If you think that everything is great in the U.S. economy, maybe it’s not. At least in New Jersey. While many residents are frolicking on the Jersey Shore, Toms River schools, one of New Jersey’s largest districts, voted to file for Chapter 9 bankruptcy after refusing to raise property taxes another 12.9 percent. This comes after last year’s 9.3 percent increase, totaling a crushing 22 percent hike over two years for homeowners. When you talk about affordability or the Fed controlling inflation, think about issues like this.
State officials had ordered the district to either pass this budget or shut down all programs immediately. Over seven years, New Jersey’s school funding changes slashed $175 million from Toms River’s budget. Residents already pay some of America’s highest property taxes, with schools consuming over 50 percent of local tax bills in many towns. Meanwhile, multimillion-dollar home sales in NJ will be subject to a tax under the New Jersey “mansion tax” as part of a new bill that was passed in tandem with the state's $58.78 billion fiscal year 2026 budget.
Taking effect on July 10, this new bill shifts the burden of the mansion tax, as well as the state's controlling interest transfer tax for commercial properties, from property buyers to sellers. It also maintains the original 1 percent fee for home sales worth $1 million to $2 million, but now also implements higher fees for increasingly expensive properties. It seems everything is going up in cost.
Character, capacity, capital, collateral, and conditions
My guess is that the average mortgage person could not recite the 5 Cs of creditworthiness, but they are the backbone of lending, and not something to be taken lightly. But FHFA Director Bill Pulte’s tweet regarding a change in credit policy caused one industry vet to write to me saying, “Pulte’s clown tweet antics are going to have repercussions that he is not even aware of, especially when he said, ‘effective today.’ Given this apparent reckless tweet, does he even know how credit scores are used? No wonder lenders and MLOs are pushing borrowers into non-Agency products.”
Pulte posted the following message on his X account: "Effective today, to increase competition to the Credit Score Ecosystem and consistent with President Trump's landslide mandate to lower costs, Fannie and Freddie will ALLOW lenders to use Vantage 4.0 Score with no current requirement to build new infrastructure (stays Tri Merge)."
While the tweet is “official,” there is currently no detailed implementation roadmap from the GSEs. “Effective immediately,” or more likely some time in the future, Fannie and Freddie will allow mortgage lenders to use VantageScore credit ratings to assess borrower creditworthiness, in addition to or instead of traditional FICO scores. Unlike FICO, VantageScore takes rent payment history into account, if those payments are reported to either Equifax, Experian, or TransUnion, the three major credit bureaus. Unlike FICO, VantageScore can take rent payments into account and can generate a credit profile with just one month of credit history, as opposed to six for FICO.
Our Mortgage Bankers Association was quick to react. “This post was followed by several others touting the ability to now use rental payments as part of the credit evaluation process and other posts indicating pricing incentives for those that use both FICO and VS 4.0.
“This clearly raises several questions on various fronts. The MBA has consistently advocated for increased competition in credit reporting and scoring and wants to see modernization that will lower costs for consumers. That being said, any benefits that could occur from this change are only possible if this is implemented correctly. The MBA understands that numerous policy, operational, and systems details will be necessary before lenders can submit Vantage scores to the GSEs.
“Unanswered questions include does this announcement mean VS will be delivered with FICO or does this indicate that you can use either score? While FICO 10T was not specifically mentioned, does the addition of Vantage 4.0 also include the addition of FICO 10T? Is there a standalone Vantage LLPA grid if you use only Vantage? If there is a Vantage grid, and a lender uses both Vantage and FICO, which score do you use for the LLPA? What is the Vantage equivalent of FICO 620 for Fannie Mae eligibility purposes? Are the mortgage insurance companies prepared to accept and use Vantage 4.0 only? Are the GSE Capital rules and PMIERS able to convert a Vantage score into FICO equivalent for capital calculations? Will MBS investors pay up or discount MBS with high percentages of Vantage loans or Vantage only pools?”
(Put another way, credit reporting agencies and lenders wonder if these scores are technically deliverable today without issue? Will VantageScore 4.0 be incorporated into the loan assessment process, and if so, how will the score be selected (e.g., middle score methodology)? Can VantageScore be delivered in place of FICO?)
The MBA’s note continued. “None of these questions are answerable today by the GSEs. While the policy change was ‘effective immediately’ our inquiries to the GSEs and FHFA, as well as with LOS vendors and MIs, suggest that it will take some time before Vantage is available for use as a practical matter. MBA is engaged with FHFA and the GSEs on this issue and will work to address the numerous implementation questions that are necessary for this change and will continue conversations around credit reporting competition.
