The wars in Ukraine and Iran, and the demand by data centers, have reminded us of how important energy is as well as how the costs are borne by citizens around the world, and in the U.S. at the pump. Lenders know that energy influences the economy, and the economy moves interest rates. For example, although it is not in the headlines every day and is facing headwinds in the United States, globally the wind industry has the wind at its back. Last year was a bona fide bonanza for wind power installations. Globally, the wind industry installed 165 gigawatts of new capacity, up 40 percent from 2024, mostly driven by onshore wind (installations were up 42 percent to 155.3 GW) rather than offshore (up 18 percent to nine GW). Despite the best efforts of the Trump Administration to stymie wind in the U.S., seven GW of onshore wind were added last year. Globally, the cumulative wind capacity is now up to 1.3 terawatts.
Thoughts on retaining the sought-after borrower
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Ryan Gran with NEO Home Loans sent over some thoughts about a recent piece in the Commentary titled, “The Battle to Retain the Borrower.” “I feel very strongly about this topic, and I think that our industry is missing an incredibly important component of this, which is “Why did the client choose the LO or the Mortgage Company to begin with?”
“We survey our clients with this question and the answer we are looking for is that the client says that “NEO was the only company who committed to helping our family long term and they laid out the plan and strategy to help us become successful, well rounded and generationally wealthy homeowners.”
“If the reason a client chooses a lender is based on rate, realtor referral, finding them online, etc., then the next time they get a mortgage, they will find a different lender for a similar reason.
“I did a webinar on this and it was our largest attended webinar that we’ve ever done. I believe that the leaders in our industry need to lead: If we don’t teach our industry to become more valuable, then we’re all going to race to the bottom.” Thank you, Ryan.
How does a company evaluate LO performance?
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When people in our biz meet up and talk shop, or look at published reports of performance, nearly the only item mentioned is volume. It is much harder, but many would argue more important, to consider profitability, retention, pull through, or low historic delinquency rates. Is anyone going to disagree that the primary role of an MLO is to generate revenue for the company? Put another way, would you rather have an LO who does $5 million a month but loses $1,000 on every loan, or an LO who does $1 million a month and makes $1,000 on every loan?
Recently the consulting firm Garrett, McAuley discussed loan officer performance. “There are many factors that should be considered for LO performance, but origination volume alone certainly shouldn't be the main one. Instead, you should make sure you're focused on LO profitability, not volume, and you should do so using scorecards for each LO. Scorecards should list the LO’s loan volume, pull-through rate, percentage of higher-margin FHA/VA loans, percentage of purchase money loans, percentage of loans with pricing concessions, average cost per concession, and on and on and on.
“We have seen scorecards with as many as 13 variables, which we really like, but many low or average performers don't measure most of these on a loan officer level. Since the sole purpose of loan officers is to generate revenue for the company, the simplest way to get started evaluating LO performance is to determine their value relative to your other LOs. Start by taking the gross revenue each one produces and subtract their commissions. You can now see the net revenue each one generates for the company. Next, divide this by the number of loans the LO originated to get a net revenue produced per loan originated. Now rank the LOs from highest to lowest. Use whatever time period you want, but you now have the single best metric to start determining who are your best LOs and who are your worst ones are.” Thank you, Joe and Mike.
Compliance is as important as ever
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Just because the current Administration has gutted the Consumer Finance Protection Bureau doesn’t mean that it has been reduced to “five guys in a room with a phone.” States, other federal regulatory bodies, and investors have continued on, knowing that investors in the secondary market want clean, performing, compliant loans, and lenders to back them.
Freddie Mac has updated its requirements regarding Seller/Servicer insurance coverage limits, deductibles, documentation, reporting, and compliance obligations. On December 3, 2025, Freddie Mac issued Bulletin 2025-16, which announced revised Seller/Servicer insurance coverage limits, deductibles, documentation, reporting, and compliance obligations that are effective on June 8, 2026.
Freddie Mac requires that a Seller/Servicer maintain, at all times and at its own expense, Fidelity Bond coverage and an Errors and Omissions (E&O) insurance policy. Freddie Mac outlines current Fidelity Bond and E&O limits, deductibles, documentation, reporting, and compliance obligations in the following sections of the Seller/Servicer Guide: 2101.6, 2101.7, 2101.8, and 2101.9 Updated requirements to the Guide may be found at: 2101.6 (updated), 2101.7 (updated), 2101.8 (updated), and 2101.9 (updated). Updates include, but are not limited to, information surrounding requirements when using a parent institution’s coverage, acceptable insurer ratings (A- or better by an A.M. Best Company required), and changes to deductible and limit requirements.
