AI Warehouse, Compliance Education Tools; Rocket’s Limits; Who is Prepaying; Inflation = Higher Rates

Most of us 30 years old and older have tales about where they were and what they did 25 years ago. Being in capital markets, and selling MBS, for over 40 years, I knew people who died in New York that day. That said, as an industry, we’re very good at looking forward to, and planning for, the future. Minority home ownership is something every major lender is witnessing. For example, on Monday, September 14, NAHREP and the Hispanic Wealth Project will unveil the 2026 State of Hispanic Wealth Report on Latino economic progress. More than 1.2 million Hispanic households have reached millionaire status, with total Hispanic household wealth more than tripling since 2014. Hispanic households drove all net U.S. homeownership growth in 2025, reaching a record 10.2 million owner-households; real estate remains the largest pillar of Hispanic wealth at 45.5 percent. “For the first time, the report devotes a full section to the risks federal policy changes from the current Administration pose to this progress.” (Today’s podcast can be found here. This week’s ‘casts are sponsored by NFTYDoor, the MLO’s favorite HELOC platform. A broad buy box and hands-on mortgage expertise mean more loans close, faster, for banks, credit unions, and brokers. Clean files close in as little as zero days. Today’s has an interview with Agile’s Greg Vacura on connecting mortgage lenders and broker-dealers to make MBS trading faster, more efficient, transparent, and less reliant on phone-based processes.)

Broker and Lender Products, Software, and Services

Affordability pressure doesn’t disappear when the loan closes. It comes back later as repurchase risk. Your borrowers are stretched, leaving less room for errors in the file. Truework, a Checkr company, verifies income, employment, and assets before you close, replacing error-prone processes with fast, automated reports pulled directly from sources. Lenders see up to 50 percent cost savings on verifications, with faster turn times and higher accuracy. Learn more.

Underwriting shouldn’t be the first place loan defects are discovered. It should be where confident decisions are made. That’s why Alameda Mortgage and FM Home Loans are working with Balerion to detect and remediate anomalies across income, assets, liabilities, and property throughout the entire loan file. Instead of asking underwriting and QC teams to rework files, chase discrepancies, and cross-reference changing guidelines, Balerion analyzes the entire file at intake, before issues create avoidable, costly delays downstream. Across the market, lenders share the frustration: skilled people are still fixing problems too late. Alameda and FMHL aren’t alone. More lenders are choosing Balerion to move that work upstream, giving teams cleaner files earlier and underwriters more time to apply judgment where it matters. That’s Intelligence Before Underwriting: understanding the file, identifying what needs attention, and turning findings into action. See why lenders are turning to Balerion at Balerion.ai.

Can you imagine if every play in baseball went to video review? Nine innings would become an endurance event. Thankfully, most calls stand and only the close ones go upstairs. That’s what the Class Valuation Underwriting Engine (CVUE) does for appraisal review. By combining AI, computer vision, and expert human review, CVUE eliminates the lender review on 80 percent of conventional appraisals, with Class Valuation assuming the repurchase risk on eligible files. At Consumers Credit Union, CVUE gave each underwriter capacity for 20+ additional files per month while cutting revisions to 7.9 percent (read about it here). At Churchill Mortgage, CVUE cut revisions from 30 to 17.9 percent and closed eligible files 3.9 days faster (more here). Find out what CVUE could do for your pipeline.

Are you ready for your next regulatory exam? When were your policies and procedures last updated? Do they reflect the latest federal and state requirements? What happens when a regulator asks for something your company can’t provide? Small and midsize mortgage companies face serious compliance demands without always having big-company compliance resources. Mortgage Education Institute (MEI) provides the compliance resources companies need to stay prepared. Policies and procedures, compliance consulting, regulatory exam assistance, BSA/AML Independent Audits, and live compliance training tailored for your company’s needs. As requirements change, MEI provides updated policies, answers compliance questions, and prepares your company for its next regulatory exam. MEI also provides live NMLS CE webinars, in-person classes, and private company training. What makes MEI unique is how they bring mortgage education and compliance together, with compliance companies can understand, manage, and apply, and education that engages, energizes, and empowers mortgage professionals. Need support? Contact MEI today.

“Choose Forta. Choose Security. In warehouse lending, your data deserves better than bots. Some software vendors use bot screen scraping to move data between systems, requiring them to store multiple clients’ credentials, often bypassing MFA, and undermining auditability. This approach runs counter to the direction set by the CFPB and is difficult to reconcile with the access-control standards enforced by the FTC under GLBA and applied by OCC, Federal Reserve, and FDIC examiners. It is not just a technical risk. It is a regulatory concern. Forta is different. Our platform uses secure enterprise API integrations to move data safely between systems, at no charge to clients or vendors. We never store credentials to your other systems, never compromise your audit trail, and never restrict which warehouse lender your originators can choose. We welcome all systems and vendors to connect via safe and secure API integrations to provide the best solution possible for all Originators and Warehouse Lenders. Forta. The enterprise warehouse system built for security, compliance, and freedom of choice.”

