July 12: Bill Pulte on Jerome Powell; Letters on gift letter fraud, LO comp changes; Saturday Spotlight: RatePlug

Imagine my surprise yesterday when I received an email from the FHFA quoting Director Bill Pulte with a simple, “I’m encouraged by reports that Jerome Powell is considering resigning. I think this will be the right decision for America, and the economy will boom.” I wrote back, asking “what reports?,” but have heard nothing. In a sense, this note, however sensationalist or awry, is marketing: creating, communicating, and delivering a message. Lenders and third-party providers are keenly aware of marketing trends. My parents used coupons (often to eat out on a Sunday night) and I still use them. Marketers distributed 50 billion coupons last year, based on one industry estimate, down from 330 billion coupons from the peak in 2010. Last year, only 750 million coupons were redeemed, down from 3.3 billion in 2010. People spend less of their time shopping than they were in the past and thus devote less time to bargain hunting and coupon collecting. Digital coupons’ redemption outperformed paper coupons. Most coupons are certainly not used for home loans but are used for food. Speaking of which… A new study published in Waste Management argues that the food leftover in short-term rentals adds up. The aggregate value of food wasted by U.S. vacation rentals totals about $2.3 billion per year. This breaks out to $12 per night of short-term lodging and comes out to 5.1 percent of the nightly rental fee. All told, the annual estimate is $2.3 billion spent on unconsumed food by the time a short-term renter’s vacation ends. Want to save money? Eat the food you purchased.

Saturday Spotlight: RatePlug

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“Pioneering the home property search process by including accurate, real-time home affordability information through Afordal.”

In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).

RatePlug's roots stretch back to the late 1970s when Brad Springer joined his father, Don, in his insurance and mortgage operation. In the 1980s, when the market was reeling from double-digit rates, Brad and his siblings pioneered one of the country's first mortgage brokerage programs, bringing financing outreach directly to real estate agents while becoming the first licensed mortgage broker in Illinois and quite possibly the first in the nation.

Founded at the intersection of real estate technology and mortgage finance, RatePlug pioneered a system that bridged the long-standing gap between real estate agents, lenders, and consumers, transforming static listings into dynamic, decision-ready experiences.

Afordal, by RatePlug, launched last month, is the first platform and app to unify home search, real-time mortgage rates, and property-specific special financing in one seamless solution… And soon it will feature nearly instant online pre-approval.

Afordal solves one of the biggest pain points in residential real estate: aligning what homebuyers want with what they can afford.

What makes RatePlug unique in the mortgage industry?

RatePlug became an indispensable tool for tens of thousands of real estate professionals, enabling smarter home search experiences and deeper collaboration between agents and lenders. Its emphasis on RESPA compliance, transparency, and real-time data delivery helped shape how affordability is considered during home discovery, well before a buyer submits a home loan application.

As of today, RatePlug is embedded in more than 70 MLSs and available to over 750,000 agents across the U.S., covering 60% of the market. Research shows that buyers spend up to six minutes longer on listings with RatePlug data, and agents using RatePlug reduce Days on Market by up to 14%.

Tell us about how your team gives back to your community.

RatePlug, through leader Brad Springer, is a founding member of the Kids Golf Foundation of Illinois. RatePlug's team is also an ardent supporter of Chelsea's Light and the fight to end breast cancer.

Things you are most proud of that don’t have to do with sales.

Being a true "family" business. Throughout the past 45 years and across various companies, we have been fortunate to have worked side by side with our father, uncles, aunts, two sisters, two brothers, multiple nieces and nephews, and even a grandmother!

Fun fact about your company.

Most people are surprised to learn that we are very involved in music. Our father was the MC of the Miss Illinois pageant for 10 years, and our entire family has been involved in bands and musicals throughout the years. Our brother and our CTO/partner even played in a band in Chicago that released two CDs in the early 2000s. Music has been a great "distraction" from the stress of running a business.

Is there anything else you’d like to share?

Today, with Afordal and our purchase late last year of HomeASAP, RatePlug is powering the next generation of real estate and mortgage technology. Its affordability-first home search solution helps buyers shop for homes based on monthly payment, not just price, and empowers agents and loan officers with predictive lead nurturing and, soon, real-time pre-approval data. Springer calls it "education-forward innovation" that delivers clarity, confidence, and the vital information needed in one place for buyers, agents, and loan officers to accelerate a home purchase

(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.) 

