“I recently saw a woman at Walmart with March Madness teeth... She was down to the final four.” Risk-free, prepayment-free Treasury rates have approached, or gone below, four percent as the expectations have grown for a slowing U.S. economy (it doesn’t help the ag states that China has cut off buying our soybeans, for example) and therefore potential Fed cuts. Borrowers are certainly reacting to rates dropping, as capital markets staffs are dusting off their renegotiation policies and explaining early payoff penalties. According to Curinos' new proprietary application index, refinances increased 36 percent week over week and increased 2 percent in February; the purchase index increased 19 percent week over week and decreased 6 percent for February as a whole. February 2025 funded mortgage volume increased 3 percent YoY and decreased 6 percent MoM. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures. (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 Marr Labs Dave Grannan on how AI is being used to enhance customer interactions in mortgage lending, as well as the evolving role of human loan officers alongside AI, the challenges and successes of implementing AI Voice Agents, and how quickly lenders can adopt this technology.)

Lender and Broker Products, Software, and Services

The Loan Store (TLS), one of the fastest-growing wholesale originators in 2024, achieved scale and saved over $300,000 a month by implementing OptiFunder’s Warehouse Management System (WMS). TLS sought a strategic solution to automate its warehouse funding, shipping, purchase advice, and paydown processes. “By implementing OptiFunder’s WMS, we’ve been able to optimize our warehouse bank selection with ease,” said TLS CEO Phil Shoemaker. “Execution was a breeze, and we were thrilled to see quick ROI and consistent improvement in spread, allowing us to grow our business efficiently.” With a commitment to delivering competitive pricing and fast turn times, while leveraging streamlined processes to ensure efficiency, TLS is poised to continue its incredible growth journey. IMBs looking to see firsthand how OptiFunder’s WMS delivers measurable results can connect with the team at ICE25 (Kiosk 5) or these upcoming events. To explore how automation improves efficiency, reduces costs, and maximizes profitability, visit optifunder.com.

“ICYMI: Optimal Blue unveiled seven innovations available to clients at no additional cost during our inaugural Summit last month. OB’s products and features are more than just software. They are tailored solutions designed to address lenders’ real-world challenges. For instance, our executive AI assistant, Ask Obi, provides instant, actionable data & insights from your Optimal Blue products, helping you make informed decisions quickly, without having to pull and parse through reports. The new Originator Assistant in the Optimal Blue PPE uses AI to identify loan scenarios that offer the most competitive product and pricing options for borrowers, saving originators valuable time and eliminating manual work. Connect with Optimal Blue at ICE Experience to discuss how our innovations can help you maximize profitability on every loan transaction.”

Discover the robust capabilities of the newly released MSRlive! platform in MCT’s new blog post, “How to Leverage MSRlive! 4.0’s Enhanced Reporting for Deeper MSR Portfolio Insights”. This post features Azad Rafat, Senior Director of MSR Services at MCT, demonstrating the platform’s new portfolio report and detailed results tabs in a series of product videos. Users can now examine the underlying components to understand exactly what's driving their portfolio's performance and valuation changes, empowering portfolio managers with actionable intelligence and deeper analytical insights. Read the full blog post to learn about the industry's most advanced MSR valuation platform and contact MCT to see how MSRlive! 4.0 can transform your portfolio management strategy.

“The tail end of 2024 brought changes to Fed policy, governmental direction and the overall real estate and housing finance landscape. The only certainty for 2025 is that even more change is still to come. Attend the Economist Super Session: market dynamics shaping 2025 and beyond taking place during ICE Experience 2025 to hear from mortgage and housing thought leaders as they examine the market dynamics shaping our industry today, including the latest trends and what’s in store for the rest of 2025. ICE Experience 2025 will take place March 10-12, at the Wynn Las Vegas. Join us for more than 50 expert-led sessions on a variety of topics including bridging the gap between data science and portfolio analytics; leveraging cutting edge technology to drive business performance; the current state of valuation analytics; and more. Register today to save your spot for these can’t miss sessions. Pricing increases after March 8. We hope to see you there!”

