Mar. 8: Primer on privatizing GSEs; vendor news around the biz; Saturday Spotlight: Marr Labs
“Word reached me here in Northern California that Finland just closed its borders. No one will be crossing the Finish line.” Speaking of international news, most lenders and vendors are accustomed to hearing about contraction, but there are actually companies expanding out there. Have you ever heard of Mixue Ice Cream and Tea? Me neither. But Mixue has eclipsed McDonald’s, Starbucks, and Subway to become the largest food and beverage chain in the world, finishing the year with 45,282 locations, an increase from 7,100 in 2019 and double the level of three years ago. It’s selling ice cream and drinks at the price of 6 yuan, or about 83 cents, which has made for explosive growth in China where the economy has many hunting down inexpensive treats. Here in the States, we may be hunting down inexpensive things soon too. Not only are FHA delinquencies rising, but, in the auto sector, the number of subprime auto borrowers at least 60 days past due on their car loans has hit 6.56 percent, the highest level in the history of data collection from Fitch, going back to 1994. Whether due to inflation pinching consumers, a slowing economy, or the high cost for cars and trucks in general, the trend is not good. This comes as the Fed Bank of New York found that the percentage of all auto loans in serious delinquency is up to 3 percent. Let’s hope it doesn’t spread to houses, although the amount of equity and demand for a roof over people’s heads are quite strong.
Saturday Spotlight: Marr Labs
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“AI Voice Agents for every customer interaction.”
In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).
Marr Labs, founded in 2023 by industry veterans Dave Grannan, Han Shu, and Ghinwa Choueiter, specializes in developing advanced AI-voice agents. Based in San Francisco, the company leverages the latest advancements in LLMs to transform operations and elevate customer interactions. Marr Labs is poised for rapid growth, focusing on delivering cutting-edge solutions to lenders and originators with the Marr Labs Mortgage Loan Officer Assistant.
What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop?
We believe that a company’s success hinges on team dynamics and strong interpersonal relationships. That’s why we’ve embedded Organizational Behavior Coaching into our culture from day one. Our OB Coach provides personalized support, facilitates leadership development, and conducts communication workshops. Every team member has access to one-on-one coaching sessions, addressing workplace challenges and personal development goals. By prioritizing a culture of continuous learning and self-awareness, we empower our employees to not only grow professionally but also thrive as a cohesive team.
Tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.
At Marr Labs, we’re a globally distributed team, by both design and necessity, to best serve our customers. Maintaining a strong culture in a remote environment requires intention, and we do it through ways. First, regular in-person connection at our San Francisco headquarters to strengthen relationships and foster collaboration. We offer seamless digital communication via our virtual office, Slack, keeps conversations fluid and engagement high across time zones. And third Marr has core collaboration hours to ensure meaningful real-time collaboration, no matter where team members are located.
Things you are most proud of that don’t have to do with sales.
We’re proud of how naturally people engage with our AI-Voice agents. Many callers interact as if speaking with a real person, making small talk, and asking about the agent’s day. Others recognize it’s AI and express genuine curiosity about its capabilities, often complimenting its natural sound. Hearing these interactions is a powerful reminder of why we do what we do: our mission is to create AI that enhances human experiences, and every moment of genuine engagement reaffirms that we’re on the right path.
Fun fact about your company.
A fun fact about Marr Labs? It’s all in the name. We’re often surprised by how few people ask, “Why Marr Labs?” The name is a tribute to David Marr, a visionary neuroscientist whose groundbreaking work laid the foundation for modern artificial intelligence.
Han, our co-founder, was inspired by Marr’s theories long before earning his PhD at MIT’s Computer Science & Artificial Intelligence Laboratory (CSAIL). Marr’s research on how the brain processes visual information transformed the field of AI, influencing a generation of scientists, including Han, to push the boundaries of intelligent systems.
Though David Marr’s life was tragically cut short in 1980 at the age of 35, his legacy lives on in the fundamental principles that continue to shape AI today. At Marr Labs, we carry forward that spirit of innovation, always looking to bridge neuroscience and artificial intelligence to build more human-like AI.
Is there anything else you’d like to share along these lines?
Marr Labs is presenting in an upcoming MBA webinar on April 10th, “AI Voice Agents and Use Cases for Mortgage Lending,” discussing the transformative power of advanced AI voice agents in the mortgage industry.
(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)
Will GSEs (gov’t sponsored enterprises) keep their abbreviation?
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There’s the U.S. News and World Report article, "Mortgages Under Trump: What Happens if He Privatizes Fannie Mae and Freddie Mac?"