Mortgage companies that allow remote work must still maintain robust supervision and ensure that remote environments comply with all applicable state and federal requirements, particularly around privacy and data security. This includes implementing written policies, conducting regular oversight such as performance monitoring and quality control reviews, and documenting supervisory activities, with some states like Kentucky and Oregon explicitly requiring periodic or annual reviews of remote or branch locations. As regulators increasingly scrutinize remote work arrangements, effective supervision frameworks and consistent compliance practices have become essential to mitigating risk and avoiding enforcement actions.
Beginning April 18, 2026, the NMLS began requiring all MU-2 and MU-4 individuals (including control persons, branch managers, qualifying individuals, and mortgage loan originators) to review, update, and attest to revised state-level disclosure questions, with companies responsible for initiating MU-2 updates in order to submit required filings. Regulators are urging completion by August 31 to allow time for review ahead of renewal season, especially since filings will be blocked without completed attestations, and any changes to prior disclosures must be clearly explained. While federal disclosure questions remain unchanged, updates to definitions and terminology may still impact company-level disclosures, making proactive review critical for compliance.
Yes, mortgage lenders and brokers are still required to file Suspicious Activity Reports (SARs). FinCEN’s October 2025 FAQs clarified existing SAR filing requirements, explaining that while financial institutions must report suspicious activity, they are not required to conduct follow-up reviews to determine if such activity continued after a SAR is filed. FinCEN acknowledged the burden of ongoing SAR filings and stated that institutions may choose, but are not obligated, to file follow-up SARs according to its continuing suspicious activity guidance. For those that do, the filing timeline remains: detection of suspicious facts (Day 0), initial SAR filing (Day 30), end of the 90-day monitoring period (Day 120), and continued activity SAR filing (Day 150), with the activity date range covering the 90 days following the prior SAR.
Thoughts on how lenders & vendors should treat policy
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National, state, and regional organizations know how important advocacy is, and how important it is to educate politicians (and their staff) on the correct public policy. I received this note from the CEO of the California MBA, Paul Gigliotti.
“The mortgage industry is very good at watching signals. We watch rates like hawks. We track consumer sentiment all day long. We buy tools to tell us when to lock, when to float, when to sell, when to hedge and when to blink. We invest in technology to improve speed, accuracy, and workflow. We spend plenty on marketing to capture the consumer at the top of the funnel and even more trying to keep them engaged through the process. In other words, we have built an entire ecosystem around watching what moves the market.
“But there is one force that can increase costs, disrupt operations, reduce access to credit, and confuse consumers, and somehow it still gets treated like an afterthought: advocacy. Or maybe more specifically, policy. We obsess over market volatility but too often ignore regulatory volatility, even though it can hit just as hard, and sometimes harder. It affects consumers, access to credit, and ultimately the bottom line. If rates move 50 basis points, everyone pays attention. If a bill moves through Sacramento that changes how forbearance must be administered during a declared emergency, half the industry shrugs until legal sends around a memo and operations starts sweating. That is backwards.
“Policy is not background noise. It is not just politics. It is a market signal. It is a business signal. And if you are not treating advocacy as part of your strategy, you are essentially driving while staring in the rearview mirror and calling it a business plan.
“That is why I keep coming back to the same idea: innovation in our industry cannot just mean better technology, faster workflows, or shinier AI tools. Innovation also has to include advocacy. Because if we want smarter laws, better outcomes, and workable consumer protections, then the people writing the rules need input from the people who actually understand how the system works.
“In California, two bills moving through Sacramento are a perfect example of why that matters. Let me be clear at the outset: California MBA supports helping homeowners in times of crisis. We support disaster relief. We support policies that protect borrowers. Full stop. But support for consumers should never mean support for policies that sound good and fail in practice. Those are not the same thing.
“AB 1842 and AB 1847 are both intended to expand mortgage relief during emergencies. The intent is understandable. The problem is that intent, by itself, does not run a servicing platform, align investor rules, or create a clear path for a borrower trying to understand their options during a crisis. AB 1842, the California Emergency Mortgage Relief Act, would expand existing disaster mortgage rules statewide any time a state of emergency is declared by either the Governor or the federal government. It would also impose new obligations that go well beyond current law.
