Here in Telluride, CO, after learning of my capital markets background, yesterday someone bluntly asked me, “Can one person slow or stop the United States economy, or the world economy?” I was taken aback by the question, but it isn’t totally off-base: no one is saying a shutdown helps GDP. In eight months, we’ve learned not to underestimate the changes that can be made by the current administration. We had been talking about the government’s shutdown, impacting several areas of residential lending (see below). As previous “on the record” statements made by President Trump circulate and are being used against him about the role of the president in situations like this, there is plenty of blame to go around. But the U.S. government shutdown is strengthening expectations for additional Federal Reserve rate cuts, which is exactly what Trump wanted, with markets fully pricing in an October move and giving an 88 percent chance of another in December. Delays and risks to the labor market from 750,000 furloughs make it more likely Chair Jerome Powell will push for further easing, even as inflation pressures from tariffs remain a concern. Remember when all we fretted about were tariffs? (Today’s podcast can be found here and this week’s are sponsored by Spring EQ, one of the nation’s leading non-bank home equity lenders, giving partners more ways to serve customers. Known for speed, service, and innovation, Spring EQ makes tapping into home equity easier. Hear an interview with new California MBA CEO Paul Gigliotti on his goals while in the role and how state and national organizations can work together for the greater good of the mortgage industry.)

Services, Products, Software, and Tools for Lenders and Brokers

“Marr Labs builds expert AI agents that streamline the mortgage lifecycle for both originators and servicers. Our human-like voice agents engage borrowers the moment a lead comes in, qualify them instantly, and keep loans moving by handling repetitive, compliance-heavy tasks that overwhelm call centers. Founded by the team behind the speech technology that powered the first Siri app and Samsung’s S-Voice, Marr Labs brings proven expertise in deploying AI at scale. Today, we’re helping top lenders cut origination costs, speed up borrower response, and strengthen retention with seamless, 24/7 borrower engagement, empowering originators and servicers to close more loans at lower cost while delivering a better borrower experience.

“MSR Sellers: Looking for a win in Vegas? You don’t need luck, just better execution and liquidity that you’ll receive from Mission Servicing Residential, a leading MSR purchaser with best-in-class customer experience, flexible execution options and operational efficiencies. As a growing flow and bulk investor, Mission Servicing Residential offers a comprehensive suite of products, including Fannie Mae SMP and Freddie Mac CIX, with GNMA PIIT on the road map. We are one of only a few MSR purchasers that are Freddie Mac CIX All-In-Funding enabled, so set up a meeting at the MBA Annual with Richard Dybel, Managing Director of Business Development, and discover how Mission Servicing Residential can help you win.”

“Keeping borrower's loyal starts with servicing that’s accurate, efficient, and built to scale. LERETA delivers tax servicing solutions that simplify complexity and strengthen customer relationships. Whether you’re managing unique portfolios or navigating complex business rules, we simplify specialty servicing and deliver true SLA transparency for high-demand customers. With our AI-driven technology, we streamline and optimize tax processes to deliver unmatched accuracy, scalability, and efficiency, helping you reduce risk, strengthen your business continuity plan, and focus on growth. Download our latest eBook to learn about the hidden costs of tax servicing; how to stay ahead of changing regulations; and responsible and cost-effective ways to leverage AI technology.”

Pathways Home Unveiling: Request Your Demo at MBA Annual! This is not your typical “swing by the booth” demo. Pathways Home is MMI’s new homeowner intelligence platform, the tool that flips post-close engagement on its head. Borrowers see equity, market shifts, and refi or move-up opportunities every day in a sleek app that carries your brand, not ours. It’s the difference between being forgotten after closing and being the lender they never let go of. Here’s the deal: demo slots are capped. Once the limited schedule fills, that's it. Everyone at MBA will be buzzing about this launch. The only question is… will you be the one who saw it live, or the one who heard about it afterward? Request your Pathways Home demo now.

