Any lender or mortgage loan originator hoping for lower rates to spur business is learning that hope is not a strategy. “Rob, you’re always talking about inflation, so here’s an example of wage inflation: In the Bay Area we just paid a plumber $212/hour to install a kitchen faucet. Granted, he has decades of experience, but still…” The markets are “tariff-ied”: inflation is expected to increase, shipping is down, and growth has slowed… after all, someone has to pay for the increased cost of goods (although who knows what will happen given the back and forth in the courts). In addition, I have not heard a single person suggest that privatizing Freddie and Fannie would result in lower mortgage rates. Many believe that once released from conservatorship, Fannie Mae and Freddie Mac could need to hold more capital to absorb losses, the capital coming from increased guarantee fees charged to lenders. In addition, upon release, unless there's an “explicit guarantee” or backstop from Congress, investors may demand higher returns to account for increased risk. But Treasury Secretary Scott Bessent said that Freddie Mac and Fannie Mae wouldn’t be released from conservatorship if doing so puts upward pressure on mortgage rates/mortgage spreads. Investment manager Pimco, and others, await. (Today’s podcast can be found here and this week’s is sponsored by CreditXpert, the credit optimization platform that helps today’s top mortgage originators and more than 60,000 mortgage professionals qualify more applicants, make more competitive offers, reduce LLPA premiums, and close more loans. Hear an interview with CHLA’s Scott Olson on the rising costs of credit scores, the monopoly power of FICO, and how increased competition, from VantageScore to new credit scoring models, could reshape the mortgage lending landscape.)
Webinars and Training
Flyhomes this Thursday, June 5, for a live webinar and see how Flyhomes Instant Equity—a short-term home equity loan on the departing residence—helps your borrowers unlock their equity before they sell. It also helps your borrowers reduce DTI by excluding the departing residence’s debt - without monthly payments during the transition. As the simplest process in the industry, it requires no income docs, no asset docs, and no mortgage statements for loan approval. For the past 10 years, Flyhomes has been a pioneer and leader in innovative financial products, helping 5,000+ buyers purchase their next home and enabling LOs to close 1.2 more loans per month on average. Now through Q2, get 25 bps off origination fees on any Flyhomes Bridge Loan! (Terms apply) Sign up for the June 5 webinar to learn more about the product and its use scenarios, or book a call now to get started today.
Operations leaders! Looking to modernize your operations? Join Vesta and Truv on June 4 at 2pm EST to see how modern lenders are verifying income and employment. You’ll see how a powerful API integration delivers real-time income and employment data, reduces manual processes, and improves the borrower experience. With insights from Vesta’s Graham Young and Truv’s Richard Grieser, this session is a must for lenders looking to modernize operations. Register today to reserve your spot.
On today’s episode of Now Next Later at 10am PT, Sasha and Jeremy talk with Mike Yu, CEO and Co-Founder of Vesta, about what truly drives loan origination costs and where inefficiencies may exist. They'll explore whether cutting costs actually benefits borrowers and if reducing expenses is as worthwhile, or as simple, as it sounds.
Products, Software, and Services for Lenders
“Homeowners have over $33 trillion in equity and 82% of them have an interest rate below 5%. 62% have an interest rate below 4% and they don’t want to give up their low 1st mortgage rate to access their equity. Button Finance Home Equity solutions help your borrower’s access their equity and keep you as their trusted mortgage source. Catch up with Button Finance at the NJ MBA Conference June 2-5, 2025, at the Hard Rock Hotel & Casino in Atlantic City, and learn more about our innovative home equity solutions like allowing non-occupant co-borrowers on standalone lines and loans, our 12-month bank statement program and industry leading compensation options that allow you to make up to 5% of the loan amount. Reach out to your Account Executive today or email us. Robert Campbell (609)-694-8699, George Niemann (307)-578-6842, Brock McCoy (720)-653-5729, Douglas Smurthwaite (916)-934-3886.”
An octopus can shift color and texture in seconds to blend into coral, sand, even checkerboard tiles. Watch this. It’s seamless. Adaptive. Borderline magical. Tropos brings that kind of invisible intelligence to lending. No matter how siloed your systems are behind the scenes, borrowers get one cohesive, intuitive experience across loan types, channels, and tech stacks. They never see the seams. They just see you, showing up clearly at every step. Try Tropos and disappear the friction.
“Finally, a mortgage Point of Sale that’s configurable, not complicated. With the industry-first configurability of Maxwell Point of Sale, lenders can define workflows for any mortgage product, while configuring triggers and business rules to align the borrower experience to operational processes… no developers needed. Maxwell Point of Sale also features more than 60 third-party integrations, allowing lending teams to seamlessly connect with other vital pieces of their workflow, from credit and verifications to pricing and disclosures. It’s no wonder that Maxwell Point of Sale is the top ranked mortgage point of sale on Capterra with 4.8/5 stars. Want to learn more? Let us know and we’ll show you what Maxwell can do for you and your borrowers.”
“Plenty of POS platforms connect to Encompass®, but LiteSpeed is built for it. Developed by LenderLogix, an ICE Mortgage Technology Gold Partner, LiteSpeed enhances your Encompass® investment with a modern borrower experience that drives conversion, not confusion. Independent Mortgage Banks choose LiteSpeed because it lives where they already work, offers a superior branded experience, and comes with a suite of complementary tools that automate more of your process from borrower intake to pre-approvals and beyond. The result? A faster, more efficient workflow for your team and a seamless experience your borrowers actually complete. No implementation fees, no clunky handoffs, just better lending. See why lenders love working with us.”
Common Securitization Solutions: A Future Utility?
