May 17: LLPAs & 2nd home prices; LO/trainer/lender lawsuit; Moody's U.S. downgrade; vendor news; Saturday Spotlight: Go Moder
My son Robbie told me that yesterday, on 5th Avenue in Manhattan, he was in line a few places behind the Dalai Lama at a hot dog cart. The Lama said, “Make me one with everything!” All he had to pay with was a $20 bill. The vendor takes the money, thanks the Lama, and starts helping the next customer. “What about my change?” the Dala Lama asks. The vendor replies, “Ah, change comes from within!” Under money subject, and the “a penny saved is a penny earned” header, did you know that nickels cost 14 cents each to produce? In 2024 it cost 3.7 cents to make a penny. In 2024 the mint produced 3.2 billion pennies and lost $85.3 million in the process. The downside is that people would use more nickels which cost 14 cents to produce. If you’d like to know how much it costs to make every coin, here you go. Where am I going with this? When the press talks about the “high cost of home ownership” people seem to automatically blame “high” interest rates (not helped by Moody’s cutting the credit quality of the United States), which really aren’t that high. They need to be reminded that a monthly mortgage payment is only one piece of the cost pie, and that HOA fees, homeowner’s insurance, property tax, special assessments, maintenance, and so on all should be included. This is where a human loan originator can help: preparing (but not scaring off) a potential homeowner for the costs ahead. Whether it is eliminating pennies or clawing .125 in rate from a lender on a lock, there are other considerations to think about.
Saturday Spotlight: Go Moder
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“Accelerating Excellence across Mortgage, Banking and Insurance”
Leading with Innovation, Built for Impact! At Moder, we help mortgage companies do more with less, without compromising on quality, compliance, or customer experience. As one of the largest mortgage service providers in the U.S., we’re proud to support lenders, servicers, and investors in tackling their biggest challenges with a combination of deep industry expertise, intelligent automation, and scalable, low-cost solutions.
We know this industry isn’t easy. Volumes shift. Regulations change. Margins tighten. But at Moder, we see complexity as an opportunity to create clarity.
Our approach is grounded in partnership. We don’t believe in “lift and shift.” Instead, we focus on identifying the right opportunities to simplify and streamline processes, starting with low-hanging fruit that delivers quick wins. From there, we build toward long-term, sustainable transformation powered by continuous improvement and smart tech integration.
Reimagining the Mortgage Lifecycle: Moder is a trusted partner to some of the most respected names in the mortgage industry. Our team combines deep domain knowledge with modern technology to help clients improve operations, manage costs, and stay agile in a constantly evolving environment.
We believe transformation doesn’t have to be disruptive. It should be thoughtful, targeted, and always aligned with real business goals. That’s the mindset we bring to every engagement. Moder supports clients across the entire mortgage value chain, from origination to servicing, specializing in operational transformation with measurable impact. Whether it's process optimization, reducing costs, or driving efficiencies, our solutions are built to meet today’s needs while keeping tomorrow in mind.
What sets Moder apart is our ability to integrate human insight with next-gen technology. Our digital capabilities enhance efficiency and improve decision-making, while our global delivery teams bring precision, speed, and scale to day-to-day operations, so you can stay focused on growth.
What Makes Us Unique?
Purpose-Built for Mortgage: With decades of collective leadership experience in the mortgage industry, we understand the details that matter. Our solutions are thoughtfully tailored, not one-size-fits-all. People + Tech, Working Together: We combine skilled talent with automation and AI to deliver real impact. It's not about replacing people. It’s about empowering them to do more valuable work. Value-First Approach: We start with initiatives that deliver quick wins and long-term value. Whether you're looking to cut costs, reduce turn times, or scale with confidence, we align with your priorities from day one. Flexible, Scalable, Reliable: Whether you’re navigating a market shift or preparing for your next phase of growth, Moder evolves with you. Our delivery model is built to scale… And built to last.
More than just a service provider, we act as an extension of your team, bringing insights, innovation, and execution together in one seamless experience. Know More.
(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)
2nd home Agency LLPAs have hurt the market
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This week the Commentary noted that, “The number of people buying second homes has plunged to its lowest level since records began, and is under a third of what it was during the pandemic boom. A toxic mix of sky-high mortgage rates, soaring maintenance costs, and a widespread return-to-office push is fueling the trend.”
I received several comments about why. “We have felt the change on the streets as well. Not to mention, with FNMA deciding it seems that ‘Most folks lie about it being a 2nd home purchase so let’s just charge them essentially investor rates,’ how many of those 2nd homes were actually classified as investor purchases contributing to the drop in reported 2nd homes? I know I have done a few in the interest of easier qualifications with the rent income and less paperwork for the buyer.”
