Jan. 18: Beware precise forecasts; individual fire protection; military recruiting; Work from home study

On this holiday weekend, it is good to be aware of topics and trends that influence lending and consumers but may not be necessarily directly mortgage related. With that in mind…

Lenders and vendors did an amazing job in 2020 during the pandemic, moving to WFH (work from home) with missing very few steps and helping millions refinance. Coming back into the office has had its fits and starts, however. A new survey from Pew Research found that among adults who have a job that can be done from home, 75 percent work remote at least some of the time. Of this group, 46 percent said that if their employer no longer allowed them to do so, they would be unlikely to remain at their current job, with 26 percent saying they would be very unlikely. This included 50 percent of workers under the age of 50. So, if you’re a manager, or an employee, you can find something in the report to help you make your case.

Be all that you can be

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If this mortgage thing doesn’t work out… don’t automatically knock on the army’s door. Last year the United States Army hit its recruiting goals (maximum age to enlist is 35, unlike other branches which go into the early 40’s) for the first time in several years, primarily due to an increase in women enlisting: Almost 10,000 women enlisted for active duty in 2024, up 18 percent year over year, over a period when male recruitment increased 8 percent. Women account for just 30 percent of juvenile arrests and are likelier to want to pursue higher ed, which makes them more likely to qualify and have interest in the Army. Male enlistments have fallen 22 percent, from 58,000 in 2013 to 45,000 last year.

Be knowledgeable about a possible fire protection product

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(Editor’s note: this is not an ad; any questions regarding this product should be addressed to Francis Garcia.)

I continue to write about homeowner’s insurance in the Commentary, whether it is the cost increasing or insurance carriers pulling out of states entirely. I received this question: “Rob, have you heard of any potential help for homeowners, servicers, builders, or insurance companies in dealing with fire risk?” The mortgage servicers are not the target as they are in the business of making sure insurance is in place already. And builders might benefit from something since it should lower the cost of insurance making homes more affordable.

There is a product that I know of that provides eco-friendly fire-retardant products and home treatment services to the fire prevention industry as well as direct sales to homeowners, and that works with home insurance companies as well as the U.S. Government. So, for an answer to a product that may reduce fire risk I turned to Francis Garcia, and no, as noted above this is not a paid ad.

“Acreage burned by wildfire has doubled over the past ten years when compared to the prior ten (NIRC). As a result, home insurance providers have continued to increase rates, cancel policies, and simply exit high fire risk areas. The implications for homeowners, lenders, real estate agents, and others are well-documented. Nonprofit First Street Foundation found that a home worth $300,000 whose annual insurance premium rose from $1,400 to $3,200, which the report says is the average cost of the FAIR Plan, the state-created wildfire insurer of last resort, could lose about 12 percent of its value. At the same time, the increase in expense has stopped some homebuyers from securing a loan.

“Your readers should know that insurance providers are not necessarily the bad guys here, and no single technology will ever provide a silver bullet. The good news, however, is that promising new technology is already here, and continuously improving. Shawn Sahbari, CEO and Founder of Komodo Fire Systems in Northern California describes Komodo as a technology company with ‘an unrelenting commitment to the environment, health, and safety.’ Komodo has designed a modern fire retardant and suppressant that is only one of three products certified by US Forest Service and USDA for land application. Komodo is water & plant based, safe for people, plants, pets, wildlife, and aquatic life. The proprietary formula employed by Komodo is a game-changer that is methodically increasing market penetration by developing an ecosystem of innovative fire technologies that provide everything from multi-acreage to individual personal fire protection; These systems enable, or will enable the application of the breakthrough Komodo ‘juice’ at the right time and place, guided by AI, telemetry, intelligent sensors, and other state-of-the-art technology.

“FireReady911 sits in the yard, looking like a covered BBQ, but when a fire threatens, the homeowner goes into action. Ditching the useless garden hose, coating home vegetation and structure with Komodo while not depleting the water reserve needed by firefighters. Mobile indoor/outdoor automated cannons detect a small ignition and immediately fire a liquid Komodo laser, gradually widening the spray if the fire expands, as other cannons join the fight when needed.

“Tethered Towers drench geographies and structures of any size, after detecting the oncoming fire and receiving critical real-time fire metrics. Think Lahaina or large HOA’s completely drenched after evacuation, but before the fire in a highly synchronized manner. Would it have saved the beautiful landmark? Right now, we only know it would have helped. Perimeter and vegetation pre-treatment of wineries and corporate assets coupled with mandatory pre-treatment of critical pre-determined evacuation routes will save properties and lives.

“Arming our firefighter heroes with a Komodo Renegade extinguisher that they have deserved for decades. 20x more effective than water, non-toxic, non-carcinogenic, non-corrosive… Humans cause as many as 85 percent of wildfires, that's why Komodo 911 was developed as the only federally certified SAFE mini fire extinguisher that can be inconspicuously placed throughout a home or structure so anyone of any age can stop a small fire ignition in seconds. For a week in April, Komodo hosted ASTM, the regulation body for unmanned drones. The conference hosted over 100 attendees including NASA, US Navy, DoD, representatives from 15 countries and Komodo customer PG&E. Drones for firefighting are here, only awaiting the official rules of engagement. 

“Stuart Mitchell, Wildfire Mitigation Expert, advises his customers in the WUI (wildland Urban Interface) to take a more active role in preparing their home for the worst. Beyond “home hardening” and “defensible space” Stuart recommends homeowners use the sophisticated but simple “Watch Duty” app to track fires real time. For wildfires that appear imminent, homeowners can be prepared to create a perimeter barrier and coat and protect their home prior to evacuation with Komodo’s FireReady911 system. 

