While the House passed President Trump’s budget resolution, the industry is abuzz about the TV at HUD’s headquarters showing an AI video of Donald Trump… There are some shifty IT folks out there. Meanwhile, focusing on reality, borrower psychology is a topic here at the Northeast Mortgage Summit, and who knows more about it, you or the CFO of Home Depot? Renovation and HELOC specialists took note that Home Depot’s chief financial officer said people are “moving on” from today’s high mortgage rates and have started investing more in their homes. HD reported strong fourth-quarter results, although CEO Ted Decker said consumers are still reluctant to make larger remodeling investments. There are plenty in our biz who tell me that people may start to view today’s mortgage rates as normal, especially when compared to historic rates. (By the way, speaking of Home Depot, Indiana’s Carol K. sent over a website that shows where corporations donate their money; you can see where Home Depot’s has gone lately.) (Today’s podcast can be found here and this week’s is sponsored by Sagent. Sagent brings the modern experience customers now expect from loan originations to loan servicing, where lifetime customer relationships are managed and grown. Hear an interview with Curinos’ Ken Flaherty on home equity lending, from origination data to borrower sentiment.)

Lender and Broker Products and Services

What’s an “energy-integrated” mortgage? Meet Ben Miller, Matt Hansen, and Cole Bestgen at the Wynn to find out. Ben and Matt reshaped the mortgage landscape when they founded SimpleNexus. Now they’ve hooked up with Arcasa CEO Cole Bestgen to help lenders close more loans by integrating solar into the mortgage process in a way that ACTUALLY makes sense. From interest-rate buydowns to generous tax credits to unlocking down payment assistance programs, Arcasa turns solar into your secret weapon for structuring creative deals that are efficient to originate and investor-friendly. See how this approach benefits both homebuyers and loan officers by meeting with Arcasa at the Wynn Las Vegas March 10-12. Spots are limited. Reserve your meeting now.

Uplist announced its integration with Polly, the leading provider of innovative enterprise technology and artificial intelligence for mortgage capital markets. This strategic integration allows loan officers on the Uplist platform to access Polly's revolutionary product, pricing, and eligibility engine and real-time rate data directly within Uplist’s suite of products, including its comprehensive refinance solution, RECAPTURE™. The partnership equips loan officers with timely rate information, enabling them to quickly identify strategic refinance opportunities and provide high-impact client service in today’s competitive market.

“Are you ready for the new Uniform Appraisal Dataset (UAD)? The upcoming UAD changes from the GSEs will significantly impact you, your loan origination system, and your appraisal management software. Join Fannie Mae, Freddie Mac, Reggora and ICE Mortgage Technology on March 6, at 11:00 AM PST / 2:00 PM EST for a live webinar where we’ll break down these changes and help you prepare for a smooth transition. Register now.”

MGIC’s SEB and rental income worksheets for tax year 2024 are now available! Self-employed borrowers? No sweat. MGIC’s editable worksheets help you analyze cash flow, liquidity, rental income, and comparative income easily and accurately. And best of all, they’re auto-calculating! Download your worksheets now.

Commit to Excellence: Step Up & Stand for Quality! ACES Quality Management aims to inspire a commitment to quality that transforms how financial institutions serve their communities and stakeholders. ACES recently spearheaded the “I Stand for Quality” movement which reinforces this commitment, empowering others to join them in raising industry standards. Take the first steps: Visit istandforquality.com to learn more about the movement. Download the Quality Advocates Guide to learn how QC professionals can promote a proactive, high-quality environment that ensures regulatory compliance, reduces risk, and enhances operational performance. Discover tools you can leverage to help champion quality. Together, we can drive meaningful changes and make a lasting difference. Take the first step today!

“Is a standing call with your servicer enough for proper oversight? What does proper oversight entail? Ultimately, you are responsible for overseeing your subservicer, so you must understand what is expected of you and the key actions you need to take to maintain oversight and comply with regulations. Proper oversight includes an annual review and testing of the subservicer’s processes and procedures. Tune in to this video, where the experts at Richey May answer the most frequently asked questions about subservicer oversight requirements. Whether you need a review or assistance navigating the general complexities of oversight, Richey May’s mortgage compliance experts can help. To learn more about our review process, check our 2025 schedule, or to sign up, contact us today!”

“Exciting news from eRESI this month! We're proud to share that eRESI has been recognized as a PROGRESS in Lending's Innovations 2025 Award Winner! This accolade highlights our dedication to delivering exceptional value to our clients and equipping them with the tools needed to scale efficiently in the non-QM space. Additionally, we're thrilled to announce enhancements to our Closed-End Second Lien offering, featuring improved pricing of up to 2.50 points and an expanded LTV to 80% for Bank Statement loans. Be sure to contact your eRESI Representative to learn about this and our latest P&L price enhancement, available when two months of bank statements are provided. For questions or additional information, reach out to your eRESI Representative or email us.”

With the 2025 market looking more like 2024 than hoped, Covius’ clients are finding ways to strip excess cost out of their operations and are investing prudently in technology to drive efficiency. To this point, “creativity” was the buzzword at the recent MBA Servicing Conference, including the benefits of outsourcing certain functions and finding more flexible ways to purchase core products and services. If you’d like to hear how your team can offer creative cost savings, connect with us at ICE Experience in Las Vegas. Covius provides comprehensive solutions for origination, servicing, title, settlement, default, and due diligence teams. Our technology-driven services help you reduce risk, improve efficiency, and stay compliant at every stage of the loan lifecycle. Click here to schedule a meeting with our team or stop by kiosk #1 to see how Covius can optimize your processes and drive better outcomes.

