Some argue that “March 4th” is the only date that is also a command (march forth), while others disagree and say that any date in March is also a command. Some things aren’t always clear. In a more important matter, U.S. Commerce Secretary Howard Lutnick said he would strip out government spending from the gross domestic product (GDP) report, but gave no indication how soon this change might happen, while dismissing fears of a possible recession. Treasury Secretary Scott Bessent is confident that inflation will reach the Federal Reserve's 2 percent target. "I would expect that very quickly we will be down to the Fed's 2 percent target," Bessent said. "So, I'm expecting inflation to continue dropping over the year." Investors are increasingly positioning against the dollar, citing signs of a cooling US economy and potential damage from President Donald Trump's tariff plans. While the dollar recently surged following tariff announcements, market expectations for Federal Reserve rate cuts have grown, diminishing the dollar's appeal. Meanwhile, lenders are continuing to look at technology, and today’s 2PM ET Advisory Angle with the STRATMOR Group focuses on AI: All Aboard the AI Train: A Practical Roadmap for Lenders. (Today’s podcast can be found here and sponsored by Floify. Floify is an easy-to-configure point-of-sale platform that allows each branch or loan officer to customize its look and feel to meet the needs of their lending team, homebuyers, and market. Hear an interview with HomeVision’s Vincent Chu on how AI-driven underwriting solutions can be both effective and safe for lenders.)

Lender and Broker Products and Services

Three big thinkers. One private meeting. Zero cash to close. If you’re looking for an edge in 2025’s market, this is it. Ben Miller and Matt Hansen are two of the most respected names in mortgage tech. Together with exec Cole Bestgen, CEO of Arcasa, they’re leading the charge on what’s next: energy-integrated mortgages that help lenders remove financing roadblocks by zeroing out cash to close. They’ll be at the Wynn Las Vegas March 10-12, showing lenders like you how leveraging solar as a strategic advantage, not an afterthought, closes more deals and makes homeownership more accessible. It’s the freshest idea you’ll bring home from ICE Experience this year. Private spots are filling fast. Book yours now.

“Every morning you face the same challenge: hundreds of leads, limited hours in your day, and no clear way to know who's actually ready to move forward. That's where Aidium's AI Propensity Modeling changes everything. By analyzing over 5,000 consumer behavior signals, we show you who's most likely to transact, months before traditional triggers. Your unique model delivers your unique insights, so you can stop gambling with your time and start focusing on the right opportunities. Find us at ICE booth 327 or visit us at thinkaidium.com to discover how we're revolutionizing lead conversion.”

With homeowners sitting on roughly $11.2 trillion in tappable equity and first mortgage interest rates holding steady in the high 6-7% range, will 2025 be the year of home equity? Are you ready to capitalize on this market and help your borrowers leverage their equity? Join FirstClose next week at ICE Experience to see first-hand how our cutting-edge technology can give you the competitive edge you need to thrive in 2025. Schedule a meeting with FirstClose or swing by booth 515 to discover how our integration with ICE can help you unlock efficiency and growth in your home equity lending solutions.

A special note from Western Alliance Bank on the upcoming MBA conference and industry engagement: Western Alliance will proudly be attending the Mortgage Bankers Association’s National Advocacy Conference (NAC) April 8-9 at the Capital Hilton in Washington, D.C. “We are excited about the opportunity to meet directly with federal lawmakers to educate them about the real estate finance industry,” said David Bernard, Senior Managing Director, Specialized Mortgage Services. “We strongly encourage all MBA members and mortgage bankers who aren’t MBA members to join us in advocating for our industry and livelihood. It’s well worth the time commitment.” Will you be there? Contact the Western Alliance team to discuss how it is supporting the industry, or learn more about Western Alliance’s Specialized Mortgage Services Group that offers mortgage warehouse financing, MSR financing, note financing, customized cash management tools, corporate credit cards, and more, all designed to optimize your operations. Member FDIC.

“Partner with Plaza, not compete. Some investors have retail lending arms and servicing retention platforms that compete with their own clients. Plaza Home Mortgage’s National Correspondent Lending Division doesn’t do that. When Plaza’s correspondent partners sell to us, they are confident that we won’t solicit their borrowers down the road. When you work with Plaza, you can count on a true partnership-first approach, competitive products and pricing, and an unwavering respect for your borrower relationships. Your success is our success, but your borrowers are yours. If you want to learn about Plaza Home Mortgage’s National Correspondent Lending Division, ask us here.”

“PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), focuses on relationship-driven business with long-term success, by-the-way, have you heard about our BTW Services? We are pleased to offer all customers our Broker-Dealer, Treasury Management and Warehouse Lending (BTW) services. Our Broker-Dealers can help customers hedge their origination pipelines by buying and selling TBAs, specified pools and whole loan trading. Our Treasury Management team helps customers with escrow and cash management. Finally, the Warehouse Lending team provides customers with confidence to meet their loan funding needs. If you are interested in learning more about our BTW Services please contact Deric Barnett or Justin Tannen.”

Servbank and TMS are proud to partner as Silver Sponsors for the upcoming MCT Exchange! This year, MCT returns with even more insights into the capital markets, powerful educational tools to enhance profitability, and a touch of fun. Join us at the Hard Rock Hotel in sunny San Diego, CA, from March 27-29. To schedule a meeting about subservicing, contact partnership@servbank.com. To schedule a meeting about correspondent, contact correspondent@themoneysource.com. See you in California!

Mergers and Acquisitions are Expected Through 2025

Union Home Mortgage (UHM), headquartered near Cleveland, announced its acquisition of Houston’s Nations Reliable Lending, also known as NRL Mortgage. NRL Mortgage closed $1.091 billion in lending in 2024, which will add to the $7.6 billion in lending UHM closed last year. Congratulations to both parties!

In general, Garth Graham and the M&A team at STRATMOR have their eye on trends in the mortgage industry. Do changes in rates change the trajectory of deals being done in mortgages? The trick is that the lower rates don’t necessarily impact everyone equally, so companies may not get the benefit they expected who were counting on a big bump from lower rates… Maybe a bump that is the difference between staying the course and selling out.

Any merger or acquisition looks at the product mix, and purchase versus refinance percentages. As Garth said, “Refinances don’t necessarily spread like peanut butter”: they do not equal for all originators. In addition, one area that has plagued deals in the past from seeing the best results is culture. Is a lender or bank merging with another lender or bank that you’ve been competing with, and despising, for decades? Is there too much “history” to make it work, even if the financials and footprints work perfectly?

Lenders and banks may have differences from others in operating structure, hierarchy, dictatorial management vs. more open styles, pay structures and other factors. Here too, candidates should evaluate things very carefully before jumping into the pool, if success is to be truly achieved over the short and long term.

Meanwhile, STRATMOR is very active in confidential M&A, and the team told me that the pace of deals in 2025 remains very high and may exceed 2024’s.

As always, timing is tricky, and Garth mentioned that the time it takes to get a deal done can vary widely depending on the complexity and emotions involved and the speed at which the parties engage. He told me, “Of the last dozen deals we have done, the timing has ranged from two months from start to finish, to over one year to get the deal done. Asset sales are faster, while stock sales take longer, so it depends on the needs of the buyers and sellers and what works best. But I warn potential sellers not to WAIT too long to engage in the process, even if you hold to pull the trigger. For example, we have deals in process where the parties have worked together for months (getting to know each other, share financials) and now are finalizing terms.”

The other key item is to be very careful about premature disclosure. Garth adds, “We are super careful about the NDA and non-solicitation process, and also with ensuring that the potential buyer signs a blind NDA before they know the seller’s name.”

And the final item from STRATMOR. “We try to do a lot of financial due diligence in advance, so the buyers and sellers go into the process with a full understanding of the financial synergies. After all, there is a lot of potential savings in back office and corporate expenses for the right acquisitions, so getting down to detailed analysis of those expenses is key to be done BEFORE the offer is made, not wait until due diligence.”

“We did multiple deals in 2024, and all had upfront premiums with solid earn out. Often the premium being paid is driven by the ability for the seller to add the production without having to add all the corporate expense, so it can be painful decisions about the corporate departments (secondary, HR, Risk, technology etc.), but the end result is that the production is worth more to the buyer than it is to the seller due to the cost savings. And that shows up on premium offers. And the seller gets the balance sheet plus a share of that financial benefit. So, it can be a potential win-win.

(Anyone interested in learning more should talk to David Hrobon or Garth Graham.)

