“Twas the third of September, the day I’ll always remember… Wherever he laid his hat was his home, and when he died, all he left us was a loan…” Okay, maybe it was “alone.” Residential lenders aren’t alone out there. Our fates and fortunes often move in tandem with commercial lenders, so it is worth noting that the delinquency rate on Commercial Mortgage-Backed Securities (CMBS) for offices surged 62 basis points in August, to a record 11.7 percent, a full percentage point above the post-2008 peak of 10.7 percent, per the weekly commercial sector newsletter, the Kobeissi Letter. Returning to the “resi” sector, there is noise out there about the government declaring an “emergency” because of it. Lenders know the issues are complex. For example, Condotek offers a compliance report for condominium associations battling ineligibility for financing. These days, one never knows what will come out of the government, so we’ll keep our fingers crossed. (Today’s podcast can be found here and this week is sponsored by Gallus Insights. Mortgage KPIs, automated, at your fingertips. Gallus allows you to turn data from your various databases and systems into automated business intelligence and actionable insights. Hear an interview between Robbie and me on what the shift from summer to fall historically means for the mortgage industry.)

Products, Services, and Tools for Lenders and Brokers

As kids head back to the classroom, it is a good reminder that education fuels success not just for students, but for financial institutions as well. With U.S. homeowners holding trillions in tappable equity, demand for home equity products continues to grow. The real differentiator, however, is not only about rates or speed. It is about education. Lenders who invest in training their teams and guiding borrowers position themselves as trusted advisors, capturing opportunities others may miss. This new blog from FirstClose highlights strategies to help build a more confident front line, engage equity-rich homeowners, and drive long-term growth by turning knowledge into action. It is a quick, free read with practical insights for making the most of today’s home equity opportunity. Tappable equity is rising, and education is the key to capturing it. Read the full blog here.

“Approve loans faster, with confidence using Gateless Smart Underwrite®. Built for modern lending, our AI-driven platform transforms the underwriting process by reading and understanding borrower documents, verifying credit & assets against trusted sources, calculating income, and clearing conditions automatically. No more bottlenecks. No more stare and compare. No rekeying of data. Smart Underwrite helps deliver accurate, consistent decisions in hours, not weeks, so lenders can approve more loans, reduce risk, and give borrowers a smoother, faster path to “yes.” Scale your operation before you need to and future proof your business! This is underwriting without the wait. See it in action: book your demo today.”

“With a standard down payment of 3.5 percent, the Link Loan Powered by Essex Mortgage can help you tap into a significant market of underbanked and underserved consumers who do not qualify for traditional financing. The Link Loan provides immediate enjoyment of a home and a structured path to homeownership, with consumers building equity from day 1 using long term financing. Lenders are also reaching new markets and enhancing their current offerings with the Essex Mortgage Down Payment Assistance Program and its many competitive advantages. With up to 101.5 percent LTV, No Income Limits, No Maximum DTI, and No First-Time Homebuyer Requirement, it can help your borrowers unlock the doors to their dream home. Reach out to us today at productinfo@essexmortgage.com to learn more about these innovative product offerings and how we are expanding access to homeownership for borrowers across the nation!”

Mortgage professionals, here’s some news worth noting. Usherpa just supercharged its integration with Homebot, giving lenders new ways to engage prospects and clients, all without leaving the Usherpa platform. Now, users can send prospects, not just existing customers, to Homebot, opening early engagement opportunities that drive pipeline growth. Contacts sync automatically, eliminating repetitive manual updates, while real-time alerts appear on Dashboards, Contact Records, and the new Homebot Alerts Report, keeping actionable intelligence front and center. Daily alerts now include Homebot activity, ensuring timely follow-ups. Smarter automation means Homebot alerts can trigger Usherpa’s Pipeline technology, helping lenders act exactly when they should. For mortgage pros looking to maximize relationships and drive more closings, this enhanced, all-in-one integration makes staying ahead simpler, faster, and more efficient than ever. Check it out today, see how Usherpa + Homebot can transform your workflow.

