10.20.26 AI Financing Boom; NFTYDoor’s Tim Rowan on Home Equity; Housing Health

Robbie Chrisman Welcome to the Chrisman Commentary, Daily Mortgage News Podcast. I'm your host, Robbie Chrisman. Topics on today's episode include preventing scams and fraud and mortgage banking, why inflation and the deficit rule the roost, and my interview with NFTYDOORs Tim Rowan on home equity lending and how digital technology and human support can improve borrower and loan originator experiences. Here, take a listen to a little preview. Robbie Chrisman The home equity space at this point can tout closing in as little as zero days with warehouse funding. Thoughts on what the first lien, first mortgage space can learn from home equity lending to make their own processes faster. Tim Rowan Yeah, I do have some thoughts on that. In fact, I of course I don't have a crystal ball, right? But I actually see this technology that's being used in the home equity space. I actually look at this at a large picture and I say, well, why can't all loans be done this way? Now, you and I know there's a lot of things going on behind the scenes and markets and so on and so forth. But from the technology perspective, why couldn't more loans be done this way? You know, we are using our product in first lien position quite a bit. It is a great solution. I'll give you a great example, Robbie. If I had a borrower that owned an investment property and maybe they owed $100,000 on it, but they needed cash, they needed whatever, but it's worth $500,000. Well, to do that cash out transaction one on a lower loan balance and investment property in first lien position with all of the adjusters and so on and so forth. Oh my gosh, the rate gets extremely high. And let's not forget the costs of a traditional mortgage. Well, the technology that's being used right now in the digital HELOC space actually solves for both of those things. The rate is competitive, it's done much faster from the digital perspective, and it's much cheaper from a total loan cost perspective. So why not more first mortgages? Why, why wouldn't we see the industry change this, especially when, and I know you've spoken to this topic a lot, when cost to produce a mortgage in our industry is where it's at. You know, margin compression and compression in general is a huge topic for everybody in the industry. So why not take advantage of technology to help solve for that? Robbie Chrisman Thanks to today's podcast sponsor, Experian. Experian verifies integration with Workday gives mortgage lenders broader access to reliable, up-to-date income and employment data, streamlining verification, enhancing efficiency, and delivering a smoother borrower experience from application to closing.com slash business slash products slash Experian dash verify. I ordered a book online titled How to Scam People Online. It's been six months and I still haven't received it. Being scammed and fraud in general isn't a laughing matter. Companies like SoFi publish information on how to recover afterward. People over 60, as always, are more susceptible. The FBI has a website, and I should say all these links are available on ChrismanCommentary.com, on mortgage fraud, which is well regarded. Good loan officers are instrumental in teaching their clients about it. I mention all this because I continue to hear from LOs about how artificial intelligence has increased fraud more than reduced it. Generating one's own pay stub online takes about 20 seconds and has for many years, hence the increase in reputable verification services. Third-party providers have increased their range and scope. First line compliance, fraud guard, funding shield, ACES quality management, and secure insight all jumped to mind. There are even companies like Privatize to check the background of those checking alone. Remember, if you have the money, they want it. U.S. Treasuries and agency mortgage-backed securities surrendered some of last week's gains on Monday as early advances gave way to sustained selling pressure. Initial optimism surrounding technology stocks and a brief oil price dip on speculation of a potential U.S. Iran deal faded. The lack of confirmation pushed oil prices back towards September highs, renewing inflation concerns and weighing on fixed income markets. With limited near-term economic data, focus will be on technology earnings, the trajectory of AI infrastructure investment, and treasury issuance dynamics. AI companies have been borrowing plenty to expand. The unwinding of the AI financial boom could ease upward pressure on long-term interest rates by reducing the massive borrowing and hedging activity tied to AI infrastructure investments, potentially benefiting banks and residential mortgage lenders through lower funding costs and improved borrowing affordability. The nearly $2 trillion in estimated AI-related debt, combined with more than $40 trillion in federal debt and elevated borrowing costs, poses growing risks to housing, household finances, and economic growth. This leaves policymakers balancing the need for further tightening against the possibility that weakening consumer demand, housing market stress, or an AI-driven market correction could force a shift toward easing. Accordingly, the Federal Reserve's Open Market Committee is expected to pause in October, raise rates by 25 basis points in December, and potentially deliver another hike in March of 2027 before holding steady. Persistent services inflation, wage growth, and increasingly hawkish messaging are reinforcing the central bank's commitment to price stability and policy credibility. The combination of uncertain Fed policy, elevated government and AI-related borrowing, and geopolitical risks warrants caution. Although select 30-year mortgage-backed securities offer attractive relative value and continued volatility, appearing particularly inexpensive relative to other maturities and seasoned mid-coupon securities and offering potential value. For today's interview, I wanted to welcome to the show NFTYDOOR's Tim Rowan to talk about home equity lending and how digital technology and human support can improve borrower and loan originator experiences. He's VP of Sales Success at NFTYDOOR, which is the digital home equity