Latest / Chrisman Commentary - Daily Mortgage News / 10.16.26 National Takeaways; Realtor Arrian Binnings on Originator Relationships; Safe Haven Trade

Transcript

10.16.26 National Takeaways; Realtor Arrian Binnings on Originator Relationships; Safe Haven Trade · Chrisman Commentary - Daily Mortgage News

• 0:02
  Speaker: Welcome to the Chrisman Commentary, Daily Mortgage News Podcast.
• 0:05
  Speaker: I'm your host, Robbie Chrisman.
• 0:07
  Speaker: Topics on today's episode include chatter on the street, rates were tired of going up, so and my interview with SF realtor Arrian Binnings on how real estate agents and mortgage originators build effective partnerships and how AI may change the work.
• 0:25
  Speaker: Here, take a listen to a little preview.
• 0:27
  Speaker: Every realtor out there worth their wait is probably getting hit up for coffee from originators.
• 0:33
  Speaker: Hey, can I get can I get some business?
• 0:34
  Speaker: What actually sets the originators that you want to work with apart?
• 0:38
  Speaker: How do you how do you choose who makes it into that Rolodex?
• 0:42
  Speaker 1: Their lending institution is is quite important.
• 0:45
  Speaker 1: A recognizable brand that has a track record of working with the type of clientele that I work with, that's important.
• 0:54
  Speaker 1: Competitive products is also hugely important, but that should come as no surprise.
• 1:00
  Speaker 1: And just availability, like I mentioned earlier, the the availability piece and the fact that, you know, when you call, they pick up and they're, you know, at your service 24-7, no matter what's happening.
• 1:12
  Speaker 1: Those three things together, I think, really make a difference.
• 1:15
  Speaker 1: I do think there's also some importance, like what's going on behind the curtain.
• 1:19
  Speaker 1: So where is the money coming from in this bank?
• 1:22
  Speaker 1: Are you dealing with a brokerage who's got their, you know, their fingers into lot lots of different uh lending institutions?
• 1:30
  Speaker 1: Or is it someone that has direct, uh, you know, where the underwriter sits sits uh, you know, one office over.
• 1:36
  Speaker 1: And if we run into a snack, they just walk down the hallway and they can talk to them.
• 1:40
  Speaker 1: These are important things that don't really get brought up a lot, you know, when I'm talking to my clients about who I should recommend to them, but it does rear, it does show itself when you're in the middle of a transaction and you realize, oh, this loan officer has absolutely no control over the process.
• 1:59
  Speaker 1: Or conversely, this loan officer is incredible at solving every little snag that's come up in this in this transaction.
• 2:05
  Speaker 1: And I think what's happening behind the scenes there, and you would know better than I because it's the business you work in, I think what's happening behind the scenes is they have, you know, they have influence.
• 2:14
  Speaker 1: They have some some oversight, they know how to get exceptions done, they know how to, you know, if an appraisal comes in low, they know how to re rebut that, or, you know, maybe order a second one and take the median of the two and and work at a place where where they're allowed to do stuff like that.
• 2:29
  Speaker 1: These are all, these are all important things that kind of come up in the in the day-to-day.
• 2:34
  Speaker 1: We are seeing, I'm sure it comes as no surprise, but we're seeing a lot of cash out there right now.
• 2:40
  Speaker 1: And we're seeing a lot of synthetic cash, which is a term that I used a couple of weeks ago.
• 2:45
  Speaker 1: I was interviewed by the San Francisco Business Times, and we were talking about how a lot of people make cash offers to be competitive and win win the house, but the second it closes within 60 days or so, they they take out a loan on the property.
• 3:00
  Speaker 1: And so that's really what what I've I've called synthetic cash uh because it closes as a cash deal.
• 3:06
  Speaker 1: It shows up in the statistics as a cash deal, but 60 days later, the house isn't owned free and clear.
• 3:13
  Speaker 1: It's uh there's there's a mortgage on it, there's different ways to achieve that.
• 3:17
  Speaker 1: Um, but we're seeing a lot of synthetic cash and cash.
• 3:20
  Speaker 1: Loan loan origination is I'd love to hear from you what's what's going on in your space and how it changes in a market like this.
• 3:28
  Speaker: Because this market is the synthetic, the synthetic cash is interesting because those loans will get counted on the refinance side of the ledger later on, and so that might artificially boost refinance volumes when it wasn't really a refinance uh in a practical sense.
