Here in Manhattan, “the cost of credit” is an abundant conversation starter in the halls of the MBA’s Secondary & Capital Markets Conference. Equifax’s latest infographic: “The True Cost of Mortgage Credit Reports: A Deeper Look,” is worth a gander. It “challenges common assumptions about where mortgage credit costs originate and provides critical context for the housing market heading into the 2026 busy season.” If you want to lower your food costs, make sure everyone eats everything on their plate. If you want to lower costs, improve your pull through. “The most significant driver of lender profitability is whether loans successfully close. In 2026, Equifax calculates that only 35 out of every 100 mortgage applicants are closing, down from 65 out of 100 in 2020. Every fallout loan represents unrecoverable costs that lenders have already incurred, including credit reports, title searches, appraisals and underwriting labor, making loan conversion a defining profitability challenge.” Meanwhile, what LO doesn’t pay attention to demographics and population shifts? Since 2020, city centers of many major U.S. metro areas have had sluggish population gains, with some places even declining. Where growth did occur, it was mostly on the outer edges of these metro areas.
Down Payment Assistance
_________________________________________________
Jason D. sent me a note addressing last Saturday’s information about down payment assistance programs, and whether they help or hurt borrowers.
“Rob, I enjoyed your article ‘Down Payment Assistance, MLOs, and Borrowers’ and I appreciate the commentary from Sean Moss. The DPA Risk Narrative Gets the Data Wrong and Sean was right to point this out. This claim continues to resurface in industry commentary, that rising down payment assistance usage is pulling borrower quality down and pushing delinquency rates up. Our data at Loan Simple tells a different story.
“When we look at our own DPA loan production, the average FICO score among DPA borrowers is higher, not lower, than our non-DPA FHA borrowers. The debt-to-income ratios are lower as well. This is not an accident. It is a direct consequence of how most DPA programs are structured, they impose tighter DTI limits than traditional Fannie Mae, Freddie Mac, or FHA programs. The programs themselves act as a quality filter, not a liability.
“Perhaps most tellingly, our DPA loans carry a lower default rate than our non-DPA FHA loans. If DPA were truly the risk multiplier it is portrayed to be, we would expect to see the opposite. We do not.
“There’s also a reserve cushion argument that rarely gets made, borrowers who skip DPA often drain their savings entirely to cover a down payment and closing costs. They close on a home financially exposed. DPA borrowers keep cash in the bank, and that cushion is often what stands between a manageable setback and a missed payment.
“On the refinancing concern, yes, some DPA second liens cannot be resubordinated. But many programs offer dedicated refinance options, and when rates fall enough to make refinancing worthwhile, paying off the second at closing is a straightforward path. It’s also worth noting that a large share of DPA seconds are forgivable over time or deferred until sale, not the equity trap they’re sometimes made out to be.
“The difference between a DPA loan that performs and one that doesn’t usually comes down to one thing, whether it was used strategically or as a last resort. When DPA is deployed thoughtfully, helping a qualified borrower preserve liquidity rather than pushing an unqualified one across the finish line, the outcomes follow accordingly. That’s not a DPA problem. That’s an origination problem. DPA, done right, works. The data says so.” Thank you, Jason.
Fraud: Not “if” but “when”
_________________________________________________
The American Land Title Association (ALTA), the national trade association of the land title insurance industry, said the FBI’s newly published 2025 Internet Crime Report reinforces the title industry’s long-standing role as a frontline defense against fraud in real estate transactions. Title professionals help identify suspicious activity, verify identities, review documentation, and address risks before they become costly losses for homebuyers, property owners, and lenders.
“According to the FBI’s newly released 2025 Internet Crime Complaint Center (IC3) report, Americans reported more than $20.8 billion in cybercrime losses last year. The report also found that reported real estate fraud losses climbed to $275.1 million in 2025, up from about $173 million in 2024, with 12,368 complaints filed in 2025 alone. The FBI’s report also highlights a broader fraud environment that is becoming more sophisticated and more costly. The agency said cyber-enabled fraud accounted for 85% of all reported losses in 2025. It also identified 22,364 AI-related complaints tied to $893.3 million in losses. Americans 60 and older reported $7.748 billion in losses, underscoring the toll these schemes can take on vulnerable consumers.
“’Fraud is not a side issue in housing; it is part of the affordability story,’ said Chris Morton, chief executive officer of ALTA. ‘The FBI’s latest data shows real estate fraud is growing in a threat environment shaped by impersonation, business email compromise, and AI-enabled deception. As losses rise, removing safeguards does not eliminate costs; it shifts them to consumers, lenders, insurers, and the broader housing finance system.’
“’Prevention matters as fraud schemes become more convincing and more sophisticated. Title is protection. Title professionals are not simply processing paperwork. They help protect consumers and property rights against costly fraud, forgery and other hidden risks tied to property ownership.’
“The association noted that the FBI’s latest figures align with ALTA’s ongoing message that weakening transaction safeguards does not make housing more affordable. Instead, it transfers risk and downstream costs deeper into the system.”
