Supposedly commercial air travel is back to normal, good for anyone coming in for the Mortgage Bankers Association of St. Louis event tomorrow and Thursday’s Mortgage Bankers Association of Kansas City annual luncheon. Speaking of Missouri, the Pony Express ran between St. Joseph and Sacramento for 18 months in 1860–1861, put out of business by the telegraph. (I had an ancestor, Frank “Deafy” Derrick, who rode for the Pony Express.) The telegraph was a great example of “better, faster, cheaper” winning out. Non-Agency investors, such as non-QM, DSCR, HELOC, and 2nd investors have certainly gained market share at the expense of the Agencies, namely Freddie Mac and Fannie Mae, perhaps for the same reason. The FHFA, Fannie, and Freddie have been distracted with Director Pulte sending out information on mortgage portability, 50-year mortgage amortization, tech companies doing business deals (with the GSEs with possibly an ownership stake in their companies), assumability, while Fannie Mae allegedly shared pricing information with Freddie Mac. (Today’s podcast can be found here and this week’s are sponsored by Figure. Figure is shaking up the lending world with their five-day HELOC, offering borrower approvals in as little as five minutes and funding in five days. And, embedding their technology is easy. Hear an interview with ICE’s John Hedlund on how mortgage leaders can scale sustainably, unlock new innovation in risk and operations, balance efficiency with human-centered borrower experience, and prepare for the next major shift in the housing and lending cycle.)
Services, Products, Software, and Tools for Lenders and Brokers
When it comes to mortgage loan registration, accuracy, speed, and compliance remain essential. While blockchain technology continues to generate interest, proven platforms like the MERS® System have built a strong track record for reliable performance. In this recent blog, Harry Gardner, Director of Digital Services at ICE Mortgage Technology, explores the realities of blockchain in mortgage registration and provides insight into balancing innovation with the practical needs of today's mortgage professionals. Click here to read more.
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Virtual reality, augmented reality and 360-degree videos place audiences at the center of events, enabling deeper engagement. It could be that some lenders would benefit from a similar deep dive on declined loans over the past 12 months. Down Payment Resource’s complimentary Declined Loan Analysis does just that, revealing how often borrowers could have been approved using down payment assistance. By applying DPR’s database of more than 2,600 down payment assistance programs to a lender’s declined applications, the analysis uncovers lost opportunities. On average, up to 40 percent of declined loans may have qualified for assistance, and 89 percent of those turned away for cash-to-close or DTI issues could have been saved. With razor thin margins, reclaiming even a few percentage points can lift overall loan production by 2-5 percent, without new marketing spend. Rob Chrane and his team invite you to reach your full potential.
“Personal relationships have always been the edge for credit unions and community banks. But now, leading lenders are proving that “high tech” and “high touch” can work together. With Total Expert Customer Intelligence, smaller lenders are turning borrower data into deeper, more meaningful connections, surfacing real-time intent signals and life events that let loan officers engage exactly when it matters most. Organizations like Dart Bank and Tucson Federal Credit Union are seeing measurable results, driving millions in additional funded loans and record engagement rates. Discover how smaller lenders are using data-driven strategies to scale personalization, strengthen loyalty, and grow faster, without losing the human touch. Read our latest blog to learn how smaller lenders are making a bigger impact with Total Expert.”
Looking for a modern, accurate, and transparent AVM solution? Introducing Procision™ AVM by First American Data & Analytics, a next-generation automated valuation model built for today’s mortgage and real estate professionals. With nationwide coverage, daily updates, and unmatched accuracy, Procision AVM empowers lenders, servicers, and investors to make smarter, faster decisions. Now’s the perfect time to experience the difference. Start your 30-day free trial today and see how Procision AVM delivers the insights you need with the confidence you expect from First American. Learn more.
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.
President Trump, Director Pulte, and Fed Governor Cook
Recall the situation. President Trump wants to fire Federal Reserve Governor Lisa Cook from the Fed over alleged fraud involving her mortgage applications. Fraud involves proving intent. Many have pointed out that Bill Pulte’s parents are guilty of the same allegation, with no threat of prosecution. Cook has denied wrongdoing and is challenging her removal in court, so far, with success. The Supreme Court has for now blocked Trump's attempt to remove her and will hear arguments on January 21. Trump's effort to remove Cook from the Fed board is unprecedented. Since the Fed's founding in 1913, no member of the Fed's seven-person board of governors had ever been targeted for removal by a president. Cook was sworn in last year to a new term at the Fed that runs until 2038.
Federal Reserve governor Lisa Cook's lawyer on Monday provided the first detailed defense of her mortgage applications, arguing that apparent discrepancies in loan documents were either accurate at the time or an "inadvertent notation" that couldn't constitute fraud given other disclosures to her lenders.
The Wall Street Journal reports that, “In a letter to Attorney General Pam Bondi, Cook's lawyer also accused William Pulte, the White House appointee who referred alleged mortgage discrepancies to the Justice Department in August, of selectively targeting Trump's political enemies while ignoring similar allegations against Republican officials.
“The lawyer, Abbe Lowell, said other recent conduct by Pulte, who is director of the Federal Housing Finance Agency, ‘undercut his criminal referrals concerning Governor Cook.’ That behavior includes the recent dismissal of the FHFA's acting inspector general and several internal watchdogs at Fannie Mae, one of the mortgage-finance companies under FHFA control.
