The Office of the Comptroller of the Currency (OCC) reported on the performance of first-lien mortgages in the federal banking system during the first quarter of 2026. The OCC Mortgage Metrics Report, First Quarter 2026 showed that 97.7 percent of mortgages included in the report were current and performing at the end of the quarter, a slight increase from 97.6 percent in 2025. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Experian. From lenders and landlords to employers and consumers, Experian helps connect the housing ecosystem with the data and insights needed to make faster, confident decisions. Lead a smarter housing journey with Experian. Today’s has an interview with First Lien Capital’s Bill Bymel on how insurance challenges, AI adoption in servicing, and key leading indicators are shaping the next potential cycle of market distress.)

Broker and Lender Software, Products, and Services

With 30-year rates range-bound in the mid-6 percent range, credit unions selling loans on a best-efforts basis are forfeiting 35-40 basis points of conventional execution on every commitment. That's margin that could be returned directly to members as more competitive rates or reinvested into balance sheet strength. In MCT's new guide, A Credit Union's Guide to Moving to Mandatory Loan Sale Delivery, Chad Stone, Director of Northwest Regional Sales at MCT, walks through the operational prerequisites for moving to mandatory, how credit unions' structural advantages, including no warehouse line expense, portfolio optionality as a backstop, and higher member pull-through, make the risk profile more manageable than most leadership teams assume, and what board and governance approval requires. The guide also covers how lean secondary teams can run a hedged mandatory pipeline without expanding the capital markets function. Join MCT's newsletter to stay informed with the latest market commentary and mortgage capital markets education.

Most mortgage AI tools automate part of the process and leave your team to catch what gets missed. That doesn’t reduce risk, it just shifts it. JazzX AI takes a different approach, reasoning across the full loan lifecycle and validating data across documents to produce findings that are complete, explainable, and audit-ready. Every output is tied to a specific guideline, document, and data field, so your team can independently verify every decision. That’s the difference between automation that looks good upfront and automation that stands up under scrutiny. Request a demo to see how JazzX automates audit-ready decisions.

“Bayview’s Silver Hill Capital is excited to announce the launch of our new Medical Professionals (Med Pro) product designed for licensed medical professionals with strong income stability and earning potential up to 100 percent LTV ratios. Program highlights include, no borrower paid MI Required, DTIs up to 50 percent, Loan sizes up to $2M, Minimum loan amount $100,000 fixed or $300,000 ARMs, Minimum credit score of 700 and Primary residence only. Eligible Professional Occupations are limited to those with established predictable income trajectories and employment stability that support the underwriting of high LTV loans with projected income. Contact your sales coverage for more details. To learn more about this new program, join us for live upcoming trainings: July 9th at 2PM EST and July 16th at 2PM EST.”

Every generation has its workplace giveaways. Boomers had briefcases, Gen X had fax machines, millennials had MapQuest, and Gen Z has never known the joy of yelling at a printer that refuses to connect. LenderLogix’s latest blog looks at a shift mortgage lenders should be paying attention to: younger borrowers and younger loan officers are increasingly speaking the same digital language. With millennials making up a major share of mortgage inquiries and Gen Z continuing to enter the market, the tools lenders give their teams matter more than ever. The blog breaks down why digital-native loan officers are well-positioned for today’s borrower expectations and how mortgage technology can help lenders attract talent, improve borrower experience, and build for where the industry is headed. Read the full blog here.

The Chrisman Marketplace is a centralized hub for vendors and service providers across the 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.

Approaching Webcasts and Video Shows

Big Picture is today at noon PT, and features Kim Nelson, the founder and CEO of BankSouth Mortgage, discussing leadership, growth, innovation and AI, and the future of lending. “If I had one goal for the conversation, it would be for listeners to come away with a few practical leadership ideas they can apply, regardless of where they are in the industry or what the market is doing.”

Which Lenders are Going to Compete in the Future?

The foundation of U.S. housing finance remains remarkably resilient: Agency lending continues to provide liquidity, credit remains broadly available, and homeownership remains accessible by historical standards.

However, the economics of participation have changed. Originations generate less revenue, while the cost of compliance, technology, labor, capital, and third-party services continues to rise, creating a structural squeeze that cannot be solved by waiting for lower rates. Success increasingly depends on scale, capital strength, and the ability to attract specialized talent across disciplines ranging from capital markets and servicing to technology and risk management. As a result, consolidation is (no longer merely a cyclical response to difficult market conditions, but) the logical outcome of an industry where operating complexity is now a competitive differentiator.

The lenders best positioned for the future are those treating servicing, technology, and strategic investment as core business imperatives rather than optional enhancements. Servicing has reemerged as a stabilizing force, providing durable revenue streams and deeper borrower relationships at a time when refinance activity remains constrained.

Concurrently, rising costs (from credit reporting to regulatory compliance) are exposing inefficiencies that can only be addressed through automation, AI, and workflow redesign at scale. Beyond just technology, sustainable growth requires thoughtful integration of talent, disciplined capital deployment, and regulatory frameworks that support housing finance rather than add complexity without measurable consumer benefit. The defining challenge for mortgage leaders today is adapting their organizations to an industry where capital, talent, technology, and operational discipline have become the primary determinants of long-term competitiveness.

