“Over the course of 18 years, it costs over $235,000 for parents to raise a child... and that's just for the alcohol.” Here in Dallas, plenty of people aren’t drinking, and instead they are wondering what isn’t being discussed in the capital markets. Well, here’s something to ruminate on: “How China Can Crush the U.S. Housing Market.” The article describes how China (and other countries) could unload over $1 trillion of Agency MBS. Supply and demand would suggest prices would drop and rates would go up. Let’s hope that the odds are slim. The odds are better that originators will find some valuable information in the 2025 Home Buyer Report. And lenders are always interested in who’s moving where. In 2024, 13.7 percent of homebuyers using LendingTree explored purchasing property outside their home state. South Carolina, Maine, and Delaware attracted the most out-of-state interest, while California, New York, and Massachusetts saw the least. Florida, Texas, and Washington were the top destinations for out-of-state buyers, likely influenced by their lack of state income tax. Meanwhile, residents of Alaska, Hawaii, and Rhode Island were most likely to look elsewhere, while Texans, Michiganders, and Wisconsinites were the most inclined to stay put. (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 Figure’s Anthony Stratis on what’s driving lender demand for embedded tech, how rising tariffs are impacting the HELOC market, and get a sneak peek at what’s next: from debt paydown tools to first lien and DSCR expansion.)

Products, Software, and Services for Lenders

Investing in technology is essential for mortgage lenders aiming to stay competitive in today’s complex and volatile market. But making the initial investment is just the beginning. To maximize the return on your investment, you need a thoughtful strategy, effective execution, and continuous evaluation. Whether upgrading your loan origination system (LOS), adopting advanced data analytics tools or improving borrower-facing technology, our latest blog outlines six best practices to help you unlock the full potential of your tech investments. Read the blog now.

PacRes Mortgage Improves the Accuracy of QC Checks by over 30% ACES Flexible Audit Technology® Before implementing ACES, Pacific Residential Mortgage (PacRes) relied on a manual quality control (QC) process that was time-consuming, error-prone, and difficult to scale. "The scalability of ACES has positioned us to handle increasing loan volumes without compromising quality, further enhancing our capacity for growth and success in the industry", says Yari Mercado, Quality Control Manager at PacRes Mortgage. After replacing its manual QC process with ACES Quality Management & Control Software, PacRes Mortgage was able to improve the accuracy of QC checks by over 30%, reduce non-compliance incidents by 25%, reduce the potential for human error and increased overall consistency and speed in their audit throughput, and created a culture of transparency and quality that benefits the entire organization. “ACES runs smoothly, giving our team faster access with fewer tech headaches while keeping our sensitive data secure,” Holloway shares. “We now have full access to our QC data, eliminating our reliance on IT." Read the full success story.

Is the market up or down 4% right now? How is that impacting MBS, bid/ask spreads, and your bottom line? Are you getting the guidance you need from your hedge advisor? Register for MCT’s industry webinar, Trading Through Tariff Turbulence, for actionable strategies that will keep you prepared and performing no matter where the market is headed next. Despite the 90-day respite for some tariffs, the most volatile period in the bond market since the pandemic is well underway, with wide and often counterintuitive swings between asset classes occurring throughout every trading day. Join MCT experts Phil Rasori, Chris Anderson, Andrew Rhodes, Paul Yarbrough, and Justin Grant as they conduct a deep dive on navigating the tariff market environment for residential mortgage lenders on Monday, April 14, at 11AM Pacific.

Correspondent and Wholesale Programs

The Loan Store’s Flex NQM Income program offers unmatched flexibility, allowing borrowers to qualify using various income sources, even combining multiple income streams on a single loan. This approach is perfect for self-employed individuals, investors, and those with unique financial situations. With Flex NQM Income, you can qualify borrowers using Bank Statements (12 or 24 months) – Perfect for small business owners and entrepreneurs, Profit and Loss Statements – Ideal for those with irregular income patterns, 1099 Income – Great for independent contractors and freelancers, Asset Depletion & Asset Utilization – Leverage assets to qualify without relying solely on income, Restricted Stocks – Another option for non-traditional income earners, or Traditional W2 – Combine with other sources for maximum flexibility. No more turning away qualified borrowers due to rigid guidelines. Learn how to make more deals work by visiting here.