“On paper, that may sound proactive. In practice, mortgage servicing does not operate on vibes. It operates within a highly structured framework governed by federal law, investor requirements, and contractual obligations. When you drop an additional layer of state-specific requirements on top of that structure, you do not create clarity. You create conflict.
“AB 1842 would apply these requirements even in cases where the federal government has not issued an emergency declaration. That raises the likelihood of misalignment with federal agency guidance. The bill also adds timelines, notices, reporting requirements, and compliance obligations, many of which already exist at the federal level in some form. So now, instead of helping a borrower quickly, servicers may be forced to reconcile overlapping frameworks during the exact moment when speed and clarity matter most. That is not streamlined relief. That is a compliance obstacle course.
“If that were not enough, AB 1842 creates a private right of action for technical violations. In addition, as AB 1842 is currently read a residential mortgage loan shall not be sold, assigned, or otherwise transferred to another owner or managed by another mortgage servicer without written consent from the borrower.
“Accountability matters. But in a system this complex, a private right of action tied to technical compliance errors is like threatening to sue the pilot for turbulence while ignoring the thunderstorm. It may feel satisfying on paper, but it does not make the flight safer.
“What it does do is increase legal risk, increase operational hesitation, and increase costs. And when costs and risks increase, access to credit has a funny way of moving in the opposite direction. That impact does not stop with servicers. It flows through the broader market and eventually lands where it always lands: on the consumer. That is not a minor drafting issue. That is a flashing warning light.
“Then there is AB 1847, which focuses specifically on borrowers impacted by the Los Angeles wildfires. This bill would extend forbearance from 12 months to as much as 36 months. Again, the goal is understandable. We all want homeowners to recover.
“But wanting something and being able to operationalize it are not the same thing. In many cases, servicers cannot offer extended forbearance beyond what the investor who owns the loan permits. If state law requires relief that investor guidelines do not allow, then we are creating a statutory promise that may not be deliverable in practice.
“And that is where good intentions become dangerous. Because from the borrower’s perspective, the distinction between “required by statute” and “allowed by investor” is not just technical. It is deeply personal. It shapes expectations, recovery planning, and trust. If the state tells a borrower one thing, but the actual loan structure only allows another, that is not relief. That is confusion dressed up as policy.
“This is exactly why advocacy must become a bigger part of how our industry thinks about innovation. We are more than willing to invest in systems that help us monitor rates, capture leads, and automate tasks. Good. We should. But if we are not equally committed to educating lawmakers on what can and cannot work in mortgage servicing, then we are leaving one of the most consequential variables in our business to chance.
“That makes no sense. Especially when the better path is sitting right in front of us. If we really want disaster relief policies that help consumers, then we should be building on systems that already work. That means aligning with existing federal disaster relief programs, improving borrower outreach and education, and focusing on the real barriers that slow recovery… Things like permitting delays, rebuilding bottlenecks and the gap between insurance proceeds and actual reconstruction costs. In other words, let us solve the actual problem.
“Because asking servicers to administer relief that conflicts with investor rules is like asking a contractor to rebuild a house with no permit, half the materials and instructions from three different architects. It is not innovation. It is confusion. And borrowers deserve better than confusion.
“The broader lesson here is simple: advocacy is not a side project for trade associations and government affairs teams. It is a strategic function. It is operational risk management. It is market intelligence. And if done correctly, it is one of the most important forms of innovation our industry has.”
Paul wrapped up with, “At California MBA, we are committed to working with policymakers to get this right. Not to block relief, but to build relief that is clear, implementable, and capable of delivering what it promises. Because in the end, the goal is not to pass bills that sound compassionate. The goal is to create outcomes that actually are.” Thank you, Paul.
(Don’t forget that the California MBA’s Mortgage Innovators Conference is next week, May 6–7, at The Waterfront Beach Resort in Huntington Beach, is where mortgage technology, lending operations, compliance, servicing, and leadership come together. With conversations focused on AI, innovation, standards, borrower experience, and practical solutions for today’s market, MIC is designed for companies looking to stay ahead of what is next while solving what is in front of them today. California MBA is also partnering with MISMO on timely sessions around responsible AI, compliance data, and industry standards. Space is filling up, so make plans to join us in Huntington Beach. Mortgage Innovators Conference: Innovation to Excellence, May 6-7.)
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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.
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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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