Non-Agency News

Whether you call it portfolio product, non-Agency, or private money in some cases, with the seeming lack of interest by the Agencies in borrower or property trends, other lending products have increased their market share. Older people in our business often recount the days of subprime lending and will argue that those loans had a valued place in the residential lending landscape. (Their eyes are prone to tearing up at the mention of pay-option ARMs.) Fast forward 20 years… The non-Agency “book” continues to perform nicely with securitizations occurring but also a good-sized portion going on to balance sheets. With $5-10 billion a week being originated, investors like Pennymac have entered the arena as liquidity is currently not an issue. Are DSCR loans from non-licensed originators a red flag? Stay tuned; much more below in the non-Agency section.

Non-QM investors are factoring in a 10-20 basis point loss but obviously hoping for much less. There is a lot more that goes into execution in the secondary markets. Be comfortable operating in the grey area underwriting sector, and dealing with exceptions… so many exceptions. These are not conventional transactions. Better at keeping up with a modern economy. Investors can have a great rate sheet, but can they buy the loan? Investors can easily customize what their guidelines are to arrive at the portfolio that they want. 50 percent of the loans and more have exceptions, that “don’t meet the black and white.” “The art of the exception.” It’s viewed as a short duration product. The path of HELOCs in the capital markets is different than that of closed-ends 2nds. The pricing on non-Agency is risk-based pricing. Who’s doing what?

Pennymac updated Jumbo LLPAs effective for all Best-Efforts Commitments taken on or after Wednesday, June 10, 2026. See Announcement 26-62 for details.

Effective with new loan applications dated on and after June 12, 2026, Pennymac has updated several non-QM requirements across all programs. View Announcement 26-65 for more information.

Effective for new loan applications dated on and after June 25, 2026, requirements for the Pennymac AUS Jumbo program are being updated to expand acreage eligibility, clarify credit score model requirements, and align property insurance guidance with GSE standards. See Announcement 26-73 for more information.

Pennymac updated non-QM LLPAs effective for all Best-Efforts Commitments taken on or after Tuesday, June 30, 2026. See Announcement 26-75 for details.

Newrez Correspondent updated the Closed End Second product, effective immediately for all pipeline and new applications.

Newrez Correspondent issued a product summary on its Smart Series as well as Underwriting Guide Updates on Non-Warrantable Condo Project, and Non-Permanent Resident Alien – Primary Residence.

Capital Markets

Prices down, rates up. Agency mortgage-backed securities (MBS) posted their first monthly loss in three months during June, with excess returns of -7 basis points. The loss reflects historically weak seasonal trends, persistent inflation concerns, and expectations for a more hawkish Federal Reserve, although the sector remains solidly positive year-to-date. Strong mortgage-backed ETF inflows, steady bank demand, and higher issuance helped support the market; performance was strongest in higher-coupon 30-year securities, particularly 6.0 percent coupons. Trading activity has remained subdued amid uncertainty surrounding the new Fed leadership and global events (both of which have been talked about ad nauseum). Looking ahead, seasonally challenging summer months, elevated inflation expectations, and a cautious Fed are expected to keep pressure on longer-term yields, supporting a defensive stance focused on capital preservation, shorter duration, and lower-premium mortgage pools.

MBS and U.S. Treasuries extended their recent losses to begin July but recovered slightly after Federal Reserve Chair Warsh reiterated a data-dependent policy approach and noted that inflation risks have eased (even though inflation remains above target). Markets faced a volatile mix of risks this week: lingering geopolitical tensions, a closely watched jobs report (more on that below), and thin holiday trading conditions; all increasing the potential for outsized moves in interest rates. While investors are currently assuming Middle East tensions will remain contained, any renewed spike in oil prices could quickly push Treasury yields higher. With many market participants on the sidelines ahead of the July 4th holiday, reduced liquidity could amplify market reactions, making even routine news a catalyst for larger-than-normal swings in rates.

On the data front, May's JOLTS report showed the labor market remained resilient, with job openings rising to a two-year high while hiring, quits, and layoffs stayed largely stable, reinforcing evidence of continued labor market strength. Consumer confidence, however, painted a more mixed picture, as households reported weaker perceptions of current labor market conditions despite easing inflation expectations and modest improvement in future outlooks. Weaker-than-expected June manufacturing data, including declines in both the ISM Manufacturing Index and S&P Global U.S. Manufacturing PMI, reinforced signs of moderating economic growth. Your takeaway? Competing forces of labor market resilience and softer consumer sentiment support expectations that the Fed will maintain a patient, data-dependent approach to monetary policy this summer.

Today’s economic calendar brought June employment data. Nonfarm Payrolls, expected +115k, were only 57k with some downward backward revisions -74k; the unemployment rate, expected to remain at 4.3 percent, was 4.2 percent, and hourly earnings were +.3 as expected, and +3.5 percent y-o-y. The expectation was for a labor market that remains stable but not inflationary, with wage growth remaining modest, with few signs of overheating. Due to the holiday tomorrow (and early bond market close at 2pm ET today) we’ve also received weekly jobless claims (215k). Later today brings May Factory Orders and weekly natural gas inventories. After the payrolls release, we begin Friday with Agency MBS prices are slightly better than Wednesday’s close, the 2-year yielding 4.13, and the 10-year yielding 4.46 after closing yesterday at 4.48 percent.