• 3:45
  Speaker: And so what am I seeing?
• 3:47
  Speaker: I'm seeing a lot of rise of non-agency lending, and maybe that that's never been much of the case in San Francisco because it's such a high-priced market where you're not dealing with you know fanny freddie conventional conforming loans.
• 4:01
  Speaker: A lot of the time is jumbo products, but that's started to rise.
• 4:05
  Speaker: I think also what we're seeing in the mortgage industry, and and I'm I'm trying to stay away from this a little bit in this interview with you, is things are becoming very localized.
• 4:16
  Speaker: And San Francisco is going gangbusters with all this AI stuff, but places like Austin or Boise or parts of Florida, they're taking a little bit of nosedives as a natural ebb from the pandemic.
• 4:31
  Speaker: And and so it's becoming more and more locally dependent.
• 4:36
  Speaker: Thanks to today's podcast sponsor, Encino, the platform for agentic AI and mortgage lending.
• 4:44
  Speaker: If you're here at MBA Annual, come find the Encino team and see how their agentic homeownership journey puts AI to work across the mortgage life cycle, helping loan teams spend less time on manual tasks and more time serving borrowers.
• 5:02
  Speaker: Visit NCNO.com slash mortgage slash US to learn more and schedule a meeting while you're on site.
• 5:09
  Speaker: The MBA believes that 2027's production will be 5% less than 2026's and be below $2 trillion.
• 5:18
  Speaker: I was asked if I'm hearing that with volumes down, that's units and volume.
• 5:22
  Speaker: Lenders are once again examining keeping loan originators.
• 5:26
  Speaker: Indeed, I am.
• 5:27
  Speaker: At the most basic level, as we move through autumn and into winter with no sign of greatly improved rates and the spring home buying season five months away, lenders are asking, is the LO carrying him or herself?
• 5:39
  Speaker: Lenders are moving LOs to part-time status or cutting benefits when possible.
• 5:43
  Speaker: Many are shifting.
• 5:45
  Speaker: Redder reports that from January through September 9, 2026, independent mortgage bankers lost roughly 100 net loan officers, representing approximately $1.8 billion in production, while the non-delegated broker and wholesale channels gained $327 net loan officers and nearly $7 billion in production.
• 6:03
  Speaker: Technology-enabled platforms make it easier to move production into operating models with lower costs and more efficient fulfillment.
• 6:11
  Speaker: There were a lot of credit thoughts coming out of the National in Chicago.
• 6:14
  Speaker: FHFA director Bill Poulty skipped the NBA's national conference entirely, leading many to wonder if he knows the value of the MBA and Fannie Mae and Freddie Mac, andor just prefers to tweet changes in policy.
• 6:27
  Speaker: This week's Capital Markets Wrap, that's a Chrisman commentary video show on YouTube, address credit changes in terms of investor acceptance.
• 6:35
  Speaker: The mortgage industry is treating alternative credit scoring as a cost-saving opportunity, but the harder question is whether lenders and investors can confidently evaluate the risk behind a score.
• 6:45
  Speaker: Matching loan-level price adjustments between FICO and vantage score may create a more level playing field on paper, but equal pricing does not improve that borrowers with the same numerical score have the same likelihood of default.
• 6:57
  Speaker: A borrower with the weighted or adjusted, whatever you want to call it, 720 vantage score may not perform like a borrower with a 720 FICO score.
• 7:05
  Speaker: And lenders still need evidence that connects those scores to actual loan performance.
• 7:10
  Speaker: The problem extends beyond the scoring model.
• 7:13
  Speaker: If a lender originates a loan using vantage score, but only a fraction of its potential investors accept that model, the lender has less flexibility to sell the loan.
• 7:22
  Speaker: Until investors, rating agencies, and aggregators can evaluate alternative credit profiles consistently, introducing competition into credit scoring could create new execution risks, even as the industry tries to lower costs.
• 7:35
  Speaker: Many will say that Vantage 10T offers the best quality picture of a borrower's credit.
• 7:40
  Speaker: No credit report can predict a job loss, of course, but or and that is why the losses for lenders and servicers occur.
• 7:48
  Speaker: There's similar data across the bureaus, but occasionally differences come up, and often due to the company's reporting information to the three bureaus.
• 7:56
  Speaker: How are lenders going to prevent gaming the system?