And this one. “I saw your opening article on the second homes. I do not dispute it, but the cause is more problematic. As you are aware, there have been a large contingent of foreign individuals, particularly Canadians leaving the USA, thus one cause. But the larger issue, I believe, is Fannie and Freddie. About a year back they, F&F, increased the LLPA charges on second homes from essentially primary residences to the LLPAs of investment properties. From a processing standpoint and a qualification standpoint, it is often easier to take a client on a DSCR loan than a Fannie loan.
“I’m not debating the legal, moral, or ethical issues. If the Government wanted to pursue those issues, they should have pursued the fraud that caused them to increase the second home LLPA to the same as the investment home LLPAs in the first place, but this is the root cause of the loss of the second home. Frankly, using a second home as an Airbnb is NOT a second home and anyone doing so should be indited in my opinion as it now costs the rest of us more money, case in point.
“If F&F wants to spur housing, they need to increase the AMIs/or drop the 80 percent limits and go to 100-120 percent of AMI. If Congress wants to spur housing, the heck with DPA, have then offer a $15k rate buydown option, of a 7 year 1 percent rate buydown for 1st time buyers with income under 125 percent of AMI, with the funds going directly to F&F NOT the lenders.”
The anatomy of a lawsuit
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Of course, anyone can sue anyone else at any time. And, of course, spending money on litigation and settlements rarely, if ever, helps grow a company’s business.
Attorney James Brody sent a note to me focused on an ongoing suit where the plaintiff (NEXA Mortgage) claims that Kristine Wake holds the domain name for NEXA's training website hostage.
“NEXA Mortgage, LLC., the nation's largest mortgage broker, is suing its former director of training, Kristine Wake, over her alleged solicitation of NEXA employees, misappropriation and retention of NEXA’s trade secrets and confidential business information, including documents and information regarding NEXA’s Mortgage Academy Training Program.
“The plaintiff, NEXA, also claims Wake has been holding the domain name for its loan officer training website, ‘WhyNexaAcademy.com,’ hostage. Wake allegedly demanded an $18,000 payment in exchange for releasing the domain to NEXA.
“In the complaint, filed in an Arizona federal court on May 2, the plaintiff accuses Wake of violating 15 U.S.C.§ 1125(d), the Anti-Cybersquatting Consumer Protection Act, and various common law claims including breach of contract, breach of duty of loyalty, unfair competition, and misappropriation of trade secrets.
“’NEXA supports its loan officers,’ said Attorney James Brody, who represents the plaintiff, NEXA Mortgage. ‘And when someone wants to leave and they come at it in a direct way. I've known [Mike Kortas] to always be supportive. However, when this type of thing happens, it's obviously a problem now.’
“Wake has yet to be served and could possibly be evading service, but it should happen here pretty soon.
“The lawsuit also names other unidentified NEXA employees as defendants, sued as ‘DOES 1 through 25, inclusive,’ but does not clarify what their connection is to Wake and her transition out of the company. The complaint states that NEXA is ignorant as to the true names and capacities of defendants but plans to amend the complaint with the true names and capacities of said DOE defendants along with any appropriate charging allegations.
“Wake was hired by NEXA in 2020 as an Outside Loan Officer, pursuant to an Outside Loan Officer Employment Agreement, which was later replaced and superseded by an Outside Loan Officer Agreement dated February 7, 2024, according to the complaint. The agreement bars Wake from using NEXA’s confidential information for her own benefit or for the benefit of any third-party, as well as soliciting NEXA employees or interfering with NEXA's business.
“While employed, Wake developed the training and procedures used for NEXA’s Mortgage Academy Training Program, which covered topics such as marketing, generating referrals, pricing, and guidance on various phases of the mortgage application and approval process. NEXA Mortgage, which currently sponsors over 3,000 loan officers, claims Wake decided to launch her own competing business ‘NEXXT LEVEL Mortgage’ in September 2024. The former director allegedly solicited 12 of NEXA's employees while still employed by NEXA.
“’Having developed the training modules and procedures, WAKE was well aware of the confidential nature of the Academy and its value to NEXA,’ the complaint reads. ‘Nevertheless, WAKE took the confidential materials with her when she left the company and, upon information and belief, is using the training program developed under NEXA’s umbrella for her own benefit and/or that of her new employer.’
“The plaintiff also claims that Wake ‘ironically’ asked the employees to sign a Non-Disclosure Agreement (‘NDA’) in connection with her alleged solicitation and related discussions to protect her own confidential information.
“NEXA suspended WAKE and ultimately terminated her employment due to her alleged misconduct and breaches of the obligations set forth in her Outside Loan Officer Agreement. Following the termination of her employment with NEXA, Wake was hired by Platinum One Lending, LLC, which is owned by NEXA’s co-founder and former president, Matt Grella. Grella was also terminated by his co-founder and CEO Mike Kortas in 2024.
