Residential lenders usually have one eye on other debt and credit markets. At some level they’re all linked, right? Overall, credit card debt is the highest it’s ever been, well over $1 trillion, and delinquencies are rising, and the highest they’ve been in many years. But banks have focused their credit card clients on high score people. Banks are actually seeing low delinquencies with credit cards, arguably because they’re providing higher quality people with credit cards. Other issuers, however, are seeing lower credit score users and are seeing higher delinquencies. It’s tough to pay your credit card, often with rates in the 20’s, if you don’t have a job. While the overall unemployment rate is at 4.2 percent, the long-term unemployment numbers are showing some warning signs. As it stands, people who were out of work for 27 weeks or more make up over 27 percent of all unemployed people in the United States in June, which is up four percentage points from a year ago, and May saw the highest level of long-term unemployment since 2021, when the labor market was recovering from Covid-19’s reverberations.
Communication: Where would we be without it?
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CrossCountry’s EVP Hunter Marckwardt suggests that we treat portions of our lives as an interview. “I was having a glass of wine with a buddy of mine who is a prominent financial advisor last week. I was grilling him on a variety of questions about his job, his clients, how he handles difficult situations, hard conversations, etc. Then I asked him if he gets offended if his clients get other opinions from other advisors and brings it to his attention. He told me a story I hope never to forget. One of his clients, who was a COO of a fortune 50 company told him ‘Look, I can get replaced every 90 days, I need you to act like you’re interviewing for this job every 2 years.’
“If you let that sink in and you reverse the lens on yourself ‘interview for your job every 2 years.’ One could argue we should be interviewing for our job every day. Interviewing for your job isn’t downstream, it’s not me asking my boss if I’m doing okay in my job, it’s a universal question. It’s upstream, it’s downstream, it’s lateral, it’s all over.
“The first thing I do is look inward. I think of my own team, if they could work with someone else, would they? I think of all of our team members inside of our division, if they could work with someone else, would they? I think of my business partners, if they could work with someone else, would they? I think of our clients, if they could work with someone else, would they? Is there a better question to ask to determine if you’re showing up every day as the best version of you? If you want to know if you’re holding yourself and those around accountable, consider the question, are you getting rehired?
“I mean this is universal. I’m interviewing for my job as Kim’s husband. I can absolutely guarantee she’d love nothing more than to put me on a performance improvement plan from time to time! Think about the roles you have in your life. Are you getting rehired? Are you treating your roles like you can get fired if you don’t perform?
“My buddy’s initial point was that financial advisors can get lazy. It makes sense, right? If you get a bunch of assets under management, and get paid a percent of those assets, you know what you’re going to earn each year if you do just enough not to lose your clients. He’s not the type to coast but when you get punched in the face with his client’s reminder, it doesn’t allow for a lot of wiggle room on understanding what he’s bringing to the table. There is a healthy paranoia imagining the person on the other side of the line is interviewing you, whether you know it or not.
“I’d like to believe ‘most’ of the people I work with would say I show up daily, but that still doesn’t mean I act like I’m interviewing for my job every day. I’m going to get a sign made that sits in my office that says, ‘interview in progress.’ Every time someone asks what it means, I’ll tell them I’m interviewing for my job with them, and I never want to forget that! It’s a great question to sit with: ‘Are you getting rehired?’” Thank you, Hunter.
What makes a good LO and leader
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What sets apart the top origination talent from wannabe talent? Or what are the best originators doing these days? What sets them apart? Recently Robbie Chrisman interviewed Jason Ponsonby with American Pacific to discuss this topic; this write up is drawn from that interview.
The number one thing right now that sets apart the originators is just the work ethic and what they’re willing to put into the business. And defining that a little further is, you know, ability to adapt to changing ways. Many things have changed from a technology perspective, but also from some of the dynamics of “the top of the funnel.” And in the top of the sales funnel, there’s a lot more opportunity for an originator to be able to take lead generation and kind of a reverse dynamic and be able to bring some of those opportunities to referral partners, versus referral partners bringing all of the business to them. And a big part of that is the top originators are finding ways to win the top of the funnel and win some lead generation and strengthen partnerships in a two-way street versus one way in the past.
“Top originators are able to make demands of their companies that benefit them and benefit their companies. The primary factor is the support and the ability for the LO to have more time to focus on origination as we move fast. Operational performance is so important, and lenders need to do the best they can in operations so that the LO can focus on income-producing activities. American Pacific has done a very good job in giving LOs the opportunity to be out originating and spending that income-producing time or maximizing income producing time.
APM has done a good job giving LOs the technology for being able to be mobile and not be limited to a laptop. That is one example of being able to maximize income producing time for originators. What can the company provide in terms of overall “AI native,” or AI cloud infrastructure, and a fully digitized lending experience. What qualitatively can you provide or what is invaluable in terms of the ways that you can support originators, build loyalty, engender trust and confidence, and all those good things beyond just having a great “tech stack”?
“It is important for senior management to remind originators that there’s still a human connection, and the human connection happens at each interval, from leader to leader, and leader to branch, and branch to LO, and continuing that path. The human connection is important, but then at the same time, the human connection is important with the consumer because we we’ve seen many different instances where yes, the tech stack’s important and that aspect helps make things easier and makes the experience you know more positive for everyone. At the same time, there’s still an aspect to trust, and there’s an aspect to we’ve even seen where a consumer will go through the AI-driven process where a lot of things are done, where they’re just interacting with a screen.