• 7:58
  Speaker: Loan officers are still going to want all the scores, and that will drive up costs.
• 8:04
  Speaker: It continues to be a hodgepodge in terms of offerings, quality, prices, and price changes, dependability, and various company offerings and investor acceptance.
• 8:13
  Speaker: U.S.
• 8:15
  Speaker: Treasuries and Agency Mortgage Back Securities staged a sharp safe haven rally yesterday that extended their rebound, holding yields at three-week lows despite hotter than expected September PPI data, which surged 1.3% versus 0.5% expected, and core PPI rose 0.7%, and crude oil climbed toward $100 per barrel, as investor concerns over heavily indebted AI-related equity valuations in data setter companies fuel the flight to quality.
• 8:44
  Speaker: The investor move toward defensive assets has seen the 10-year treasury yield sharply reverse from its recent 20-year high of 5.36% to as low as 5.03%.
• 8:53
  Speaker: With inflation stubborn, economic data resilient, and oil prices elevated, the rally may reflect technical mean reversion and short covering rather than a durable shift in fundamentals.
• 9:05
  Speaker: In the near term, technology-driven equity volatility is likely to exert greater influence on treasury yields than incremental inflation data, with safe haven demand currently outweighing persistent inflationary pressures.
• 9:17
  Speaker: For today's interview, I wanted to welcome to the show San Francisco Realtor Ariam Biddings to talk about how real estate agents and mortgage originators build effective partnerships and how AI may change their work.
• 9:30
  Speaker: Let's start by talking about the interaction between realtors and originators.
• 9:39
  Speaker: And maybe this is a good place to talk about your background a little bit.
• 9:42
  Speaker: When you first started as a realtor, what was your interaction like with originators?
• 9:47
  Speaker: How did you choose where to send business and how has that evolved to where it is today?
• 9:51
  Speaker: And just where is it?
• 9:53
  Speaker 1: My interaction with originators started before I became a realtor because prior to becoming a realtor, I had a real estate appraisal business.
• 10:01
  Speaker 1: And so I had a lot of interaction with originators back when that was allowed.
• 10:07
  Speaker 1: Following the GFC, that was no longer allowed.
• 10:10
  Speaker 1: So yeah, I brought a little bit of that kind of knowledge with me as I shifted gears and became a realtor.
• 10:15
  Speaker 1: And I only did so is because I moved to California from Atlanta, Georgia back in 2007.
• 10:22
  Speaker 1: So I had to uh decide if I wanted to start another appraisal business in California or shift gears and do something different.
• 10:28
  Speaker 1: And I had a really good run with appraisal.
• 10:31
  Speaker 1: Really thankful for those years.
• 10:32
  Speaker 1: And it basically gave me an incredible foundation to do what I do now successfully.
• 10:38
  Speaker 1: But uh, but yeah, it's very different when you're talking to originators as an appraiser versus an agent.
• 10:45
  Speaker 1: I think since we're focused on the agent piece, the most important thing, I think, is that the loan officer needs to be kind of working the same way we do, which is if you're really good at what you do, you've chosen to give up your nights and your weekends, and you're taking calls on the soccer sidelines and at your kids' games, and and it's that that level of high touch, high availability customer service that really cements you in having you on speed dial and having you somewhat having a name that I'm constantly sending out.
• 11:21
  Speaker 1: We run into issues all the time with loans, uh, where you know having our originator available on a Saturday night at 8 p.m.
• 11:32
  Speaker 1: or and I know this is not what people want to hear, but but having having them pick up at 8 p.m.
• 11:37
  Speaker 1: on a Saturday or Tuesday morning before market hours, you know, I think that these are really important things.
• 11:44
  Speaker 1: And it's really sometimes that's when problems need to be solved.
• 11:47
  Speaker 1: And otherwise that wouldn't bother you during those times and our clients wouldn't bother us.
• 11:50
  Speaker 1: But you know, the the real estate market, especially with its seasonality, you know, there's a couple times a year where it's just super active and you're it's like being a doctor on call.
• 12:00
  Speaker 1: You're gonna be you you might as well think every every hour of your day is gonna be work.
• 12:05
  Speaker 1: Um, and then around July you'll be able to take a breath, and around December, you'll be able to take a breath.
• 12:10
  Speaker 1: But during the busy seasons, there's no taking any breaths.