As summer winds down and year-end priorities take shape, check the date of your last Anti-Money Laundering (AML) Independent Review. If it’s been a year or more, call Firstline Compliance now. AML Independent Reviews are more than a 12–18-month requirement; they protect your business and the country from financial crime, legal exposure, and reputational risk. Even with a smaller CFPB, the mortgage industry remains in the spotlight. State regulators examine AML programs, including Independent Reviews, and some require them for licensing. Your review should be specific to your business and provide actionable intelligence. Firstline delivers results grounded in the pillars of AML compliance, tailored to lenders’ risks. Clients receive detailed feedback to improve their business and AML Program that strengthens controls, improves risk management, and supports ongoing compliance. Contact Ashley Bradford at 469-717-4232.

Ever watch a mise en place relay, like this one where teams raced to peel garlic, dice onions, and shuck clams? The lesson’s simple: prep matters. That’s exactly how Friday Harbor is thinking about loan files. Friday Harbor’s AI-powered Originator Assistant now integrates with ICE Mortgage Technology’s Encompass LOS, giving originators the ability to cook up clean, complete, and compliant files from the very start. Developer’s Mortgage Company is already seeing the payoff: fewer underwriting touches, faster closings, and more time for originators to win business. Lenders on Encompass can now plug into Friday Harbor’s underwriting intelligence without leaving their LOS. That’s not just tidier—it’s a competitive edge. To learn more, visit fridayharbor.ai or catch the team on the road at the Pacific Northwest Mortgage Lenders’ Conference, MISMO Fall Summit, HousingWire’s Mortgage Bankers Summit, #IMNMortgageAI or MBA Annual.

The Chrisman Marketplace is 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.

Non-QM and HELOC Products

Symmetry Lending is excited to share that Phase 2 enhancements are now live! Standalone Pricing has been updated to better serve a wider range of borrowers. Standalone margins have been adjusted, with a decrease of .25%–.50% for loans at 80% CLTV or less, and an increase of .25% for loans above 80% CLTV. In addition, the minimum FICO requirement for Standalone loans has been lowered to 680 (primary residence with an 80% maximum CLTV). For non-owner-occupied properties, we now allow 2nd liens with piggyback and standalone options up to 70% CLTV—another way we’re opening doors for more scenarios. Finally, we’ve updated our lender origination/application fee to $499. These updates reflect our continued commitment to providing solutions that meet the needs of our partners and borrowers. Stay tuned for more enhancements ahead: Symmetry Lending!

“Non-QM Demand Is Growing. We’ll Help You Close More of It. According to Scotsman Guide, mortgage activity cooled in July while non-QM volume reached a new milestone, a clear sign borrowers are turning to flexible financing. Kind non-QM suite is built for this shift, offering solutions that help brokers meet evolving borrower needs. Our DSCR program lets investors qualify using rental income only, with up to 85% LTV, no limit on financed properties, and NO RATIO options. For self-employed borrowers, our Bank Statement program allows qualification with 12–24 months of deposits, no tax returns, and co-mingled accounts. And we don’t just offer programs: we train you to use them. Upcoming non-QM trainings: Sept 4: Non-QM Deep Dive: Know the Borrower, Build the Deal. Sept 18: Mastering Bank Statement Loans: A Non-QM Tool for S/E Success. Register here! Not yet a partner? Complete our Partner with Us form.”

PennyMac Financial Services, Inc. (NYSE: PFSI) (Pennymac) today announced that its Correspondent Group will launch a new suite of non-qualified mortgage (non-QM) products on September 22. “These products will expand access to flexible financing for borrowers who do not meet traditional agency criteria. The new offering includes four product types: Debt Service Coverage Ratio (DSCR), a product for real estate investors that qualifies a loan based on the property’s cash flow rather than the borrower’s personal income; and A+, A, A-, the products are designed for creditworthy borrowers who have non-traditional income profiles such as self-employed professionals or entrepreneurs.

“Pennymac’s non-QM offerings provide lenders flexibility on both borrower qualification and loan structure. Income documentation options include Full Documentation, Streamlined (12 months), Bank Statement, Asset Depletion, Asset Qualifier, 1099, and Verbal Verification of Employment. Eligible borrowers include first-time homebuyers, first-time investors, and non-permanent residents among others… Pennymac intends to retain servicing on all non-QM products. The initial rollout will be for delegated correspondent sellers on a best-effort basis. Non-QM products will also be made available through Pennymac TPO beginning in Q4 2025.

