Fraud Prevention, Loss Mit, Bridge Loan Products; Cost of Hedging; Trump Threatens Powell’s Job
A week from today is “Take Your Child to Work Day.” Something tells me that it won’t be observed in U.S. Government offices. While we’re on family issues, I received this note. “Rob, have you heard of originators sponsoring SPCA pet adoption days, since sometimes when a family welcomes a dog, it is a precursor to moving from an apartment into a house? And the LO wants to be in front of pet owners.” Yes, indeed I have, and it’s a good cause. There is talk that the traditional chain of, “College, job, marriage, children, home, pets” may be shuffled a little for starter families and starter homes for people in their 20s. Nearly everyone knows where the equator is, but polls indicate that 89 percent of people in the United States couldn’t identify Syria, Ukraine, or Gaza on a world map. Okay, I just made that statistic up, but I bet it is not far off. Hopefully they know where Omaha is, or at least Nebraska, since lenders may want to have a branch there because it is a fine place for people in their 20’s to afford a home. (Today’s podcast can be found here and this week’s are sponsored by BeSmartee, transforming mortgage lending with Bright Connect, its native mobile app designed to boost loan officer productivity, speed up referrals, and simplify the borrower experience. Hear an interview with Luxury Mortgage’s David Adamo on the strategic advantages of non-QM loans, and insights on how they can help lenders stand out, diversify their portfolios, and navigate today’s competitive lending landscape.)
Products, Software, and Services for Lenders
Borrowers want to buy before they sell, but get stuck with contingencies, DTI hurdles, or trailing debt? Flyhomes, a wholesale platform focused exclusively on bridge lending, offers customizable Buy Before You Sell solutions to help your borrowers confidently secure their next home before selling their current one. With flexible financing tailored to each borrower’s unique situation, they can move just once, reduce their DTI, unlock equity from their current home, and make cash-like purchase offers at up to 95%-100% LTV in today’s competitive market. For the past 10 years, Flyhomes has been a pioneer and leader in innovative financial products, helping 5,000+ buyers purchase their next home and enabling LOs to close 1.2 more loans per month on average. Now through Q2, get 25 bps off origination fees on any Flyhomes Bridge Loan! (terms apply). Sign up for an upcoming webinar to get more product insights and promotion details. Book a call to learn more, or send us a live scenario to get started.
In today’s market, lenders are looking for ways to cut costs wherever possible across the mortgage loan lifecycle. One preventable yet common expense during loan origination comes from fee cures, which may significantly impact operational budgets. According to a recent study by ICE Mortgage Technology, one in three loans include a fee cure, adding an average of $1,225 to production costs per loan. Understanding the sources of fee cures is critical for lenders looking to cut unnecessary expenses. Richard Lombardi, EVP of Property Data Solutions & Data Strategy at ICE Mortgage Technology, shares his insights in a recent article, How you can reduce origination costs by identifying the four common sources of fee cures. Discover the most frequent causes of fee cures and how leveraging effective fee management solutions can help streamline loan origination processes and achieve cost savings. Take control of your loan production costs and reduce fee cures with the right strategies. Read the full article now.
The industry has long needed more options for Jumbo loans, and the good news is that liquidity is finally starting to flow into the market. One Jumbo investor worth checking out is Merchants Bank who recently announced they will be launching a Private Label Securitization platform, which will initially feature three products: Prime Jumbo, Agency High-Balance, and Second Homes. For more information about the Merchants Premium Program, reach out to Rob Wilson.
FundingShield, the market leader in wire & title fraud prevention, released its Q1-2025 report showing 46.8% of transactions had deficiencies. During Q1-2025, a record high 10.9% of transactions had CPL Validation issues, 47.7% had CPL issues, 8.4% had wire/bank account related findings. Decision ready, live, source data-based verifications with remediation are needed to manage risk and lower costs. “Cybersecurity, data security, and credit concerns are rising in the market. Many of our Fannie seller clients underwent MORA audits during Q1 and were asked to demonstrate transaction-specific controls to confirm closing agent compliance and recourse to rated title insurance firms. FundingShield’s transaction-level reviews of license, good standing, insurance, loan-data, bank data, title system checks and more are essential for managing these risks effectively and demonstrating compliance in such audits,” shared Ike Suri, CEO. Contact Sales@fundingshield.com for demos and free trials, Meet us at the CMBA Mortgage Innovators (largest Mortgage-Tech conference of 2025, lender clients/contacts of FundingShield attend free), Texas MBA Annual or MBA Secondary NYC.
First American Data & Analytics has served the industry for more than a century and is continuing to set the standard for property and mortgage data. Its commitment to providing unmatched property data, AI-powered analytics, and deep mortgage and real estate expertise is unwavering. Since 1889, it has been your trusted data provider, continually innovating with tech-enabled solutions to deliver the most timely and accurate data in the industry. You deserve a partner who’s ALL IN! Explore First American’s premier data.
For homeowners facing financial hardship, the threat of losing their home can be devastating – causing stress, anxiety, and uncertainty about their future. But servicers can play a critical role in helping families find a way forward. The ICE Loss Mitigation solution helps you streamline processes and reduce risk, while providing you with the tools to connect struggling homeowners with available assistance options. Loss Mitigation also helps automate GSE decision and settlement steps with API integrations, track activities with rules-driven tracking, and more all from within a user-friendly interface for agents. Learn more about ICE Loss Mitigation so you can be ready to help homeowners when they need it most.