“LADRIS, an AI software company focused on climate risk, and partner to Komodo, collaborates with local governments, firefighting entities and others, enabling them to inform emergency response and fire mitigation strategies. The wealth of information they gather ahead of a fire can be staggering, and according to Retired Fire Chief Harold Schapelhouman, LADRIS has harnessed and simplified their UI making it one of the most useful fire mitigation technologies available. LADRIS represents another State-of-the-Art fire mitigation tool that needs to be recognized by the insurance and firefighting industries for its merits. 

Even the best, most innovative new fire mitigation technologies will struggle to penetrate and bring change to a firefighting industry with hundreds of years of entrenched protocols and loyalties. As they say, ‘the firefighting industry is over 200 years old, unimpeded by progress.’ These institutionalized barriers-to-entry have influenced Komodo to successfully re-focus its limited resources on developing solutions for governmental agencies and departments that are more receptive to change and progress. Therein lies the rub however, implementing these technologies with homeowners in the WUI, so that insurance underwriting models can account for their mitigation benefits, simply presents more entrenched hurdles than other opportunities. 

A small tech company forging a new path in this environment requires the collaboration of more powerful vested interests who are truly committed to making hard fought change that will help address the wildfire challenges faced by the real estate, mortgage and insurance industries. This will require a concerted effort by leadership in these industries to activate new technologies that will be recognized by insurance providers as beneficial and effective...or, of course, we can wait on the government to ‘save the day!’ (If you have questions, reach out to Francis Garcia.)

Be careful about believing forecasts, and the source

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The MBA has revised its 2025 volume prediction to $2.1 trillion. Forecasts about inflation, growth, and unemployment by senior economists at big banks drive critical decisions by businesses, investors, and the Federal Reserve. The stakes are high, and sometimes those forecasts turn out to be overly rosy… or too pessimistic.

Perhaps a bigger pitfall, according to new Berkeley Haas research that examined the longest-running survey of professional forecasters, is that these predictions tend to be overly precise. Forecasters reported 53% confidence in the accuracy of their forecasts, but were correct only 23% of the time, the researchers found.

“This is an elite set of forecasters: well-informed, with lots of practice, and clear standards for performance,” says Professor Don Moore of UC Berkeley’s Haas School of Business, who studies overconfidence and decision making. “We were interested in understanding the degree to which they were vulnerable, like the rest of us, to being too sure of themselves. The answer, unfortunately, is quite a bit.”

Co-written with former doctoral student Sandy Campbell, PhD 24 (now a post-doc at UCLA) the study explores lesser-considered aspects of forecasting: over-certainty and over-precision. To examine the phenomenon, Moore and Campbell examined the quarterly Survey of Professional Forecasters, conducted by the Federal Reserve Bank of Philadelphia since 1968. Given to senior economists at big banks and corporations, it asks them to predict key economic indicators for the upcoming quarter. The data are used by organizations such as the Federal Reserve in economic policies like decisions on interest rates. “It really matters whether they get this stuff right,” Moore says.

The survey asks the economists to rate the probability that an indicator will land in a certain “bucket,” for example, whether GDP will grow or fall by 1% to 2%, 2% to 3%, etc., with the total probability adding up to 100%. Moore and Campbell analyzed 16,559 forecasts; comparing them to actual indicators, they found the forecasters got it right less than a quarter of the time. Yet on average, they were 53% sure that they picked the right answer.

The problem wasn’t over-optimism. In fact, there was no consistent direction in which the economists were wrong… Some thought the economic indicators would be higher, while others thought they would be lower. The problem was that they were over-precise.

The researchers did find that the more experience a forecaster had, the more likely they were to get the right answer. But at the same time, experienced forecasters were also more over-precise in their certainty, which canceled out the increased accuracy of their forecasts.

“This tells me that all of us are fallible,” Moore says. “The Fed should really be considering monetary policies that allow for some wiggle room and hedging, given the uncertainty about what the future holds.”

The good news, Moore says, is that even if any particular prediction is over-precise on its own, forecasts tend to be more accurate in the aggregate. Since there isn’t a bias towards an overly rosy or dark future, the average of the predictions tends to fall in the correct range. Disagreement between forecasters improves the confidence calibration of the aggregate, Moore says.

The findings offer broader lessons for more accurate decision making. “Whether we realize it or not, every decision we make requires a forecast or thinking about probable outcomes,” says Moore, who is the Lorraine Tyson Mitchell Chair of Leadership and Communication. “It’s common to talk about overconfidence as being overly optimistic: you think the future will be brighter than it is, or you think you are better than you are,” Moore explains.

Yet being overly certain you have the right answer is just as big of a problem: fixating too closely on a specific outcome can create problems in how you allocate resources or take advantage of opportunities. “You can be both overly pessimistic and too certain of yourself.”

Most of us don’t have the benefit of consulting a wide survey of experts in making decisions in business or in our personal lives, however, so we might do well to call upon some humility when it comes to making predictions. Ask yourself where you might be wrong. Think about the relative costs and benefits of erring on one side or another. Be open to criticism. “Reflecting on your vulnerability to error will increase the probability that you are well-calibrated in the confidence of your judgment, and improve your chances of making a good decision,” he says.

“America is the only country where a significant proportion of the population believes that professional wrestling is real, but the moon landing was faked.”

“When a man opens a car door for his wife, it's either a new car or a new wife.”

“In hotel rooms I worry. I can't be the only guy who sits on the furniture naked.”

“Hollywood must be the only place on earth where you can be fired by a man wearing a Hawaiian shirt and a baseball cap.”

“Home cooking. Where many a man thinks his wife is.”

“If God had intended us to fly, he would have made it easier to get to the airport.”

(Thank you to Michigan’s Don C. for these.)

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. STRATMOR’s current blog is, “Leaders Don’t Wait for Markets”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(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. Occasional 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.)