platform built for speech. Robbie Chrisman Maybe a good starting place for this episode is on the home equity landscape in general. From everything we hear at conferences, anecdotally, and I guess quant I mean quantitatively too. It's going gangbusters. People say, Well, I don't really want to move because mortgage rates are so high. Well, I don't really want to take out a personal loan or keep racking up credit card debt because those interest rates are also very high. Home equity seems the solution, but you're the expert here, not me. I don't want to put words in your mouth. Thoughts on the overall landscape where we are as we enter the fourth quarter of 2026? Tim Rowan Well, I think you're spot on. I think home equity does provide a solution and is a fantastic strategy. I think the biggest hurdle our industry has is to want to embrace that message and in fact change our mindset away from I don't do HELOC messaging. In other words, I speak to a lot of loan originators in recent years, and I've actually heard some, including sales leadership, make that exact comment. Yeah, I don't do HELOCs. I kind of get it, right? I've been there, done that myself over my career. So I think our biggest challenge is yes, is accessing equity a huge strategy right now? Absolutely. But I think the biggest hurdle we have to jump over as an industry is embracing that conversation as a strategy. Robbie Chrisman The biggest hurdle to jump over might be deciding which home equity partner to do business with, at least from our our seat. There's a bunch of different home equity providers that are spending a lot of money to get the name out there. Obviously, NFTYDOOR is clearly one of if you're a lender and you're getting told, hey, we can white label our stuff and we want to work with you and we want to be part of you. How would you decide between different home equity providers though? Tim Rowan Well, actually, I think they all have a certain place, strengths and weaknesses. And so I suppose that might be hard to go and get approved or signed up, especially from a white label perspective with all of them. So to me, I think the split is what are your digital path options versus your more traditional underwriting submit full package options? And then each have their strengths. Some are going to lean heavily into the purchase world using uh piggyback scenarios. Others, like the digital experience, NFTYDOOR is going to lean into the refinance, cash out, debt consolidation, home improvement, access your equity from a refinance perspective. Beyond that, I think path of least resistance is probably the conversation that a potential partner or existing partner needs to have. How quick can we get signed up and how quickly can we get our sales team engaged? And what does it mean to us at the end of the day? Like, is it a platform that can help our sales team put themselves in front of more people to have this strategy conversation? So, yes, there are numerous different home equity lenders, if you will. Uh, some are gonna focus on fix, some ARM, some both. Several are gonna be manual full loan files, which actually there's nothing wrong with that. However, I think it's also the leading reason why so many loan officers say they don't dabble in this space because they think it's gonna be a regular full loan process, take them 30 plus days and to close for very little, if any, compensation. And that's the and that's the solution that digital HELOC provides right there. Robbie Chrisman Well, not only does NFTYDOOR offer a HELOC platform, but you also specialize in home equity loan software. And I want to ask you from a software and technology perspective, what is the cutting edge? What benefits are out there for companies interested in home equity software? Tim Rowan So the benefit right out of the gate is how fast a loan originator can get an answer to what the scenario would look or feel like. Meaning, to make that simple, I'll say to price out a scenario. Literally within 30 seconds or less, a loan originator with just a little bit of borrower data can find out exactly how that scenario prices up and then decide with themselves and the homeowner is this something we want to move forward with? And if so, yes, let's hit go and on we're moving through the process. And so the files themselves, not only can they close very quickly, but maybe importantly for the day in the life of our partners, they can find out what the answer is very quickly. Robbie Chrisman NFTYDOOR rolled out a digital home equity platform, which is obviously cutting edge, but as we know, technology is moving so fast. How does that technology platform continue to stay at the forefront when it comes to home equity technology? And what does the home equity experience technology platform of the future look like to you? Tim Rowan Yeah, so you're right. That is a moving target and constant, like we're constantly enhancing things, uh, reacting to whatever partners' needs are or market conditions are from a tech perspective. Something we're leaning in heavily to currently is yes, the digital path is how it's been designed. Yes, we want to start there and ideally finish there. However, we're taking a different approach. We're using the digital experience to work with as many people as we can. And yet we've added a human off-ramp. So we're trying to approach this from a people working with people using technology to work with more people, if that makes sense. So right now, and by the way, this an interesting balancing act. Um, and there's pros and cons both ways. We love it when a file stays on the digital path. But listen, let's agree that not every loan is that simple. Not every borrower is that easy to push through. There's going to maybe be an issue with title, or maybe a deeper look needs to be taken on income. Well, we've added now that human path. So I actually think as we look off into the future, I think that's really going to be the magic is what is the blending of the two, the digital technology piece, but also incorporating still the human piece. And I think that's really, in my mind, where the future lies. Robbie Chrisman I saw somewhere out there something about the one-minute mortgage. Is this something that NFTYDOOR is working towards? Is this