May 3: Reader thoughts on disparate impact changes, the jobs data, GDP & tariffs, Cinco de Mayo; vendor news from soup to nuts

“Give a man a fish and he will eat for a day. Teach a man to fish and he will sit in a boat all day drinking beer.” There’s plenty of fish, and fishing, in Florida. Wanna buy a house? Go shopping in Florida: The number of homes on the market in the Sunshine State rose 23 percent year over year to a record high in January amid a decrease in homebuying, an influx of newly built homes for sale, intensifying natural disasters, and surging insurance costs & HOA fees. Florida finds itself in the middle in terms of states’ mortgage debt changes. Americans collectively owe over $12.6 trillion in mortgage debt, and this week WalletHub released its report on the States Adding the Most Mortgage Debt, highlighting either where homeowners are facing the greatest challenges, or where homeowners are financing their dream and paying off their expensive credit card debt, take your pick. WalletHub examined proprietary data from Q3 2024 to Q4 2024 to compare mortgage debt trends across all 50 states. Largest Increases: Vermont, Delaware, Massachusetts, Minnesota, Hawai’i, Arkansas, California, Maine, Washington, and Colorado. The smallest increases (40-50) were Indiana, Iowa, North Carolina, Michigan, Pennsylvania, Montana, South Dakota, Nebraska, West Virginia, and Kansas. Rock Chalk!

Jobs and housing drive the U.S. economy

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MBA SVP and Chief Economist Mike Fratantoni’s reaction to yesterday’s U.S. Bureau of Labor Statistics report on employment conditions in April. “The pace of job growth slowed in April to a 177,000 gain, a drop from the downwardly revised 185,000 gain in March but above the 152,000 average gain over the past year. The unemployment rate was steady at 4.2%. While the unemployment rate has not increased in recent months, there continues to be increases in the duration of unemployment spells. Given the declining number of job openings and the slow pace of hiring, for those who lose a job, it is getting tougher to find a new one. Wage growth held steady at 3.8% on an annual basis in April.

“In April, job gains were concentrated in just a few sectors, including health care and transportation and warehousing. We expect that transportation and warehousing jobs are at risk as the tariff effects kick in. Federal government employment decreased by 9,000 in April and is down 26,000 so far this year. Given the plans for further reductions, it is likely that this category will also shrink in the months ahead.

“Despite the financial market volatility in April, and expectations of a sharp slowdown in economic activity in the coming months, these data will be enough to keep the Federal Reserve on the sidelines for now, as they assess whether the threat to economic growth or inflation is the bigger concern. Mortgage rates are likely to stay within their current range as well.”

NAR Chief Economist Lawrence Yun issued the following statement on the jobs report data. “In April, a total of 177,000 payroll jobs were added to the economy, with average weekly earnings of $1237. Income growth is outpacing consumer price inflation. Regardless of what may be happening on Wall Street, where half of the stock market valuations are held by the top 1% of the population, Main Street America continues to move forward. Homeowners across the country are also faring well as housing equity continues to reach new record highs. The manufacturing sector, however, stalled in the latest month with no net job additions. The retail sector reduced staffing levels.

“The federal government continues to be affected by DOGE, with a further 9,000 job reductions. As in recent months, overall government employment rose as local governments added 13,000 jobs in the education sector. Jobs were also created in construction, professional business services, and health care sectors. Moreover, the overall job gains indicate increased occupancy demand for apartment and commercial buildings. Therefore, nearly 10,000 jobs were added to the real estate sector, primarily related to rental and leasing activity. The economy is progressing despite all the trade and tariff disruptions.”

Thoughts about Gross Domestic Product & Tariffs

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“This week the economy went into reverse, turning the 2.4% percent annualized GDP growth of the last quarter of 2024 into a 0.3% contraction in the first quarter of 2025. It was the worst showing since the pandemic, ending nearly three years of steady expansion.

“Soon after the dismal GDP report, trade adviser Peter Navarro marched out to the White House driveway and announced that the report ‘really should be very positive news for America’ and was the best negative growth report ‘I have ever seen in my life.’ The rosy adjectives flowed: ‘very, very good and quite encouraging … huge, literally off the charts ... good, strong news ... all things are good. So, we felt really good about that number.’

“This became the official White House line. Press secretary Karoline Leavitt issued a statement saying that ‘the underlying numbers tell the real story of the strong momentum… and economic boom.

“Kind of like in 1984 where war is peace and freedom is slavery.”

