This weekend my son Robbie and I head to Austin, TX (something about a football game), which has seen its share of residential price ups and downs. The current residential lending environment? “Rob, I retired recently from lending. It must be a bloodbath for IMBs with no leads and no servicing. Our LOs would have been hammering us to have tiny margins so they could book the few deals that come across their desk. Our capital markets team would want to raise margins to reach breakeven on the lower volume. The Ops management team would be irate because we would be asking them to do another major layoff in 4 years!” But as PRMG’s Kevin Peranio points out, “The U.S. consumer has shown time and again resilience especially those employed and continuing to purchase houses. First time home buyers share inched up last report. In the context of the 25th year since 9/11, the resolve is still strong in America.” Life isn’t easier elsewhere in the business world. For example… we all have to eat, right? But where to buy food? There is a supermarket price war brewing in the United States, as low-cost German supermarket Aldi is on pace to become the second-biggest supermarket chain in the U.S. behind Walmart. Aldi had 2,626 stores in 2025, slightly behind the 2,689 Kroger locations and 3,556 Walmarts. Aldi intends to mount a serious challenge to Walmart, which has a 21 percent market share for U.S. sales in this category. Aldi needs only 10,000 to 20,000 square feet of retail footprint, considerably less than the 50,000 square feet of a typical supermarket and the 200,000 square feet of a Walmart Supercenter. According to one analysis, Aldi was 12 percent cheaper on average than Walmart was.
Saturday Spotlight: Truework, a Checkr company
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When “Date the Rate, Marry the House” Doesn’t Pan Out
“Date the rate, marry the house” is a popular real estate strategy: buy a home you love today, even at a high interest rate, with the plan to refinance to something better once rates come down. A new Truework survey of 1,000 recent U.S. homebuyers suggests the plan isn’t panning out and is reshaping what affordability actually means after closing.
The research found that 73 percent of recent buyers planned to refinance when they bought their home, treating today’s rate as a placeholder rather than a permanent cost. Eighty-five percent now say refinancing within three years matters to their financial health, up sharply from 56 percent a year ago, and half say their mortgage becomes unsustainable without a lower rate. For a large share of recent buyers, the rate cut they were counting on simply hasn’t arrived.
That gap is driving a pattern that Truework calls “Conditional Affordability”: A mortgage that works today, but only as long as something else goes right: a rate cut, an income bump, or continued sacrifice elsewhere in the budget. And 88 percent of recent buyers say a common financial setback could put their mortgage payment at risk. These aren’t buyers who overextended recklessly; they’re people who qualified under standard underwriting and still find the math fragile.
First-time buyers report the highest strain, with 87 percent saying they’ll need to take financial action if they can’t refinance. Millennials are a subtler case: most had bought a home before, yet two-thirds still expected rates to fall this time around.
The industry has historically treated “can this borrower close the loan” and “can this borrower sustain it” as the same question. The data suggests they’re not, and “date the rate” only works if the rate eventually says yes.
These findings come from Truework’s 2026 Recent Homebuyer Report, which surveyed 1,000 Americans who purchased a home in the past 24 months. The full report includes generational breakdowns and a segmentation of how buyers are managing this risk.
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A different perspective on the cost to produce
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Anita Padilla-Fitzgerald, CEO of Take3Tech and long-time industry leader, had some thoughts given how last Saturday Mike Yu wrote that AI could reduce the effort required to operate a mortgage business, giving lenders more flexibility to pursue difficult lending opportunities.
“I agree that costs matter and that AI can reduce unnecessary work. I offer two additional cost considerations. First, AI cannot produce reliable results when a lender’s data is spread across an LOS and bolt-on technologies such as a POS, PPE and CRM, each potentially holding different or unverified information.
“Second, paying for multiple systems is already expensive. When lenders add the integrations and employees required to manage those systems, the cost rises even further. Each system can hold a different version of the borrower and loan. Calculations used by sales may not match those used by underwriting. AI cannot create certainty from conflicting information. It may simply process the wrong information faster.
“Adding AI to this fragmented infrastructure creates another layer of expense. Any projected savings should be measured against the full cost of licensing, connecting, maintaining, governing and auditing the lender’s technology and data.
“The greater opportunity is not simply to add AI. It is to give AI one reliable source of truth. When the mortgage team works from the same platform and loan record, AI can recognize what has been completed, recommend the next action and preserve the traceability required in a regulated industry. AI can lower the cost of production, but only when it operates on reliable data and lenders consider the full cost of their technology. If the data is wrong, the result will be wrong and the lender, loan officer and borrower will bear the cost.” Thank you, Anita.