• 12:14
  Speaker 1: Um, so you know, loan officers that understand and embrace that are, you know, they're on the short list.
• 12:20
  Speaker 1: They're on they're in the Rolodex, so to speak, if people still use that term.
• 12:24
  Speaker: Your background on the appraisal side of things, what did that teach you about residential origination that you feel like helps in your role today that maybe other realtors out there don't get that's an advantage for you?
• 12:35
  Speaker 1: It taught me that the loan loan officers work really hard at what they do.
• 12:39
  Speaker 1: And they are an essential piece, an essential bridge to making, as I like to say, sales makes the world go around.
• 12:48
  Speaker 1: Like if you have a if you have a great product but you don't have any sales, who cares?
• 12:52
  Speaker 1: Like, you know, so in real estate, sales makes the world go around in real estate too.
• 12:57
  Speaker 1: And the only way the world can go around uh is if you have all these necessary components that that give the give give the system the ability to operate smoothly.
• 13:09
  Speaker 1: And so um loan officers are an absolute essential piece of that because they take, you know, where the money is coming from, the bank, and they bridge, you know, bridge an institution down to a personal level where an individual or family or husband and wife are, you know, trying to make their dream of home homeownership come true.
• 13:32
  Speaker 1: And uh between the real estate and the lender, or sorry, the real estate agent and the lender, I can't think of two more important people in in bridging that connection.
• 13:43
  Speaker 1: You know, you have your inspector, you have your appraiser, you have your title officer, and and other uh, you know, uh essential components, of course.
• 13:52
  Speaker 1: But in terms of who's running the the leg of the relay race with the baton and who could who has the most susceptibility to drop it in a key moment and how important that leg of the race is, I think it's the the real estate agent and the lender.
• 14:08
  Speaker 1: Those are kind of the two most important runners.
• 14:11
  Speaker: It's very interesting because people had thought, okay, well, we can displace the real estate agent.
• 14:16
  Speaker: Oh, we can displace the LO.
• 14:18
  Speaker: And both have actually proved very hardy when it comes to the overall equation.
• 14:23
  Speaker: And that's probably a good segue into talking about tech because the thought with AI, rather than replacing the originator, is that it'll free up the originator from menial tasks or tedious tasks to focus on relationships, building relationships with borrowers, building relationships with the referral network or realtor partners.
• 14:43
  Speaker: From your perspective, on the realtor side of things, what is AI or technology going to help with?
• 14:50
  Speaker 1: And where do you see it changing the role?
• 14:52
  Speaker 1: AI is algorithmic.
• 14:54
  Speaker 1: I mean, at the end of the day, it's it's algorithmic.
• 14:57
  Speaker 1: And so um anything that can be automated by by means of an algorithm is susceptible to change from this technology.
• 15:09
  Speaker 1: What parts of my job are algorithmic?
• 15:12
  Speaker 1: Well, a decent amount, but not enough to totally replace me.
• 15:17
  Speaker 1: I know that that for sure.
• 15:19
  Speaker 1: And a big reason for that is a lot of my job takes place out in the physical world.
• 15:24
  Speaker 1: Uh, and the physical world is very messy.
• 15:27
  Speaker 1: So there's a lot of um emotions involved, and especially in residential real estate, commercial a little less so.
• 15:34
  Speaker 1: But residential real estate, you have, you know, people who've lived in their homes for 30 years and they're having a tough time detaching.
• 15:41
  Speaker 1: Uh, you have buyers who are stressed out making the most, you know, the biggest purchase that they've ever made and all their life savings, or not all of it, but a decent chunk of life savings is going to go into this one asset.
• 15:53
  Speaker 1: So they're freaked out.
• 15:55
  Speaker 1: Um, you have, you know, a sewer line with with root intrusion and and clay pipe.
• 16:01
  Speaker 1: Uh, you have an unclosed permit from 2007, you have an easement from the neighbor, you have a construction project slated for 2028, a few blocks away.
• 16:10
  Speaker 1: Are you in the blast zone for that?
• 16:12
  Speaker 1: Um, you have, you know, school district boundaries that can change.
• 16:17
  Speaker 1: You have, you know, there's there's so it's so unbelievably messy that it really takes that kind of super micro market knowledge, like on a block level, to really be good at this.
• 16:30
  Speaker 1: And I just don't see AI being able to do that, especially when a lot of this uh business happens through conversations on the soccer sidelines or conversations at the school.