something that's plausible? Is this just a nice guiding light out there? Tim Rowan You know, it's interesting. We've we you and I both have seen over the years, you know, different catchphrases like that. And and we are not uh focusing or promoting like a one-minute mortgage. It's funny though, because it we've heard click here to get a mortgage, you know, we've seen TV ads over the years, you know, that type of thing. And what's interesting me to me about that is some of that marketing has kind of gone away a little bit. And is it more directed towards the actual LO partner to get them to engage? You know what I mean? More so than the homeowner. I think a homeowner wakes up and they have a certain pain. Is it debt consolidation? Is it home improvement? Is it needing to buy an additional property? And that's what spurs a conversation, not the one-minute mortgage at the homeowner level. Now, the loan officer, they may very well think, and maybe rightfully so, like, how fast can I get an answer for something? Because the truth of the matter is the speed to need for an LO couldn't be any more real right now. If they can't quickly give an answer to a borrower, well, the borrower's got internet and AI and you know, all these different tools that are going to get answers, which by the way, may not even be accurate, but it doesn't matter. The consumer, the homeowner, all of a sudden thinks, well, wait a minute, he didn't get back to me. I'm just gonna so again, I think that one-minute mortgage phrase is maybe geared to get loan originators engaged and maybe not as important for a homeowner. Robbie Chrisman Let's talk about what homeowners want because I would say they probably want a fast application, they want automated processing, and they want quick funding. It doesn't have to be one minute, no, but from your perspective, where's the actual intersection of the technology, the mortgage industry designing, and how consumers will use it and be satisfied using it? Tim Rowan Again, I think it's speed to need. It's interesting, Rob, because I have this conversation a lot where a borrower, a homeowner may say, Oh my gosh, that rate, 8.5%, that seems so high. It's really important to me for our industry to always be able to drive back to, well, wait a minute. Do we really think that borrower woke up today and said, you know, I need to pay off $50,000 worth of consumer debt, but I'll only do it if my rate is 4%. My opinion, I've never believed that's true. The borrower gets up and they have a certain pain. It's not to say rate's not important. Of course, rate's important, but what's really important is what's the best strategy to quickly solve the homeowner's pain. And getting that answer quickly, whether it be the borrower logging onto your site and quickly getting an answer, great, or engaging with the loan originator. Now, interestingly enough, when homeowners engage with the loan originator or loan originators engage with them, the pull through is considerably higher. Which tells me, Robbie, that homeowners are not quite ready for that one-minute mortgage. In other words, they still need, whether they realize it or not, they still need the strategy and advice and hand holding of their loan originator. I actually think that's fantastic news for our industry. Robbie Chrisman I do too. I get a little tired of speaking to people on this podcast going, well, we can completely remove humans from the process, and the cost to originate is going to dive down to zero, and everything's gonna no. Before I let you go, any other big announcements, news, things going on in NFTYDOOR that are worth sharing, things you're proud of. Tim Rowan You know what? I think the biggest thing that I'm I'm proud of right now, in fact, this week I'll be heading off to a company event in Manhattan where all of us will be gathering up. And the number one topic and breakout sessions and stuff that we're doing with the team is all surrounding borrower experience and hospitality. That is really where we're leaning heavily into right now. I'm really excited about that. Again, much like what we just talked about briefly, is the human element and why homeowners still show the evidence still shows they want to and need to work with loan originators. So great. How do we take that, build a credible experience around the topic of hospitality? So, yeah, that's what I'm most excited about. That new new change is coming very soon. Robbie Chrisman Well, I certainly wish you and NFTYDOOR the best of luck. This was a pleasure speaking with you, and hopefully we'll do it again soon. So thank you very much, Tim. Tim Rowan Uh Robbie, always a blast. Thank you. Robbie Chrisman Today's economic calendar is underway with housing starts and building permits for September. Housing starts came in at 1.221 million, well below expected, and down 5.2% month over month. Building permits were in at 1.400 million about is expected, down 0.2% month over month. Later today brings September pending home sales, Red Book same store sales, and the Atlanta Fed GDP now for Q3. As the ongoing tension between inflationary energy risks and demand for safe haven assets continues, we begin the day with agency MBS prices, a few ticks or 30 seconds better than Monday's closed, the two-year yielding 4.78, and the 10-year yielding 5.12 after closing Monday at 5.14%. Let's wrap up with a joke and some housekeeping. A motivational seminar is packed the gills with people. The speaker starts off the event by asking for some audience participation. He says, How many of you have sex once a day? Okay, how many of you do it once a week? A few more folks raise their hands. How about once a month? A few more sheepishly raise their hands. Okay, how many of you have sex once a year? A little guy in the front row is jumping up and down and raising both hands. The speaker asks, Sir, you only have sex once a year? The guy cries out, Yes, and tonight's the night. Thanks again to Experian for sponsoring this week's podcasts. Experian verifies integration with Workday, gives mortgage lenders broader access to reliable, up-to-date income and employment data, streamlining verification, enhancing efficiency, and delivering a smoother borrower experience from application to closing.