The stalemate & shutdown continue, all but eliminating the government release of economic news. Recall that the U.S. Treasury posted a $345 billion budget deficit in August, the largest monthly deficit of 2025 and the 2nd-worst August on record but helped by tariff revenue. This is up from July’s $291 billion deficit and has only been surpassed by last year’s $380 billion deficit. Government spending surged to $689 billion for the month. Through the first 11 months of FY2025, the U.S. deficit was up to $1.97 trillion, on track to be the 3rd-largest annual deficit in history, after 2020 and 2021. In other news, occupancy should not be a partisan issue, right? Letitiia James has been indicted for mortgage fraud. An attorney will tell you that “fraud” is difficult to prove (typically involving intent and knowledge), while critics are asking, “Why aren’t his three cabinet members being indicted for occupancy fraud as well,” or FHFA Director Bill Pulte’s father and stepmother who claimed dual homestead exemptions in Michigan and Florida. I am sure that the courts will sort things out; each case should stand on its own merits! (Today’s podcast can be found here and this week’s are sponsored by Truework, the only all-in-one, automated VOIEA platform that helps mortgage providers achieve up to 50 percent cost savings with an industry leading 75 percent completion rate. Today’s features an interview with Home Builders Institute’s Ed Brady on the home building climate, evolving workforce trends, trade misconceptions, and the strategic solutions needed to rebuild America.)
Services, Products, Software, and Tools for Lenders and Brokers
Eris SOFR Swap futures give mortgage lenders and servicers a powerful way to manage interest rate risk. Mortgage Servicing Rights (MSR) holders use them to protect servicing values from prepayment increases that can result from even modest rate moves. Eris SOFR Swap futures track the SOFR curve, the key benchmark for discounting and portfolio valuation, maximizing hedge effectiveness. Mortgage companies that originate non-QM loans use Eris SOFR to hedge interest rate risk, as these loans are not eligible for delivery into the traditional agency hedging instrument, TBAs (To-Be-Announced). By using Eris SOFR to hedge their non-QM production, lenders can enhance execution by expanding and growing their delivery options (such as bid tape, mandatory, and bulk executions) as they transition away from Best Efforts. Eris SOFR Swap futures are CME Group exchange traded contracts, making them an easily accessible and cost-efficient alternative to over-the-counter (OTC) interest rate swaps. Start hedging MSR and Non-QM pipeline risk with tools designed for today’s mortgage market. Contact John Douglas to learn more.
Is your Home Equity portfolio at risk for compliance issues? With the recent rise in HELOCs and HELOANs, lenders and servicers are keeping more of these mortgages in their portfolios, leaving them vulnerable to decreased Quality Control scrutiny as compared to those that are sold on the secondary market. These loans must be reviewed to ensure quality and compliance! For more information on how TENA Companies, Inc. can help audit Home Equity Loans and to discuss your specific needs, contact us today at info@tenaco.com, or visit our website at www.tenaco.com. Don’t miss TENA’s VP of Loan Origination QC, Jamie Huseth, CRCM, at the FHLB of Des Moines Mortgage Conference! She will be leading the session, “Fraud Alert: Navigating the New Threats in Mortgage Lending” on October 28th. Sign up for the TENAlert newsletter for the latest mortgage regulatory updates delivered to your inbox. And don’t forget to schedule your 2025 MERS Annual Review & Report. The end of year deadline is quickly approaching!
“Supporting Your Business Is Cenlar’s Business! Cenlar is the nation’s leading mortgage subservicer. But did you know we’re also a commercial bank? Our subservicing platform is built on decades of experience in managing the complexities of mortgage servicing, offering cost-saving solutions through advanced infrastructure, regulatory expertise, customer retention strategies, and innovative AI driven innovation, helping clients grow and deliver long-term value. And, as a commercial bank, we offer scalable liquidity solutions through our Mortgage Purchase Offering. And, since we can’t originate loans, we never compete with our clients: We empower them with reliable execution and capital flexibility. Whether selling in bulk, flow or participation, servicing retained or servicing released, contact us to learn how we can design a program to meet your needs. For information on how we can support mortgage and home equity servicing, please contact Andrew Pohlmann, SVP of Business Development. For information about our Mortgage Purchase Offering, please contact Keith Dyer, VP Mortgage Acquisition.
Loan Officers: Your insights matter! The Today in Mortgages podcast is conducting a confidential industry survey to help you understand how your company compares to others in the mortgage space. When you participate, you’ll receive a free personalized report showing how you rank in compensation, support, technology, products, and culture. This survey is designed to help you see what’s working (and what’s not) so you can make more informed decisions about your career and future. Open to licensed U.S. Loan Officers. Survey closes November 15. Visit here to secure your free report!