The current administration is cutting programs
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Seven Agencies Rescind 2022 Guidance Blessing Special Purpose Credit Programs. Troy Garris addressed the issue. “On August 25, 2026, seven federal agencies jointly rescinded the 2022 “Interagency Statement on Special Purpose Credit Programs Under the Equal Credit Opportunity Act and Regulation B.
Attorney Troy Garris has some thoughts. “The agencies involved were the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), the Consumer Financial Protection Bureau (CFPB), the Department of Housing and Urban Development (HUD), the Department of Justice (DOJ), and the Federal Housing Finance Agency (FHFA). We flagged the underlying regulatory changes in an earlier post (see our post on the Regulation B amendments); this rescission is the next domino to fall.”
Define AI before you implement it
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Lender Toolkit’s CEO Brett Brumley expressed some thoughts on AI’s impact on the industry, and what users should be cognizant of.
“When a company says they’ve built an AI model, that doesn’t always mean what people assume. Training a model in any meaningful sense means teaching it very specific, narrow things so it gives more definitive answers on those exact items, and plenty of legitimate companies do that well.
“But a lot of what gets marketed as proprietary AI is really just a wrapper around a generalized model from one of the large providers. That’s not where the value sits. You could get similar output by feeding the same information directly into a general-purpose chatbot yourself. The real value, and the actually hard part, is what a company does with that output afterward: the tracing, the durability, the observability, the ability to walk through exactly what the model did and confirm it did it correctly.
Where the industry sits right now is moving fast, probably faster this year than every prior year of mortgage AI combined. Recent research shows a large share of lenders already using AI in production and nearly all planning further adoption, and nobody is pulling back. Generalized AI can handle roughly eighty percent of mortgage work well today.
“The problem is that the other twenty percent is where “mortgage” actually lives, the edge cases and lender specific exceptions that no general model was trained to understand. Closing that gap is about documentation. The more detailed and specific a lender’s own processes and exception handling are, the better a system can be built around that particular workflow, because what works for one lender’s exceptions often doesn’t transfer to another’s at all.
“Agentic AI in mortgage is still early, but the pattern is becoming clear that if you want AI to run a genuine multi-step workflow, pulling documents, validating income, checking guidelines, flagging exceptions, without a human clicking through every stage, that requires a fundamentally different design than a human in the loop tool. Humans are where creativity lives, especially as more of the industry converges on the same underlying models and builds increasingly similar things.
“My advice to anyone trying to drive adoption is to resist the urge to boil the ocean. Solve one workflow, apply AI where it clearly handles the bulk of the volume well, and measure whether people are actually using it and getting real benefit, not just how many hours it theoretically saved on paper. Adoption compounds. Once people see genuine value in one workflow, they start asking for more, and that’s how real momentum builds.
“That also means knowing where to stop. Something like a credit report is a standard, structured document that looks essentially the same every time except for the data inside it, which makes it an excellent candidate for AI to fully own without a human re-checking the same document afterward. We need to retire the checking-the-checkers-checking-the-checkers instinct that’s crept into parts of this industry. If AI analyzes a credit report and then an underwriter reviews the exact same document the same way, you haven’t added any value, you’ve just added a second point of failure.
“That validation exercise belongs in implementation, when you’re building trust in the system, not baked permanently into daily workflow as noise. On the other hand, a one-off situation that happened on a single loan and will likely never recur isn’t worth building AI logic around at all, because you simply don’t have enough examples to train it properly. Focus energy on what’s standard and repeatable, and let humans keep guiding the exceptions.
“None of that works without getting implementation right, and implementation is really about people, not technology. It has to start with leadership, and I mean that literally, not as a platitude. I’ve watched executives championing a product, signing the contract, and then vanishing from the day to day, leaving their own employees to guess what the rollout actually means for their jobs. People fill that silence with worst case assumptions. Being upfront that AI may eliminate certain tasks, while being just as clear about what it’s meant to free people up to do instead, earns you far more genuine buy-in than pretending the change is painless.
“The second mistake I see constantly is trying to force new technology to replicate an old process exactly. If you bought the tool to change how something works, let it actually change that, use it as intended for a while, gather real feedback, and iterate from there rather than waiting for perfection before anyone’s allowed to touch it. Waiting for perfect means it never ships.
“After nearly two decades building AI into mortgage workflows, long before it was fashionable, I’ve learned disciplined scope and honest change management, knowing exactly which twenty percent still needs a human, documenting the edge cases well enough that the system can eventually absorb them, and being straight with your people about what’s changing and why. Get that right, and the AI conversation becomes a lot less about chasing the newest model and a lot more about steadily proving value one workflow at a time.” Thank you, Brett!