“Meeting with Planet Home Lending’s Correspondent sales team at the MBA Secondary & Capital Markets Conference can be the catalyst for a year-round boost in your business. Join us at the InterContinental New York Times Square: secure your spot now before they're all booked! From niche products, like renovation, manufactured home lending, and USDA, to co-issue for consistent MSR pricing and fast funding, we offer full-service flexibility. Whether you need best effort, mandatory AOT, delegated, or non-delegated delivery, Planet has you covered. Plus, as a sub-servicer, Planet provides best-in-class solutions to meet the demands of your loan portfolio. To start your path to performance, reach out to your Planet Regional Sales Manager or SVP Correspondent Sales, Jason Mac Gloan (843-625-6869).”

As we stare down one of the most volatile markets in recent history, AmeriHome continues to thrive and deliver products and services you need. There’s no better time than now to partner with AmeriHome and take advantage of its new Non-QM suite of products including DSCR, Expanded with Bank Statements, and Asset Qualifier! AmeriHome will also be releasing additional non-QM products and features such as the AUS Jumbo Express later this quarter and rolling out its eNote purchase platform, so if you are originating eNotes make sure to speak with your AmeriHome sales representative! If you are new to mortgage banking or thinking about making the jump from broker to banker, check out the Emerging Banker Program. You can catch AmeriHome later this month at the TMBA 109th Annual Convention or check here for a more detailed breakdown of where AmeriHome will be throughout 2025, email the team to schedule a meeting, and follow AmeriHome Correspondent on LinkedIn to stay in-the-know!

News From DC

Mortgage bankers from across the country descended on Capitol Hill yesterday, meeting with lawmakers from both the Senate and House to advocate for key legislative priorities backed by the Mortgage Bankers Association (MBA). Armed with policy briefs and talking points, they lobbied on issues ranging from trigger lead reform to housing affordability initiatives, pressing for bipartisan support. While some meetings yielded encouraging signals of cooperation and shared goals, others highlighted the uphill battle facing certain proposals in an increasingly unproductive Congress. Still, the presence of the mortgage industry’s front-line advocates underscored a unified push to keep housing policy front and center in Washington’s legislative agenda.

Thank you to Michele D. who wrote, saying, “No, Congress does not go on vacation for the rest of the month beginning today, April 10. However, both the House of Representatives and the Senate have scheduled recesses around mid-April, which align with the Easter and Passover holidays.

“According to available information, the House of Representatives is scheduled to begin a two-week recess around mid-April, often starting after the second week of the month. This is consistent with historical patterns and tentative schedules, such as those outlined for 2025, which include a break around Easter (April 20, 2025) and Passover (beginning April 12, 2025). The Senate also typically takes a similar two-week recess during this period. For example, posts on X and web sources suggest the House might start a recess as early as Friday, April 11, 2025, lasting approximately 17 days, while the Senate could begin a 12-day recess the following week.

“These recesses do not extend for the entire rest of the month. Both chambers are expected to resume session by late April, likely around April 28 or 29, 2025, based on typical congressional calendars, which allow for about two weeks off during this holiday period.”

Lenders Want to Know: Why Should I Care About Tariffs?

In a recent move, President Trump has introduced sweeping tariffs that have sent shockwaves through financial markets, with stocks dropping and the dollar weakening. But how will these measures impact the broader economy? In "Tariffs, Trump, and the Economic Fallout: A Condensed Analysis," Robbie Chrisman delves into the potential consequences of Trump's protectionist policies, offering a critical examination of their risks and rewards. Will these tariffs stimulate growth as Trump hopes, or will they lead to economic stagnation? Read the full article to explore the complex dynamics at play and the potential fallout from this bold economic experiment.