My email lit up. “What is he thinking: Most Loan Origination Systems (LOS) are not yet configured to support VantageScore 4.0, as the industry had been awaiting final direction before making updates.” “If I am a borrower, can I walk into a IMB or bank and demand they approve my loan based solely on a Vantage score?” “Did Pulte just make a promise that Fannie and Freddie have to keep?” “So FICO3 and FICO4 now have some competition, or will soon?”
Elliot F. Eisenberg, Ph.D., of GraphsandLaughs, LLC, wrote, “While Fair Isaac is now incorporating Buy Now Pay Later (BNPL) into newer FICO models, those newer models are not the ones lenders use for mortgage lending. Mortgage lending is still entirely based on earlier FICO models, so I expect the addition of BNPL to be a nothingburger, at least for mortgage lending.”
Employment, promotions, and transitions
“Take the Open Road to Investment Success This Summer! Logan Finance just launched our Open Road Series, featuring seven specialized mortgage solutions breaking conventional non-QM boundaries and transforming how TPO brokers and clients approach challenging loan scenarios. As summer rental demand peaks, our DSCR No-Ratio (Accelerate) and traditional DSCR products are helping real estate investors qualify using property cash flow alone, with no income verification required and loan amounts up to $2 million. Whether your clients need financing for luxury condotel properties (Horizon) or want to explore 5–8-unit opportunities, Logan's Open Road Series provides the premium non-QM experience that's earned us the title "the Agency of Non-Agency™." We're also expanding our team of experienced Account Executives who understand that delivering exceptional results requires both innovative products and true partnership. Ready to navigate your path to non-QM success? Contact us today to discover how Logan's Open Road Series can accelerate your investment lending business this rental season.”
ACES Quality Management announced the promotion of two key leaders on its in-house compliance team: Amanda Phillips, who has been named general counsel and executive vice president of compliance. Savannah Prout has been elevated to associate vice president of compliance. Double congratulations!
Movement Mortgage welcomed 20+ year vet Jeff Rose as Regional Director for California and Nevada where he will “lead growth efforts, support market expansion, and serve loan officers across both states. Congratulations!
The Chrisman Job Board is live, the go-to platform for employment opportunities across the mortgage industry. For employers, adding a job listing is easy. Simply create an account and drop in your existing application link, or forward the details to our team and we’ll take care of it for you. For job seekers, joining our Talent Community is completely free. Upload your resume to be visible to hiring companies across the industry and stay connected to new opportunities as they go live.
Products, software, and services for lenders & brokers
What’s moving the mortgage market? Find out in Optimal Blue’s Market Advantage report, now enhanced with nine new metrics that spotlight borrower behavior, rate lock trends, and secondary market activity. With integrated data from both PPE and hedging and trading platforms, Optimal Blue delivers a uniquely comprehensive view across the rate lock lifecycle. In June 2025, total lock volume rose by 2% MoM, driven by increased refinance activity. Non-QM lending represented 7.4% of all June rate locks, a share that has gradually increased in recent months as lenders and borrowers explore alternative qualification paths. Whether you’re tracking early-stage mortgage activity or evaluating loan profitability, the Market Advantage report equips you with the data to act decisively. Subscribe now to access the latest report and receive future editions, complimentary and delivered monthly to your inbox.
“PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), understands the importance of efficiency when it comes to meeting mortgage lenders funding requests. “Express Funding” is how we help our customers reduce the time needed to get loans funded quickly. Express Funding allows our customers to submit multiple loans for funding in one simple data upload, whether it is one loan or 100 loans. We have a growing list of 5,000+ approved closing agents, No Doc funding requirements and funding turn times averaging under 20 minutes! As a well-capitalized financially strong banking partner we give our customers confidence in an uncertain market. If you are interested in learning more about PlainsCapital Bank National Warehouse Lending please contact Deric Barnett, (469)955-6786.”
As Inside Out 2 reminds us, new emotions pop up when life gets real. Joy, Sadness and Fear all agree that down payment is the No. 1 roller-coaster inside buyers’ heads. At NAMMBA Connect, Down Payment Resource’s HFA Relationship Manager, Angel Romero, will show lenders how to turn those feelings into pure Joy. Catch her session, Empowering Inclusive Homeownership with Down Payment Assistance, Aug. 22, 3:00–3:45 p.m., Pine Level 1, and learn how 2,500-plus DPA programs (average benefit: $18K) are bridging historic gaps and building generational wealth for underserved buyers. Can’t wait? Book time with VP, Brad Cardwell, to see how DPR’s tools already include 43 fresh programs from Q1 2025. Either way, you’ll leave with the playbook for turning inside doubt into outside closed loans, before Disgust whispers you missed it. Schedule your meeting here.