Want to see the secret tech that Thuan Nguyen used to close over 11,600 loans in just two years? On the next OriginatorTech Deep Dive, you’ll see how MOSO, an all-in-one mortgage software, helped Loan Factory scale to over 1,600 loan officers by streamlining operations and giving MLOs access to 230+ lenders, vendors, and consumers. Instead of juggling multiple third-party systems, Loan Factory built its own proprietary platform, one that continuously evolves to help originators close loans faster, win more business and grow their reputation. On Tuesday, March 11, at 2 PM ET / 11 AM PT, for a behind-the-scenes look at the tech driving Loan Factory’s success. See how its custom-built system gives loan officers a competitive edge and how you can apply these insights to your own business. Register here.

“NAN Continues to ‘March’ Forward with Strategic Growth! Nationwide Appraisal Network (NAN) is proud to announce the addition of Reetu Dave, Chief Operations Officer, and Staci Thomas, Director of Quality Control, to our leadership team. Their expertise strengthens NAN’s commitment to accountability, transparency, service, and innovation, the core values that drive our success. As a trusted ally to our lending partners, NAN is dedicated to helping you grow your business by delivering the highest-quality appraisal solutions. With a nationwide footprint, deep industry expertise, and extensive coverage, NAN offers valuations for Residential, Commercial, HELOC, Renovation, Alternative Valuation, Modernization, DSCR Short-Term Rentals, and Spanish-speaking needs. Our network includes over 15,000 appraisers, vetted for even the most challenging and specialty order types, ensuring accuracy and efficiency in every report. Leverage NAN’s credibility and experience to navigate today’s market with confidence. Connect with us today and see how we can support your success.”

HUD, FHA, VA, Ginnie, and Reverse Changes

Yesterday news broke that 70,00 or more employees were to be cut from the VA. Is a veteran with mental health issues going to be okay with being on hold and then a call back in two hours? To be honest, I have lost track of what the Administration tells us, the rumor mill tells us, and employees tell us about personnel cuts at the government agencies overseeing a portion of our lending. The big fear of lenders, of course, is that key personnel who approve and sign off on critical functions (approving Ginnie applications, for example, or being able to borrow money to service loans and advance delinquent payments) are now unemployed.

Department of Housing and Urban Development (HUD) Secretary Scott Turner said he would terminate the Affirmatively Furthering Fair Housing (AFFH) rule, repealing the law which was enacted to “overcome historic patterns of segregation.” President Trump originally terminated the rule created during the Obama administration in 2020 after he said it would “destroy the value of houses” but it was restored by former President Biden in 2021. “By terminating the AFFH rule, localities will no longer be required to complete onerous paperwork and drain their budgets to comply with the extreme and restrictive demands made up by the federal government,” Turner said in a Wednesday statement obtained by The Hill. “This action also returns decisions on zoning, home building, transportation, and more to local leaders,” he added.

Ginnie Mae Mortgage-Backed Securities Portfolio reached $2.71 Trillion in January. View the Press Release for details.

Pennymac updated Conventional and Government LLPAs effective for all Best Efforts Commitments taken on or after Wednesday, February 26, 2025, Announcement 25-21.

There’s a 100% FHA Financing with JET 200 DPA program. Two DPA available options:

Option 1 - Repayable DPA, Option 2 – Forgivable DPA. 3.5% DPA: Repayable or Forgivable option, must be DU Approve/Eligible - No Manual Underwrites.

American Senior Lending Wholesale Division is now offering Jumbo Reverse Mortgages.

The Platinum comes in three variations: Maximum LTV Fixed Rate, Adjustable Rate with a Line of Credit, and Reduced LTV with a lower Fixed Rate.

Capital Markets

“Take control of your loan sales with Vice Execution Portal™ (ViceEx), the all-inclusive whole loan trading platform from Vice Capital Markets. Tailored to each lender’s pipeline ViceEx streamlines bulk bid management, compares agency executions with customizable servicing values, and automatically identifies optimal pay-ups to eliminate opportunities missed during manual processes. With 50+ bulk investors and direct access to Fannie Mae’s Servicing Marketplace and Freddie Mac’s Cash-Release XChange, ViceEx provides unparalleled market access. Seamlessly integrate with your LOS, leverage daily hedged pipeline uploads, and rely on the expertise of senior traders with over $1 trillion in MBS transactions. Discover how ViceEx can support your secondary marketing strategies. Want to meet in person? Connect with Chris Bennett at the ‘Live Large, Think Big’ conference by The Mortgage Collaborative. Join us in Dallas March 16-18 to see how ViceEx can elevate your secondary strategy.”