Talk of LO comp reform is in vogue

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A white paper from the Community Home Lenders of America (CHLA), published in late June on the airwaves and in this Commentary, argued that the current LO Compensation rule, originating from the Dodd-Frank Act, has strayed far from its original intent and is now harming consumers by limiting flexibility, reducing access to bond and affordable loan programs, and creating inconsistent enforcement across channels. The CHLA’s proposed reforms include allowing loan officers to reduce compensation to match competing offers, exempting bond/HFA loans from rigid comp restrictions, and allowing adjustments for LO errors or brokered loan structures.

The paper prompted Bill Kidwell, NMLS #174542 and the President of IMMAAG (303-674-1200), to write, “The CHLA white paper paints an unfortunately accurate portrayal of the thinking of many in the late 1990’s and early 2000’s about YSP which led to the MLO Compensation rule. However, while it makes a salient point that Congress went too far, implying that the rule somehow only affects mortgage bankers misses the true tragedy of this overzealous, unnecessary, and unjustified rule imposed by the FRB, supported by Congress, and perpetuated by the CFPB.

“The white paper makes no attempt to address the fabrications and misrepresentations which led us to where we are now. As a result, the recommendations do little more than position changes which serve the non-profit’s members and do nothing to address the fact that a bad law should not simply be incrementally changed but rather should be repealed.

“The CHLA’s white paper says that YSP is a ‘a practice where banks or other aggregators offered higher fees as incentives to mortgage brokers to secure loans with a higher mortgage rate.’ While it may be true that banks and other aggregators secured loans which had higher interest if a credit for the rate was provided, the statement is misleading in that it fails to address the consumer benefit provided by the mortgage company access to a process which increases consumer choice.

“In fact, in the body of the paper, under the Yield Spread Premium section, the authors unabashedly state ‘offered to pay a mortgage broker a higher broker loan fee if they could secure a higher mortgage rate on the loan.’ The reality is that the funds available through shared YSP allowed the consumer choices: 1) pay fees up front, 2) finance them, or 3) a combination of the two. To imply, as the white paper does that the increased rate was for the benefit of the mortgage company ignores, as did the Congress and regulators when the industry argued the general misunderstanding of the value of YSP, the fact that the consumer pays all costs. The only difference is whether the costs are paid up front, through the loan proceeds or financed in the rate.

“The myth that YSP was a ‘hidden,’ consumer-harming payment to mortgage brokers was a grossly exaggerated claim based on a few companies that took advantage of the availability of the additional funds. The broader fact is that most small companies used this flexibility to help consumers decide the best way to cover the cost of the broker’s services. This was argued unsuccessfully by industry representatives at the time, even the bankers’ associations and lobbyists.

“Between 2005 to 2007 there were five (5) legislatively required HOEPA hearings. In its MLO compensation proposed rule the FRB fabricated information about the ‘clamor’ against YSP they heard during the hearings and used the misrepresentations to support their proposed rule. Their exaggerated ‘facts’ just did not support the claims. The fact is that the regulators focused their arguments on a few ‘bad apple’ examples of the abuse caused by programs such as Option Arms and 2/28 ARM’s and their mismatched prepayment penalty durations. The regulators ignored that these outlier programs, which were appropriately stopped, had little to do with the financial debacle or claimed consumer issues.

“Yes, there were ‘bad actors.’ Companies such as Countrywide, Washington Mutual, IndyMac and other large funding sources, promoted these outlier programs. These companies increased demand by lowering underwriting standards. They relied on the fact that they would be distanced from the resulting negative outcomes because the loans were immediately sold into the secondary market or pooled into securities. Regardless of this, the Federal Reserve Bank and others laid the financial debacle at the feet of the small broker shops and when the FRB could not find the facts on which to support its claim of consumer harm, it simply lied in its proposed rule. Not only did the FRB lie in its proposed rule, but it also went beyond its authority by lobbying the Congress who bought into its exaggerations and fabrications. The Congress bought into the rhetoric, gave in to “consumer groups” and their ‘crying wolf’ and without any facts to support the action passed legislation after the fact that codified a rule that has done nothing but confuse and harm consumers and create an unlevel competitive environment which adds to the consumer harm. So, the flaw in the white paper is that instead of demanding the repeal of this bad law, the paper suggests incremental changes which serve the author’s constituents and puts ‘lipstick on the pig.’