The “average” borrower may be changing
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Rich Martin at Curinos observed, “We’ve now had over three years of homeowners sitting on sub-3 percent first-mortgages with every incentive to stay exactly where they are rather than trade into something twice as expensive. That’s tightening supply in a way that shows no sign of resolving on its own, since I don’t think we’re going to see functionally assumable mortgages solve this in the next five to ten years.
“But the effect isn’t only about supply. It’s fundamentally shifted what used to be a four trillion-dollar mortgage-centric market into one that’s increasingly centered on home equity, because homeowners are choosing to tap the value they’ve built rather than give up a rate they’ll never see again.
“What happens to borrower psychology if this isn’t temporary at all, but becomes the accepted normal? If the ten year settles around 4.5 percent and mortgage rates hold in the sixes for the next couple of years, a 200-basis point spread just becomes the world people live in. Go back to the history our parents lived through, rates in the teens, and people eventually just accepted that as reality and kept transacting anyway because life required it.
“I think we’re heading toward a version of that acceptance now. People still need to move for a new job, a growing family, or any ordinary life events that don’t wait for rates to cooperate. The real question is how much pent-up demand eventually gets pulled forward simply because people stop waiting for a return to three percent rates that may not be coming back.
“That same dynamic is shaping who the next wave of borrowers actually looks like, and I’d describe the emerging profile with a simple phrase: more debt, less savings. Student loan and credit card balances sit at record highs, and down payment funds are limited for a meaningful share of buyers, which is exactly why we’re seeing genuine innovation in co-investment structures and low down payment products for people who might only have half of what a typical program requires.
“But that same group often carries stronger income than people assume, especially younger professionals benefiting from strong wage sectors. Put those pieces together and what you get is a borrower who is near credit worthy and deserves a real shot, but who needs affordability programs, down payment assistance, and non-QM solutions built specifically around that profile rather than a product designed for a completely different borrower a decade ago. Community lending from banks and credit unions has a real role to play here too, meeting that same borrower with more localized, relationship-driven solutions.
“If there’s one lever I think this industry consistently undervalues, it’s speed, and I don’t mean speed for its own sake. You can get a credit card approved in minutes and an auto loan in a few hours, yet a home equity loan or a first mortgage routinely still takes 30 to 40 days. Too many lenders default to thinking rate is the only real competitive weapon available to them, that if pricing is sharp enough, volume will simply follow.
“I think that’s an incomplete strategy. It has to be paired with a broader operational view, your digital engagement, your distribution, your fulfillment, what we’d call true operational excellence. Faster cycle times drive real, measurable outcomes: higher borrower satisfaction, better pull-through, and lower hedge and carrying costs on the origination side. You genuinely win on multiple fronts at once when you close that gap. The honest caveat is that speed has diminishing returns and even a ceiling, since not every borrower is ready to close in three days even if you offered it, so the goal isn’t chasing an arbitrary record. It’s closing the gap between where you are today and where borrower expectations already sit, because in a market that’s contracted more than 60 percent from its 2020 and 2021 highs, cycle time was never really solved, it was just masked by volume.” Thank you, Rich.
Jane Mason on servicing and borrower communication
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Jane Mason, CEO of Clarifire, on mortgage servicing and proactive approach to borrower communication as it continues to become more significant issue with rising FHA foreclosures, delinquencies and increasing debt.
“I hear a lot about ‘proactive servicing.’ If a borrower needs to resort to credit cards or other forms of unsecured debt to pay for utilities, car payments and daily living expenses, it’s a sign that they’ve already fallen behind. It’s rarely a single event that causes borrowers to miss a payment, but rather several events happening at once.
“The most common causes of a missed payment are unexpected events such as an emergency home repair, a medical emergency, or job disruption. That stacking effect is what servicers need to be watching out for, and why they need automated triggers to flag signs of financial strain among borrowers before they fall into serious delinquency.
“Another conversation topic is ‘self-service portals.’ Most borrower self-service portals require homeowners to do the hardest part themselves, which is figuring out which option best fits their situation. Most borrowers don’t understand the difference between forbearance and a loan modification, and they shouldn’t have to guess which path is best. The portal should ask questions and point them in the right direction. Most borrowers already use these portals to make payments.
“The opportunity for servicers is turning that same portal into a guided conversation, one that gets a borrower to the right answer before they’ve already fallen behind. Being proactive with communication with the borrower and providing self-service options and results are key. It’s important to let borrowers know their servicer can help when needed.”
“Servicers must remember to create trust, and the best way to create that trust is by using process automation and proactive, automated communications when there are changes to the borrower’s escrow payment, so borrowers know what to expect. If today’s financial pressures continue, the servicers who struggle won’t necessarily be the ones with the toughest portfolios, but the ones who put borrowers on hold when they call to get answers.” Thank you, Jane.
The adult version of “head, shoulders, knees and toes” is “wallet, glasses, keys and phone.”
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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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