Webinars, Training, and Webcasts This Week

“Big news! MQMR and Matic Insurance are teaming up for a LIVE webinar THIS THURSDAY March 6th at 1 PM EST, and trust us: you don’t want to miss this. Industry experts Michael Barone and Ben Madick will dive into the evolving mortgage and insurance landscape, shedding light on the biggest challenges lenders face today. From shifting industry trends to regulatory updates and risk management strategies, they’ll break down what you need to know to stay ahead of the curve. Whether you’re looking for actionable insights, best practices, or just an engaging discussion with two seasoned pros, this webinar has it all. You’ll walk away with valuable takeaways that can help you strengthen your business approach. Plus, we promise it won’t be all dry talk; there might even be a laugh or two along the way! Don’t miss out: secure your spot today and join the conversation!”

Today at 11AM PT, origination takes the focus with Mortgage Pros as Audrey B. and Kevin C. address issues facing residential originators.

Today’s 2PM ET Advisory Angle with the STRATMOR Group focuses on AI: All Aboard the AI Train: A Practical Roadmap for Lenders. Garth Graham and Kris van Beever will discuss proven AI applications already delivering results, explore emerging technologies poised to reshape lending practices, and share actionable implementation strategies that can position your organization at the forefront of this technological revolution. Register here.

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.

In Michigan, there’s the MMLA Southeast Chapter Economic Update Luncheon at the Federal Reserve Bank - Detroit Branch on March 5, 11:00 - 1:30. This enlightening session with senior business economist Martin Lavelle, who will dive deep into the current economic landscape. Discover the key factors influencing our economy and their implications for the mortgage industry, along with a tour of the Federal Reserve Bank after the presentation. Reserve your spot now and empower yourself with the knowledge to navigate the future! NOTE: all registrations need to be made before February 26th for security purposes.

Join Ron Vaimberg on March 6 at 1 PM EST for a free, 90-minute masterclass, Winning Great Agent Relationships with the Help of AI. Learn how to build stronger agent partnerships and use AI to get more done faster. Don’t miss this chance to gain actionable strategies that drive real results. Register now to secure your spot!

Thursday will be another episode of The Big Picture at 3PM ET. Rich Swerbinsky hosts a variety of guests. You can click here to register for Thursday’s 3 PM ET show.

Friday the 7th, listen in to opinions (Last Word Fridays at 1pm ET) from Kevin Peranio, Christy Soukhamneut, Courtney Thompson, and Brian Vieaux! Register here. On this Friday’s The Last Word, KP, Brian, Christy, and Courtney will discuss President Trump's executive orders and their impact on housing and housing finance. The conversation will explore potential changes in mortgage lending, affordability, and government-backed housing programs.

Capital Markets

What is going on out there? President Trump yesterday confirmed that his pledged levies against Canada and Mexico, America’s biggest trading partners, will most definitely happen today. Markets took him at his word, and we saw bond yields precipitously decline. Market volatility was subdued for most of February but has picked up recently due to those aforementioned tariffs, political tensions between the White House and Ukraine, and general concerns over a slowing U.S. economy. Investor sentiment remains guarded as inflation remains sticky. While markets have begun factoring in the likelihood of two or even three rate cuts by year-end, this outlook contrasts with the Fed’s consistent message of caution and the ongoing challenge of persistent inflationary pressures.

We learned yesterday that manufacturing activity is slowing, construction spending is declining, and there are concerns about economic growth. The ISM Manufacturing PMI fell in January. Combine that with a weaker-than-expected 0.2 percent decline in January construction spending (consensus 0.9 percent), and it makes sense that the Atlanta Fed lowered its Q1 GDPNow forecast to -2.8 percent from -1.5 percent. The ISM report also signaled a troubling combination of slowing activity, rising prices, and weakening employment, raising concerns about stagflation.

Meanwhile, the decline in private construction spending was concentrated in multifamily housing, while public construction edged up 0.1 percent. On a year-over-year basis, total construction spending rose 3.3 percent, but the weakness in key sectors suggests ongoing economic headwinds.

Treasury yields responded to yesterday’s data, with the 10-year yield nearing its December low and shorter-term yields hitting levels last seen in October. The only piece of data scheduled for today is Redbook same store sales, due out later this morning (for those who care). The rest of the schedule is also about Fedspeak and T-bill supply. We begin Tuesday with Agency MBS prices roughly unchanged from Monday’s close but much better than Friday, the 2-year down to 3.91, and the 10-year yielding 4.14 after closing yesterday at 4.18 percent.