Here in San Antonio, TX, interest rates are obviously part of mortgage event discussion. (On today’s The Big Picture Guild’s David Battany will be discussing rates and recent developments impacting them with Robbie C. and me.) Here’s what happens when you mix campaign promises, mortgage rates and the markets. Texas is a border state, obviously impacted by changes in immigration policy, especially when it comes to employment. Last Friday’s employment data showed strong job growth, but overall, a muddled picture. For example, the hiring rate is very low, and hiring is concentrated in restaurants, bars, and health care. The “worry” driving rates is on the inflation side. The U.S. Federal Reserve is likely on hold for the September meeting, given current data, and on hold in October given the meeting is a few days before the mid-term election. Our Mortgage Bankers Association recently moved its mortgage rate prediction higher and brought down 2026 volume and unit predictions and estimates that 2027 is expected to be close to this year’s production. Meanwhile, lenders are acting. Ryan Grant with NEO Home Loans, for example, wrote to say that the company created an assessment for mortgage professionals to take that helps them better understand the opportunity to take a new path in origination. “To date, we have had 500+ mortgage professionals take this assessment. Here is the quick 10-minute YouTube video that explains what we have created and why it’s so important.” (Today’s podcast can be found here. This week’s ‘casts are sponsored by NFTYDoor, the MLO's favorite HELOC platform. A broad buy box and hands-on mortgage expertise mean more loans close, faster, for banks, credit unions, and brokers. Clean files close in as little as zero days.
Broker and Lender Products, Software, and Services
“Does your subservicer oversight actually hold up under review? Some lenders rely heavily on subservicer reporting and attestations, but still lack a clear, documented, independent validation of how controls are being executed day to day. That can create real exposure with regulators, Agencies, and GSEs. Firstline Compliance is performing an independent subservicer oversight review of Servbank, N.A., and will be assessing its compliance program and adherence to regulatory requirements, as well as providing optional targeted file review for clients to validate actual and historical performance. Our team understands what effective oversight looks like in practice because we’ve worked through the operational, compliance, and examination challenges tied to mortgage servicing relationships firsthand. The result is stronger oversight, better visibility, and documentation you can confidently defend. Contact Ashley Bradford or 469-717-4232 to learn more.”
What if you could modernize execution without rebuilding your technology stack? JazzX AI was built for exactly that purpose. Rather than replacing your LOS, CRM, document systems, pricing engines, verification providers, or third-party services, JazzX sits above them as a System of Intelligence - an AI-native execution layer that orchestrates work across the mortgage lifecycle while preserving the systems you've already invested in. The result is a modern mortgage operation that becomes more adaptive, intelligent, and efficient without the cost, risk, and disruption of rip-and-replace initiatives. Want to see it in action? Book a demo with our team.
“The MBA Annual Convention is just around the corner, and the Citi Correspondent Lending Team wants to connect with YOU in Chicago! This event is a great chance to learn about recent developments and new opportunities and discuss how these, in combination with our full product/program suite, can help drive growth for your business. If you're attending this event, whether you’re a current or prospective client, schedule some time to meet with the Account Executive supporting your location to explore how we can partner for success. Not making it to Chicago this year? No problem! Let's still connect before year-end to discuss how we can help elevate your business in 2027. Prospective clients can also easily get started by completing our Prospective Client Questionnaire.“
With 30-year mortgage rates pushing back toward 7 percent, Treasury yields near three-year highs, and inflation concerns keeping the Fed’s next move uncertain, lenders don't have margin for reactive decision-making. In MCT’s recent case study, How Direct Mortgage Loans Built Steady Profitability and Controlled Growth with MCT, Chris Naylor, CRO at Direct Mortgage Loans, shares how they've spent over a decade building a secondary marketing function around accurate data, consistent margins, and a hands-on capital markets partnership designed to support disciplined growth. With MCT’s lock desk, full-service hedging, EBX, and MCT Marketplace supporting the secondary desk, Direct Mortgage Loans can identify where markets are competitive, find profitable business to win, and expand its investor network. In a market where every basis point matters, the case study offers a practical look at how consistency on the secondary desk can become a strategy for profitable growth.
