo program delivers highly competitive pricing on ARMs and 15-Year FRMs. Whether you’re looking to place flow, access specialized capital, or grow your product footprint, HomeLend offers a platform that helps sellers compete without adding internal overhead. Contact Jenine Fitter or Gerry Walker.

Webinars, Podcasts, and Training to end May

Join ICE for its monthly Mortgage Monitor webinar where you’ll gain critical insights into U.S. housing and mortgage market trends. The information presented in this preeminent, widely attended monthly webinar is based on the most current data available from ICE's vast mortgage, housing, and property data assets, including the largest servicer-contributed loan-level database in the industry. Learn how borrower demand, housing affordability, interest rates, available equity, and other factors may impact your lending strategies. Register for the upcoming complimentary webinar which will be hosted on Thursday, May 29, from 2 – 3 p.m. ET.

Today will be another episode of The Big Picture at 3PM ET. Rich Swerbinsky hosts a variety of guests. You can click here to register for today’s 3 PM ET show featuring THE Steve Richman!

Friday the 23rd on Last Word, Brian Vieaux, Christy Soukhamneut, Kevin Peranio, and Courtney Thompson discuss everything to the conference this week to affordability to the secondary markets.

Monday’s a holiday, but then Tuesday is a focus on origination with Mortgage Pros at 2pm ET and Wednesday has big-name interviews with Mortgage Matters at 2pm ET, presented by Lenders One.

Join Agile on May 28th at 11AM PT for Outsmart the Chaos: How Top Firms Are Fixing MBS Pooling. Agile’s Greg Vacura, Tawab Abawi, and Sam Farmer will walk through real-world scenarios, from managing dealer bids to simplifying swap allocations, and show how lenders can achieve operational efficiency through intelligent automation. This session will highlight the challenges lenders face today when managing MBS pool bidding and demonstrate how a centralized, automated, and more intelligent solution can improve efficiency and execution.

The House Passes the Spending Bill; On To The Senate

The House of Representatives early this morning passed the spending bill, not helping the overall financial situation of the United States but

MBA's President and CEO Bob Broeksmit, CMB, said, “The MBA is pleased that this bill includes numerous tax provisions that will help to increase real estate investment in communities and improve the financial outcomes of homeowners, renters, and our members’ businesses.

“We have worked diligently with Congressional leadership and committee members to preserve key elements of the 2017 Tax Cuts and Jobs Act. This includes the deduction for qualified residence interest, the up to $500,000 homeowner exclusion on the gain on the sale of a principal residence, Section 1031 like-kind exchanges, and the continued deductibility of business interest for real estate.”

The National Association of REALTORS Seemed Pleased.

“NAR’s advocacy team successfully secured its top five tax priorities in the bill, including an enhanced small business tax deduction, a strengthened state and local tax deduction, and protections for the mortgage interest deduction. The bill also makes the current lower individual tax rates permanent and increases the child tax credit, moves that could help increase homeownership access for more American families.

“In addition to NAR’s top tax priorities, the bill includes a broad range of other REALTOR®-supported provisions, such as enhancements to the Low-Income Housing Tax Credit, estate tax certainty, renewed Opportunity Zone incentives, and the creation of tax-advantaged child investment accounts that can be used for qualified expenses of the beneficiary such as first-time home purchases, all of which strengthen housing affordability, investment, and generational wealth.

Capital Markets

MCT announced a major breakthrough for generative AI in mortgage capital markets. Atlas, an AI advisor for MCT clients, made the first AI hedge recommendation on a live mortgage pipeline during the MBA Secondary Conference. “Atlas recommended that we sell $2MM of UM30 6’s and $250K of G2SF 5.5’s,” shared Steve Pruitt, CFO of Pike Creek Mortgage Services. “We executed both trades through a competitive auction on MCTlive! More than anything, we trust Atlas because we trust how it was built.” This marks the first time that AI has directly informed a hedge execution in the secondary mortgage market. Unlike tools that simply summarize reports, Atlas fully integrates into the core of MCTlive! Built to the highest standards of data security, privacy, and client trust, Atlas is setting a new standard for AI in capital markets. Read the press release to learn more about Atlas and what’s coming next.