Capital Markets

A week after so-called Liberation Day, President Trump put a ninety-day pause on the implementation of most of his tariffs yesterday. After saying all week he wouldn’t back down from his tariffs, he backed down (and just hours after his much-touted “reciprocal” levies went into effect and China retaliated by raising its tariff on U.S. goods to 84 percent).

The EU has matched Trump’s 90 day pause. Oh wait, the U.S. has now raised levies on Chinese goods to 125 percent. The midday move sent stocks rocketing upward, and his administration billed it as an example of the President’s dealmaking prowess, claiming that the tariffs had inspired new trade deals with many countries. Just don’t whisper too loud that Trump caved in the face of alarming disruptions in the huge market for U.S. Treasury bonds, which the American government uses to finance itself. Continued stress will likely fuel speculation about a response from the Fed, not necessarily in the form of rate cuts, but through other measures like an expansion of the standing repurchase facility or an introduction of a new program that will act as a release valve.

Yes, this week’s spike in bond yields has rattled markets and even had Trump admitting concern. Rising yields signal falling bond prices, often a red flag that institutions might be scrambling to unload assets. Speculation centered on the risky “basis trade,” where hedge funds borrow heavily to exploit small price differences between Treasuries and their derivatives. When the market moved unexpectedly, it may have triggered a wave of forced selling, pushing prices down even further. While the exact cause is still unclear, former Treasury Secretary Larry Summers warned of a looming crisis sparked by U.S. tariff policy, while current Treasury Secretary Scott Bessent tried to downplay the fallout. Ultimately, Trump was pressured into announcing a pause, but not before confidence, retirement accounts, and the broader economy took a hit that won’t be easily undone. For capital markets folks, track your hedge ratios closely and when you need to add coverage or lift a position, do your best to find pockets of liquidity.

According to a recent analysis by Wells Fargo, trade policy changes seem likely to exert upward pressure on construction costs through higher material prices. Although the construction industry does not have outsized exposure to international trade, increased levies on foreign producers will likely reduce international competition, increase domestic demand, and ultimately push up domestic material prices. The knock-on effects of tariffs on economic growth, interest rates and construction demand are highly uncertain, though risks are skewed to the downside. We learned yesterday that Wholesale Inventories increased by 0.3 percent in February, as expected, after increasing 0.8 percent in January. And the FOMC released the Minutes from its March meeting in the late afternoon, but the report was seen as stale, given the volatility that has been experienced by markets over the past three weeks.

If there hasn’t been enough stress and volatility already this week, today brings the March CPI report. CPI was -.1 percent, +2.4 percent year over year, core +.1 percent, +2.8 percent year over year, when markets were looking for an increase of 0.2 percent month-over-month in the headline and 0.3 percent in the core, with year-over-year readings up 2.7 percent and 3.0 percent versus 2.8 percent and 3.1 percent previously. We’ve also received weekly jobless claims (223k, as expected). The only other data points today are the March budget deficit and Freddie Mac’s Primary Mortgage Market Survey, though Treasury will auction $22 billion reopened 30-year bonds and conduct a buyback (cash management) in 1-month to 2-year coupons for up to $8.5 billion.

There is also a laundry list of Fed speakers, including Richmond’s Barkin, Dallas’ Logan, Kansas City’s Schmid, Philadelphia’s Harker, Chicago’s Goolsbee and Boston’s Collins. The Senate Banking Committee will hold a confirmation hearing on Governor Bowman’s nomination for Fed vice chair for supervision. After the tariff waffling, CPI, and jobless claims data, agency MBS prices are better by .125-.375, the 2-year yielding 3.84, and the 10-year yielding 4.30 after closing yesterday at 4.40 percent.