“The 2026 Encompass ROI Study is out, and the results are worth a look. MarketWise Advisors conducted independent research and found that Encompass clients are reporting up to $1,154 in savings per loan. On average, they're closing 15.5 percent more loans without adding staff and seeing a 7.53x return on their technology investment. We break down where the biggest gains are coming from and why. See the data now.
Meet the enhanced Covius Settlement Services! Covius Settlement Services now brings origination and home equity title services together as one unified solution, built to move loans faster, with fewer touchpoints and greater accuracy at every step. Built on more than 100 platform integrations across major POS and origination systems, Covius helps lenders process more loans, faster and more accurately, while reducing risk and ensuring compliance at every turn. Whether you're managing purchase and refi volume or growing your home equity book, our connected, tech-enabled solution can handle it all. Meet with Covius’ Andy Schafer at ACUMA's upcoming “Make Your Mark” Annual Conference September 20-23 in Las Vegas and learn how Covius Settlement Services can help optimize your mortgage workflow.
Affordability pressure doesn't disappear when the loan closes. It comes back later as repurchase risk. Your borrowers are stretched, leaving less room for errors in the file. Truework, a Checkr company, verifies income, employment, and assets before you close, replacing error-prone processes with fast, automated reports pulled directly from sources. Lenders see up to 50 percent cost savings on verifications, with faster turn times and higher accuracy. Learn more.
Chrisman Demo Day is a free perk for all Chrisman Marketplace members. If you're a technology or service provider and haven't joined the Marketplace yet, reach out to Jake Perkins at info@chrismancommentary.com to learn more.
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.
Financing Tools
“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.”
“Independent mortgage bankers need flexible capital, efficient execution and partners that understand how warehouse financing and correspondent lending work together. Western Alliance Bank’s Specialized Mortgage Services Group brings more than 17 years’ experience helping mortgage banking clients navigate those needs with mortgage warehouse lending, MSR financing, note financing, treasury management solutions and whole loan trading for scratch-and-dent loans (send bid requests to SnD@westernalliancebank.com). Together with AmeriHome Correspondent, we support both delegated and non-delegated sellers through a more connected relationship. Thank you to everyone who joined us at the All-Attendee Party during the California MBA’s 2026 Western Secondary Market Conference. We were proud to once again co-host the event as a conference sponsor and President’s Council sponsor of California MBA. Contact the Western Alliance team or the AmeriHome team. Western Alliance Bank, Member FDIC.”
Conventional Conforming Changes
Providers of private mortgage insurance are fully prepared for the credit score transition to VantageScore 4.0, according to Seth Appleton, president of U.S. Mortgage Insurers, a trade group. He told Inside Mortgage Finance that it’s critical for lenders to be able to identify which credit score model was used when they transmit loan data to a private MI. The key is integrating the technology with the new guidance tied to private mortgage insurer eligibility requirements set by the government-sponsored enterprises. “Some lenders have their own technology integration platforms and can manage those integrations themselves,” Appleton said. “Others go through third parties; so, I’m sure, as the rollout gets expanded, there will be additional work with those third parties.” He added the capital impact of the PMIERs guidance from the GSEs for VS4 will be minimal. “All of the MI companies are holding billions of dollars in excess of the minimum required assets under PMIERs,” he said.
Meanwhile, forgetting that investors’ acceptance of changes is vague at best and often using informal social media channels rather than official letterhead, FHFA Director Bill Pulte continues to “make waves.” Is it any way to run a trillion-dollar business? Talk from both Freddie and Fannie personnel have morale reaching low levels as stress and anxiety mount about business practices and uncertainty.
The MBA of Eastern Pennsylvania and other organizations sent out note about informal changes. “Last week, Federal Housing Finance Agency (FHFA) Director William Pulte made clear that significant changes to the mortgage credit reporting system are under consideration, including moving away from the costly and antiquated tri-merge requirement.
“Now is the time for MBA members to make their voices heard. In posts on X since last Thursday, Director Pulte has highlighted the high costs of the current credit reporting system and the impact those costs have on American consumers. He said FHFA is ‘strongly considering bi-merge, and stronger solutions,’ and that the agency is ‘studying the use of just one credit report’ to lower costs to consumers. Director Pulte posted lender letters from the GSEs on allowing all lenders to originate and deliver loans using VantageScore 4.0.