Chrisman Demo Day is a free perk for all Chrisman Marketplace members. If you’re a technology or service provider and haven’t joined the Marketplace yet, reach out to Jake Perkins at info@chrismancommentary.com to learn more.

The Chrisman Marketplace is a centralized hub for vendors and service providers across the industry to be viewed by lenders in a very cost-effective manner. We’re adding new providers daily, so check back often to see what’s new. To reserve your place or learn more, contact us at info@chrismancommentary.com.

Sponsored Webinars

New Non-QM Webinar: Master Entity Vesting for Business Purpose Loans. Don’t let entity paperwork stall your non-QM closings. Join Pennymac TPO on Tuesday, September 15th at 10AM PT for a Non-QM Deep Dive to learn how to master entity vesting requirements and strip away any confusion surrounding documentation and compliance. Equip yourself with the industry knowledge needed to navigate these unique hurdles and stand out as a trusted expert for your business purpose clients. Register today, contact your Pennymac TPO Account Executive, or become a partner to learn more. We hope to see you there! (Equal Housing Lender, NMLS #35953)

If you’re doing non-QM loans, handling the calculations for deposit-based income is a time-consuming process that can be a breeding ground for errors. Join Cotality on September 16 at 11 a.m. PT for a 45-minute webinar around Using Cash Flow Analysis to support non-QM underwriting. During this session, we will highlight how new tools can help you automate many steps of the deposit-based income process, saving you hours of processing time and greatly reducing the chance of income calculation errors. Register today and see how you can take the hassle out of deposit-based income calculations.

Homeowners aged 62 and older are sitting on $14.92 trillion in housing wealth, and most of it never comes up in a loan conversation. That’s a tremendous amount of equity and a tremendous opportunity for originators who know how to recognize when it belongs on the table. Join us for another NMP Webinar, “The Untapped Potential In Retirement Lending: The Opportunity Most LOs Miss,” the first session in a three-part series, on Thursday, September 17 at 1 p.m. ET / 10 a.m. PT. Courtney Rozell, Manager of Partner Engagement, and Barbara Cripple, National Sales Training Manager, will walk through the changing retirement landscape, why traditional mortgage conversations rarely surface a borrower’s real needs, and the everyday scenarios where a home equity solution should be considered. You’ll leave knowing the specific conversation triggers that signal a deeper discussion and where those prospects are hiding in your existing database. Register here.

Last Word is today at 10AM PT. Brian Vieaux, Kevin Peranio, Christy Soukhamneut, and Coby Hakalir break down the week’s biggest market signals, agency developments, and industry storylines. The discussion focuses on what the industry got right, what it missed, and what lenders should be watching next.

Now Next Later is Monday, September 14, at 10AM PT. On Now Next Later, Jeremy Potter and Eric Lapin are joined by Jennifer McGuinness-Lubbert of Pivot Financial for a conversation on what broker-dealers, institutional investors, and servicers are watching across the mortgage market. The discussion explores how firms are evaluating credit risk, liquidity, profitability, and balance-sheet management, what investors and servicers are demanding from lenders today, and the biggest forces that could shape mortgage capital markets over the next 12 to 24 months.

Conventional Conforming Changes

Despite the steady increase in market share by non-Agency investors, what Freddie Mac and Fannie Mae do is still important and has ramifications in the primary markets.

“The National Association of REALTORS® thanks Director Pulte, Fannie Mae, and Freddie Mac, for their diligent work to vet and adapt VantageScore 4.0 to their systems,” said Shannon McGahn, executive vice president and chief advocacy officer of the National Association of REALTORS®. “The implementation of VantageScore marks a major milestone for credit scoring, introducing competition among score providers and the use of alternative data such as telecom and utility bills as well as rent payments. This change is the first time a credit score using alternative data has been available to the broad housing finance system and represents years of testing and vetting by the Federal Housing Finance Agency, the GSEs, industry, and academia. NAR has been a steadfast proponent of the use of alternative data and credit competition for years, and in time, this important change may lead to better access and affordability for some homebuyers.”

Brokers took note of Rocket’s announcement. “Starting today, our one-unit conforming loan limit is $845,000, up from $832,750, and we didn’t wait for the Federal Housing Finance Agency’s (FHFA) official 2027 release to get there. This applies to Wholesale and Non-Delegated Fannie Mae and Freddie Mac conforming loans, effective now – High-Balance, Jumbo, HELs, Non-Agency, FHA, and VA limits haven’t changed yet. We made this move for you and the clients you’re working to get to closing: more deals that priced into jumbo can now qualify conventional, often with simpler underwriting and a smoother path to closing. If you have a client in that range, now’s the time to take another look at your pipeline. Give me a call and we’ll walk through the new limits together.”