Evocalize and Mutual of Omaha Mortgage launch partnership to transform mortgage lead generation for loan officers! Evocalize, the provider of patented digital marketing technology that powers many of the largest mortgage companies and real estate firms, including Realtor.com, Rate, CMG Financial, United Real Estate, eXp, Synergy One Lending, Embrace Home Loans, Atlantic Bay, Guild Mortgage and many more, is excited to announce its partnership with Mutual of Omaha Mortgage to transform the way its loan officers connect with consumers by effortlessly deploying precision-targeted marketing programs to attract, capture, and convert high-intent borrower leads across Google, Facebook, Instagram and other popular sites online. Read More.
Elevate your accounting function today! As an independent mortgage bank, your focus should be on growth, not accounting headaches. Whether you have no accounting expertise in-house or you have a new team with no mortgage experience, you can tap the Richey May Client Accounting and Advisory Services (CAAS) team for the support you need. This team is stacked with mortgage industry experts who can tailor your solution to meet your most pressing needs with no training needed. Need help transitioning to loan-level accounting? Need a fully outsourced function? You got it! Need industry training for your controller? We can do that. Contact Richey May today to get started on the solution that fits your business.
Verus Mortgage Capital is tapping into the strength and resilience of the non-QM market, where originator and investor demand continues to grow in 2025. To meet this momentum, Verus is launching a first-of-its-kind Down Payment Assistance program in the non-agency space. This innovative solution matches a homebuyer’s down payment, doubling their purchasing power without monthly payments. It lowers upfront costs and mortgage debt while making homeownership more attainable. When the home is sold or the investor’s interest is repurchased, both parties share in the future equity. Initially rolling out in California, Arizona, Florida, and Texas, the Down Payment Assistance program is designed to help lenders expand their reach and stay competitive in today’s market. To learn more, contact Jeff Schaefer, EVP of National Sales at Verus (202-534-1821).
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.
Capital markets: tariff news volatility has grown old
We saw more selling action in the bond market yesterday, a continuation of Monday’s action, with little change across the yield curve despite a relatively weak 3-year note auction and talk of more tariffs (and tariff letters) coming soon. July's Treasury auction series began with a $58 billion sale of 3-year notes, coming amid a bearish month that saw yields rise nearly 20-basis points since June.
While the issue priced 10-basis points richer than June’s auction, “relative value” wasn't so compelling given strong performance in surrounding maturities. Investors have shown a recent preference for concessions in 3-year notes, with most of the last nine auctions tailing. Yesterday’s auction followed suit, tailing by 0.4 basis points, as inflation concerns and Trump’s renewed tariff threats weighed on sentiment. Treasury yields briefly rose but reversed lower into the close.
President Donald Trump escalated trade tensions yesterday by targeting a new commodity (copper) with plans for a 50 percent tariff. Additionally, the White House confirmed a series of new tariff rates set to take effect on August 1, including 25 percent for Japan and South Korea, 30 percent for South Africa, 32 percent for Indonesia, 35 percent for Bangladesh, and 36 percent for Thailand and Cambodia. The original July 9 deadline has been pushed to August 1, but Trump made clear that this is a firm cutoff. He indicated additional notifications will be sent to other trading partners soon, with no further extensions expected for countries already notified or those about to be.
Consumer expectations for future inflation have returned to pre-tariff levels, according to the monthly survey data from the Federal Reserve Bank of New York. The June survey showed median expectations for consumer price increases one year ahead decreased for the second straight month in June, falling back to 3 percent. Estimates for annualized inflation three and five years ahead remained unchanged at 3 percent and 2.6 percent. A series of reports from the federal government over the past four months have shown inflation to be lower than that predicted by economists, who fear Trump’s trade war will reignite price rises.
Today’s economic calendar kicked off with mortgage applications increasing 9.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 4. Last week’s results included an adjustment for the Independence Day holiday. Later today brings wholesale inventories and sales for May, a couple of Treasury auctions that will be headlined by $39 billion reopened 10-year notes, and the minutes from the June 17/18 FOMC meeting. Overnight, the RBNZ was out with its latest monetary policy decision, keeping the cash rate unchanged at 3.25 percent. We begin the day with Agency MBS prices unchanged from Tuesday’s close, the 2-year yielding 3.89, and the 10-year yielding 4.41 after closing yesterday at 4.42 percent.
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