Secure Insight’s Andrew Liput wrote that SI polled its lenders and discovered that banks are doing a much better job of managing business email compromise, which leads to wire fraud, then many of their counterparts. “Lenders are seeing wire instruction and mortgage payoff substitution, as well as email imposter identity fraud impacting real estate agents, attorneys and title agents after the proceeds are safely wired to the closing table. The criminals are seeking out the softer areas of the closing transaction where they perceive training, supervision, and diligence may be lacking.
“To address the gap in risk management, SI developed and launched TruePay as a wire verification and identity validation tool for realtors, attorneys, and title agents. Several title insurers and real estate brokerages are recommending the tool for their agents to help prevent these losses. The tool features custom integrations with various public and government databases for instant risk reports.” (For more information, email Amanda Padd, CRO.)
I asked Ike Suri, Chairman & CEO of Fundingshield about the current state of things. “The FBI’s 2025 IC3 report confirms what we are seeing across live transactions: fraud is no longer episodic. It is systemic, data-driven, and increasingly AI-enabled. In our own Fundingshield Q1 2026 analysis of over $106.7 billion in transactions, more than 43% were flagged with issues tied to wire or title fraud risk, with multiple defects often present within a single loan. These are not edge cases; they reflect structural gaps between lender, title, and settlement data that create exploitable points across the closing process. As the American Land Title Association correctly notes, fraud is not separate from affordability—it is embedded in the cost and risk profile of housing finance.
“What is changing is not just the scale of fraud, but the velocity and precision of attacks. Static controls and post-close reviews are no longer sufficient. The industry is moving toward continuous, real-time verification, where identity, wiring instructions, licensing, insurance, and title data are validated directly at the source, with remediation embedded into the transaction workflow. This shift transforms fraud prevention from a reactive function into a foundational control layer. In our experience of protecting over $5 Trillion in closing value, embedding these controls earlier in the lifecycle has reduced defects, improved remediation efficiency by double digits, and delivered meaningful ROI for lenders while strengthening auditability across loan sales, securitizations, and regulatory reviews.
“As regulatory & governance expectations (from the FHFA, state regulators, and broader banking oversight) rise, the requirement is becoming clear: defensible, auditable, real-time controls across the full transaction lifecycle. Through standards bodies like MISMO and integrations across platforms such as ICE Mortgage Technology, the path forward is an interoperable framework where trusted data flows seamlessly across stakeholders. In that environment, prevention becomes scalable, costs come down over time, and the industry can better protect consumers while improving the integrity and efficiency of the housing finance system.” Thank you, Ike.
Fortra Intelligence and Research Experts (FIRE) have released their April 2026 BEC Global Insights Report. Findings reveal a sharp 151 percent month-over-month increase in business email compromise (BEC) attack volume, signaling a significant escalation in threat activity. Advanced fee fraud led all scam types, while wire transfer attacks spiked 262%, with average requests rising to $60,723. Apple gift cards dominated gift card fraud (55%), and cryptocurrency scams ranged up to $2.7M.
Third-party provider products continue to strengthen our biz
_________________________________________________
Let’s take a random look at who has been doing what lately.
In what many view as the mortgage industry beginning to move beyond AI hype and into questions around governance, defensibility and regulatory readiness, Brody | Gapp LLP, a national mortgage banking compliance, litigation, and AI governance law firm, launched its Mortgage AI Governance Audit Practice and set a Q3 2026 publication date for The Mortgage Bankers AI Governance Guide™, which was conceived by Founding and Managing Partner James W. Brody and co-authored with Founding Partner Ronald Gapp, Jr. Both initiatives debut this week at the MBA Secondary & Capital Markets Conference in New York. Friday Harbor, the Seattle-based AI pre-underwriting platform, has become the first mortgage technology provider to complete the firm’s Limited Attestation.
“The engagement, initiated by Friday Harbor before any regulator compelled it, evaluated the platform across fair lending, adverse action under Regulation B §1002.9, model governance, vendor risk management, data governance, internal controls, and examination readiness. The launch arrives as Freddie Mac’s AI risk management requirements under §§1302.2 and 1302.8 are in effect and Fannie Mae Lender Letter LL-2026-04, which requires lenders to satisfy themselves that vendors operating AI systems on their behalf are subject to controls no less protective than the lender’s own, becomes effective August 6, 2026.”
Secure Insight has completed a technology enhancement that provides users of its True Pay bank account validation tool with a KYB/KYC option. This new feature allows users to instantly obtain a confidence score to verify a business or personal identity through a search of numerous government and non-government databases. This allows attorneys, title agents, and all small businesses to better verify the true identity of business partners and electronic payment recipients. This feature will be live on May 1st and will be available at the same low cost as the current bank validation tool, using banked credits that do not expire, without a long-term commitment, onboarding fees or annual or monthly minimums. For more information contact Randi Tanenbaum, Client Relations Specialist. Schedule a meeting with us at the NY Secondary Conference in NYC, May 17-20.
Docutech added new functionality to several Request for Notice of Default and related documents to include MERS (Mortgage Electronic Registration Systems) information regarding the prior lien. With this enhancement, these documents will now conditionally include language in the Request for Notice of Default to reflect MERS as nominee for the prior lienholder.
