I don’t know if the rumor is true that Webster’s is considering adding “Tariffied” to its dictionary, but the word certainly fits the climate. Capital markets staffs who have to set rates and prices have been wondering where President Trump’s tariff philosophy is coming from, given that the market volatility has increased hedge costs. The answer is Peter Navarro, and everyone hopes that his tariff strategy pays off for the United States in the long run and is better than his legal past. In the meantime, world financial markets are roiled impacting lenders and borrowers alike. You may not care what they do in places like Armenia, Russia, or Ukraine, but it is good for lenders to know what is going on in various financial markets and these three countries are among the 11 that are dropping the U.S. dollar in international transactions. Hope is not a strategy, but let’s hope that this doesn’t move into MBS demand. (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 STRATMOR Group’s Garth Graham on potential clouds looming on the warehouse bank side of things as IMBs continue to post quarterly losses.)
Products, Software, and Services for Lenders
“Attention all Mortgage Innovators! Join us for the blueprint in cutting edge mortgage technology at the Mortgage Innovators Conference May 7 – 8 in Huntington Beach. Our Co-Chairs Kevin Peranio, PRMG, and Ike Suri, Funding Shield welcome all California MBA lender members free of charge! Texas MBA lender members and MISMO lender members also receive complimentary registrations! For non-lenders, you can use the coupon code MIC25-SALE to receive 25% off your registration through April 25th. Thank you to our Premier Sponsors Cotality (formerly CoreLogic) and ICE Mortgage Technology. This conference will not only cover technology and product innovations in mortgage, but we’re also featuring a session of private equity and venture capital companies discussing factors that go into investing in technology. Of course, we top it off with the best party in the industry: the Innovation Deck Party! Hosted dinner, bars, entertainment, and fantastic networking. See you in May!”
“NexBank is the lending partner that can help you succeed in this changing market. We offer a comprehensive range of services including Wholesale and Correspondent Lending, Warehouse Lending, Treasury Management and Escrow Management. Focused on residential housing and driving growth through our TPO channels, our experienced team supports you every step of the way. Along with exceptional customer service, we offer unique products and competitive rates to help you stand out in the industry. NexBank does not compete with our clients for retail originations or refinancing business, focusing solely on being a value-added partner. To reach more TPOs nationwide and continue to support their success, we are excited to announce that Mark Dombrowski has joined our team as a new Account Executive based in Arizona! Contact us to learn more or to meet at the TMBA Annual Convention or MBA Secondary and Capital Markets Conference. Restrictions apply. Subject to change. For mortgage professionals and not intended for general public. Equal Housing Lender NMLS672886.”
In today's episode of Last Word at 10AM PT, Brian Vieaux, Christy Soukhamneut, Kevin Peranio, and Courtney Thompson explore key developments shaping the housing and finance landscape, including tariff shifts, GSE reform discussions, and recent lobbying efforts in Washington, D.C. They also examine the sharp swings in the bond market and what this volatility could mean for the broader economy.
Zillow Did What?
Starting in May, Zillow will remove for-sale home listings from its platform unless they are sourced from a Multiple Listing Service, ending its previous practice of displaying listings submitted through other channels. Zillow's new rule will exclude thousands of listings from appearing on the site. That doesn’t mean they don’t exist, of course. The decision is a pushback against "pocket listings," which are homes marketed privately, often only to buyers working with the same brokerage. Zillow argues that these listings not only reduce exposure for sellers but also create blind spots for prospective buyers.
According to a Zillow research report published in February, sellers who did not use the MLS received an average of $4,975 less for their homes, amounting to more than $1 billion in lost value nationwide in 2023 and 2024. Zillow noted, “If a listing is online, it should be online everywhere: Zillow’s new listing access standards.”
This is a big deal, and acknowledgement that exclusive inventory is a significant threat to Zillow. This is a logical move on Zillow’s part: Op-eds, opposing research, and rousing speeches haven’t stopped Compass and others from growing exclusive inventory.
Curinos and MCT Check in on Volumes
“According to Curinos’ new proprietary application index, refinances increased 53 percent week over week and increased 62 percent in March; the purchase index increased 3 percent week over week and increased 33 percent for March as a whole. March 2025 funded mortgage volume increased 10 percent YoY and increased 30 percent MoM. In the Retail channel, funded volume increased 8 percent YoY and increased 30 percent MoM. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures. We drill into this data further here.”
Of course, not every application becomes a rate lock. MCT reported a 17 percent increase in mortgage lock volume amid mounting tariff concerns and low consumer confidence. April's MCT Indices Report shows a 17.05% increase in mortgage lock volume compared to the previous month. “The volume growth comes as mounting tariff concerns and weakening consumer data raise the risk of a recession heading into the second half of 2025. The size and scope of recently announced tariffs by the administration are contributing to recessionary anxiety and inflationary pressures. The broader market is now paying close attention to data signals that could prompt action from the Federal Reserve.”