Wholesale News
The wholesale/broker world took note yesterday that RocketPro is now on Anthony Casa’s platform ARIVE, which is available to almost 50% of the broker community. Apparently, according to the jungle drums, talks between ARIVE and Rocket have been active for months. It is a safe guess that Katie Sweeney, a former CEO of both ARIVE and AIME, had a hand in getting Rocket on the platform in her current role. ARIVE is most closely associated with United Wholesale. Now that Rocket is also on the ARIVE platform, will more brokers send it loans? The Rocket vs. UWM contest continues.
On top of that, per National Mortgage Professional, another piece of news was “Equity Smart Home Loans is cutting ties with its long-time lending partner, United Wholesale Mortgage (UWM), to join Rocket Pro’s ever-growing ecosystem. It’s a move of epic proportions for the mega brokerage that currently employs 435 loan officers, per the NMLS… Rocket Pro is gaining Equity Smart, which originated more than 1,600 loans in 2024, according to Modex.”
The Cost of Hedging
Ever wondered what it really costs mortgage bankers to hedge their locked loan pipelines? In “What’s the Real Cost to Hedge a Mortgage Pipeline?”, author James Hedvall breaks down the complex, and often misunderstood, factors that go into protecting lenders from volatile interest rates. From extensions and renegotiations to the pitfalls of oversimplified hedge models, Hedvall offers a sharp, behind-the-scenes look at how timing, execution, and market swings can make or break profitability. Read on to discover why this isn’t just a finance question… It’s a strategic imperative.
Capital Markets
While market volatility appears to have moderated somewhat, it’s worth considering whether this perceived stability reflects actual calm or simply a growing desensitization within the bond market (read: a kind of psychological callus forming among participants). The uncertainty remains palpable. Fed Chair Powell, whose job President Trump threatened again, said yesterday that continued market turbulence is likely, raising concerns about the sustainability of running significant fiscal deficits during periods of full employment without incurring long-term economic consequences. The Fed chair said he expects inflation to rise because of Trump’s tariffs, which will likely also put the labor market under pressure. Powell and other Fed policymakers have expressed support for holding rates steady as they try to sort out the impact from the Trump administration’s scattershot policies. He also acknowledged the unpredictable nature of tariff-induced inflation and suggested it may compel the Fed to reconsider or deviate from its traditional policy frameworks, an admission that has clearly unsettled many in the pricing community.
Amid rising long-term yields and the 30-year bond experiencing its worst performance since the early 1980s, speculation has intensified over whether the Federal Reserve might intervene to stabilize the market. However, Fed officials such as Neel Kashkari and Susan Collins have recently emphasized that, despite observable market stress, current conditions remain orderly and do not yet warrant policy action. Investors, nevertheless, remain vigilant for signs of market dysfunction that could prompt a shift in the Fed’s stance. Some analysts suggest that Treasury yields may have already peaked, citing sustained foreign demand as a stabilizing factor.
A key metric reflecting market conditions is the spread between the 10-year Treasury yield and the 30-year fixed mortgage rate. Historically, this spread averages around 170 basis points when the Federal Reserve actively purchases mortgage-backed securities, and approximately 230 basis points in the absence of such intervention. Currently, the spread has widened to about 260 basis points, indicating heightened risk premiums and reduced investor appetite for mortgage-backed securities.
We learned yesterday that retail sales in March rose 4.6 percent year-over-year, maintaining positive growth even when adjusted for inflation, prompting debate over the underlying drivers of this strength. One prevailing interpretation is that consumers are front-loading purchases in anticipation of tariff-induced price hikes, particularly evident in the sharp rise in auto sales during March. While other retail categories likely experienced more modest gains, the overall uptick in spending suggests a temporary pull-forward effect rather than a sustained economic rebound (like, “this is one gigantic clearance sale” rather than genuine economic strength, with expectations of higher future prices motivating an accelerated pace of spending).
This view is corroborated by weak consumer sentiment data, which reflects growing anxiety about affordability, potential job insecurity, and future economic conditions. Conversely, the stronger-than-expected March retail numbers and recent employment reports hint that the economy may not be as fragile as widely assumed. Come to your own conclusion, as signs of strain persist.
Today includes an early close, and the economic calendar has already kicked off with weekly jobless claims (215k, 1,855,000 continuing claims, so the labor market is solid), Philadelphia Fed manufacturing (30.7, showing signs of inflation), and housing starts/building permits (-11.4, +1.6 percent, respectively). Later today, the Treasury will announce month-end supply consisting of $69 billion 2-year, $70 billion 5-year and $44 billion 7-year notes, and $30 billion reopened 2-year FRNs before auctioning $25 billion new 5-year TIPS. Freddie Mac will release its Primary Mortgage Market Survey, and one Fed speaker is currently scheduled: Governor Barr. Internationally, the ECB was out with its latest monetary policy decision, a 25-basis points cut. For the early close ahead of the Good Friday holiday, bonds will settle at 1:00pm ET and SIFMA recommends a 2:00pm ET close for cash bonds. We begin the day with Agency MBS prices roughly unchanged from Wednesday’s close, the 2-year yielding 3.78, and the 10-year yielding 4.28 after closing yesterday at 4.28 percent.
