Feb. 8: Vendor news; climate change & home values; humorous predictions; thoughts about the CFPB; simple originator advice
There are creative people out there. “Dear, did you say pastry?”: meet the “AI granny” driving scammers up the wall. Lenders and vendors can be creative and are always trying to find value for their money, even in the ordinary. Where to process loans? Lenders, for example, have always grappled with centralized or distributed processing. Chick-Fil-A is moving its lemonade production out of its 3,200 locations and into a centralized, automated plant in California that processes 30 to 35 truckloads of lemons per day, or 750-875 tons daily. The lemonade loses its homespun charm, but the juice is worth the squeeze given that only about 40 percent of the lemon gets used at a given location, compared to pretty much all of it at the facility, in no small part because centralizing production means that the lemons’ oils can be extracted and sold to the fragrance and cosmetics industry. Wouldn’t it be nice if lenders could do that?
The numbers don’t lie in disaster severity & climate change
_________________________________________________
The Trump Administration may be doing its best to scrub websites of the term “climate change” but it isn’t convincing real estate agents, MBS investors, or homeowners to ignore it and the increase in the severity of storms. A new study from First Street estimates that climate change will cause a $1.47 trillion decline in home values in the United States by 2055, in no small part due to rising insurance costs and homeowners declining to move to risky neighborhoods. The estimate doesn’t account for inflation or other factors that might weigh on the value of a property and strictly looks at the aggregate shed value. Today home values are worth an aggregated $50 trillion, and if they were to continue to rise steadily, this is more a haircut than a decapitation. Then again, if the number of Americans who consider climate risks when moving will rise from 5.2 million to 55 million in 2055 as projected, that can’t be hushed up.
Meanwhile, State Farm has asked state regulators in California to allow an emergency rate hike in the state as the payouts from the Los Angeles wildfire threaten to destabilize the insurance market. State Farm is the largest home insurer in California and is seeking a 22 percent average rate hike, starting May 1. Specifically, they plan for a 15 percent hike for renters and condominium owners and insurance for rental dwellings needing to rise 38 percent. This follows a 6.9 percent increase the state allowed for State Farm in 2023, and a 20 percent increase allowed last year. There is a pending request for a 30 percent hike, but it’s not entirely clear if that’s still being pursued on top of the 22 percent hike.
City National and First Republic have a large chunk of jumbo loan exposure in the fire-damaged area of LA County. As a Bloomberg story puts it, “Banks with the most exposure include City National Bank, known as the “bank to the stars,” and First Republic Bank, a lender acquired by JPMorgan Chase & Co. after failing in 2023. First Republic originated almost $1.3 billion of jumbo loans, ranking it behind only Bank of America Corp. among the area’s jumbo lenders. City National, which was acquired by Royal Bank of Canada in 2015 and counts California as its largest market, originated $843 million in jumbo loans in the area from 2018 to 2023, nearly as much as U.S. Bancorp and Morgan Stanley combined. The jumbo loans on banks’ balance sheets make lenders responsible for the losses should borrowers walk away from their debt.”
Advice for LOs from an industry vet: it’s simple
_________________________________________________
Hunter Marckwardt, EVP with CrossCountry Mortgage, LLC, has decades of origination experience and along with it wisdom… a term that is not used with internet lenders. “Most people in sales are competitive, competition is good. I host a bi-weekly sales call for our division. I recently interviewed the top four point holders for our competition, YTD.
“I'm a huge fan of all four of these people and I thought the call went well. It was basic stuff, asking them questions about how they got off to the start they did, what they were doing, etc. I was driving home that night talking to one of my favorite regional managers, and he commented that he thought the call was ‘excellent.’ I asked, ‘Why excellent?’ and his response got me thinking: ‘It was simple.’ During the call with the group, I was asking questions around cold calling, like are you still doing it? How are you doing with your calls? Who are you calling? Cheesy gifts, speed to the lead, eat the frog, etc. I heard all different type of answers, all 100 percent genuine, and reflective of these people’s individual businesses.