• 16:42
  Speaker 1: Uh, and it's just too much of a human business, I think.
• 16:46
  Speaker 1: I do think the parts of the business that are more algorithmic, the agents who embrace that and don't get uh scared by it, and they say, Oh, this can actually make me way more efficient.
• 16:59
  Speaker 1: And I'll give you a good example.
• 17:01
  Speaker 1: I used to spend like two to three hours in Adobe InDesign, which is Adobe Photoshop, Adobe InDesign, Adobe Illustrator.
• 17:12
  Speaker 1: There's all these great Adobe applications.
• 17:14
  Speaker 1: Adobe InDesign is where we would create our property brochures.
• 17:19
  Speaker 1: So we have a new listing, we create a 12-page brochure.
• 17:22
  Speaker 1: These things cost like eight bucks each.
• 17:24
  Speaker 1: They're like, you know, really nice.
• 17:25
  Speaker 1: We hand them out at open houses, they kind of elevate the whole thing.
• 17:28
  Speaker 1: It's it's way different in the days where you would just run it, run something off the photocopier and hand it out at the open house.
• 17:34
  Speaker 1: We're now into like really high-end stuff.
• 17:36
  Speaker 1: It would take me, you know, three hours to to do a 12-page brochure in InDesign.
• 17:42
  Speaker 1: A couple of days ago, well, now I'm I'm at the point in my career where I have a couple of assistants.
• 17:48
  Speaker 1: So now they've been they've been doing that for me for for years.
• 17:51
  Speaker 1: So I actually haven't had to do that, but I do play a key role in it because they want to know what should go in the brochure, what do we talk about in the brochure, et cetera.
• 17:58
  Speaker 1: Um, a couple of days ago, I took uh ChatGPT's new GPT 6 Astra model, which can control your computer.
• 18:09
  Speaker 1: And I told Astra, I said, Look, I want you to go control InDesign.
• 18:14
  Speaker 1: It's loaded up right now.
• 18:16
  Speaker 1: I've got an old brochure I want you to use as a template.
• 18:19
  Speaker 1: And I have my new property, and here are the photos, and here's the here's the text for the property.
• 18:25
  Speaker 1: You build the brochure.
• 18:27
  Speaker 1: And I came back 20 minutes later, and not only had it built it, it had pretty much done a perfect job.
• 18:33
  Speaker 1: And my brochure has an area map with points of interest, it has a floor plan, it has money, you know, the the money shots, and then the ones that are kind of secondary and tertiary shots, like it, it's got all that in there.
• 18:44
  Speaker 1: And it figured out what to do on every single page, and the alignment was perfect, and the text was perfect.
• 18:50
  Speaker 1: And I probably spent like maybe 15 minutes doing an edit, but we're talking a three-hour task now down to 15 minutes.
• 18:58
  Speaker 1: That's the type of stuff that AI is going to help an agent like me or an agent team like me uh really become more efficient at, which frees us up to do more high value tasks.
• 19:10
  Speaker 1: High value is being out showing and selling, high value is building more relationships and trust.
• 19:16
  Speaker 1: High value is taking a really messy world full of information and coming up with a really sophisticated answer to a very tough problem that my client is facing.
• 19:26
  Speaker 1: That's what we need to do is elevate our service level and the information that we're providing to our clients.
• 19:32
  Speaker 1: And you also have to imagine that our clients have access to these tools as well.
• 19:37
  Speaker 1: But because they don't do real estate for a living, they only are going to go one or two levels deep with a couple of chat GPT or Claude conversations.
• 19:46
  Speaker 1: Whereas I do this for a living.
• 19:47
  Speaker 1: So the conversations, for example, the conversations I've had with Claude about building pricing models for my, you know, using my real estate appraisal background and knowing everything I know about evaluation.
• 19:58
  Speaker 1: I've had conversations over weeks and months that have led me to um a Claude skill that I can just at a drop of a hat, I can tell Claude to run this skill now.
• 20:09
  Speaker 1: But it would take, you know, an end user a whole career and knowing what questions to ask and how to arrive at this uh this particular pricing model, uh, it would take them, you know, uh it's just not accessible.
• 20:23
  Speaker 1: Uh so I think you need to use AI and you need to figure out how to go way deeper than your clients ever would.