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.

Correspondent and Wholesale Products

If your borrowers are stuck behind a home sale contingency or hitting DTI limits, Flyhomes, a leading wholesale lender specializing in Buy Before You Sell solutions, offers a fast and effective path forward. The Flyhomes Guaranteed Backup Contract gives your borrowers a bona fide purchase agreement on their departing home, allowing underwriters to exclude that mortgage from DTI calculations, helping borrowers qualify for up to 50% more and remove the home sale contingency when purchasing their next home. This nationwide solution requires no loan, offers a competitive flat fee, and can be ready in 24 hours. Over the past 10 years, Flyhomes has helped 5,000+ buyers move into their next home. On average, LOs close 1.2 more loans per month with Buy Before You Sell, now available nationwide. Bonus: Now through Oct. 31, get 50 bps off interest rate on all locks! Book a call today to learn more or sign up for the weekly open house for a live walkthrough and Q&A.

“Arc Home at NAMB and MBA Annual in Las Vegas! We are bringing something different to NAMB National on October 18-19 at Caesars Palace. Stop by our A’rc’ade for a full retro arcade experience and meet with our team of non-QM pros to talk scenarios, pricing, and the programs that help brokers win more business. Then, we shift over to the Fontainebleau for the MBA Annual, October 20-21, where Arc Home will host correspondent partners in our private suite. This is your opportunity to connect with us directly and explore how our Non-QM and Non-Agency programs can help you grow. Whether you focus on wholesale or correspondent, Arc Home will be on site in Las Vegas to meet you where you do business. For MBA meeting details, contact Elliott Grumer to schedule a time.”

Shutdown and Government-Related Lender News

If you need an example of the current administration intertwining residential lending and politics, you have no further to look than the USDA or HUD website statements.

News informally broke yesterday that the FHFA, led by Bill Pulte, would force the closure of Freddie Mac’s and Fannie Mae’s New York offices in “response to Attorney General Letitia James' "corrupt and dangerous business practices".

Speaking of Freddie and Fannie, alternative procedures were laid out for mortgage lenders to follow if the shutdown hinders their ability to gather standard employment or income verification, as well as temporary measures for flood insurance verification. The new guidance issued by Freddie Mac still requires flood insurance for at-risk homes but will allow mortgage borrowers to submit proof that they have applied for an NFIP policy, even if the policy hasn't been issued yet. When the shutdown ends, lenders will be required to verify that the borrower actually obtained flood coverage that meets standard requirements.

The new guidance states that for federal employees, lenders can waive verification of employment if they document the steps taken to verify employment and certify that the shutdown prevented them from obtaining verification. For federal workers, the temporary rules also waive the requirement that their pay stubs be dated no earlier than 30 days before the initial loan application.

The National Flood Insurance Program (NFIP)’s authority to issue new policies has lapsed, complicating an estimated 1,400 property transactions each day and leaving many buyers in high-risk areas without flood insurance coverage. The National Association of Realtors writes that, “Most existing policies remain active, include a 30-day grace period, and can be transferred to new owners. NFIP claims will continue to be paid, but uncertainty grows the longer the shutdown lasts, especially regarding how long buyers may go without coverage and how quickly FEMA’s claims paying funds could be depleted.”

NAR states, “According to NAR research, the NFIP supports roughly half a million home sales annually, generating 1 million jobs and contributing $70 billion to the U.S. economy.” For more on how a shutdown could affect real estate: NAR Letter to Congress Urging the Extension of the NFIP. Possible Government Shutdown: What You Need to Know. NAR Original Research on NFIP. NAR Mobilizes to Extend National Flood Insurance Program. What a Government Shutdown Means for REALTORS®.