“Pulte's referrals to the Justice Department became Trump's justification for attempting to remove Cook from the Fed's board in August at a time both men were increasingly outspoken that the central bank should move faster to lower interest rates.
“The letter addresses mortgage applications for three properties Cook owns: a home in Ann Arbor, Mich., a condominium in Atlanta and a home in Cambridge, Mass. Trump administration officials have focused on the Ann Arbor and Atlanta properties, which Cook bought or refinanced weeks apart in 2021. Standardized loan forms that Cook signed show she pledged to live in each home for a year as her principal residence unless the lender otherwise agreed to a different arrangement.
“Pulte suggested Cook could have received favorable lending terms, such as lower interest rates, by misrepresenting her occupancy status. The Justice Department has opened a separate fraud investigation but hasn't filed charges.
“The Ann Arbor home was accurately described as Cook's primary residence when she refinanced it in 2021, Lowell said, because she was still living there and employed by Michigan State University at the time. Former President Joe Biden nominated her to a seat on the Fed's board in 2022, and she began renting out the home, with the proper local licenses to do so, after moving to Washington, D.C., for the Fed job.
“Cook bought the Atlanta condo to have a permanent place to stay when she would visit relatives after her family sold a jointly owned home in Milledgeville, Ga., that same year, Lowell said.
“Although one line on the mortgage application for the Atlanta condo listed the property as a primary residence, other records show that this ‘was at most an inadvertent notation,’ Lowell said. A separate May 2021 loan estimate provided by her lender shows Cook had identified the property use as a ‘vacation home,’ Lowell said.
"’Because Governor Cook submitted that document to the lender as well, it would be impossible to conclude that she intended to defraud the lender by inadvertently listing the property as her 'Primary Residence' elsewhere,’ he said. Pulte ignored ‘critical context’ and misled the public and the Justice Department ‘in cherry-picking one line from one document,’ Lowell said.
“Lowell suggested that Pulte's use of the criminal referral process would weaken the referrals he made against Cook. Lowell said that using the arms of FHFA and the companies it controls to selectively and publicly investigate Trump's political enemies ‘gives rise to the unmistakable impression that he has been improperly coordinating with the White House to manufacture flimsy predicates to launch these probes.’
The Federal Reserve Act doesn't permit removal of a governor because of disagreements on monetary policy. The president can remove governors only for cause. The law doesn't define ‘cause,’ though it is often understood to be related to inefficiency, a neglect of duty, or misconduct in office.
“The case has attracted attention from economists and investors because a ruling in favor of Trump would make it easier for the president to dismiss Fed officials and neuter a guardrail that has allowed the central bank to argue it enjoys greater autonomy, or ‘independence,’ over interest rate decisions. Investors could worry that the Fed won't be able to take sometimes unpopular steps to control inflation if its independence was severely weakened.” The Wall Street Journal and reporter Nick Timiraos did a bang up job detailing the points of the situation; thank you.
Capital Markets
Federal economic data is resuming after the shutdown, and we learned yesterday that construction spending rose 0.2 percent in August, its third monthly gain, driven mainly by higher residential renovation and multifamily building. Overall activity remained 1.6 percent below last year, and any growth came from housing-related projects, not from new single-family construction.
The September payrolls report, now set for Thursday, will offer the market its first major data point since the government shutdown and will help shape expectations for the Fed’s December 10 meeting despite being somewhat stale. With policymakers emphasizing that another rate cut is not assured, even imperfect data should bring welcome clarity, though investors will treat official releases with added caution as the shutdown’s distortions linger. Other Census Bureau reports this week may provide context but are unlikely to shift the broader economic narrative.
The Treasury market, and along with it securities backed by mortgages, remains range-bound, with the 10-year anchored near 4.10 percent and the yield curve steady at a 50-basis point 2s/10s spread. Many investors expect a curve steepening into year-end, driven by the likelihood of a more dovish Fed in 2026, though this has become somewhat of a crowded view. Futures markets have nudged up their expected SOFR floor, reflecting fluid policy expectations. As a result, the December Federal Open Market Committee meeting (and its updated projections) will be pivotal in assessing how the Fed interprets the shutdown’s fallout and the path of normalization ahead. Market volatility has spiked to its highest level in a month, though it is still near multi-year lows.
Securities and their prices are often compared to similar instruments. The U.S. MBS index slipped 10-basis points in excess return last week (put another way, mortgage-backed securities performed slightly worse than comparable safe investments last week, earning a little less than what investors expected based on their level of risk), with nearly all the damage occurring midweek despite otherwise quiet trading and average volumes across Class A and B settlements. Against this backdrop, the Fed has reaffirmed that any future bond-buying (likely not before 2026) would be intended to maintain smooth market functioning rather than to stimulate growth, signaling a cautious and technical approach to balance-sheet policy.
Import prices and industrial production/capacity utilization, both for October and scheduled to be released today, are expected to be delayed. That leaves Redbook same store sales, the NAHB Housing Market Index for November, Treasury conducting a buyback for liquidity purposes in 5- to 7-year coupons for up to $4 billion before releasing September TIC data, and remarks from Fed Governor Barr, Richmond Fed President Barkin, and Dallas Fed President Logan. We begin the day with Agency MBS prices slightly improved from Monday’s close, the 2-year yielding 3.57, and the 10-year yielding 4.10, after closing Monday at 4.13 percent.
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