Aug. 23: LOs look at both sides; Role of the Federal Reserve; GSEs and Army Corps of Engineers; Saturday Spotlight: Moder
Our business is full of people who a) like numbers, b) drive places, and c) have kids that ask lots of questions like, “Why is the speed limit what it is?” In the 1930s and 1940s, studies of rural roads in the U.S. coalesced around the idea of the 85 percent rule, which said that the posted speed limit of the road should be as fast as the 15th-fastest vehicle out of every 100 traveling on the road in free-flowing traffic. The rule essentially allowed the so-called “natural pace” of traffic to set the speed limits for thoroughfares. This has been the hard-and-fast rule for speed limits for decades, with some exceptions. For example, in the 1970s, the oil crisis prompted a lot of 55 miles per hour limits, which were upped to the increasingly standard 65 miles per hour on most highways after the crisis elapsed. However, a new approach for stretches of highway in urban areas is challenging that rule of thumb. A 2019 study from the Insurance Institute for Highway Safety found that each 5-mile-per-hour increase to a state’s maximum speed limit increased fatalities by 8.5 percent on interstates and 2.8 percent on other roads. Residential lending is full of oddities that go back many years. We’re not alone.
Saturday Spotlight: Moder
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“Scalable, Efficient Mortgage Operations with GenAI”
Company Name: Moder
Automation, AI, and GenAI are transforming industries, and the mortgage sector is no exception. At Moder, we help lenders and servicers move from vision to value, turning next-gen technologies into measurable outcomes.
With deep technology expertise and an understanding of mortgage industry nuances, we enable our clients to achieve higher productivity, lower costs, superior customer experience, and stronger compliance and risk management. At the heart of our approach is the Digital Office framework, designed to drive operational excellence across both front and back offices. What makes us different is our consulting-led strategy, backed by proven execution and a long-term commitment to client success.
Our next-gen Digital Services drive your business toward seamless, zero-touch operations. By leveraging advanced technologies such as Gen AI, machine learning, the cloud, and analytics, we automate manual processes to enhance efficiency, reduce costs, and minimize errors. This approach enhances service delivery, strengthens security, and enables systems that are both scalable and adaptable.
Our values – RAISE – act as our North Star, defining who we are, how we collaborate, and what we strive for. They reflect the essential qualities that make our high-performing team truly exceptional. Rooted in our leadership approach, these values shape every aspect of our work, propelling us towards continued success. We Deliver Results. We Embrace Adaptability. We Act with Integrity. We Create Synergy. We Lead with Expertise.
Our leadership spans the globe. Our Modernization Approach offers much. Strategic Assessment: We evaluate your platforms, applications, and infrastructure to determine modernization readiness. Gap Identification: We uncover process inefficiencies, data challenges, and workflow bottlenecks. Modernization Roadmap: We design a scalable, future-ready plan aligned to your business outcomes. Implementation: Using the right tools and technology, guided by human expertise, we ensure seamless transformation. Continuous Evolution: Beyond go-live, we keep investing in management and upgrades to keep you future-ready.
With Moder, modernization isn’t a one-time project… It’s a journey toward sustainable efficiency, resilience, and growth. We don’t just bridge the gap between desire and delivery. We help you reimagine what’s possible.
At Moder, you won't just take on responsibilities. You'll be empowered to make a real impact, working alongside the best in the industry to achieve personal growth and deliver exceptional client value. You’ll tackle challenges that spark innovation, contribute to projects that drive meaningful change, and be part of a team committed to excellence.
At Moder, we RAISE (Respect, Accountability, Innovation, Service, Excellence) the bar every day. If you're ready to grow, adapt, and thrive in a dynamic environment that values collaboration and forward-thinking, Moder is the place for you.
(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)
LOs need to look at both sides
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Earlier this week I posted some thoughts from Brian Vieaux for loan officers. Seasoned vet Hunter Marckwardt, EVP with CrossCountry Mortgage in the Bay Area, weighed in with some advice for those in our industry adding value by being people.
“I have become friends over the past few years with one of the top loan originators in the country. (This person has closed over $300 million year-to-date.) We were speaking recently about their technique, obvious or not, about their business success and anything other LOs might glean from it. Basically, why this person is able to do what they do? They initially thought that they didn’t have anything new to offer, and everything we'd be discussing would be ‘stuff’ everyone already knew. But they were wrong: Sometimes it takes the right timing and the right messenger to motivate us to act on something we've overlooked in the past. When you have the chance to hear from someone who has mastered their craft, you have to take notice.
“I've thought about what I'm about to tell you at least 100 times before writing this today, so although I'm hopeful it has some impact on you, I'm not sure I can do it justice for what's in my own head. When I asked this top LO how they have developed the relationships they have with business partners, I was told, ‘We have to think about what's in it for them.’ It sounds so simple, some might say ‘duh.’ But how many of us do anything with that thought process, asking the question, ‘What's in it for them?’ Most of us ask, ‘What’s in it for me?’ Two things come out of the question ‘what's in it for them?’ For one, you must be crystal clear on your overall value, but you also have to ask enough questions to understand where your perceived value will come to fruition in helping them be more successful. A few weeks ago, I was randomly listening to a Jack Welch interview (legendary CEO of GE), and the interviewer asked him about developing his people, his response was, ‘You always need to be explaining to your team what's in it for them.’
“When you digest ‘what's in it for them,’ it's way bigger than sales. If I broke it down professionally, people need to ask certain questions. What's in it for someone to be a part of our company? What is in it for someone to be a part of our division? What is in it for someone to be a part of our branch? What's in it for someone to be a part of our loan team? What’s in it for a business partner to work with us vs. a different lender? What's in it for a client to work with us vs. a different loan officer?