Capital Markets

August prepayments reinforced the view that the 2026 refinancing wave has likely peaked. Aggregate Fannie Mae 30-year speeds fell 12 percent month-over-month to 7.1 CPR, the slowest since April 2025 and the first break in a 25-month streak of year-over-year increases. Shorter-term Fannie and Ginnie Mae II speeds also slowed, as largely unchanged mortgage rates left little incremental refinance incentive; only 3.4 percent of conventional, 1.7 percent of VA, and 5.3 percent of FHA borrowers currently appear refinance-incentivized. With seasonals (the normal time-of-year pattern in which borrowers tend to prepay more or less), becoming less supportive (prepayments typically slow in the fall/winter, so the calendar is expected to put downward pressure on prepayment speeds) and day count unchanged, another roughly 9 percent decline in aggregate Fannie speeds looks possible next month. For lenders and MBS investors, the combination points to subdued near-term runoff and continued extension risk, while originators face another challenging period of muted refinance and purchase activity.

Ginnie II 30-year prepayments have slowed sharply, with aggregate speeds down to their slowest since March 2025. The key takeaway from the latest report is the divergence between VA and FHA: VA loans continue to prepay materially faster, particularly in 6.0 percent and higher coupons where the advantage reflects VA’s greater refinance flexibility. With more than 15 percent of the $2.5 trillion Ginnie II universe in those higher coupons, and meaningful dispersion across servicers and younger WALA cohorts, higher-coupon VA pools remain the primary prepayment risk if rates move lower.

Servicer composition remains an important differentiator in prepayment performance, with Rocket/Quicken, Huntington, and Fifth Third among the fastest Fannie 30-year servicers, while Rushmore, Marlin, and CMG ranked among the slowest. AmeriHome and Rocket/Quicken were particularly fast in younger 24-month to 36-month WALA pools, while Idaho HFA remained notably slow. Rocket/Quicken also led 15-year speeds, alongside NewRez and United Shore, highlighting the importance of pool-level servicer composition in forecasting future runoff. Meanwhile, Ginnie Mae convexity has deteriorated structurally since the late 2010s as loan sizes and borrower DTIs have increased. This leaves recent 2023 to 2025 Ginnie vintages as a latent source of prepayment risk: relatively quiet while rates remain elevated, but potentially much more reactive to a meaningful rate decline. Younger WALA peaks under today’s nonbank-servicer landscape reinforce that sensitivity.

Rates are caught in a tug-of-war between an increasingly oversold Treasury market with potential technical support from buybacks versus persistent inflation, fiscal, supply, and geopolitical risks. Selling pressure continued yesterday as President Trump’s fiscal rhetoric (his proposed dividend adds to a growing list of costly payout ideas and raises significant questions about its impact on the federal deficit) combined with rising oil prices, higher interest rates, weaker foreign demand for U.S. bonds, and a muted response to Treasury Secretary Scott Bessent’s buyback initiative; 30-year Treasuries have now breached the politically sensitive 5.30 percent threshold. Economic data didn’t help matters, as August PPI rose 0.4 percent month-over-month and accelerated to 5.4 percent year-over-year, while core PPI undershot expectations, jobless claims remained benign, and the ECB raised rates 25-basis points. Despite a remarkably strong $22 billion 30-year Treasury reopening (with a 2.7-basis point stop-through, 2.61x bid-to-cover, and record-high indirect participation) the broader bond selloff resumed, pushing the 10-year yield toward 4.95 percent, Brent crude above $108, and equities lower. Mortgage-backed securities significantly underperformed the broader rate selloff across all maturities, with current coupons (FNCL 5.5s fell to $97-24) and spreads worsening. A heavy corporate issuance calendar is likely to keep pressure on rates through the Fed decision and Chair Warsh’s press conference. Recent Fed commentary has suggested greater willingness to prioritize inflation, and the robust August jobs report released a week ago not only reinforced U.S. economic exceptionalism but also shifted focus to today’s CPI as the key determinant of next week’s Fed decision. Speaking of, we have received August CPI (+.4 percent, as expected, after increasing 0.1 percent in July) and Core CPI (+.3 percent, +2.4 percent Y-o-Y). Later today brings Preliminary September University of Michigan Consumer Sentiment and August’s Treasury Budget. After the high inflation numbers we have Agency MBS prices worse .125-.250 versus Thursday’s close, the 2-year yielding 4.64, and the 10-year yielding 4.97 after closing yesterday at 4.94 percent. It is likely that this will push markets toward pricing in a 25 bp hike next week.