“These four people are highly successful and always have been. What makes them successful? The very simple answer is they go to work every day. They don't overthink, they have little egos, they're comfortable in their own skin. They're unapologetic about their individual styles and they simply go to work.
“I know I can get more complicated than I need to at times. Listening to these four loan officers talk about the simplicity of what they're doing. It was more about action and less about strategy. It was more about the mindset to move the ball forward, make progress, book appointments, make calls, be useful to clients and business partners and let the chips fall where they may. These people create their own momentum. Activity creates momentum, momentum creates progress, and progress creates results. We all need to be reminded at times to keep it simple.”
Foreign landownership hits legislatures
_________________________________________________
K&L Gates, LLP writes, “2024 was a busy year for legislatures throughout the United States on the topic of limitations and restrictions on ownership of real property assets. Last year, state legislators introduced over 75 bills in 29 states throughout the country that affect the beneficial ownership of real property. Legislative proposals affecting beneficial ownership generally fell into three categories: restricting ownership of agricultural land by foreign persons or entities; restricting ownership of any real property near critical infrastructure by foreign persons or entities; and restricting ownership of agricultural land by corporate entities.”
Not exactly the CFPB’s pal
_________________________________________________
This week the Commentary had various notes about keeping or eliminating the CFPB, given that there are two sides to every story. As a reminder, Congress must be the one to eliminate or re-write laws, not a presidential advisor. That said, funding could be reduced. Here’s quite a note:
“Rob, I am all for doing away with the CFPB. To speak to your recent reader’s comments about how we should all be wanting to keep the CFPB, please consider the following: We already have 50 different states interpreting the CFPB’s ‘guidance.’ Each state is responsible for interpreting and enforcing what they ‘think’ the CFPB wants to have done when it comes to regulating and enforcement of local mortgage brokers.
“In addition, each bank is regulated by the FDIC based on their different regional locations, with each regulator from different regional locations interpreting differently what they ‘think’ the CFPB wants. Then you have each credit union regulated by the NCUA, where they also are regional and have different interpretations of what can and cannot be done. The result? You have one market area where national, regional, and local banks, credit unions, brokers, etc. are all competing under different interpretations of the exact same CFPB rules.
“The CFPB, seemingly, is vague on purpose in order to create this hostile regulatory environment governed by fear and ignorance, with the CFPB showing no desire to step in and help interpret regulations correctly and consistently. As a result, you have some lenders being told they are allowed to rent space in a real estate agent’s office and others that are regulated differently being told they aren’t allowed to do that. You have some lenders doing joint Zillow marketing with realtors and other lenders being told they aren’t allowed to do that. You have some lenders that are doing reverse mortgages, and others being told by their regulators that every reverse mortgage is a RESPA Section 8 violation, even though that loan is being done with the exact same brokerage as their competitor in exactly the same way. Etc., etc., etc.
“When I talk with our regulators and even our local state regulators, they all admit that it is unfair that some lenders are allowed to do some things when other lenders aren’t allowed to do some things, all because their regulator counterparts all have different interpretations of the CFPB’s guidance, or lack thereof. The CFPB has created more problems and provided no answers than pre-CFPB, allowing us all to fumble our way through the dark, all the while trying to avoid running into something that will result in a future potential fine or penalty based on what a regulator ‘thinks’ the CFPB is wanting. And when we appeal to our regulators to reach out to ask for an interpretation that matches our competition’s interpretation of a regulation, they reply that the CFPB will not clarify. It is an unfair playing field precisely because of each of our 50 state’s regulatory agencies, as well as regional and national regulatory agencies, all interpreting things differently.
“Even with the CFPB, each state still has the right to add their own rules and regulations above and beyond what the CFPB decrees. Even with the CFPB, Texas still has unique refinancing rules, California can still require additional guidelines, etc. So even with or without the CFPB, there are still multiple different regulatory agencies interpreting things differently, 50 different states regulating their mortgage brokers differently, 50 different potential versions of state laws and regulations to consider, 50 different ways that title companies and closings are regulated, etc. So why not get rid of the CFPB altogether so we can avoid the exhaustion that comes every election cycle with each political party weaponizing or not weaponizing the CFPB for or against the mortgage lending industry?”
