“The seminar ‘How to avoid frauds’ is canceled. Tickets are non-refundable.” Mortgage fraud is alive and well in the United States. In Utah, Kouri Richins, 35, the Kamas mother who is accused of killing her husband and writing a children’s book about grief is facing 26 new felony charges, including five counts of mortgage fraud. It certainly is not confined to the U.S.: In Canada (remember Canada, whose citizens used to visit the U.S.?), a tragic tale unfolded with lost money and death. In lighter legal and regulatory news, the recent MBA Hawai’i annual conference attracts well-known industry experts, and a few weeks ago attendees heard Mitch Kider (Chairman and Managing Partner of Weiner Brodsky Kider PC), Brian Levy (Of Counsel to Katten & Temple, LLP and author of Mortgage Musings), and Bob Niemi, CMB (Director of Government Affairs at WBK) discuss regulatory and compliance issues. Lenders and vendors should know what they and other compliance people are watching (see below). (Today’s podcast can be found here and this week’s is sponsored by Figure, which is shaking up the lending world with their five-day HELOC, offering borrower approvals in as little as five minutes and funding in five days. Figure has hundreds of partners in the banking, CU, home improvement, and (of course) IMB space embedding their technology, giving borrowers an experience they will rave about. Today’s has an interview with Figure’s Michael Tannenbaum on stable coins, the latest happenings at Figure, and product proliferation in the mortgage industry as a result of borrower and investor demand.)

Products, Software, and Services for Brokers and Lenders

“NFTYDoor is the only true plug-and-play digital HELOC for Correspondents! What makes our correspondent program unbeatable? We handle 100 percent of fulfillment (application, processing, docs, funding, post-closing, customer support), all in your brand. You don’t need ops, compliance, or treasury teams. Fund it for less than a day, and we buy it the next morning, auto-magically! Compliance? Baked in. Support? White-labeled. Brand? Fully yours. Our platform runs on powerful APIs, easily integrated with your servicing or lead gen systems to prequalify prospects in seconds. With NFTYDoor, you run the front of house, we run the back. It’s fast. It’s scalable. And it’s built for you. See it to believe it. Contact your REMN AE, Matt Rohl, or Seth Cohen to learn more.

Lenders are still buzzing about the Encompass® automation strategies shared in a recent webinar with US Mortgage Corporation and LenderLogix. From cutting the clicks to reducing manual work, the session breaks down how US Mortgage uses Encompass® automation and LiteSpeed, LenderLogix’s point-of-sale platform, to streamline lending and build a more efficient tech stack. If you're serious about optimizing workflows and delivering a better borrower experience, this is a must-watch. Catch the on-demand replay now.

On today's episode of Now Next Later at 10am PT, Jeremy welcomes Frank Fiore, President of Matchbox LLC, to discuss how lending institutions can effectively manage change and adopt new technology. They'll explore strategies for successful implementation, common mistakes to avoid, and ways to stay competitive during digital transformation.

The Chrisman Marketplace is now “up and going,” 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.

Regulation and Compliance News

Whether it is weekly, monthly, or at every conference, experts are discussing compliance, regulatory changes, and how different governments view regulating residential lending and servicing. In terms of a broad scope, lenders should realize that the Trump Administration has not abandoned protecting consumers; the status is more nuanced than that. Talk from politicians slashing the Consumer Finance Protection Bureau’s budget continues, and it seems that 1,500 employees are still on some kind of leave.

But the CFPB carries on prosecuting cases and attending to instances where consumers are wronged. The things that the CFPB is looking at include debt relief, lending to members of the armed forces, and deceptive acts against students and the elderly. Colony Ridge (a fair lending case based on deceptive marketing to minorities and predatory lending) is still active, for example, involving deceptive marketing. The residential lending industry wants a fair CFPB Director and administration, pursuing clear cut violations and preferably not letting politics determine when consumers are harmed.

Lenders sometimes ask, “Why can’t they just…” Changes to a bureau like the CFPB can take a long time. The proposed rulemaking and comment periods can take many months, if not years. Unfortunately for lenders, it is very unlikely that the CFPB staff still actively employed have not worked with borrowers or processed and funded a loan. Therefore, the knowledge of our industry and borrower behavior is lacking, and with the CFPB gutted, writing new rules or changing old ones is all but impossible and thus “we have what we have.” So, lenders and vendors should be very well versed in existing rules and regulations. But not so fast…

Meanwhile, many states’ regulators are reminding mortgage companies that they are still the primary regulators but have also come to the conclusion that they have to be responsible for writing and enforcing rules, possibly adjusting nationwide statutes. A portion of this is because independent mortgage banks (IMBs) and other lenders are licensed at the state level. Many states have their own “mini-CFPBs,” “mini-RESPAs,” or what have you, and they will pursue any potential violations. Colorado has tried to address artificial intelligence (AI), Massachusetts junk fees, Ohio has gone after UWM over deceptive advertising which allegedly led consumers to believe that UWM-approved brokers are the best way to obtain financing. And prior to trigger lead action in Congress, Idaho, Utah, Arkansas have addressed abusive trigger leads.