RWLTrade.com: New Site for Non-QM Loan Trading! Whole Loan Capital, LLC announced the launch of RWL Trade, its new Non-QM trading platform for active institutional sellers and buyers of Non-QM loan pools. According to David Akre, the Founder and Principal of Whole Loan Capital, "RWL Trade is a low cost, fast and simple way for originators to increase liquidity and execution, while giving buyers access to sizable loan pools, market intelligence, and transparency that is often hard to find." The first pool on the site was $106 million of new production non-QM. Several other pools will be added soon as more originators are onboarded. Founded in 2010, Whole Loan Capital is an advisory and loan trading business headed by David Akre, an active industry participant with over 35 years' experience in the non-agency residential whole loan purchase, management and securitization market.

U.S. Treasury yields have been rising, as have mortgage rates, as investors react to proposed tax cuts and budget discussions that could significantly increase the national deficit. The bond market remains cautious, with yields nearing multi-year highs amid concerns over fiscal sustainability and potential credit rating impacts.

With little in yesterday’s economic calendar to influence market direction, attention largely turned to risk assets’ response to rising long-term Treasury yields. Historically, U.S. stocks have stumbled when 30-year yields cross the 5.0 percent threshold, as we saw in April, January, and October of last year. Investors are now questioning whether this time is different, and whether optimism fueled by a more tempered stance on trade policy has replaced fears of a recession. Presently, the market seems more focused on inflation and debt supply than on economic slowdown. Still, this sentiment could shift quickly, and if a ceiling on rates does emerge, it may be triggered not by bond dynamics but by a pullback in the stock market.

In this environment, technical indicators carry more weight than normal. The recent rise for the 30-year bond has broken through a key level of 5.03 percent, which could lead Treasury yields back into a higher range that we saw last October pre-election. Such a spike would likely coincide with sharp losses in equities, raising broader concerns about the impact on growth and borrowing costs. Unlike previous event-driven rate increases, the current somewhat gradual rise has given markets time to adjust, perhaps making it more sustainable. However, if this trend continues, the rising cost of government borrowing could eventually spark enough concern in financial markets to push lawmakers into reevaluating fiscal policy. Whether this will be enough to shift the GOP’s stance on spending remains uncertain.

Yesterday’s $16 billion sale of 20-year Treasury bonds saw weaker demand than usual, with the yield coming in at 5.05 percent, notably higher than the recent average of 4.61 percent. That reflects hesitation amongst investors about long-term government debt amid growing concerns over federal deficits and spending. The auction occurred in a market already under pressure, as long-term bond prices were falling (and yields rising) earlier in the day.

Prices continued to drop after the results, signaling investor discomfort with locking in yields at current levels. Although the bonds are now priced more attractively, especially compared to shorter maturities and past auction levels, there are worries about the size of government borrowing and lack of a near-term catalyst for lower rates. Still, the discount offered could draw in domestic and overseas buyers, potentially helping stabilize the market despite the broader fiscal unease.

Weekly jobless claims (227k, slightly lower than expected; 1.903 million continuing) and the Chicago Fed National Activity Index for April kicked off today's economic calendar. Later today brings S&P Global flash PMIs for May, existing home sales for April, KC Fed manufacturing for May, Treasury announcing month-end supply (consisting of $69 billion 2-year, $70 billion 5-year and $44 billion 7-year notes as well as $28 billion reopened 2-year FRNs) before a couple of auctions that will be headlined by $18 billion reopened 10-year TIPS, Freddie Mac’s Primary Mortgage Market Survey, and remarks from Richmond Fed President Barkin, and New York’s Williams. We begin the day with Agency MBS prices little changed from Wednesday’s close, the 2-year yielding 3.99, and the 10-year yielding 4.62 after closing yesterday at 4.60 percent.