Some humor in predictions
_________________________________________________
Rich Swerbinsky, the Founder of Onward & Upward Consulting, has some thoughts about 2025. (Take them with a grain of salt.)
“The CFPB is on pause. Will the Bureau ever return? If not, what will be the ramifications for the industry? I gaze into my crystal ball for some predictions:
“The Triumphant Return of Countrywide Home Loans. Emboldened by a deleted CFPB, Countrywide Home Loans makes a triumphant return to the mortgage marketplace with a wild suite of old/new products. Back from the dead is the ‘Countrywide Fast & Easy’ (just register pulse reading at application for approval), an enhanced version of the old NINJA Loan (no income, no judgement, auto-approval) … and a brand-new product called the “Pinky Promise Loan.”
“Commissions Gone Wild, Season Two. Lenders reinstate the classic points bank commission schemes, allowing LOs to stash points and “credits” earned from closing government loans and other high cost or high-rate products. Reach 10,000 points, and they unlock rewards like a Tesla lease - or immunity from underwriting conditions for a month. Who needs compliance when you’ve got enough points to skip appraisal contingencies and order bottle service at the closing table?
“FICO’s Unveils New Slogan: 'Because You Have No Other Choice.’ With no CFPB breathing down its neck, FICO doubles down on their monopoly with mortgage lenders with aggressive new marketing. TV and streaming ads are launched featuring a montage of confused borrowers trying to find alternatives, only to be met with empty Google search results. FICO’s tagline flashes across the screen: ‘Your options are as nonexistent as our competition.’ They also roll out a new ‘pay to play’ product. For $1 per point, FICO lets you ‘rent’ the score you need for any application. Warning: Terms may include financial regret.
"The RESPA-Free Realtor Referral Rewards Program. Without RESPA enforcement, lenders roll out "Swipe for Referrals" loyalty cards. For every mortgage client sent their way, realtors earn points redeemable for vacations, luxury watches, or cash payouts disguised as “consulting fees.” Hordes of buyers’ agents that ran for the hills in the wake of the NAR settlement come flocking back to the business as loan referrals suddenly come with more perks than an NBA player’s sneaker contract.
“Ishbia Issues Another Edict. Still reeling from dealing four 1st round picks, four 1st round pick swaps, six second round picks, Mikail Bridges, Cam Johnson, and Chris Paul for Bradley Beal and Kevin Durant … United Wholesale CEO Mat Ishbia once again demands his customers ‘bend the knee.’ Ishbia threatens to stop doing business with mortgage brokers that sell loans to competitors Caliber Home Loans, Penny Mac, NewRez, Plaza, PRMG, Equity Prime, and AFR. ‘The business advantage of being a mortgage broker is having access to many different lenders products and pricing,’ said Ishbia. ‘By eliminating brokers’ ability to sell to all of our vastly inferior competitors and to essentially become retail net branches of United Wholesale, everyone wins. Especially United Wholesale.’”
Vendor (third-party) news bits
_________________________________________________
It would be difficult, if not impossible, to be a lender with no outside help whatsoever. Let’s take a random look at who’s doing what.
Polly, the leading provider of innovative enterprise technology and artificial intelligence for mortgage capital markets, unveils the impressive productivity gains wholesale mortgage company ResiCentral and national mortgage lender New American Funding (NAF) are seeing from its novel AI platform, Polly/™ AI. Powered by state-of-the-art AI/ML algorithms and Polly's proprietary technology and data, the platform is embedded directly within Polly's next-generation, commercially scalable product, pricing, and eligibility (PPE) engine.
As previously announced, Docutech has added optional subtitle functionality to all California Deeds of Trust.