“These comments and actions represent an important opportunity to advance credit reporting reforms that MBA has been working on for years: ending the GSEs' universal tri-merge requirement and creating greater competition in the mortgage credit reporting market. The MBA has consistently made the case that requiring lenders to obtain reports from all three credit reporting agencies limits competition and gives providers little incentive to compete on price or service. The result has been years of significant price increases that have raised costs for lenders and borrowers. And the pressure on costs continues. It will come as a surprise to nobody if additional price hikes are again on the table in the coming months.
“The MBA also supports ending the tri-merge requirement and moving to a single-file approach for borrowers with strong credit profiles, which would further promote competition and reduce costs for consumers. These important updates will give lenders greater flexibility, enable more consumers to be scored accurately while maintaining prudent risk management, and expand sustainable access to homeownership.
Act now: Director Pulte is signaling that FHFA is seriously considering changes to the status quo. Now is the time for MBA members to make their voices heard. Using the hashtag #endtrimerge, tweet at Director Pulte or share our post on LinkedIn: ending the universal tri-merge requirement will increase competition and lower costs for consumers without compromising credit quality.”
But will investors buy those loans?
Capital Markets
In the “old days,” world events often triggered a flight to quality with investors around the world buying dollar-denominated assets… like bonds, including MBS. No more, apparently. Renewed Middle East tension continually triggers selloffs, lifts oil prices, and revives concerns that inflation could keep interest rates elevated for longer. The benchmark 10-year Treasury yield has firmly moved above 4.80 percent for the first time since January 2025 and is weighing on equities as investors reassess the outlook for Fed policy. Last week Fed Governor Christopher Waller indicated he could support holding rates steady if upcoming inflation data continues to improve. We’ll see… is the 10-year heading toward 5 percent?
U.S. Treasuries and Agency MBS sold off broadly yesterday (price down, rate/yield up), pushing 10-year and shorter-duration yields to fresh 2026 highs. Geopolitical tensions around Iran added initial pressure before the Treasury’s announcement of a tripling in its next longer-dated debt buyback. The $6 billion operation covering 10-year to 20-year notes, alongside an additional $4 billion in purchases across 10-year notes to 30-year bonds through early November, was apparently less aggressive than some investors anticipated. In response, the 10-year yield rose as much as 6-basis points to 4.85 percent, its highest level since 2023. A strong $38 billion 10-year note auction offered only brief support, leaving 10-year Treasury prices near their lowest levels since late 2023. Traders are watching closely to see whether prices bounce back or fall even further in an important technical test. Technically, Treasuries look oversold and positioned for consolidation or a tactical rally, particularly if this week’s auctions are absorbed well and larger buybacks provide support. This week’s Treasury auctions have been generally strong on demand: Tuesday’s 3-year was solid, and yesterday’s $39 billion 10-year was notably strong with a 2.71 bid-to-cover ratio and low dealer participation, but yields remain elevated. More concerning was the performance of the MBS basis (the extra yield investors demand to own mortgage-backed securities instead of comparable Treasuries, reflecting the additional risks of mortgages), which cheapened across virtually every coupon versus both 5-year and 10-year Treasuries, indicating that yesterday was more than a simple rate-driven selloff. The broad-based widening points to genuine “dislocation” in the basis amid uncertainty over the scope and effectiveness of Treasury’s buyback strategy, while also indicating growing investor sensitivity to the scale of U.S. government debt and its servicing costs.
Put another way, the market appears to be reassessing how much support buybacks can realistically provide: Treasury can potentially dampen volatility at the margin, but the program is unlikely to offset broader concerns around the supply, valuation, and fiscal trajectory of the Treasury market. Today’s economic calendar kicked off with August PPI (+.4 percent, as expected, +5.4 Y-o-Y) versus a prior reading of unchanged, Core PPI (+.2 percent, +4.6 percent Y-o-Y), weekly Initial Claims (206k), and Continuing Claims. Later today will bring Wholesale Inventories, August Existing Home Sales, Weekly crude oil inventories, and a $22 billion 30-year Treasury bond reopening results. After the inflation data Agency MBS prices are worse .125-.250 than Wednesday’s close, the 2-year is yielding 4.48, and the 10-year is yielding 4.89 after closing yesterday at 4.84 percent.
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