Jerome Powell’s thoughts on current events are spelled out. “Looking forward, the new Administration is in the process of implementing substantial policy changes in four distinct areas: trade, immigration, fiscal policy, and regulation. Those policies are still evolving, and their effects on the economy remain highly uncertain. As we learn more, we will continue to update our assessment. The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth. Both survey- and market-based measures of near-term inflation expectations have moved up significantly, with survey participants pointing to tariffs. Survey measures of longer-term inflation expectations, for the most part, appear to remain well anchored; market-based break-even continue to run close to 2 percent.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem. As we act to meet that obligation, we will balance our maximum-‑employment and price-stability mandates, keeping in mind that, without price stability, we cannot achieve the long periods of strong labor market conditions that benefit all Americans. We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension. If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”

A well-versed observer noted, “The Fed has said that they are comfortable with the level of unemployment, and any increase would be unwelcome. IMO, the body language is that if unemployment starts heading towards 5 percent, and inflation increases marginally, then the Fed will become more aggressive cutting rates.

“The neutral rate (r-star) is in the 3% - 3.5% range. So, if they need to stimulate the economy, we are probably looking at a Fed Funds rate with a 2 handle. Unemployment is generally more uncomfortable than inflation. Don't forget that inflation in the 1990s averaged around 2.8%, and I think most people remember that as a pretty comfortable time, economically. There is nothing magic about a 2% inflation target.

“Meanwhile, Trump continues to chastise Powell for not cutting rates more aggressively. Recall the ‘Powell’s termination cannot come fast enough!’ Trump said Powell “is always TOO LATE AND WRONG” and should be cutting interest rates alongside other central banks.

“Treasury Secretary Scott Bessent tried to smooth things over, saying that the Fed's independence is a ‘jewel box that has got to be preserved.’ Trump, like most politicians, prefers lower rates to higher rates. Powell's term ends in May of next year, and it will be interesting to see who Trump chooses to replace him.

A view of disparate impact changes

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Last Saturday the Commentary noted that President Trump signed an executive order affecting disparate impact claims. “For those who enjoy numbers, the Treasury, Census Bureau, and Forbes have all published information documenting the persistent differences. Unfortunately, things probably may very well worsen during Trump II, and this piece came out yesterday.

“Presidential Action Enables Discrimination in Housing and Lending: Order Threatens to Widen Racial Wealth Gap. This week, President Trump attempted to rewrite settled Supreme Court precedent to make it easier for lenders and others to discriminate without fear of prosecution. The order calls for federal agencies, including the U.S. Department of Housing and Urban Development (HUD) and the Consumer Financial Protection Bureau (CFPB), to stop using data to identify discriminatory policies and practices that disproportionately harm certain groups, known as ‘disparate impact.’ Instead, the government will only address illegal discrimination in the rare instances when the bad actor is caught red-handed.”

“Disparate impact claims allow consumers to challenge a wide variety of discriminatory practices aimed at people of color, people with disabilities, families with young children, and women, among others. These discriminatory practices would otherwise, even when identified, go unaddressed. Lawsuits bringing disparate impact claims have exposed and remedied longstanding patterns of discrimination and brought relief to thousands of consumers.”

One respected industry vet spoke up. “To the contrary, this was great news. Disparate impact is a crazy approach to claim there must be discrimination because there are different outcomes and even when there isn’t any evidence of an attempt to discriminate. I’m not surprised the National Consumer Law Center doesn’t like that it’s coming to an end. It’s been a way for the CFPB and some of the housing advocacy groups to extort money from companies who don’t discriminate and some of whom are exemplary in outreach for minority homeownership (one example that I know well Draper & Kramer Mortgage, who settled for $2MM for alleged disparate impact and redlining despite being incredibly generous to minority housing and other causes). This was long overdue and is just, not regressive and discriminatory.”

Cinco de Mayo: Debt, Diplomacy, and a Pastry Problem

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Gallus’ Augie Del Rio reminded me that, “Cinco de Mayo isn’t Mexico’s Independence Day. It marks the Battle of Puebla in 1862, when a smaller Mexican force stunned the world by defeating the French army.

“Why was France invading? Debt. Mexico had defaulted on payments, including about $15 million owed to France, which is nearly $460 million in today’s dollars. France used the unpaid tab (and a prior bakery dispute known as the Pastry War) as a pretext to invade.

“The takeaway? Paying your sovereign debt is just as important as paying your mortgage: miss enough payments, and you might get more than a late fee.”

Vendor tidbits

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Both the California MBA’s Innovation Conference and the National Secondary are this month, it’s good to keep up on who’s doing what especially when lenders are involved.