Ginnie Mae announced that it will continue to perform all functions necessary to ensure that the market is not disrupted during a potential lapse in appropriations. These functions include granting of commitment authority, support for continued issuance of Ginnie Mae Mortgage-Backed Securities (MBS) (including related Pools Issued for Immediate Transfer (PIIT)) and Real Estate Mortgage Investment Conduits (REMIC), taking all actions necessary to ensure timely payment of principal and interest to investors, and continuing to manage servicing of extinguished Issuer portfolios. Single-family and multifamily loans will continue to remain eligible for securitization even in the event of a potential lapse in appropriations, so long as they meet requirements for insurance/guaranty of the insuring/guaranteeing agency when they are pooled and are in the process of being insured or guaranteed. For more information, including FAQs, see HUD’s Contingency Plan for a Possible Lapse in Appropriations.

Capital Markets

The decision to hedge isn’t just about market timing. It’s about operational readiness, margin stability, and long-term strategy. Whether you’re still relying on best efforts or already exploring forward commitments, getting a solid grasp of the fundamentals can shape smarter execution. Vice Capital Markets’ new white paper, Hedging 101: A Mortgage Lender’s Guide to Managing Interest Rate Risk, explains what hedging is, how it works, and how lenders can implement it effectively. It’s a clear, lender-focused breakdown for those seeking to strengthen their secondary marketing approach. Attending MBA Annual in Las Vegas this October? Schedule time with Troy Baars to talk through the white paper. Or, if it felt a bit too introductory, dive into a more advanced “Hedging 201” discussion on modeling, analytics, and execution strategies.

With the government shutdown, the Bureau of Labor Statistics’ employment data that normally comes out on the first Friday of month, is delayed. So, traders are looking at the September ADP private-sector jobs report, which came out Wednesday. Based on data from employers who use Automatic Data Processing, and covering over 26 million workers (19 percent of private-sector employment), showed the private-sector shedding 32,000 jobs. August was drastically revised down from +54,000 to -3,000. As Dr. Elliot Eisenberg put it, “These declines clearly show a slow and steadily weakening labor market, defined by very cautious hiring.”

But that’s not all. The ongoing U.S. government shutdown has delayed key economic data releases, including construction spending, jobless claims, and the September jobs report, creating a data void ahead of the Federal Reserve’s policy meeting at the end of this month. The Fed, for the time being, may rely on alternative indicators, to guide its decision-making. Case in point, yesterday the customary release of the weekly initial jobless claims report was not released, but the September Challenger Job Cuts report was, coming in down -25.8 percent year-over-year. The report is not known for getting a reaction from the market, but given the current lack of official employment data, the report received some attention.

If the government shutdown continues and deprives the Federal Reserve of key economic data, policymakers are still expected to follow through with the 25-basis point rate cut indicated in the September SEP, as one month of missing data is unlikely to alter the broader easing narrative. Labor market signals remain mixed, with stagnant job openings, low quit rates, and job cuts still elevated by historical standards despite a drop in September. As Congress remains at an impasse and the Senate in recess, the chances of a prolonged shutdown are rising, mirroring the 35-day closure in 2018–2019. Markets are responding accordingly: Treasury yields have fallen amid the absence of official data and soft private-sector indicators. The narrative right now is labor market fragility and fears of further disruption from potential mass federal layoffs.

Mortgage rates ticked up for the second week in a row after hitting the lowest levels since last October. For the week ending October 2, the 30- and 15-year mortgage rates in Freddie Mac’s Primary Mortgage Market Survey rose 4-basis points and 6-basis points, respectively, to 6.34 percent and 5.55 percent and remained higher by 22-basis points and 30-basis points from a year ago.

With no BLS September payrolls report, today’s data are the services PMIs from both S&P Global and ISM, both due out later this morning. Three Fed speakers are currently scheduled: New York’s Williams, Dallas’ Logan, and Vice Chair Jefferson. We begin the day with Agency MBS prices unchanged from Thursday’s close, the 2-year yielding 3.54, and the 10-year yielding 4.09 after closing yesterday at 4.09 percent.