Jim Parrott, former senior housing policy advisor to President Obama, was interviewed on The Big Picture, sponsored by Depth, and he expects the Trump administration to “absolutely make a run at” privatizing the GSEs and expects the administration to make more public facing GSEs comments over the next two years. He noted that Treasury Secretary Scott Bessent said the GSEs are not a near term priority. The Trump Administration may get up and running on this initiative in one year (i.e., 2026) and start gaining traction in year two (i.e., 2027), according to Parrott, who expects the GSEs to continue to build capital during this time. He noted that FHFA Director nominee Bill Pulte can grab Calabria’s playbook and pick up where Calabria left off, entailing the GSEs hiring investment bankers to provide advice on capital raise as well as performing legal work to get the regulatory structure right.
Ed Groshans with Compass Point Research and Trading observes that, “We think it is notable that one of the architects of the Net Worth Sweep (Parrott) thinks that the Trump administration will engage in the process to release Fannie Mae and Freddie Mac from conservatorship.
Parrot remains skeptical that the Trump administration will actually pull the trigger and release Fannie and Freddie due to Treasury’s investment in the entities and the risk to the mortgage finance system (specifically to MBS investors and mortgage rates).
“He noted that Treasury’s investment is $334 billion and has warrants to own 79.9 percent of the companies. The Treasury could exercise its warrants and ‘own the companies tomorrow even out of conservatorship.’ Parrott views Treasury’s stake in the GSEs as a major impediment to attracting private capital and doesn’t think it is feasible for the Treasury to write off its senior preferred shares (SPS) due to the politics surrounding such a significant action. He said maybe the Trump administration will have the ‘guts to do that, but it seems a politically problematic move to make to just erase a’ $334 billion dollar obligation to the taxpayer. We agree on this point, which is why we expect any plans to release the GSEs will result in Treasury converting its SPS into common.
“Market sentiment is the next major hurdle, and Parrott thinks the Trump administration will have to address government support post-exit. Based on his comments, he expects Treasury’s lines of credit to remain in place but is concerned with how Treasury’s support would be communicated if the GSEs needed to draw down the remaining availability.
“The federal government’s actions during the Great Financial Crisis indicate that this concern is being overstated. Treasury and the Federal Reserve required all the large U.S. banks to ‘participate’ in Treasury’s Troubled Asset Relief Program (TARP). Treasury forced support on these banks in the middle of the crisis. JPMorgan Chase had $1.8 trillion of assets as of 2Q08 and Wells Fargo had $609 billion of assets. As YE2024, Fannie and Freddie had total assets of $4.3 trillion and $3.4 trillion, respectively. It is possible that the federal government would permit systemically important financial institutions to fail, but the fallout from the failure of Lehman Brothers makes this an improbable event in our view.
“The 2023 stress results do not support Parrott’s concern either. For 2023, FNMA would have generated net income of $9.9 billion and had a net worth of $107 billion. The Freddie Mac results showed net income of $6.0 billion and a net worth of $66 billion. The GSEs were not required to publish 2024 stress test results. He highlighted implicit support is critical as it supports the GSEs’ credit ratings and MBS investor sentiment on credit risk, saying, ‘Sovereign investors that are nervous about investing in credit risk … didn't have to worry about it because they were pretty confident government was going to step in and clean things up.’ Both Moody’s and Fitch indicated that releasing the GSEs is not necessarily an immediate negative credit rating action depending on the structure of the transaction. Moody’s said that a significant factor in the GSE ratings is implicit support from Treasury.
“Parrot highlighted that if President Donald Trump said there is no implicit support for entities, then rating agencies would likely downgrade the GSEs, which would negatively affect the mortgage finance system and mortgage rates. We agree with Parrott on this point and if President Trump were to consider making such a comment, then releasing the GSEs would not be feasible. We do not expect such a comment to be made and maintain our view of better than 80 percent odds that the Trump administration releases the GSEs from conservatorship.” Thank you to Ed and Compass Point Research and Trading!
Call them vendors or third-party providers…
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Just don’t call them late for dinner! What lender could originate home loans without third-party providers? Let’s see who’s doing what out there, in no particular order.
