When Moody’s announced the surprise cut of the US credit rating on Friday, there were only a few minutes left to trade and all but the latest working US-based traders were even at their desks. The most logical fallout in a scenario like that is for the rest of the world to take its turn piling into the trade as soon as overseas markets opened (not to mention US traders who were already gone for the day on Friday).  Unfortunately, logic prevailed overnight. We’d note that Moody’s was simply the last of the big 3 to make this change, and that it’s not really a groundbreaking development.  Rather, the groundbreaking development is playing out behind the scenes as the US government (all of it, red and blue and in between) once again fails to set the country on a sustainable fiscal path.  THAT is what the market is protesting. That is why the crowd is booing. Moody’s is simply the surly guy who shouted “you suck!” from the back of the audience.

People who don’t attend the National Secondary here in Manhattan wonder what happens behind the scenes. Here you go. We had the MCT elevator failure last night, inconveniencing a carload of mortgage folks between floors. There is definitely an older crowd at the conference. I was walking by one fellow who had asked a non-QM rep for her number, and she replied “140 over 95.” Fewer wing tips and high heels, and more tennis shoes and talk of Fab Feet products. What are capital markets personnel talking about in the hallways? One issue is the rating agency Moody’s cutting the credit quality of the United States given our debt situation: it certainly won’t help lending rates. (Our nation isn’t approaching B or C or subprime status, but the current budget proposal adding trillions of dollars of debt won’t help.) Fox News reports that President Trump warned Walmart to eat the cost of the tariffs instead of raising prices, despite thin retail margins. The MBA’s expectation is that the U.S. economy will slow down due to the tariffs, and that their impact on the new home market, appliance cost, HVAC cost, will hurt housing affordability, not help it. (Today’s podcast can be found here and this week’s is sponsored by Xactus and its commitment to the continued transformation of the mortgage verification industry. Pioneering a new class of technology, “Intelligent Verification,” Xactus is redefining how the industry originates and services mortgages. Today’s has an interview with Xactus’ Greg Holmes on how the company’s consultative approach, intelligent verification, and strategic partnerships are helping lenders.)

US states from Florida to North Carolina and Texas would likely hold onto top-notch credit scores from Moody’s Ratings, mostly because they’re in better fiscal shape than the federal government itself.

Investors face yet another bumpy start to the trading week, although it’s mounting concern over US debt rather than tariffs likely generating the volatility this time.

Firing 90% of the Consumer Financial Protection Bureau’s staff and stripping it down to “the statutory studs” is lawful, an attorney for the CFPB told an appeals court.

Servicing profit offset origination losses for some companies, but more than 40% were unprofitable, according to the Mortgage Bankers Association.

The Virginia man filed a false tax return in 2021 claiming an $18.3 million refund, working with a co-conspirator to defraud a real estate agent.

Rocktop Management anticipates rising loan origination volume and increasing borrower distress, driving more servicing sales — key reasons behind its acquisition of Incenter Capital Advisors.

The rule rescission, one of many the Consumer Financial Protection Bureau is planning, would officially remove temporary steps for mortgages added in 2021.

Lenders using an automated process can save up to $1,500 per loan but do they have the capacity to pass those through to applicants as the FHFA director asks?