• 20:31
  Speaker 1: That way you're like, oh yeah, that's cute that you've done that with the AI, but that but I, you know, I I've I've already been down this path and I'm I'm like 10 10 steps ahead of you on this.
• 20:41
  Speaker 1: So let's look at this information.
• 20:43
  Speaker: Very good point.
• 20:44
  Speaker: In your two decades on this side of the real estate equation, how has the procedurally, how have the interactions between agents and originators evolved?
• 20:57
  Speaker: And where is it like what is that moving toward?
• 21:00
  Speaker: What is the what is the interaction of the future for you look like between the borrower, the agent, and the lender?
• 21:06
  Speaker 1: I think it's all about trust and reliability.
• 21:09
  Speaker 1: When I hand out someone's name and I say, because we have to hand out multiple names, I can't just say use this lender.
• 21:15
  Speaker 1: I have to give them a list of three, four, five different names.
• 21:18
  Speaker 1: But whenever someone's on that list, it's because they have earned trust.
• 21:24
  Speaker 1: Um, they've usually come to me by way of uh referral from another respected colleague who does a similar type of business.
• 21:33
  Speaker 1: And over time they've earned our trust and earned our business.
• 21:37
  Speaker 1: And our clients, when I hear feedback from my clients to say, look, I'm so glad you sent me to that guy or that gal, like she she did an incredible job for us.
• 21:45
  Speaker 1: And that when when I hear stuff like that, I'm like, okay, this person is definitely staying on the short list.
• 21:51
  Speaker 1: And so how do I see it evolving?
• 21:54
  Speaker 1: I mean, I just it doesn't need to evolve.
• 21:56
  Speaker 1: I think it it it's already where it needs to be, which Is based on trust and reliability.
• 22:02
  Speaker 1: I mean, what else is what else is there at the end of the day?
• 22:04
  Speaker 1: You know, you've got to be able to, and I mean, when when I say reliability, I'm talking about execution and problem solving, you know, because there's so many, as you know, so many little snags can happen.
• 22:14
  Speaker 1: And I think a part of that is influence.
• 22:17
  Speaker 1: You know, can do you have the ability to walk into your underwriter's office and say, hey, you know, I know you don't like this, but you should know in this market, this is actually normal.
• 22:28
  Speaker 1: You know, that's one thing I learned uh early on in real estate.
• 22:32
  Speaker 1: And what's normal for a market area is very different based on where you go, you know.
• 22:39
  Speaker 1: Like if what's a good example of this?
• 22:41
  Speaker 1: You know Bernal Heights, you know that neighborhood?
• 22:43
  Speaker: San Francisco, yes.
• 22:44
  Speaker: Yeah.
• 22:44
  Speaker 1: So Burnle Heights is full of these earthquake cottages.
• 22:47
  Speaker 1: They were built like right after the 1906 earthquake.
• 22:50
  Speaker 1: And so you have this earthquake cottage from 06 or 07, and then you have an addition that was stapled on in the 1960s, and another edition from the 1980s, and then you have a little pop top that was stapled on in 2001.
• 23:03
  Speaker 1: And and so you have these incredibly quirky, ridiculous floor plans.
• 23:07
  Speaker 1: And uh we call these burnal steps.
• 23:10
  Speaker 1: Whenever you go up to the second floor, they have like a really big rise and very little runs.
• 23:14
  Speaker 1: So you have to walk up the steps with your feet kind of sideways, you know, to get and so so this is all like in a normal market, you'd be like, this detracts value from a home.
• 23:24
  Speaker 1: This is this is terrible.
• 23:26
  Speaker 1: Like, this is uh you would call this functional obsolescence, right?
• 23:29
  Speaker 1: This we should detract value from this.
• 23:31
  Speaker 1: But in Burnal, it's 100% normal and it's normal for the market area.
• 23:36
  Speaker 1: And so I bring up that point because oftentimes underwriters, especially if they're sitting at quicken loans in Cleveland and they're looking at a deal in San Francisco and they're looking through all the paperwork and they're like, This is abnormal.
• 23:50
  Speaker 1: This doesn't, this shouldn't work out.
• 23:52
  Speaker 1: And you're like, no, actually, if you were in our market and you understood what our market was all about, you would say this is 100% normal.
• 23:59
  Speaker 1: You know, 12 offers on a home is normal, you know, like going 800 above the asking price is normal.
