The letter requested the agency to consider expanding the use of hybrid valuation methodologies and increasing the deployment of value acceptance.

A new state omnibus bill also adds explicit language and rules addressing servicing loan transfers and timely notifications of changes in escrow amounts.

The retained portfolios’ latest record monthly number puts Fannie Mae in front while Freddie Mac has held onto a lead in quarterly single-family loan purchases.

BCG finds lenders are turning to AI and M&A to permanently cut costs, even as origination volume and gain-on-sale margins showed year-over-year improvement in Q1.

An audit by the Office of Inspector General concluded that information security programs at both the Federal Reserve Board and the Consumer Financial Protection Bureau are no longer effective due to critical vulnerabilities.

Yields End Higher Despite Some Mid-Day Solace

As has been almost constantly the case for the past few months, today’s ebbs and flows in the bond market were tightly tied to the Iran war news cycle. Yields spiked after AM headlines suggested Iran was not interested in negotiating as long as fighting continues between Israel and Lebanon. Bonds bounced back in a friendlier direction after mid-day news that Trump would talk to Netanyahu about de-escalating. Nothing conclusive came from that conversation by the 3pm ET close and 10yr yields remained roughly 3bps higher on the day. Tuesday’s slate of potential volatility receives an additional (though mild) layer of complication from the job openings data at 10am ET.

Econ Data / Events

Construction spending (Apr)

0.4% vs 0.2% f’cast, 0.6% prev

ISM Manufacturing Employment (May)

48.6 vs — f’cast, 46.4 prev

ISM Manufacturing PMI (May)

54.0 vs 53 f’cast, 52.7 prev

ISM Mfg Prices Paid (May)

82.1 vs 85.5 f’cast, 84.6 prev

Market Movement Recap

09:19 AM moderately weaker overnight with additional losses after latest war headlines regarding Iran breaking off talks. MBS down 6 ticks (.19) and 10yr up 3.6bps at 4.475

09:36 AM MBS are now down 3/8ths of a point on the day and 10 ticks (.31) from intraday highs. 10s are up 6bps at 4.497.

12:24 PM Holding near weakest levels. MBS down 14 ticks (.44) and 10yr up nearly 7bps at 4.507

02:02 PM rebounding on news about Trump/Netanyahu talks. 10yr still up 3bps at 4.47 and MBS down a quarter point

Following last week’s relatively strong move to the lowest levels since May 14th, mortgage rates bounced slightly higher to start the news week. The move followed a clear shift in the Iran war news cycle with morning headlines citing Iranian officials saying the peace negotiation were effectively tabled as long as hostilities remained between Israel and Lebanon. As a refresher, the Iran war is bad for rates primarily due to the actual and implied impact on inflation due to higher fuel costs. Bonds dictate rates and bonds hate inflation. There was an immediate and moderately sharp reaction in both oil prices and bonds right when this morning’s news came out. Fortunately, the damage was fairly mild for mortgage rates with the average lender moving up 0.04% to 6.60% for a top tier 30yr fixed scenario. This is still 0.10% lower than the most recent high of 5.70% seen on May 19th.

Last week’s focus for war-related headlines involved various attempts to hone in on just how close we were to a confirmed preliminary peace deal. The results were predictable with bonds moving to their lowest yields in weeks. The shoe is very much on the other foot to start the new week with headlines saying Iran is pulling out of peace talks until the Israel/Lebanon fighting ends. In addition, the IRGC is said to be taking control of diplomacy and threatening to re-block the strait. With that, 10yr yields jumped back up near the highest levels in over a week and MBS dropped a quick 3/8ths of a point.

While M&A continues (the latest example being Berkshire Hathaway buying homebuilder Taylor Morrison for $8.5 billion!), I find myself in San Juan Capistrano at the Insellerate Experience Summit but keeping an eye out for returning swallows. Lenders are keeping an eye out for loans: Although lenders generally had a good April and May, pipelines for June fundings and beyond appear to be down significantly. Insellerate’s Summit is focused on AI and tech. Mortgage has spent decades layering technology onto a system that still costs too much, moves too slowly, and frustrates nearly everyone involved, says Figure CEO Michael Tannenbaum. In an exclusive Q&A for Chrisman Commentary, he explains why he believes most mortgage technology has failed to solve the industry’s core problems, how Figure is trying to rebuild parts of housing finance from the infrastructure level up, and why Wall Street increasingly views the company less like a lender and more like a financial network. The conversation also touches on AI hype, blockchain skepticism, the psychology of running a newly public company, and why mortgage may be entering its most important transition since the rise of securitization itself. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Experian and the Experian Verify Hub. The platform brings manual submissions in-house and consolidates post-submission activities into a single environment, aiming to provide more streamlined access, faster insights, and a more cohesive user experience. Today’s has an interview with Movement Mortgage’s COO Lyra Waggoner on breaking into mortgage banking, what it actually takes to run a lender day-to-day, and thinking differently about building careers, culture, and long-term success.)

The FHA published a request for information in the Federal Register Friday, looking for stakeholder comment on how to improve and modernize property standards.