“More importantly, take that question personally. What's in it for someone to be my friend? What's in it for someone to be my wife? What's in it for to be my children? What in it for someone to be my neighbor?
“You might be thinking that I am taking this a little far. No, I don't think I am. The clarity that comes from asking the question ‘what's in for them’ in any situation immediately comes back to you being an asset or a liability to the world. What's in it for them isn't always good. Plenty of people have lost betting on the wrong horse, in business, in marriage, you name it. I just know keeping this question out in front of all my activities, personally and professionally, creates a desired level of accountability to want to be on the right side of someone saying, ‘This is what's in it for me dealing with Hunter’, and having their final answer be they're better off with me than without me. You might consider what’s in it for anyone to be in a relationship with you.” Thank you, Hunter!
Anything’s possible with the GSEs or the Army Corp of Engineers
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Here's something from a concerned reader in Arizona. “Rob, I don’t want to see my conventional conforming borrower’s interest rates go up, yet it appears that nearly every course of action that the government carries will end that way. I believe that there is an option where the government can guarantee the MBS but not the GSEs themselves. Let the GSEs fail, and the MBS payment streams are protected, similar to what GNMA does today. Not sure if that is what was implied in the back and forth. I believe that this was the original structure proposed by the MBA. I think it is still the MBA’s position as well, but I confess it has been a while. It is nuanced but it is more viable than what I surmise is being discussed today among the brain trust in the White House.
“Also, the GSEs still owe the liquidation preference which I believe is now closing in on 350 billion. This would be in addition to the capital they would need to raise outright. It has to be paid back, or it would need to be written off the government’s balance sheet. You think the student loan issue was challenging could you imagine the discussion if they tried to write this off. Wow. This topic deserves serious discussion by serious people. Passing snippets or comments on twitter or at press conferences scare the bejessus out of me. I assume the MBA is all over this with Congress.”
While we’re on conjecture…
Third Way, a prominent center-left think tank, unveiled a proposal calling on Democrats to build 12 million new homes through deregulation, removing tariffs and deploying the U.S. Army Corps of Engineers to help with the construction. The proposal is a reflection of the growing "Abundance" movement, inspired by the bestselling book, that urges Democrats to remove red tape and focus on building things if they want to win more elections.
Rates: what does the Fed actually impact
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Chairman Powell opened the door to a cut in overnight rates this week in Jackson Hole, Wyoming. Softer economic data make Federal Reserve interest rate cuts more likely, but that doesn’t mean mortgage rates will follow them down. Certainly, the psychology of the market has changed.
Homebuyers and those looking to refinance may have to wait longer for interest rates on 30-year mortgages to fall meaningfully below 6.5%, according to economists and market analysts. The bond market is propping up mortgage rates, as traders are betting the Fed may only lower rates a few times rather than undertake an aggressive cycle of rate cuts. If there were signs that tariff impacts would significantly damage the economy, the Fed would have more wiggle room to cut interest rates aggressively, and bond traders would likely help bring long-term rates down. Right now, analysts say, the economy doesn’t seem to be weakening enough to warrant that type of action, if it even gets to that point at all in the coming months.
“For the foreseeable future, it really does feel like mortgage rates are going to be staying pretty close to where we are,” said Chen Zhao, head of economics research at Redfin. Mortgage rates could even rise if tariffs end up pushing up inflation substantially, Zhao said. If so, markets’ expectations for Fed cuts would diminish, keeping rates elevated. One potential harbinger of that scenario came on Thursday, when new data on inflation for producers rose far more than expected, raising the prospect that businesses will pass on price increases to consumers.
Fed cuts would immediately make borrowing cheaper on credit cards, small business, and auto loans, since those products are based on the short-term interest rates the central bank heavily influences.
Mortgages are a different story, however. Rates on a 30-year mortgage are based heavily on investors' expectations of the economy and inflation over the next decade, not on the Fed’s near-term actions. While mortgage rates include other costs to process each loan, they rely heavily on the benchmark 5 through 10-year U.S. Treasury yield, the interest rate that the U.S. government pays to issue debt over 10 years. A complex mix of factors helps determine 10-year yields, including economic growth forecasts, inflation, demographics, and U.S. fiscal deficits. The U.S. central bank only has “an indirect pressure” on long-term rates. Fed Chair Jerome Powell has reminded us, “We don’t set mortgage rates at the Fed. It’s not that we don’t have any effect. We do have an effect, but we’re not the main effect.”
Some Fed officials still seem hesitant about cutting rates in September, but markets are more or less viewing a rate cut next month as a slam dunk, analysts say. Some observers have suggested that the Fed could cut rates by 50 basis points rather than its usual quarter-point decrease. But a .5 percent cut could send a panic message, and we don’t need that.
We all remember last year, for example, the Fed opted for a 50 basis point cut after deciding inflation had ticked down enough from its post-COVID highs. Rather than also heading downward, the 10-year Treasury yield, and thus mortgage rates, rose sharply. “The Trump administration is pushing for the Fed to cut the federal funds rate to reduce the long-term borrowing cost of the federal debt and to lower mortgage rates,” Edward Yardeni wrote, but last year’s experience “serves as a cautionary tale.”
Forget “artificial” intelligence. This is actual physical intelligence. I thought “walking the dog” was a pretty terrific trick, but this guy is amazing. Do kids play with yoyos anymore?
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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes, visit the Chrisman Job Board. This newsletter is intended for sophisticated mortgage professionals only. There are no paid endorsements by me. For the latest mortgage news, visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.ChrismanCommentary.com. Copyright 2025 Chrisman LLC. All rights reserved. Paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)