Have we reached a temporary rate floor? Bonds sold off yesterday (prices down, rates up), continuing directional movement from Tuesday after hitting multi-month (price) highs on Monday. Trade policy remained a hot topic, as the White House announced a one-month exemption from auto tariffs on Canadian and Mexican imports, though retaliatory tariffs are still set to take effect on April 2. A stronger-than-expected ISM Services report for February drove the selling.

Separately, private sector employment grew by just 77k jobs per ADP, the weakest gain since July. Wage growth for job-stayers held steady at 4.7 percent, while job-changers saw a slight slowdown in pay increases. On the manufacturing side, factory orders rebounded in January, rising 1.7 percent after a revised December decline, driven in part by a boost in non-defense aircraft orders and overall business investment. While the data suggests some resilience, the hiring slowdown raises concerns about the broader economic outlook, especially ahead of tomorrow’s payrolls report.

The Federal Reserve released its Beige Book yesterday, and economic activity saw a slight overall increase since mid-January, with most regions experiencing little or modest growth and a few noting slight contractions. Consumer spending was mixed, with steady demand for essential goods but greater price sensitivity for non-essentials, especially among lower-income shoppers. Adverse weather impacted leisure and hospitality, while vehicle sales declined slightly.

The Fed ruminated on the Beige Book indicating that manufacturing showed slight to modest growth, though concerns arose over potential trade policy changes. Banking activity edged higher, while residential real estate remained constrained by low inventory, and construction declined modestly. Agricultural conditions weakened, and uncertainty over tariffs added to concerns in construction and manufacturing. Employment saw slight gains, with growth in healthcare and finance but declines in manufacturing and IT. Labor availability improved overall, though some sectors remained tight, and rising uncertainty around immigration and policy changes influenced hiring decisions. Wages grew at a modest-to-moderate pace but at a slightly slower rate than before, with some easing of wage pressures.

The final report on February mortgage prepayments will be released this evening, but we do have preliminary indications of what it will say. Overall, 30-year and 15-year fixed-rate mortgage prepayment speeds are expected to slow by about 5 percent, while Ginnie Mae loan speeds may decline by just 1 percent. This slowdown is due to fewer refinancing activities and a shorter month, despite the usual seasonal increase in home sales. Total mortgage issuance for February was $75 billion, the lowest since last February’s $67.1 billion and significantly below January’s $98.7 billion. These figures hint that the market may have found a floor, though a true recovery will depend on increasing housing supply. Inflationary pressures remain a key focus, but a slowing housing market and fragile consumer confidence add to the growing list of challenges shaping the economic outlook in the months ahead.

Job cuts from Challenger Gray & Christmas for February kicked off today’s U.S. economic calendar: U.S.-based employers announced 172,017 job cuts in February, the highest total for the month since 2009 and the highest monthly total since July 2020. We’ve also received weekly jobless claims (221k, lower than expected; 1.897 million continuing), the January trade deficit (plunging to $131.4 billion as countries stocked up ahead of Trump), and productivity and unit labor costs. Later today brings wholesale inventories and sales, Treasury announcing the details of the refunding supply (consisting of 3-years and reopened 10-years and 30-years, and Freddie Mac’s Primary Mortgage Market Survey. Markets will also receive remarks from Philadelphia Fed President Harker, Fed Governor Waller, and Atlanta Fed President Bostic. Internationally the ECB was out with its latest monetary policy decision, another 25-basis point cut to 2.50 percent followed by ECB president Lagarde’s press conference. After this spate of news we begin Thursday with Agency MBS prices little changed from Wednesday’s close, the 2-year yielding 3.95, and the 10-year yielding 4.27 after closing yesterday at 4.27 percent.