In a compelling open letter to policymakers, Jeremey Shiers spotlights Common Securitization Solutions (CSS)—a critical yet often overlooked pillar of the U.S. housing finance system. As debates around the future of Fannie Mae and Freddie Mac intensify, Shiers warns that failing to address CSS's role could lead to major disruptions in the $11 trillion mortgage-backed securities market. Proposing a transformative path forward, he advocates for CSS to become a regulated public utility, enhancing transparency, competition, and efficiency while ultimately lowering loan costs for American homeowners. Read the full article to understand why CSS could be the key to unlocking sustainable housing finance reform.
Conventional Conforming News
Despite the rise of non-QM and the persistence of FHA, VA, jumbo, and bond programs, Freddie and Fannie are still the standard. Who’s doing what, either product-wise or forecast-wise?
Freddie Mac has updated the Uniform Loan Delivery Dataset (ULDD) Phase 4a and Phase 5 specifications and guidance for the delivery of credit scores. In addition, Freddie Mac and Fannie Mae (the GSEs) have updated the ULDD Job Aid for UAD 3.6. For further information, please refer to the ULDD Phase 4a and Phase 5 Updates and Guidance Announcement.
Fannie Mae announced, opens new tab an AI fraud detection technology partnership with Palantir (PLTR.O), opens new tab on Wednesday and said it was in talks with Elon Musk-owned xAI as well. The mortgage fraud detection software will be trained on Fannie Mae data, and Palantir will comply with the company's controls, Fannie Mae CEO Priscilla Almodovar said.
On May 18, the 2025 area median incomes (AMIs) were updated in Desktop Underwriter®, Loan Delivery, and the AMI Lookup Tool. At the FIPS level, 93.1% of AMIs saw an increase, which means more borrowers can now meet the AMI requirements. This expansion helps more people access homeownership opportunities. AMI is also used to determine eligibility for certain loan-level price adjustment waivers. Lenders can use this information to assess income eligibility for HomeReady® and other loans with AMI requirements. Read the notice posted by Fannnie Mae.
Have you checked the AQM list lately? Fannie Mae posted the May Appraiser Quality Monitoring (AQM) list to Fannie Mae Connect™.
According to the May 2025 Economic and Housing Outlook from the Fannie Mae Economic and Strategic Research (ESR) Group, total single-family home sales are expected to close 2025 at 4.92 million units, with existing home sales accounting for 4.24 million of those units. Revisions to the home sales forecast were driven in part by the ESR Group’s lower expectations for mortgage rates, which it now forecasts to end 2025 and 2026 at 6.1% and 5.8%, respectively. The latest outlook also projects real gross domestic product growing at 0.7% in 2025 and 2.0% in 2026 on a Q4/Q4 basis. Visit the Economic and Strategic Research site at fanniemae.com to read the full May 2025 Economic and Housing Outlook, including the Economic Developments Commentary, Economic Forecast, and Housing Forecast.
Discover what Fannie Mae economists are projecting for home sales, mortgage originations, and other housing market activity in its Latest Forecast.
Pennymac updated Conventional LLPAs effective for all Best Efforts Commitments taken on or after Thursday, May 29, 2025 as announced in Pennymac 25-28.
Capital Markets
Last week, a pair of court rulings raised doubts about the legality of President Trump’s use of the Emergency Powers Act to justify tariffs, injecting new uncertainty into trade policy. Despite this legal uncertainty, consumer confidence edged higher in May after the U.S. and China agreed to ease tariffs, which helped lower inflation expectations. However, broader investor sentiment remains fragile (and that’s despite the S&P 500 posting its best May since 1990) as traders brace for a potentially more volatile June driven by continued tariff drama and geopolitical tensions.
Markets have reacted cautiously as mixed economic data and renewed trade tensions have weighed on sentiment. Last week, April’s personal income rose more than expected, but the weak Chicago PMI and slowing consumer spending pointed to an economic cooldown. President Trump reignited trade concerns by accusing China of violating the preliminary trade agreement, though he later expressed optimism about resolving the impasse. This combination of hardline rhetoric and conciliatory messaging helped steady equities, while bond yields flattened, partially due to month-end portfolio rebalancing.
Economic indicators continue to paint a mixed picture. Core Personal Consumption Expenditures, the Fed’s preferred inflation metric, rose just 0.1 percent in April, with year-over-year inflation slowing to 2.5 percent, the smallest annual increase in over four years. Imports posted a record monthly drop amid tariff-related disruptions. Housing data remained weak, with pending home sales falling 6.3 percent in April, although easing valuations may offer some relief for affordability. All told, the economy appears to be slowing modestly, but inflation remains "well-behaved," offering the Fed more flexibility should it need to shift policy.
This first week of June means the May employment report on Friday will highlight the economic calendar, but that will be preceded by manufacturing and services PMIs, construction spending, vehicle sales, ADP employment, trade, productivity/unit labor costs, and consumer credit. There are Fed speakers scheduled throughout the week, including Chair Powell speaking today. The Beige Book will be released on Wednesday. Outside of the Fed, the Bank of Canada and ECB will be out with their latest monetary policy decisions on Wednesday and Thursday, respectively. The MBS market will digest agency prepayments on Thursday evening, with Class A 48-hours next Tuesday.
Final May S&P Global manufacturing PMI leads off today/this week's economic calendar, and is due out later this morning. That will be followed by the ISM equivalent, construction spending for April, and (in addition to Fed Chair Powell) remarks from Dallas Fed President Logan and Chicago Fed President Goolsbee. We begin the week with Agency MBS prices unchanged from Friday’s close, the 2-year yielding 3.91, and the 10-year yielding 4.43 after closing last week at 4.42 percent.
Get Rob Chrisman Daily by Email
