While much of the nation deals with the severe cold, I received this note from a new loan officer in Oklahoma. “Rob, I overheard my secondary group talking about a ‘PITA’ price adjustment. I didn’t want to show my ignorance. What is it?” You should ask your team, as it refers to a price handicap given to investors that your secondary group doesn’t want to sell loans to for whatever reason, usually continuing operational issues, making that investor a “pain in the ---" to deal with. Secondary and capital markets teams also deal with prices and interest rates. (The Last Word has a new panelist, Coutney Thompson who will cover the impact of current Federal Reserve rate policies on interest rates and the challenges facing the homebuilding sector in America.) Currently, the futures market is pricing in a ____ percent probability of a pause in policy rate cuts after the January 29th FOMC meeting and a ____ percent chance of a 25 bps rate cut during the March 19th meeting. You can fill in the blanks yourself: if you really want to know, here’s a handy-dandy site for fed fund forecasts: CME FedWatch Tool. (Today’s podcast can be found here and this week’s is sponsored by nCino. nCino Mortgage Suite's three core products, nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics, unite the people, systems, and stages of the mortgage process. Today’s has an interview with Real Atlas’ Michael Hills on the brokerage landscape and home buyer behavior as we enter spring home buying season.)

Lender and Broker Services, Products, and Software

Visualizing an entire idea, rather than just seeing components individually, is “big picture” thinking. In this, Dark Matter Technologies may be ahead of many thanks to its newly announced cloud-based servicing platform. The robust and mature platform (formerly known as CMS Servicing) delivers capabilities throughout all functional areas of a servicing operation, including customer service, payment processing and cashiering, escrow management, investor reporting, default management and has a white-label consumer portal for borrower self-service with the ability to make payments, view loan details, exchange documents and more. In adding the scalable, configurable servicing platform to its product lineup, Dark Matter connects the dots for lenders that want to add interim servicing to their offerings and servicers already deeply entrenched in the business. Grow your bigger picture today by connecting with Dark Matter.

“Are you prepared to elevate your new construction lending process? At Class Valuation, we specialize in delivering reliable, credible appraisals for new home builds nationwide. Our New Construction Panel of expert appraisers understands the intricacies of valuing new construction… factors like market trends, builder upgrades, and architectural designs are second nature to our team. In our latest blog, The Importance of Partnering with an Expert Appraiser Panel for New Construction Appraisals, we explore how partnering with skilled professionals reduces risk, streamlines processes, and improves loan quality. Whether you're managing fluctuating timelines or unique project complexities, our panel ensures timely, dependable valuations that meet the highest standards. Ready to make informed lending decisions with confidence? Read the blog now and learn how Class Valuation can support your new construction appraisal needs.”

Some lenders rely on a one-to-one approach to recruit top-end loan officers which makes scaling a challenge. Actionable intelligence can help identify the right LOs to recruit and help them carry over database information to eliminate hassle. Not to mention, that same data can also help clean up existing loan officer databases, so they have a complete list of customers and contacts to engage more effectively. Total Expert Chief Lending Officer Dan Catinella and InGenius CEO Jeff Walton's sat down to discuss how to make database management easy for LOs, centralizing recruitment efforts, and removing onboarding barriers. Watch now.

“Informative Research is making income and employment verification easier with an expanded integration between Freddie Mac’s Loan Product Advisor® (LPA®) asset and income modeler (AIM) and AccountChek®. Now, LPA will assess AccountChek reports for income and employment representation and warranty relief eligibility using a broader network of payroll providers. As an approved third-party service provider, AccountChek simplifies the process, allowing lenders to seamlessly transmit borrower data to LPA for efficient assessment of income, assets, and employment. The result? Potentially reduced repurchase risk and accelerated processing times. What’s more, borrowers may benefit, too, with faster approvals and fewer paper documentation burdens. Get ready to unlock faster, smarter VOEI with AccountChek + AIM. Contact Informative Research to see how we can help you get the most out of your verification process.”

Fiscal Versus Monetary Policy

Fiscal and monetary policies both shape the economy, but they do so in distinct ways. Fiscal policy involves government taxation and spending decisions, while monetary policy is controlled by central banks (like our Federal Reserve) to manage interest rates and money supply, writes Robbie Chrisman in the latest Thought Leadership piece for the Chrisman Commentary. For mortgage lenders, understanding this distinction is essential because each affects the housing market differently. Monetary policy directly influences mortgage rates. Fiscal policy, on the other hand, impacts housing demand indirectly. Lenders who grasp these dynamics can better anticipate shifts in the market, adjust their lending strategies, and provide informed guidance to borrowers navigating changing economic conditions.

Speaking of raw information, in 2025, many mortgage professionals are bracing for 7+ percent rates, but what if they’re wrong? For the thought leadership piece on the Chrisman Commentary website, Rich Swerbinsky writes how the mortgage bond market is currently overreacting to exaggerated fears driven by political rhetoric and concerns about inflation and tariffs. However, these fears may be short-lived, and as the Trump administration tackles the national debt with creative solutions, mortgage rates could start to fall. Find out why the current market dynamics may be mispricing future opportunities and how investors could soon be drawn to mortgage bonds, narrowing spreads, and pushing rates lower. Click here to read more.

Capital Markets

MBA President and CEO Bob Broeksmit has some thoughts on the MBA’s Weekly Applications Survey. “Mortgage applications declined to the lowest level since the start of the year, even as mortgage rates have held steady at just under 7 percent. Purchase activity was higher than year-ago levels, but many prospective homebuyers are waiting for supply and affordability conditions to improve meaningfully before jumping into the market.”

We have some good mortgage rate news! Mortgage rates fell to the lowest levels of the year according to this week’s Primary Mortgage Market Survey from Freddie Mac. For the week ending February 20, the 30-year rate fell 2-basis points to 6.85 percent and is 5-basis points lower from a year ago. Meanwhile, the 15-year rate more than reversed the prior week’s increase and dropped 5-basis points to 6.04 percent, which is down 25-basis points year-over-year.

Weaker than expected economic data yesterday helped that movement, with Treasury yields returning below their respective 50-day moving averages. Weekly jobless claims (219k), increased more than expected while the Philadelphia Fed Survey for February was weaker than expected, still expanding, albeit at a slower pace than the prior month. The continued low level of initial claims means that economists are apt to be expecting a fairly solid increase in February nonfarm payrolls released the week after next.

Regardless of how those payrolls print, it’s extremely likely that further rate cuts are on hold until we have more clarity on inflation. The Fed believes there is much more risk for higher inflation than economic weakness, based on the Minutes from the most recent FOMC meeting that were released on Wednesday. That was corroborated by St. Louis Fed President Musalem yesterday, who said that the risk of disinflation stalling is greater than that of the labor market deteriorating. Potential tariffs enacted by the Trump administration also give the Fed justification for its ongoing wait-and-see approach. Atlanta Fed President Bostic told CNBC that he continues to expect two rate cuts this year.

Preliminary S&P Global PMIs lead off today’s economic calendar later this morning; forecasts are for modest changes from previous figures. PMIs measure the health of the manufacturing, construction, and service sectors based on surveys of purchasing managers at many companies. After that comes existing home sales for January, Michigan sentiment for February, and remarks from both San Francisco Fed President Daly and Fed Vice Chair Jefferson. Today is also Class D 48 hours for MBS; sellers of to-be-announced (TBA) MBS must communicate all pool information regarding the MBS to buyers 48 hours before the settlement date of the trade. We begin Friday with Agency MBS prices unchanged from Thursday’s close, the 2-year yielding 4.25, and the 10-year yielding 4.48 after closing yesterday at 4.50 percent.