• 24:05
  Speaker 1: So there's a lot of things that these loan officers, uh originators, and uh underwriters, they they need to know the local nuance.
• 24:14
  Speaker 1: And that's how they that's how they gain your trust as an agent.
• 24:18
  Speaker 1: Is like, yeah, they they know about water heater bracing and brick foundations and and you know, just there's so many things you can run into, right?
• 24:27
  Speaker 1: Um, but knowing how to navigate that and and earning that trust and and being reliable, I think, are the most important things.
• 24:33
  Speaker: Yes, I I've had a discussion recently with a forward-looking lender, and he was basically saying, because you'll be freed up for higher value things, you should you, as an LO should be able to focus on, let me help you with moving, let me help you with certain logistical things of the house.
• 24:49
  Speaker: And so being able to have that wide range of knowledge and a variety of subjects is going to be where things are headed and what borrowers want to work with or buyers want to work with.
• 24:59
  Speaker: Mr.
• 24:59
  Speaker: Biddings, I appreciate the time.
• 25:01
  Speaker: I thought this was great to get a realtor perspective.
• 25:04
  Speaker: And uh hopefully I'll see you on the basketball court somewhere in Marine County soon.
• 25:09
  Speaker 1: Well, like I said, no video, please.
• 25:11
  Speaker: Uh despite hotter than expected inflation data and elevated oil prices, mortgage-backed security prices gained three-eighths to more than a point yesterday, although production coupons lagged and spreads remain mixed amid roughly $90 billion in trading volume.
• 25:28
  Speaker: While attractive energy levels, short covering, and flight to quality demand have reinforced the rally, persistent inflation and shifting expectations for Fed tightening remain significant headwinds, with markets pricing a 29% probability of an October rate hike and an 88% probability by December.
• 25:46
  Speaker: For what it's worth, Fed officials are yet to signal any immediate urgency to raise rates.
• 25:50
  Speaker: Consequently, sustaining the rally will hinge on whether continued market turbulence supports defensive flows or if stabilization in tech stocks, rising energy costs, and renewed concerns over inflation and the Fed's tightening trajectory ultimately reverse the move.
• 26:05
  Speaker: It's tough times for U.S.
• 26:07
  Speaker: affordability and mortgage credit risk, as elevated home prices and borrowing costs strain household budgets even as the market cools, with home values declining 0.6% month over month in September and annual appreciations slowing to 1.1%.
• 26:22
  Speaker: Meanwhile, record mortgage debt of $14.8 trillion and persistently elevated borrower debt to income ratios underscore growing vulnerabilities, particularly among Jenny May borrowers with DTI ratios of 45% or higher, whose serious delinquency rate reaches 5.1%, compared with 3.2% for those below that threshold.
• 26:43
  Speaker: It's important to prioritize borrowers' cash flow resilience and repayment capacity over home equity alone when assessing credit risk.
• 26:51
  Speaker: Elevated mortgage rates, affordability constraints, and seasonal weakness are expected to keep purchase and refinance originations subdued in the near term.
• 27:00
  Speaker: Today's economic calendar is already underway with September import and export prices.
• 27:05
  Speaker: Later today brings September industrial production and capacity utilization.
• 27:09
  Speaker: We begin the day with agency MBS prices, little change from Thursday's close, the two-year yielding 4.75, and the 10-year yielding 5.10 after closing yesterday at 5.09%.
• 27:19
  Speaker: Let's wrap up with a joke and some housekeeping.
• 27:25
  Speaker: 10% of European babies are conceived on an IKEA bed.
• 27:30
  Speaker: So be sure to follow the instructions.
• 27:32
  Speaker: Put peg A into slot B and then screw until the nuts tighten.
• 27:35
  Speaker: Oh my gosh, that was bad.
• 27:37
  Speaker: Thanks again to Encino for sponsoring this week's podcasts.
• 27:46
  Speaker: Encino is the platform for a gentic AI and mortgage lending, helping mortgage lenders deliver a faster, simpler path to home ownership.
• 27:53
  Speaker: If you're here at NBA Annual, come find the Encino team and see how their agentic home ownership journey puts AI to work across the mortgage lifecycle.
• 28:01
  Speaker: Helping loan teams spend less time on manual tasks and more time serving borrowers.
• 28:05
  Speaker: Visit Ncino.com/slash mortgage slash US to learn more and schedule a meeting while you're on site.