Today I travel to the Dallas area for a Logan Finance event, and this comment from a friend last night is echoing in my ears: “Becoming an adult is the dumbest thing I’ve ever done.” Yes, we have to worry about things like interest rates, tariffs, and politics. Fortunately, interest rates have moved down, but this is primarily due to the increased odds of an economic slowdown. The proponents of a high tax on imported goods say that the U.S. is moving from “free” trade to “fair” trade. Congress has stepped aside, yielding to President Trump, and beginning Thursday night they go on vacation for the rest of the month. Elliot F. Eisenberg, Ph.D., spells it out: “Imports are 11 percent of GDP, and GDP is $30 trillion, making imports $3.3 trillion. As it now stands, the average tariff on imports is 24 percent resulting in $792 billion in tariffs. But there will, of course, be behavioral changes reducing imports. Import price elasticities suggest a reduction of 1/3, getting us to $528 billion, a tax hike of 1.76 percent of GDP, or $1,550/person! A recession is increasingly likely.” On today’s episode of Capital Markets Wrap presented by Polly, they examine the latest tariff updates & impacts, as well as Rocket’s acquisition of Mr. Cooper on base TBA pricing and prepay speeds. (Today’s podcast can be found here and this week’s is sponsored by Figure. Figure is shaking up the lending world with its five-day HELOC, offering borrower approvals in as little as five minutes and funding in five days. Lenders, give your borrowers an experience they will rave about. On today’s hear an interview with Truework’s Ryan Sandler on how AI and advanced machine learning technology can facilitate expedited borrower approvals and streamline processes in the current housing market and economic climate.)

Products, Software, and Services for Lenders

“PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), is committed to providing mortgage lenders with a sustainable funding source in an uncertain market. With over 30 years’ experience and a well-capitalized, diversified financial holding company. PlainsCapital Bank National Warehouse Lending provides confidence in meeting our mortgage lending partners’ funding needs. With exceptional operational performance, and a focus on relationship-driven business geared towards long-term success, we do not dwell on unnecessary fees. With PlainsCapital Bank National Warehouse Lending there are NO non-usage fees, NO application or renewal fees, NO third party due diligence fees or Third Party Doc Custodians and NO interest charged on the day of loan settlement. If you attending the TMBA Annual Conference in Arlington, TX and interested in learning more about PlainsCapital Bank National Warehouse Lending please contact Brent Amos.”

A library with no late fees or shushing! MGIC’s first-time homebuyer resource library is stocked with free, downloadable tools and materials for sharing with and educating your borrowers. Browse the library and check out affordability calculators, worksheets, and checklists, plus guides that explain credit, budgeting, down payments, how to prevent identity theft and more. All available in English and Spanish. It’s the easy way to go above and beyond for your first timers. Check it out.

“CreditXpert's Year of Innovation and what's yet to come! CreditXpert Platform powers credit optimization for 58,000+ users across 1,000+ lenders. Preview our latest features reshaping the lending landscape. Register Now.”

“Looking for a subservicing partner who puts your needs and ultimately your success first? At Servbank, we know that the strongest partnerships are built on trust, collaboration, and delivering exceptional service for you and your customers. Our team works as an extension of yours, providing the care, transparency, and expertise you need to grow your business. But don't just take our word for it, hear what our clients have to say: "Servbank has been a great partner, making it easy to resolve customer issues with efficiency and collaboration. I look forward to continuing our relationship as we grow our portfolio and expand our footprint across the U.S." (Jesse E Bainter, Servicing Manager & Compliance Analyst, GVC Mortgage, Inc.) As the nation’s premier bank subservicer, we’re more than just your subservicer, we’re your partner in success. Contact us to discover how Servbank can help take your business to the next level.”

Missing the boat conveys that one’s arrived too late… And missed an opportunity. Because sometimes timing is everything. With the GSEs easing out of the affordable lending space and a tide of new business is rising, this may be the perfect time for lenders, LOs, MLSs and real estate agents to test the DPA waters. According to Down Payment Resource, the skipper of all things DPA, there are over 2,500 programs in the U.S., one in every county, with an average benefit of $18,000. Buyers are already sold: 5 million who learned about DPA at Zillow submitted an online eligibility form. Real estate pros adding DPA-availability to signage, websites and fliers are getting noticed, and DPR invites you to jump in now. This is one boat you won’t want to miss.

Capacity Planning and Efficiency Cost

Ready to learn how capacity planning can make or break your business? From college Costco runs to scaling multi-billion-dollar production, this thought leadership article by Marcus Lam dives into the importance of knowing your limits, whether it’s a Honda Accord or a capital markets operation. Discover how technology is revolutionizing processes and reducing costs in ways you may not have imagined. Don’t miss out on this insightful look at the evolution of capacity planning and how Polly is paving the way for the future of mortgage origination.

Capital Markets

Global markets remained on edge to start this week following last week’s tariff announcement, which introduced sweeping trade levies that sharply escalated economic uncertainty. Fears of a prolonged slowdown in global commerce have triggered a flight to safety, driving bond prices higher and Treasury yields lower for the third consecutive trading day. As volatility surges and fears of a recession deepen, markets are left guessing whether the financial fallout will force a change in course from both President Trump and/or the Fed, or merely usher in a new era of instability.

Anyone who believes that politics, and the acts of politicians, don’t impact lending, should think again. Certainly rates have come down, which is nice, but the reason is problematic. The proponents of the President’s tariffs say that they’re needed to right the trade imbalance. Critics say that the president who took us into a war, a trade war, us against everyone, all at once, and without a single ally. The rest of the world is free to trade without dealing with tariffs. It’s only their U.S. trading that is impacted since the U.S. is the only country dealing with tariffs from every other country, and other countries can still trade freely among themselves. But the unintended consequences are more than just stocks. Trump is jeopardizing our status as the world reserve currency, and how might that impact the demand for our securities backed by mortgages?

Traders continue to pull forward expectations for Federal Reserve rate cuts, with fed funds futures now implying over 100 basis points of easing this year, including nearly a 50 percent chance of a cut as soon as May. Despite a stronger-than-expected February jobs report and a pickup in residential spending, other indicators (such as manufacturing contraction and lukewarm service-sector growth) point to a fragile business environment. In his latest remarks, Fed Chair Powell emphasized the need for clarity on the economic impact of the tariffs before adjusting policy.

Today’s economic calendar got under way before the open with NFIB small business optimism for March. Later today brings Redbook same store sales, remarks from San Francisco Fed President Daly, and then Treasury takes over, when it auctions $58 billion 3-year notes and conducts a buyback in 1.5- to 7.5-year TIPS for up to $500 million. We begin the day with Agency MBS prices little changed from Monday’s close, the 2-year yielding 3.72, and the 10-year yielding 4.15 after closing yesterday at 4.16 percent.