Fannie’s Layoffs
This week Fannie Mae made the news with personnel moves. This Commentary wrote, “The U.S. Federal Housing Finance Agency (FHFA, overseer of Freddie and Fannie) and Fannie Mae announced, ‘In President Trump’s housing market, there is no room for fraud, mortgage fraud, or any other deceitful act that can jeopardize the safety and soundness of the housing industry,’ said William J. Pulte, Chairman of the Board of Directors of Fannie Mae. ‘Since my swearing-in, we fired over 100 employees from Fannie Mae who we caught engaging in unethical conduct, including facilitating fraud, against our great company. Anyone who commits fraud against Fannie Mae does so against the American people.’
“Fannie toed the line. ‘I would like to thank Director Pulte for his empowering Fannie Mae to root out unethical conduct, including anyone facilitating fraud. We hold our employees to the highest standards, and we will continue to do so,’ said Priscilla Almodovar, President and Chief Executive Officer of Fannie Mae.”
So, what happened? A very reliable, anonymous source sent me a note. “Rob: The scoop is that these employees were making donations to a bogus charity and then having Fannie do matching corporate donations. The bogus charity would then kick back cash to the employees more than the employees’ cash donation amount. The employee ends up with net cash in their pocket, and a nice tax deduction for their donations to the charity. The fraudsters would then recruit other Fannie employees into the scheme. For at least some of them, they were fired from previous employers for doing the same thing, and apparently were never prosecuted, hence their ability to clear the background checks to get hired at Fannie Mae. One reliable source told me the bogus charities were based or connected to India and the employees doing the fraud were from India. This might be similar or the same as the Apple employee charity fraud that came out in December?”
Capital Markets
U.S. Treasury markets ended Thursday with mixed results: shorter-term bonds went up in value, while longer-term bonds dropped slightly. That was despite a big government 30-year bond sale going well, helping steady the market and ease fears of weak demand. The volatile rate environment has seen long bond yields swing by more than 70 basis points in just four trading days. Positive sentiment in global markets was aided by new data that showed inflation was cooler than expected in March. This lowered the annual inflation rate, which encouraged more buying of Treasuries early in the day. More on that in a second.
President Trump's surprise 90-day pause on some of the recently announced tariffs temporary reprieve helped ease concerns sparked earlier in the week, when a spike in bond yields raised fears of financial instability, potentially tied to forced selling in leveraged hedge fund trades like the basis trade. The decision to give U.S. allies more time to negotiate individual deals suggests a softening of tone (at least temporarily) though Trump’s decision to raise tariffs on Chinese imports to 125 percent signals a continued hardline stance toward Beijing. Treasury Secretary Scott Bessent acknowledged the shift, suggesting the U.S. could unify its allies before taking a more coordinated approach to China.
Despite some short-term relief, investors remain cautious as the market grapples with the broader implications of reshaping global trade dynamics. While the delay in tariffs has slightly improved risk sentiment, as was evidenced by strong demand at Wednesday’s 10-year Treasury auction and yesterday’s 30-year bond auction, volatility remains elevated. A sharp deterioration in financial conditions underscores the fragility of investor confidence. Much of the market’s optimism hinges on the belief that Trump’s tariffs are primarily a negotiation tactic, but the longer-term impact on inflation, trade relationships, and economic planning remains uncertain. The real test will be whether this tariff delay calms investor nerves long enough to restore a sense of stability or simply sets the stage for more drama ahead.
It’s being reported that Federal Reserve officials are prepared to hold their policy rate steady at their May meeting, even if the labor market softens further. The thinking is that this would minimize the risk that Trump’s tariffs trigger a longer-term rise in inflation. Minutes from the Fed’s March meeting, released Wednesday, showed that FOMC members were already starting to be worried about stagflation. One official, Neel Kashkari, said the bar for lowering rates is higher now. And speaking of inflation, we received monthly CPI data yesterday. The CPI data was unexpectedly soft in March (Core CPI rose 0.1 percent, the smallest increase since January 2021), which gives the FOMC a bit of breathing room as policymakers grapple with the appropriate stance of monetary policy amid significant economic uncertainty. A drop in energy costs offered some relief to consumers before tariffs begin to inevitably impact data for April and onward.
March wholesale inflation kicked off today’s economic calendar. The Producer Price Index was down .4 percent versus expectations of increasing 0.1 percent month-over-month… so deflationary. Food and energy were +3.3 percent year-over-year. The only other data point today is the preliminary April Michigan sentiment. Three Fed speakers are scheduled: Boston’s Collins, St. Louis’ Musalem, and New York’s Williams. Bank earnings for Q1 also get underway, with JPMorgan, Wells Fargo, and Citigroup all reporting before the opening as well as BlackRock. After more tariff volatility and the producer prices number, Agency MBS prices are worse about .125 from Thursday evening, the 2-year is yielding 3.85, and the 10-year is yielding 4.43 after closing yesterday at 4.39 percent.
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