Odds are, anything you buy was transported using diesel fuel, the price of which has shot up after Russia banned exports of it, impacting farmers, trains, trucks… kind of nearly everything. Today is “Pie and Beer” Day in Utah, aka Pioneer Day, and having parades is costly. It was also celebrated last year, and the year before, and the year before. What were we talking about a year ago? We were interested in how FHA and VA wanted early payoffs when loans traded below par. At that point, JPMorgan Chase was very active in MBS issuance, and most banks preferred short duration products like HELOCs or ARMs while offloading 30-year MBS. There was a lot of talk about how IMBs were increasing production of non-Agency loans. Things haven’t changed too much… like Pie and Beer Day. But change is the name of the game on today’s Last Word at 10AM PT where Brian Vieaux, Kevin Peranio, Christy Soukhamneut, and Coby Hakalir break down the week's biggest market signals, agency developments, and industry storylines. The discussion focuses on what the industry got right, what it missed, and what lenders should be watching next. (Today’s podcast can be found here. This week’s ‘casts are sponsored by JazzX, the first true end-to-end AI platform built for mortgage. From application to closing, JazzX is a new operating model that helps you scale growth, boost productivity, and transform how your team performs. Today’s has an interview with Morgan Stanley’s Matthew Hornbach on identifying the risks that investors and the mortgage industry may be underestimating as the economy transitions into its next phase.)
Lender and Broker Software, Products, and Services
“Live Webinar: Close More Loans with Pennymac TPO’s Non-QM Bank Statement Program! Join Pennymac TPO for a complimentary, live webinar on Tuesday, July 28th at 10 AM PST / 1 PM EST as we take a deep dive into our Non-QM Bank Statement Program. Discover key program guidelines, learn how to use our bank statement analysis tools, and see how our dedicated non-QM credit team and innovative tech platform can help you qualify more clients with confidence. Don't let complex income scenarios hold back your pipeline! RSVP today, contact your Pennymac TPO Account Executive, or become a partner to learn more. We hope to see you there! (Equal Housing Lender, NMLS #35953)”
Truework, a Checkr Company, is the unified income, employment, and asset verification platform built for mortgage lenders, replacing slow, manual processes with fast and automated reports pulled directly from payroll providers and other authoritative data sources. Lenders see up to 50% cost savings on verifications, with faster turn times and higher accuracy. Trusted by 4 of the top 5 lenders in the US, Truework delivers verification results your team can rely on. Learn more.
Lenders looking to cut origination costs and speed up closings should mark their calendars for HousingWire's Demo Day on August 4. Blue Sage will be showing its Digital Lending Platform live, including its newly expanded AI suite that spans document analysis, workflow automation, underwriting support, and more, all built natively into the platform. If you're evaluating LOS options or just want to see what "AI in production" actually looks like versus "AI on a slide," this is worth 10 minutes. Register 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.
AI, AI, Oh…
AI is rapidly becoming an enterprise-wide risk management issue for mortgage lenders, making risk, compliance, and governance professionals central to ensuring its responsible use across loan origination, servicing, underwriting, fraud detection, and other core operations, writes Brian Vieaux in this week's #vieauxpoint. As regulatory expectations from the GSEs continue to evolve, lenders should proactively establish AI governance frameworks by identifying where AI is being used (including embedded and shadow AI), assessing risks such as fair lending, privacy, explainability, vendor oversight, and consumer impact, and creating repeatable governance processes. To help organizations build these capabilities, MISMO's August 24 AI Governance Workshop will provide hands-on training using its FRAME framework, equipping participants with practical tools to inventory AI use cases, evaluate risks, and develop a defensible governance program before regulatory requirements become more prescriptive. Read the full article here.
The industry's strongest performers use data to guide strategic decisions in real time, identifying emerging market opportunities, aligning products and talent with evolving borrower needs, and continuously adapting as conditions change, recognizing that sustainable growth comes not from collecting more data, but from building the discipline to act on it.
Waiting for AI clarity is a strategy, just not a winning one. One of the biggest misconceptions surrounding artificial intelligence is that organizations should wait for regulatory certainty before making meaningful investments. That certainty is unlikely to arrive in the way many executives hope. Federal agencies continue to refine their positions, states are pursuing their own approaches, and the relationship between those frameworks remains unsettled. The result is more overlapping regulation, where lenders can find themselves trying to satisfy multiple authorities that are solving the same problem from different perspectives.
While that uncertainty can feel paralyzing, it should not become an excuse for inaction. Financial institutions have operated through evolving regulatory environments before, and the organizations that emerge strongest are usually the ones that build thoughtful governance while the rules are still taking shape rather than waiting for every question to be answered. The objective is not to predict every future requirement but to create a decision-making process that can withstand scrutiny regardless of which regulator eventually asks the questions. That means AI governance should be viewed more as an organizational capability as opposed to a compliance checklist. Companies need to understand how AI is being used, document why those decisions were made, establish clear oversight, and continuously revisit those choices as both the technology and the regulatory environment evolve. Transparency matters not because it guarantees immunity from future enforcement, but because it demonstrates that decisions were intentional, measured, and grounded in consumer outcomes rather than blind enthusiasm for a new technology.