What do 2,400+ minutes of mortgage insight sound like? Optimal Blue’s podcasts (Optimal Insights and Market Advantage) just hit their one-year mark, and they’ve been helping professionals like you stay ahead ever since. Optimal Insights delivers weekly episodes packed with real-time rate data and capital markets commentary, empowering confident, profitable decisions across the industry. Market Advantage brings Optimal Blue’s monthly mortgage data report to life, turning direct-source insights into expert-led conversations that reveal early lending activity and emerging trends. With 52+ episodes of Optimal Insights and 12+ episodes of Market Advantage, both shows offer perspectives from across the mortgage life cycle – powered by the industry’s only end-to-end capital markets technology provider. Whether you’re refining your pricing strategy or navigating market shifts, these podcasts are your shortcut to smarter decisions and better outcomes. Stay ahead: Subscribe now and get the insights that give you a true market advantage.
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.
Government Program Changes
The shutdown has impacted some programs entirely and others partially. Where did we leave off with FHA, VA, and USDA? There are the USDA or HUD website statements.
FHA announced its adoption of the modernized Uniform Appraisal Dataset (UAD) 3.6 beginning early Spring 2026. Following collaboration with the Government Sponsored Enterprises (GSEs), and the Department of Housing and Urban Development’s (HUD) investment in the FHA Catalyst platform during the first Trump Administration, the implementation of this industry-wide initiative will preserve FHA’s alignment with the industry and strengthen its collateral risk management capabilities.
FHA announced an update to Electronic Data Interchange (EDI) file layout for the Transaction Set 264 (TS 264), Mortgage Loan Default Status. This update adds nine (9) new reporting elements and removes 24 reporting fields associated with Personally Identifiable Information (PII). View FHA INFO 2025-43 for update specifics.
With FHA’s Mortgagee Letter (ML) 2025-21, FHA published minor changes to facilitate the implementation of servicing and loss mitigation requirements announced in ML 2025-12, and ML 2025-14. This ML addresses feedback received from the industry and also updates FHA’s requirements in accordance with Executive Order 14218, “Ending Taxpayer Subsidization of Open Borders,” to ensure that FHA’s programs are administered in accordance with the Trump Administration’s priorities. This ML aligns with FHA’s broader goals of supporting homeownership and safeguarding the FHA Mutual Mortgage Insurance Fund (MMIF) to protect taxpayer dollars. Additionally, the Single Family Default Monitoring System (SFDMS) Reporting Codes are being updated and will be available on the supplemental documents webpage.
FHA implemented a new phishing-resistant multi-factor authentication (MFA) for its FHA Connection (FHAC) system. Users are reminded that they must implement the phishing-resistant MFA before October 27, 2025. This new security feature is part of FHA’s ongoing commitment to maintaining secure lender, borrower, and stakeholder data while advancing identity management and access control capabilities. This enhancement also helps ensure that login credentials are not shared or exposed to attacks. View FHA Info 2025-24 for further details.
On 9/8/2024, USDA announced that funding will not be available for a short period of time at the beginning of FY 2026. As stated in AmeriHome Mortgage Product Announcement 20250901-CL, during the funding lapse, AmeriHome Mortgage Loans with a Conditional Commitment reflecting “subject to the availability of commitment authority” will remain eligible for purchase.
As described in Pennymac Correspondent Announcement 25-94, updates to Government LLPAs are effective for all Best Efforts Commitments taken on or after Friday, September 19, 2025.
Capital Markets
Yesterday's session, another one bereft of key economic data as the U.S. government shutdown carried into day nine, did bring remarks from Fed Governor Barr (who said that the FOMC should be cautious about adjusting policy) and muted reaction to a $22 billion 30-year bond reopening (the high yield of 4.73 percent tailed the when-issued yield by a slight margin). We also learned that consumers’ estimates of inflation have been rising this year, and not by volatile items like food and gas, as households brace for higher prices on imported goods tied to President Trump’s tariffs. This increases the risk that inflation expectations will remain above the Fed’s 2 percent target, and are closely watched by Fed officials, as they seek to assess whether such levies will result in a one-time price shock or a more persistent inflation surge.
Mortgage rates fell for the first time in three weeks after hitting year-to-date lows in the week ending September 18. For the week ending October 9, the 30- and 15-year mortgage rates in Freddie Mac’s Primary Mortgage Market Survey fell 4-basis points and 2-basis points, respectively, to 6.30 percent and 5.53 percent, with the 30-year rate 2-basis points lower from a year earlier and the 15-year rate still 12-basis points higher. (As always, we encourage you to check out the most accurate and up-to-date mortgage rate info here, from Mortgage News Daily.)
For a change, today’s economic calendar includes some data that will not be impacted by the partial government shutdown: preliminary October Michigan sentiment will be released later this morning. Markets will also receive remarks from Chicago Fed President Goolsbee and St. Louis Fed President Musalem. Today is Class B net out ahead of Monday’s Columbus Day holiday, when bond markets are closed, but there will still be a daily Commentary hitting your inbox. We begin Friday with Agency MBS prices better by about .125 from Thursday’s close, the 2-year yielding 3.58, and the 10-year yielding 4.11 after closing yesterday at 4.15 percent.
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