State regulators at the NMLS Policy Summit continually reminded the audience that their main job has not changed, and they have teams of examiners out there now looking at their licensees. State regulators are worried about the “very large” or “mega nonbank entities” in mortgage and concerned that they are appropriately supervising this new level of entity. They are looking at the process to see if they need to adjust their practice and policy in how they regulate at a larger and nationwide level.

Given that 20 percent of home loans come from California, it is good to watch what is happening there. AB 130, a “budget trailer” bill that was amended last week to add several provisions including the flawed section from SB 681 which the California MBA opposed. Susan Milazzo, the CEO of the California MBA, wrote, “Essentially the bill could render certain subordinate liens unenforceable given the overly stringent compliance requirements attesting to the entire loan history and actions of both past and present mortgage servicers.

“The California MBA engaged immediately on AB 130, meeting with legislators, leadership, budget committee, and the Governor’s office. This is an extremely high priority for us, and we continue to work towards a resolution.

“It has also been rumored that servicers are poised to file a lawsuit against the state if this provision is passed with the budget. If this occurs, this could force renewed negotiations if the state prefers a legislative fix versus a legal battle. Every lender doing business in California, or in other states where similar legislation may be introduced, should be aware of what is happening. The California MBA relies on the support of our membership in order to remain a strong voice for the real estate finance industry in our state.” Thank you, Susan!

Capital Markets

Bonds finished last week with some selling, but nowhere near enough to keep yields throughout the yield curve from closing the week below the levels where they started; that’s good news for mortgage rates! What could potentially push rates higher? Well, there are plenty of tariff-related inflation worries. President Trump on Friday said that the U.S. had ended its talks with Canada due to its 400 percent tariff on dairy products and digital services tax. Uncertainty surrounding the inflationary impact of tariffs has solidified expectations that the Federal Reserve is unlikely to move rates until at least the September 17 FOMC meeting unless upcoming data presents a compelling case for earlier action (more on that in a second). Sure, lower rates would goose the economy, but it would also make it easier for the government to pay off its debt.

Broader macro forces are also shaping rate expectations. Easing geopolitical tensions and falling oil prices have reduced inflationary fears, supporting Treasury demand. At the same time, weakening consumer fundamentals (e.g., the lowest personal consumption since Q2 2020 and falling real incomes) point to emerging cracks in the economy. As the Fed maintains a cautious posture, the markets are pricing in only a 20 percent chance of a July rate cut, with most expecting action in September. Upcoming data, including CPI and Q2 GDP, will be important in determining whether rate cuts are delayed further or pulled forward. For now, the market remains balanced between hopes for easing and the need for clearer signals of economic deterioration.

Treasury yields remain near the lower end of their recent range as investors brace for this week’s wave of high-impact economic data culminating in Thursday’s June payrolls report. Chair Powell has underscored the importance of summer data, particularly the three inflation prints due before September, compared to just one prior to the July 30 meeting. The market is looking for signs of resilience or deterioration in key labor indicators. In this context, the upcoming ISM Manufacturing and Services reports, ADP employment data, and especially the Non-Farm Payrolls release are key for shaping the near-term monetary policy outlook.

In terms of last week’s data, new home sales fell to a seasonally adjusted annual rate of 623k in May, nearly 14 percent below April’s 722k annual pace. Inventory is currently at 9.8 months, and the median sales price is $426,600, roughly 3 percent above the May 2024 price of $414,300. Rising existing home inventory is slowing price appreciation and putting pressure on new home prices. Consumer spending declined 0.3 percent in May and spending from the third estimate of the first quarter GDP was revised significantly lower. The pullback May in spending suggests consumers were spending cautiously rather than reversing a pre-tariff spending bump from earlier in the year.

Economists remained concerned that a period of stagflation could still occur in the second half of the year. Last week’s data point towards flattening growth as consumers become less willing to accept today’s prices which is preventing some businesses from passing through increased costs due to tariffs. The expectation is that at some point businesses will have to pass on higher costs or accept thinner margins to maintain sales.

Markets this week are focused on Thursday’s June payrolls report, expected to show a modest 110k job gain, as investors weigh the potential for early Fed rate cuts. Even slight surprises in labor data have recently driven sharp moves in yields, with last month’s modest upside surprise triggering a Treasury selloff despite downward revisions. Although softening labor trends, like the highest jobless claims in a survey week since mid-2023, are reinforcing market expectations for weaker data, the ADP report, despite its poor correlation with private payrolls, is anticipated to rebound from last month’s weak print. A combination of a disappointing jobs report and a tame CPI reading could bring rate cuts back into play for July, especially as unemployment has climbed steadily for four months, hitting 4.24 percent in May, with forecasts pointing to another rise in June.

Today’s economic calendar consists of Chicago PMI for June, remarks from Atlanta Fed President Bostic and Chicago Fed President Goolsbee, and Dallas Fed manufacturing for June. Over the remainder of the week ISM manufacturing, construction spending, JOLTS, layoffs and ADP employment, the June jobs report, ISM services, international trade, and factory orders. Markets will get a break from coupon supply, though the Treasury will announce the mini-refunding details on Thursday. Markets are closed on Friday for Independence Day. We begin the week with Agency MBS prices are better than Friday’s close by about .125, the 2-year yielding 3.72, and the 10-year yielding 4.25 after closing last week at 4.29 percent.