“To provide a deeper dive into the new offerings, Pennymac will host a live webinar featuring Alex Boand and Nick Pabarcus on September 10 at 11AM PT. Interested parties can register here. To learn more or get started, partners are encouraged to contact their Pennymac Account Manager or visit corr.pennymac.com for additional details.”

LOs and the Importance of a Database

Over the weekend I received an “MLO VieauxPoint” from Brian Vieaux, CMB, President & COO of FinLocker & Founding ‘Expert’ of MLO Live, suggesting to LOs that “winning starts with your database.”

“Most loan officers treat their database like a digital filing cabinet, names and emails waiting for the next rate drop or birthday reminder. The reality is your database is alive, constantly signaling when someone is ready for a meaningful conversation. Credit score changes, savings milestones, property searches, and even sudden spikes in app engagement are all real-time intent signals. When acted on quickly, they create opportunities to engage before the competition.

“The latest J.D. Power data shows 45 percent of borrowers now engage a lender at the very start of their homeownership journey, nearly half of them Gen Y and Gen Z. Borrowers who engage early report dramatically higher satisfaction, trust, and loyalty. Those who wait until after finding a home are 31 percent more likely to shop around.

“The takeaway? Big brands may control national marketing budgets, but local loan officers who organize their database and act on signals can win by showing up at the right time with the right message. Are you really seeing your database, or letting the biggest moments pass you by? Read the full article here: Winning Starts With Your Database.” Thank you, Brian! #VieauxPoint

Capital Markets

You’d think that during this holiday-shortened week, the focus would be on the first wave of high-profile August data, with the most attention going to Friday’s August payrolls report (with the headline expected to register around +75k). However, an Appellate Court ruled against most of President Trump's tariffs yesterday, deeming them invalid from September 16; it’s a case that will likely be escalated to the Supreme Court, so the final outcome remains unclear.

During the first half of this year, economic growth slowed substantially, as tariffs have raised taxes and generated a great deal of uncertainty. Yes, Trump has been quoted as saying that the goal of restoring American manufacturing justifies some "short-term pain," but he would prefer an inflation-wary Fed bail him out by slashing borrowing costs.

And yes, the tight monetary environment, partially due to Fed policy, is weighing on economic activity: July saw residential construction inch upward, but overall spending fell due to weakness in the nonresidential sector. Meanwhile, the ISM manufacturing index remained in contraction territory for a sixth consecutive month, despite minor gains in new orders and a drop in input costs. Economic data released yesterday showed another contractionary reading of the ISM Manufacturing Index for August (to 48.7 percent), though the reading was a touch better than expected. Separately, the final reading of the ISM Manufacturing Index (53.0) remained in expansionary territory while the Construction Spending report for July (-0.1 percent month-over-month) showed an unexpected dip in activity.

Fans of adjustable mortgages know that in August the yield curve steepened, driven primarily by a sharp 34 basis point drop in the 2-year yield, while longer maturities (particularly the 20- and 30-year bonds) barely moved, reflecting ongoing inflation concerns and investor reluctance to lower long-end rates. Despite expectations for an upcoming Fed rate cut, persistently elevated core inflation (currently at 2.9 percent for PCE and 3.1 percent for CPI) continues to challenge the Fed's 2 percent target and dampens enthusiasm for longer-duration assets.

Yields remain stuck in familiar ranges, with 2s near 3.65 percent, 10s just above 4.25 percent, and 30s approaching 5.0 percent, a level made more resilient by sticky inflation dynamics and uncertainty around new tariffs. Global influences, particularly surging UK gilt yields tied to budget worries, have helped reinforce a preference among investors for shorter-term securities, making it harder to justify extending duration.

Today’s economic calendar kicked off with mortgage applications decreasing 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Later today brings Redbook same store sales for the week ending August 30, July factory orders, July JOLTS job openings, Treasury activity that will be headlined by a buyback in 10- to 20-year coupons for up to $2 billion, and remarks from St. Louis' Fed President Musalem and Minneapolis Fed President Kashkari. We begin the day with Agency MBS prices unchanged from Tuesday’s close, the 2-year yielding 3.65, and the 10-year yielding 4.27 after closing yesterday at 4.28 percent.