“In April 2024, Grella filed a lawsuit against Kortas, accusing him of misappropriating funds to purchase luxury aviation. A countersuit was subsequently filed by Kortas. However, the plaintiff accuses Wake of continuing to wrongfully use NEXA’s confidential and competitive business and training information to this day, for her own benefit and for the benefit of her employer.
The complaint adds that ‘Wake has further breached her contractual obligations by soliciting and/or attempting to solicit a dozen NEXA employees to join Platinum One, after her efforts to start and manage NEXXT LEVEL MORTGAGE failed.’
“Additionally, the plaintiff claims that Wake registered the domain ‘whynexaacademy.com’ as part of her job responsibilities with NEXA, but she registered the domain name in her own name. NEXA argues that Wake’s registration and later refusal to turn over the domain name constitutes an act of cyberpiracy prohibited by 15 U.S.C.§ 1125(d).
"[NEXA's training academy] is a specific value-add to NEXA because it's a value-add to its loan officers. And the value of any mortgage company is the people there, the loan officers, the producers. It's not in the business of selling the widgets. It's in the business of attracting, training, and supporting top talent."
"She had a position of trust. Everything that she had done while she was with NEXA and receiving the support of NEXA, [were] efforts that were being done in furtherance of the company. So, for her to go ahead and take anything, much less to hold these things hostage is something that is wrongful."
“Due to Wake’s alleged misconduct, NEXA claims it has incurred and continues to incur damages in amounts that exceed $75,000. Therefore, NEXA requests from the Court an order compelling the defendant to turn over the domain name and relief for compensatory, contractual, and actual damages in an amount to be proven at trial — but no less than $75,000.
Vendor morsels
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RWLTrade.com: New Site for Non-QM Loan Trading! Whole Loan Capital, LLC announced the launch of RWL Trade, its new Non-QM trading platform for active institutional sellers and buyers of Non-QM loan pools. According to David Akre, the Founder and Principal of Whole Loan Capital, "RWL Trade is a low cost, fast and simple way for originators to increase liquidity and execution, while giving buyers access to sizable loan pools, market intelligence, and transparency that is often hard to find." The first pool on the site was $106 million of new production non-QM. Several other pools will be added soon as more originators are onboarded. Founded in 2010, Whole Loan Capital is an advisory and loan trading business headed by David Akre, an active industry participant with over 35 years' experience in the non-agency residential whole loan purchase, management and securitization market.
Argyle just announced a new integration with Tidalwave, the first mortgage POS to lean into “agentic AI” as part of its core value proposition. It’s a smart move that brings income and employment verification (VOIE) directly into the 1003 workflow with no separate steps or manual back-and-forth. The complete story is available in the full news release.
Tavant, a global leader in AI-powered solutions and digital engineering, announced its new ‘AIgnite’ AI Accelerator Suite, designed to help enterprises rapidly unlock the value from GenAI-powered IT automation, data transformation, and creation and adoption of intelligent applications and AI Agents. The Suite enables comprehensive AI-powered enterprise automation and digital transformation, spanning end-to-end software development lifecycle, application & production support, IT infrastructure management, data platform development, and AI and AI Agent-powered intelligent application solutions. Tavant is also launching its first wave of industry-specific AI Agents for Manufacturing, Service Lifecycle Management, Lending Loan Origination and Servicing, and Agents to enhance the Agriculture & Food value chain.
Optimal Blue just made its new Originator Assistant broadly available, and it’s something I think your audience will appreciate. It’s a generative AI-powered tool built into the Optimal Blue PPE that helps originators structure better loan scenarios faster by spotting breakpoints, incentives and alternative pricing paths that might otherwise get overlooked. Giving loan officers more confidence and borrowers more choice seems especially timely given the competitive purchase market we’re in. They also rolled out a reimagined lock extension workflow built in close collaboration with customers. More details are in the press release.
A new Restb.ai White Paper analyzes more than 1,200 real estate appraisals to reveal for the first time over $27 billion in potential hidden financial risk tied to flawed property condition and quality adjustments exposing a major blind spot in the real estate and mortgage ecosystem. The new Restb.ai study uncovers widespread inconsistencies and transparency issues in how appraisers assess and adjust for a property’s physical condition and quality, two factors that directly impact property valuation, borrower equity, and lender risk. Crucially, the White Paper provides deep insight into how appraisers can leverage computer vision to mitigate risks using objective image-based scoring to detect and justify condition and quality adjustments with greater precision. The study's findings echo recent warnings from Fannie Mae, which identified condition and quality misreporting as one of its top three appraisal quality concerns.
Who doesn’t like a feel good short video story about a dog being rescued from a bad, unusual plight?
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, “Love Them or Leave Them? The Ongoing Saga of Fannie and Freddie.” 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. 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.)