“The white paper offers two short-sighted and misdirected recommendations. First, Congress should revise the Dodd-Frank Loan Originator (LO) Comp statute to limit its applicability to compensation practices between firms… The problem that gave rise to the LO Comp law in the first place. Until Congress can act, the CFPB should create flexibility as possible within the existing LO Comp law, to allow reduced LO compensation to match competitive offers for a borrower the LO is working with, allow a different LO compensation level for State HFA Bond Financed mortgage loans, clarify that mortgage bankers can have a different LO compensation level for loans they broker out, and allow reduced compensation on a loan where the loan originator makes an underwriting error.

“The question is: Why should Congress be engaged in the contractual relationships between legitimate business at all beyond ensuring there are laws which provide the framework to punish perpetrators of abuse and deceptive practices? Regardless of whether the law is repealed or not, the CFPB can take regulatory action, but not just what is listed in the white paper, but rather to act on what they were petitioned to do in 2022 by IMMAAG, Inc. Stop the unfair, unnecessary double count of lender paid compensation which is already considered in the rate. Allow all companies regardless of their business model to compete. Stop prohibiting small mortgage companies from counteroffering during shopping. Cease the unjustified prohibition against MLO’s lowering compensation for the benefit of the consumer. Allow all participants in the delivery system to have the same flexibility to assist consumers during the process. Lastly, cease the illogical prohibition on changing the amount of compensation if the transaction is changed from Lender Paid Compensation to Borrower Paid Compensation. It now exists only as an exception.”

Bill’s note finished with, “Of course, if Congress acts and repeals this unnecessary law, the above won’t be necessary. The reason I felt it necessary to react to the white paper is that it is clearly a self-serving, banker-oriented opinion which perpetuates the misunderstanding of the value of YSP to consumer choice. And because the CFPB has had the real issues of the inappropriateness and unfairness of this rule presented to them multiple times over the decade and a half this travesty of a rule has been in effect and has demonstrated they even considered alternatives. Someone needs to point out the misstatements and misrepresentations.”

Gift letter fraud on the upswing? Here’s how

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I continue to hear how companies are constantly battling mortgage fraud, and with good reason. One source of fraud that is often discussed is how gift letters play into this.

James Brody, Managing Partner of Brody Gapp, writes, “Gift letters have long been a known source of fraud, though I believe meaningful progress has been made in combating abuse. Many lenders now require full donor bank statements covering at least 30 days, monitor the timing of fund transfers, and rely on forensic tools to flag falsified documents or manipulated donor IDs. Automated systems are also increasingly effective at detecting red flags, like last-minute deposits, the sudden appearance of a ‘cousin’ donor, or circular transfers routed through shell accounts.

“For an interesting case involving a gift letter, click here.

“That said, AI is rapidly shifting the landscape. The sophistication of fabricated bank statements and gift letters has reached a point where manual reviews may no longer suffice. Regulators are beginning to take notice, and I anticipate the rollout of standardized gift letter templates mandated by the agencies, along with expanded post-close QC audits specifically aimed at gift letter authenticity.

“Ultimately, gift letters continue to be exploited in fraudulent schemes, and with the increasing influence of AI across all aspects of mortgage banking (and life in general), the need for more robust safeguards will only intensify.” Thank you, James.

Would you take $50,000 to move to a small town in Nebraska? Here’s your chance.

Visit www.ChrismanCommentary.com for more information on our industry partners, access archived commentaries, or subscribe to the Daily Mortgage News and Commentary. You can also explore the Chrisman Marketplace, a centralized hub connecting mortgage professionals with trusted vendors and solutions. If you’re interested, check out my periodic blog on the STRATMOR Group website. This month’s piece is titled, “The Tax and Spending Bill: The Impact on Borrowers.” The Commentary’s podcast is available on all major platforms, including Apple and Spotify.

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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.)