Rocktop Technologies LLC, a firm specializing in AI-driven data, document intelligence, and asset management solutions, announced the formation of Rocktop Digital, a new business dedicated to the digitization and tokenization of financial assets and the development of next-generation market infrastructure. As part of the launch, they announced the promotion of Brett Benson, its former Co-president, to Chief Executive Officer of Rocktop Digital. The appointment reflects their commitment to building a dedicated leadership structure around blockchain-enabled innovation.
Many lenders still navigate an MBS pool bidding process filled with disconnected, manual steps that slow execution and increase the likelihood of mistakes. Explores how modern automation and real-time intelligence can replace fragmented, manual bidding processes. Visit Agile’s blog to view Advancing MBS Pool Bidding with Intelligent Workflow Design.
Wilqo, creators of the industry’s first production optimization platform (POP), called Charlie®, has completed an integration with Optimal Blue, the mortgage industry’s end-to-end capital markets platform. The integration embeds real-time pricing and eligibility data from Optimal Blue’s product, pricing, and eligibility (PPE) engine directly within Charlie, enabling lenders to access accurate, investor-ready product and pricing results without leaving their core loan manufacturing environment.
Beeline Holdings, Inc. announced a strategic partnership with Structured Real Estate Group (SRG) to integrate its Embedded Mortgage and Title solutions into SRG’s proprietary AI-driven real estate platform. The collaboration represents a significant advancement in delivering seamless, technology-enabled homeownership experiences for modern buyers. View the full press release here.
The 2026 ServiceLink State of Homebuying Report taps into the mindset of homebuyers, revealing financial pressures, emotional drivers and digital expectations plus loan officer insights. Now in its sixth year, the report offers a deep look into the psychology of today’s homebuyers, uncovering their biggest stressors, time pressures, economic uncertainties, and ever-growing reliance on digital tools.
Certainty Home Lending launched a complete Spanish language digital mortgage experience, giving Spanish-speaking borrowers the ability to review all key loan documents and complete the entire mortgage application in Spanish with the click of a single button. The feature instantly switches the application interface from English to Spanish, removing a barrier that has historically made the homebuying process more difficult for millions of families.
PartnerOne announced the official closure of its acquisition of Mortgage Cadence, a provider of cloud-based digital lending solutions. The integration will accelerate Mortgage Cadence’s ability to transform the mortgage origination experience for lenders and borrowers, streamlining loan origination, reducing operational costs, and enhancing borrower experiences through AI, robust automation, and new capabilities.
Robbie and I, and an estimated thousand industry execs, are in (or head to) Manhattan this weekend. Adam Quinones of dataQollab, has some advice for anyone going to New York for the MBA’s National Secondary. “Midtown Manhattan is a giant grid. Getting lost is pretty hard. Odd Avenues run North to South. Even Avenues run south to north. Even streets run west to east. Odd streets run east to west. As you walk west, the Avenues go up. As you walk south, the street numbers get lower. When specifying how far away another location is, don’t just say, ‘It’s 4 blocks.’ There are short blocks and long blocks: Streets are short blocks; avenues are long blocks. A huge difference in time required to go 4 long blocks (from Broadway to 3rd Ave), as opposed to 4 short blocks (43rd to 47th).
“Be careful crossing the street: the yellow cars don’t stop. If you’re hailing a cab, look for yellow tops with their numbers lit up. That means the driver wants a fare. Once you’re in the cab, give the driver a cross street, not an address. ‘9th and 57th’ for example. If you give them an address, they will know you’re a tourist and will be more likely to take you on a joy ride.
“NYC restaurants are graded on a letter scale. You’re looking for an ‘A’ in the window. Anything else is caveat emptor. Don’t eat in Times Square. It’s gross. Midtown sidewalks are superhighways. You wouldn’t stop abruptly on the highway. Don’t do it on the sidewalks here. Locals will run into you on purpose and blame you for jamming the breaks at full speed in heavy traffic. Crosswalks are high-traffic areas. If you’re waiting to cross the Avenue, get out of the way of people who are crossing the Street. Make a path! Watch out for people on bikes. Don’t just step off the curb. They will hit you. Not joking. Dogs and humans alike use the sidewalks, streets, and planters as bathrooms. Keep that in mind when you get home. Clean your shoes!”
Visit www.ChrismanCommentary.com for more information on our industry partners, access archived commentaries, or subscribe to the Daily Mortgage News and Commentary. You can also explore the Chrisman Marketplace, a centralized hub connecting mortgage professionals with trusted vendors and solutions. If you’re interested, check out my periodic blog on the STRATMOR Group website. This month’s piece is titled, “Mortgage Rates Are Not Random.” The Commentary’s podcast is available on all major platforms, including Apple and Spotify.
qoɹ
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes, visit the Chrisman Job Board. This newsletter is intended for sophisticated mortgage professionals only. There are no paid endorsements by me. For the latest mortgage news, visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.ChrismanCommentary.com. Copyright 2026 Chrisman LLC. All rights reserved. Paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)
80,000+ mortgage professionals get this every weekday morning.