“At some point, however, many younger consumers and borrowers that we work with will actually reach out and ask, ‘Can we meet in person?’ Because they’re not even sure, in today’s world, if they’re even talking to somebody real because of the avatars and all the crazy things and technology that have happened. So, I think the human connection is still a real big aspect of that. It is almost as if we’ve come full circle: the more tech there is, the more people crave humanity.
“The root of everything we do is in providing home ownership. LOs need to feel the gratification of making a difference. And making a difference as an originator is being able to watch somebody at a closing, and the smiles and the tears and the hugs of buying their first home or their vacation home or dream home or investment property. And then over the years it shifts for leaders. Success for me is making a difference today: helping somebody else become more successful. At American Pacific good leaders pull others up to their level. They are transparent. They are scrappy.
“We have found that a team of solid originators starts with solid recruiting, whether that comes from mergers and acquisitions or recruiting individual branches and LOs, at which point signing bonuses enter into the discussion. For example, APM has had growth-focused strategic mergers, the latest being Synergy One Lending and American Pacific coming together.
“When recruiting branches and loan originators, we’ve found that it is important to focus on the aspect of win-win situations and really find talent that that fits the culture and who we are. And we really have stayed true over the years to just focusing on things of we really embrace the entrepreneurial spirit. We embrace the aspect of DBAs, and we embrace really the success of how somebody will be more successful: What’s their vision? Production always has a seat at the table because production touches everything in the organization and we do our best to foster an entrepreneurial spirit and align goals and vision.” Thank you, Jason, and Robbie.
Thoughts on the percentage increase in foreclosures
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Think about basic math. I am making this up, but if the cost of M&Ms went from 10 cents a bag to 20 cents a bag, that isn’t much in the scheme of things, but the newspaper could say, “Price of M&Ms up 100 Percent!”
Although they are a fraction of where foreclosures were in 2010, the foreclosure report from ATTOM indicates that first-half 2026 foreclosures were up 21 percent from the same period in 2025 and 28 percent higher than the first half of 2024. Two mortgage servicing industry leaders, Mirza Hodzic and Donna Schmidt, weighed in on the increase in foreclosures and what to expect ahead.
Mirza Hodzic, Managing Director and Founder, BlackWolf, thought, “The increase is being driven by a mix of financial pressure and continued normalization after several years of unusually low foreclosure activity. Higher taxes, insurance, and everyday household costs are making it harder for some borrowers to recover once they fall behind, even when the mortgage payment itself has not changed.
“The 18 percent rise in foreclosure starts tells us more loans are entering the pipeline, while the 33 percent increase in REO shows more are also reaching the end of the process. That combination will keep pressure on servicers through the second half, especially in Loss mitigation, attorney oversight, property preservation, and REO management.
“I expect foreclosure activity to remain elevated through the rest of 2026, although not at crisis levels. Shorter timelines, rising starts, and higher completions suggest the process is moving more efficiently, but they also mean servicers have less room for delays, weak handoffs, or incomplete borrower outreach.”
Mirza wrapped up with, “The geographic concentration is important. Florida, South Carolina, Indiana, and several Southern markets continue to show higher foreclosure rates, so servicers should not treat this as a uniform national trend. Capacity, vendor coverage, and borrower outreach need to reflect where the pressure is actually building.”
Donna Schmidt, President & CEO of DLS Servicing, opined, “Two factors are contributing to the increase in foreclosure activity. First are VA loans. Congress withdrew VA’s authority to continue the very costly VASP program, which purchased loans from mortgage servicers and then modifying the loans to reduce the borrower’s principal and interest payment by 25 percent.
“In the absence of VASP, VA offered no payment reduction option, in fact, the current options tend to lead to a higher modified payment than what was defaulted on. It took VA almost a year to release a new waterfall. Even under the new waterfall, released in June of 2026, but mandatory for servicer participation by November 28, 2026, there are no expressed payment lowering options. Practically the only time a veteran borrower may receive a lower modified payment is if the Note rate is higher than the modified market rate. Under current market conditions that will be a very rare event. Absent a lower payment option for veteran borrowers, their only option is a short sale or foreclosure.
“Second are FHA loans. After years of lenient COVID era related loss mitigation policies, the pendulum has swung in the other direction. Wisely, FHA has placed some restrictions that have prevented the repetitive cycle of reinstatement by loss mitigation and then subsequent redefault. Beginning on October 1, 2025, FHA requires that all borrowers complete a three-month trial payment plan prior to reinstatement by loss mitigation. Failure rates for these plans have been as high as 40-60 percent and were only being felt in the early part of the year.
“While FHA does permit a borrower to request a second attempt at loss mitigation, they have limited participation to only those seeking a lower payment option, after failing an option that did not afford a lower payment. This restriction is pushing more loans into foreclosure. Additionally, FHA also has limited the borrower to only one permanent loss mitigation option within 24 months. This too, is pushing more loans into foreclosure. Finally, FHA originations saw debt to income ratios rise to 50 percent or more for 29 percent of the loans originated since 2022. All of these factors have led to higher defaults and more foreclosures.
“Other than the inherent deficiencies with the VA loss mitigation program, the increased foreclosures in the FHA space are a correction to more normal activity. Foreclosures throughout the COVID era were artificially suppressed. There will be inflated activity over the next one to two years, while that correction occurs.”
Language is important. Leave it to George Carlin, rest in peace, to cover modern euphemisms and how our language has lost its impact and been watered down.
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. STRATMOR’s current blog is “Pricing That Can Help Borrowers.” The Commentary’s podcast is available on all major platforms, including Apple and Spotify.
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(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.)
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