Radian Mortgage Capital (RMC) posted Bulletin # 2-2025 stating that due to recent changes in Maryland licensing requirements for secondary market mortgage loan purchasers, including private label securitization trusts, effective immediately, RMC is suspending purchasing of any Agency Enhanced and Jumbo loans in the state of Maryland. RMC will continue to purchase eligible Maryland Agency GSE loans. Lending partners should contact their Sales Representative with any questions.
Optimal Blue launched Ask Obi, an AI assistant designed to provide mortgage lending executives with instant, actionable insights from their Optimal Blue products and data. Executives can inquire about intricate profitability metrics with simple, conversational queries such as, “What markets had the greatest change in average margins from Q3 2024 to Q4 2024?” or “Which loan officers issued the most concessions over the second week of January 2025?” Ask Obi responds with easy-to-understand answers at a granular level to improve strategic decision-making. Available to Optimal Blue clients for beta testing later this month, Ask Obi offers complete access to a lender’s PPE data, with development work underway to expand access across Optimal Blue’s complete capital markets platform.
Dark Matter Technologies (Dark Matter®) announced its expansion into the servicing market with the launch of a Dark Matter servicing platform. This strategic move positions Dark Matter as a comprehensive provider of mortgage solutions by aligning the scalable, easy-to-configure servicing platform alongside the company’s loan origination systems (LOSs) and artificial intelligence productivity assistants. Formerly known as CMS Servicing, Dark Matter’s servicing platform is an enterprise-level cloud-based solution with a full suite of loan servicing capabilities. The platform also supports interim servicing and can manage the printing of consumer disclosures and account statements.
The Coalition of Home Equity Partnership (CHEP) launched on January 30, featuring the largest shared equity product companies in the U.S. marketplace. CHEP’s mission is to promote industry best practices, advocate pro-consumer policies and protections, and ensure a better understanding of shared equity products among consumers, policymakers, and the media. Its members include Hometap Equity Partners, LLC, Point Digital Finance, Inc., and Unlock Technologies, Inc. Amid ongoing economic uncertainty, elevated mortgage rates, and persistently high home prices, more homeowners are turning to shared equity products as a viable solution.
Click n’ Close (CNC), a multi-state mortgage lender, announced its SmartBuy™ Shared Appreciation Mortgage (SAM) program now features a 30-year, fixed-rate conventional option approved by Freddie Mac. CNC’s SAM program offers a below-market interest rate for first-lien FHA, USDA and now conventional loans and a repayable DPA second lien in exchange for a portion of the home’s appreciation during the first five years. After the five-year accumulation period, the shared appreciation amount is added to the second lien and amortized over the remaining term. The program has no restrictions on first-time purchases or income levels.
One of the nation's first Certified Minority Business Enterprise (MBE) mortgage services providers, Diverse Mortgage Services (DMS), offering nationwide title and closing services to lenders, announced the official launch of its operations, marking a pivotal moment in the transactional mortgage services industry. DMS has an exclusive licensing agreement with minority investor ServiceLink to leverage its best-in-class, bank-level secured, industry leading mortgage services platform, EXOS®. Through this, DMS has already become an emerging leader in providing title and close services that help Tier 1 suppliers achieve diversity and spend goals, while also exceeding client speed, quality, and overall performance expectations, ensuring seamless service delivery.
A football coach walked into the locker room before a game, looked over at his star player and said, "I'm not supposed to let you play since you failed math, but we need you in there. So, what I have to do is ask you a math question, and if you get it right, you can play."
The player agreed, and the coach looked into his eyes intently and asked, "Okay, now concentrate... what is two plus two?"
The player thought for a moment and then he answered, "4?"
"Did you say 4?!?" the coach exclaimed, excited that he got it right. At that, all the other players on the team began screaming, "Come on coach, give him another chance!"
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you're interested, visit my periodic blog at the STRATMOR Group web site. This month’s piece is titled, “Natural Disasters and Economic Resilience.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).
qoɹ
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2025 Chrisman LLC. All rights reserved. Occasionally 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.)