AnnieMac Home Mortgage (AnnieMac) is excited to announce a new partnership with UNIFY Home Lending (UNIFY), South Dakota’s only independently-owned IMB. This partnership will expand AnnieMac’s presence to Montana while strengthening its footprint in North Dakota, South Dakota, and Wyoming markets. “This partnership reflects AnnieMac’s commitment to helping high-performing IMBs like UNIFY scale sustainably while staying rooted in their communities. We’re proud to offer the infrastructure, products, and strategic support that allow local lenders to thrive without sacrificing what makes them special,” said Joe Panebianco, CEO of AnnieMac. UNIFY will now have the support of AnnieMac’s operations team and sales executives, and access to AnnieMac’s expansive suite of over 300 loan products, including the exclusive Cash2Keys program.

From Click to Close: Smarter LendingTree Conversions with AI! Lenders buying LendingTree leads know the challenge: too many leads, not enough insight. Aithena by Insellerate changes the game. With 89.4% accuracy in predicting loan closures and a 9X ROI reported in just 90 days, Aithena helps lenders prioritize who’s ready to close—based on ability, need, and intent. From lead scoring and real-time coaching to uncovering missed opportunities in your CRM, Aithena turns guesswork into strategy.

Maxwell announced the launch of QuickPricer within the Maxwell Point of Sale, a new tool designed to empower loan officers to educate consumers easily with personalized loan product and pricing scenarios. QuickPricer integrates seamlessly with all leading pricing engines—including Optimal Blue, Polly, MeridianLink’s PriceMyLoan (PML), ICE PPE, and more—along with mortgage insurance providers, fee engines, and credit reporting agencies to ensure instant access to accurate pricing and product data. Right in the point of sale, loan officers input basic borrower information and generate customized loan options to share with their borrowers.

Dark Matter Technologies unveiled a new Developer Portal during its second annual Horizon user conference. The Developer Portal marks a significant evolution for the Empower® loan origination system (LOS), moving from API access to a fully open API ecosystem. By providing external developers with self-service access to documentation, code samples and integration guides, the portal removes barriers to innovation and enables clients and partners to build on Empower with greater speed and independence. Designed with the developer experience in mind, the portal delivers a modern, frictionless interface that helps users get up and running fast. It supports a wide range of development use cases, from integrating customer relationship management systems to building custom workflows, allowing organizations to extend the Empower platform in ways that align with their business strategies.

AmeriHome Correspondent has partnered with Snapdocs, the industry’s leading digital closing provider, to support eNote adoption across its network of IMBs, banks, and credit unions. AmeriHome’s acceptance of eNotes through the Snapdocs eVault addresses a critical and timely need in the industry. Snapdocs powers 1 in 6 eNote originations and 50% of lenders originating eNotes are AmeriHome customers, highlighting the impact Amerihome’s eNote acceptance will have on industry-wide adoption efforts.

FundingShield recent report: FundingShield Q1, 2025 Fraud Analytics with Commentary from CEO Ike Suri.

Aivre, a fast-growing real estate appraisal software company, has cut the time it takes to complete an appraisal by more than half, thanks to its integration with Restb.ai's computer vision and image recognition technology. According to a new Case Study, appraisers using Aivre now save more than three hours per appraisal by automating time-intensive steps like photo classification, comparable scoring, and report generation. That’s a productivity boost that can double the number of appraisals completed in a day.

HECM Tool, the leading reverse mortgage sales and conversion software, announced the integration of Smartfi Home Loans' Choice Fixed proprietary reverse mortgage product into its platform. Choice Fixed offers fixed-rate stability, quicker closings, and broader borrower eligibility than FHA-insured HECMs. Now fully integrated into the HECM Tool's visual interface, loan officers can easily compare and present both HECM and proprietary reverse mortgage options for refinance or purchase transactions. The update makes it easier than ever for traditional mortgage brokers and forward loan officers to offer reverse mortgages, including Choice Fixed, to clients. With side-by-side comparisons and intuitive visuals, the HECM Tool bridges the gap between forward and reverse lending with clarity and ease.

Lenders One has launched a new suite of solutions to help you separate yourself from the competition, creating added value and customer stickiness: L1 Borrower Benefits. From homeowners’ insurance to HELOCs, these solutions are designed for all of your borrowers whether they are purchasing a new home, refinancing their existing mortgages, or they are a past client in need of one of the services. L1 Borrower Benefits can help you enhance borrower relationships, cultivate loyalty with repeat business, and increase referrals. As an added benefit, there is also the potential to drive revenue growth from the clients you already have.

This optical illusion expands as you stare at it, and now we know why

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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