ACES Quality Management® (ACES) announced the release of its quarterly ACES Mortgage QC Industry Trends Report covering the third quarter (Q3) of 2024. The latest report analyzes post-closing quality control data derived from ACES Quality Management & Control® software. Notable findings from the Q3 2024 report include the overall critical defect rate declined from Q2 to Q3 by nearly 17%, ending the quarter at 1.51%. Income/Employment was again the leading category of defects at 25%, followed by Assets at 16.67%. Credit and Loan Documentation tied for the third most defects at 12.12% each. Purchase defect share increased despite a decrease in purchase reviews. Defects declined significantly for conventional and USDA loans this quarter, FHA defect share increased by 25%, VA defect share increased significantly in Q3, though primarily driven by a temporary phenomenon.
Total Expert had two key announcements recently pointing to its continued focus on innovation. Its 2025 Winter Platform Release featuring a new addition, Rate Enrichment Data for lenders to use dynamic interest rate data to deliver more impactful customer engagements. The announcement of a strategic hire expanding Total Expert’s executive team as they prioritize investments in Agentic AI and predictive intelligence, Pete Karns as New Chief Product Officer (CPO).
Leading origination platform Blend Labs has tapped Truework, a leading income and employment verification provider, to create an integrated solution for lenders that enables faster borrower approvals and significantly broader income and employment coverage. Truework’s verification service is now embedded directly within Blend’s borrower and loan officer experience. This partnership comes at a crucial time for mortgage lenders looking to navigate housing market uncertainty with smarter origination solutions that reduce costs and streamline operations (vs. fragmented systems and disconnected workflows that slow down processes and create friction). More information about this news can be found in the press release.
Xactus, a fintech and market leader in verification solutions for the mortgage industry, introduced a new class of technology called Intelligent Verification. Built on valuable insights derived from verification data, it harnesses real-time insights to power automated actions, enabling faster and better decision-making while reducing waste and redundancies. Xactus360, the industry’s first Intelligent Verification PlatformSM (IVP), integrates with existing POS and LOS systems to provide verifications. This allows clients to eliminate unnecessary data pulls and improve next-best actions, facilitating greater efficiency throughout the loan life cycle.
Snapdocs, the mortgage industry’s leading digital closing provider, announced the availability of two new capabilities: Quality Control (QC) and Trailing Document Management. These advancements are part of the company’s broader strategy to automate the complex closing tasks beyond the eSignature. Snapdocs Quality Control streamlines lenders’ manual and error-prone file review processes by automating two key steps with Funding QC and Post-Close QC. Trailing Document Management enables lenders to track, manage, and receive final documents within the Snapdocs eClosing platform. This functionality accelerates final document delivery, reduces manual follow-ups with settlement, provides real-time visibility into the status of final documents, and automates document pushback to the LOS.
Xactus announced that global analytics software leader FICO (NYSE: FICO) has teamed up with Xactus as its first technology partner in FICO’s quest to bring its innovative FICO® Score Mortgage Simulator to market. The FICO® Score Mortgage Simulator can be accessed via Xactus360, the industry’s first Intelligent Verification PlatformSM, a data-driven, scalable platform reframing how, what, and when verifications occur. It is the only score simulator for mortgage professionals that uses FICO® Scores and FICO Score algorithms. It simulates possible impacts on consumers’ FICO® Scores and includes a variety of scenarios to simulate the impact of potential changes to their credit report data. With that information, lenders can help applicants gauge how certain actions could impact their FICO Scores and demonstrate how more loan options and potentially better interest rates could become available based on different scenarios.
(Warning: Rated R for language. No complaints please. Delivered in a southern drawl.)
Betty Joe meets up with her BFF Mary Lou and says, “Hi Mary Lou, how’s it going… and what’s that on your finger!?“
Mary Lou: “Why, my husband and I renewed our vows, and he bought me this two-carat diamond ring!"
Betty Joe: “Why Mary Lou, that’s mighty nice!”
Mary Lou: “And then he bought me a mink coat for our upcoming trip.”
Betty Joe: “Why Mary Lou, that’s mighty nice! Where are you going?"
Mary Lou: We’re going to take a grand tour of Europe and stay in all the finest hotels.
Betty Joe: “Why Mary Lou, that’s mighty nice!”
Mary Lou: “So Betty Joe what is your husband doing for you?”
Betty Joe: “Why Mary Lou, my husband is sending me to finishing skewel.”
Mary Lou: “And what are you learning in finishing skewel?,” asks Mary Lou.
Betty Joe: “Why Mary Lou, at finishing skewel, they’re teaching me to say, ‘Why that’s mighty nice’ instead of, ‘Screw you!’”
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you're interested, visit my periodic blog at the STRATMOR Group web site. This month’s piece is titled, “Natural Disasters and Economic Resilience.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).
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