Mortgage lending has always required institutions to balance innovation with accountability, and AI simply raises the stakes on that responsibility. The lenders that will be best positioned over the next several years are unlikely to be the ones that waited for perfect regulatory clarity. They will be the ones that built adaptable governance, documented their reasoning, and treated compliance as an evolving conversation instead of a destination.
Information is abundant, but certainty remains scarce. Advances in artificial intelligence, credit modeling, servicing analytics, and secondary market execution have given lenders more data than ever before, yet each innovation introduces new assumptions, tradeoffs, and risks that require human judgment. Whether evaluating alternative credit scores, evolving Agency underwriting models, or the economics of retaining mortgage servicing rights, determining which signals deserve confidence and which remain unproven remains a challenge. Adoption lags innovation because markets ultimately demand demonstrated performance, not theoretical improvement.
As technology becomes more sophisticated, competitive advantage is shifting away from simply having better tools toward making better decisions with them. AI can accelerate analysis and uncover patterns, but it cannot fully account for changing investor sentiment, borrower behavior, regulatory shifts, or market context that ultimately drive execution. Recognize that models should inform decisions, not replace them, and that experience remains essential in distinguishing temporary market "noise" from meaningful structural change.
A rare policy window is opening for the mortgage industry as regulators and policymakers appear more willing to revisit longstanding rules that affect origination, servicing, affordability, and compliance. But meaningful reform will depend on whether the industry can provide clear, coordinated, and practical recommendations rather than broad complaints. Simultaneously, mortgage companies must navigate an increasingly complex risk environment shaped not only by federal regulators, but also by aggressive state-level oversight and a growing plaintiffs' bar that is often driving industry behavior as quickly as formal regulation. In this environment, participation matters: policy priorities emerge from real-world operational challenges raised by practitioners, and the organizations that engage constructively today will have the greatest influence on tomorrow's regulatory framework.
Several reform opportunities are gaining traction because they directly impact affordability and operational efficiency, including loan officer compensation flexibility, servicing modernization, QM, and streamlined refinance enhancements, TRID tolerance reforms, and scrutiny of rising third-party costs such as credit reporting. Meanwhile, AI is rapidly becoming the next major compliance battleground, with regulators making clear that institutions remain fully accountable for fair lending, disclosure, and consumer protection obligations regardless of the technology they use. As litigation continues to expand around areas such as TCPA, FCRA, and RESPA, the industry's most successful firms will be those that view this period not as a time for passive observation but as an opportunity to shape policy outcomes, strengthen governance, and position themselves for a regulatory landscape that remains very much in transition.
Thoughts on Oil, Bonds, and Rates
LendFriend Mortgage's President, Eric Bernstein, has heard the same assumption in nearly every borrower conversation this week: oil just spiked past $90 amid fighting near the Strait of Hormuz and a Houthi embargo threat, so mortgage rates must be headed higher. But that isn't necessarily true. The same crude spike that fuels inflation fear can just as easily fuel recession fear, 2008 proved this when oil hit a record high that July while the 10-year yield collapsed to record lows by year-end. As Bernstein explains, the real signal to watch isn't the price of oil itself but how the bond market reads the shock, and right now inflation expectations are holding steady even as yields climb. He unpacks what actually determines the direction mortgage rates take, and why locking decisions should be anchored to a borrower's timeline rather than a geopolitical guess.
Capital Markets
Even before markets learned of President Trump imposing new tariffs on imports from most major U.S. trading partners, U.S. Treasuries extended their selloff as surging oil prices and escalating U.S.-Iran tensions intensified inflation concerns, pushing yields on the 10-year note and shorter maturities to their highest levels since early 2025 while the 30-year yield approached levels not seen since 2007.
The markets are increasingly pricing in the possibility of a September Fed rate hike, reflecting rising expectations that energy-driven inflation could delay the path toward policy easing. Mortgage rates, already the highest in almost a year, rose for a third week: the average for a 30-year, fixed loan climbed to 6.58 percent, according to Freddie Mac. The rate was 6.74 percent a year ago.
Today’s economic calendar kicks off later this morning with Flash July S&P Global U.S. Manufacturing PMI and Services PMI. The report is forecast to show modestly slower growth as customers added less to inventories, and the re-escalation of the Iran conflict weighed on new orders. The surveys will likely report that input-price inflation picked up from June as prices rose for crude oil, gasoline, diesel, jet fuel, and other refined products.
That will be followed shortly thereafter by June New Home Sales, which are expected to post a modest rebound to 620k in June after two consecutive monthly declines (and a May reading of 580k). The housing market remains hampered by elevated mortgage rates, deteriorating affordability, and subdued buyer demand, leaving sales well below year-ago levels and pointing to another disappointing year for residential activity. Builders continue to rely on price cuts and incentives to support demand. We begin the day with Agency MBS prices slightly improved from Thursday’s close, the 2-year yielding 4.33, and the 10-year yielding 4.68 after closing yesterday at 4.70 percent; rates being lower on the thoughts that more tariffs will lead to a further slowdown.
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