STRATMOR Group on Artificial Intelligence

Artificial Intelligence serves as a powerful engine propelling our industry forward. But despite the clear potential, many lenders remain uncertain about selecting the right AI technology partners and implementing AI solutions while maintaining regulatory compliance and customer satisfaction. In STRATMOR Group’s latest Insights Report, principal advisor Kris van Beever has compiled a practical blueprint for mortgage lenders looking to leverage AI in their operations.

Van Beever explains, “AI is not a magic solution. It's a set of tools that, when properly implemented, can help mortgage companies operate more efficiently while reducing errors and improving service quality. The mortgage industry is rapidly adopting these technologies. As AI reshapes global markets, organizations must choose to innovate, or risk being left behind.”

Check out “All Aboard the AI Train: A Practical Roadmap for Lenders” to discover proven AI applications already delivering results, explore emerging technologies poised to reshape lending practices, and learn actionable implementation strategies that can position your organization at the forefront of this technological revolution.

Conventional Conforming Updates

Regardless of the machinations occurring in Washington DC, and the news flow, 70-80 percent of application volume is being processed, underwritten, and sold under the “conventional conforming” heading.

Help borrowers navigate the condo buying process and prepare for sustainable homeownership with Fannie Mae’s updated Condo Buyers Guide. This enhanced resource provides foundational information about owning a condo as well as vital questions to ask before purchasing.

Research shows that new homeowners are seeking information about how to manage homeownership responsibilities, including household budgeting and seasonal maintenance. Servicers can help by encouraging homeowners to subscribe to Fannie Mae’s monthly email series, designed to fill these gaps and more by helping new homeowners navigate their first year. Explore Fannie Mae’s free homeowner resources.

Updated Conventional LLPAs information posted in Pennymac Announcement 25-19.

Pennymac Announcement 25-20 discusses Fannie Mae’s Selling Guide Announcement 2024-07 regarding revisions to their eligibility requirements for properties subject to leasehold estates. These changes provide clarifications and update lease requirements and address scenarios related to leasehold estates in projects. These changes are effective for loans with applications dated on or after 3/1/2025 and include the following:

Capital Markets

Enhance trading efficiency and improve economics on TBA trades with Agile's cutting-edge request for quote (RFQ) platform. Agile revolutionizes the TBA market by connecting lenders and dealers of all sizes, leveling the playing field for everyone involved. Their streamlined digital TBA trading process helps lenders boost efficiency by minimizing settlement errors. Increased visibility into live market pricing comes through more competitive bids. These platform capabilities have delivered improved execution for lenders according to the whitepaper, How (and How Much) Agile Helps Mortgage Originators Save on Hedging Costs. Discover more about Agile's RFQ platform, or subscribe to their newsletter for timely updates.

The recent rally in bond yields has puzzled investors, as there’s no clear news driving it. Some speculate tariff concerns could be a factor, despite tariffs typically leading to higher inflation and interest rates. Another theory is that the Fed might pause its balance sheet reduction ahead of the debt ceiling debate, though that remains uncertain. Meanwhile, the latest FOMC minutes reinforced the Fed’s focus on inflation risks over employment, signaling no immediate policy shifts. Investors are pricing in around one and a half rate cuts by year-end, with the first expected in September, but Friday’s PCE inflation report could disrupt those expectations. While CPI and PPI came in hotter than anticipated, some PPI components hint that PCE could be slightly lower. However, with inflation still elevated, the Fed is unlikely to cut rates soon without facing criticism, and officials continue to emphasize patience.

Consumer confidence took a sharp hit in February, experiencing its biggest drop since 2021 as economic uncertainty weighed on sentiment. The Conference Board’s confidence index fell for the third consecutive month to 98.3, its lowest level in eight months, with broad-based declines across income levels and age groups. Concerns over labor market conditions, future incomes, and business prospects contributed to the pessimism, pushing recession expectations to a nine-month high. As a result, many Americans are pulling back on major financial decisions, with a Wells Fargo study showing that over half of consumers are delaying significant life plans, including home purchases, education, and even retirement, due to economic uncertainty and ongoing policy concerns.

Home prices continued their steady climb in December, with both the S&P Case-Shiller and FHFA Housing Price Indexes showing sustained growth. The Case-Shiller Index rose 4.5 percent year-over-year, slightly outpacing expectations, while the FHFA index posted a 0.4 percent monthly increase for the second consecutive month. Although price gains have moderated, the market remains resilient despite higher mortgage rates, underscoring factors beyond interest rates (most notably the persistent housing supply shortage) are driving home values higher. Since the Fed began tightening monetary policy in March 2022, home prices have risen 10 percent, challenging the notion that elevated borrowing costs alone dictate housing affordability. With inventory still constrained and demand holding firm, home prices are likely to remain supported even in a high-rate environment.

Today’s economic calendar kicked off with mortgage applications decreasing 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association. Later this morning brings new home sales for January, with expectations for around a 675k annualized pace, close to the long-term average of 697k (and 698k reported for December). Unlike the struggling existing home market, new home sales appear relatively stable. Treasury then auctions $28 billion reopened 2-year FRNs and $44 billion 7-year notes and markets will receive remarks from Richmond Fed President Barkin and Atlanta Fed President Bostic. We begin the day with Agency MBS prices roughly unchanged from Tuesday’s close, the 2-year yielding 4.12, and the 10-year yielding 4.30 after closing yesterday at 4.30 percent.