“If life gives you lemons, make lemonade.” Just make sure that you can call it lemonade.” LO compensation, regardless of title, is aways a topic. With its staffing situation seemingly reaching a new homeostasis, the CFPB is now probably just waiting for the confirmation of Brian Johnson as its new Director to get back at its deregulatory agenda. Still, despite DOGE’s chainsaw bravado imagery and considered behind the scenes industry work on reform proposals, the eminently counterproductive LO Comp Rule (now over 15 years old) still plagues industry and consumers alike. Attorney Brian Levy takes a look at the Rule and the impact of discount points. (Here’s where to subscribe.) Comp is usually the predominant factor in costs, and profit calculations, and lenders are quick to move into channels if there are profits to be had. Switching industries, California’s wineries are struggling with a glut of wine and awful margins, as the region produces too much product and the world drinks too little of it. Some vintners are switching things up and ripping out vines to plant alternative crops, among them agave, the succulent that constitutes the key ingredient in tequila and mezcal. Agave is cheaper and also consumes less water (it costs $10,000 an acre to plant agave versus $70,000 an acre to plant grapes, and it survives on natural rainfall) but there are still risks, like the uncertainty about what spirit the agave will eventually turn into, as there’s very little distilling capacity in California. And due to denomination of origin, any alcoholic beverage derived from the California agave can’t legally be sold as tequila or mezcal anyway.
Saturday Spotlight: Flyhomes
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70 percent of the homeowners in your pipeline are stuck, not gone. They have the equity to move. They just won’t touch their rate.
Here’s the shift: don’t just talk about rates anymore. When the rate conversation is dead, the equity conversation is just getting started.
Flyhomes, the leading Buy Before You Sell platform in the US, lets your borrowers tap the equity in their current home to buy the next one, before they sell. That turns a stalled “someday” client into a deal you can close now.
Flyhomes Buy Before You Sell DREAM Solutions give borrowers real advantages: buy with $0 down, reduce their DTI by up to 50 percent, and make cash-equivalent offers that close in as little as 10 days. They also become fresh talking points with your agent partners and clients.
We’re wholesale-only, so we never compete with you or your agents. Our solutions are available in all 50 states.
This October, we’re launching the new Flyhomes Buy Before You Sell Calculator and hosting a live session to show you how to use it:
Oct 22, 10:00 AM PT / 1:00 PM ET: Reopen Stalled Deals with the New Buy Before You Sell Calculator. See how to run a buyer’s scenario in two minutes, live on a call, and turn plain numbers into a clear reason for stalled borrowers to move now. Stay for live Q&A.
Save Your Seat or Book a Call to see how Flyhomes can help you close more deals today.
(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)
Down Payment Assistance and MISMO’s role: worth a look
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Rob Chrane, the CEO of Down Payment Resource, sent a note that could be titled, “Standardizing DPA data: a MISMO opportunity to unlock homeownership at scale.” “Down payment assistance (DPA) programs are among the most underutilized homeownership resources in the U.S. housing finance market. More than 2,700 programs exist across every U.S. County, with 62 percent carrying income limits above $100,000, yet many eligible borrowers never learn about them. That is a shame given the protracted high-rate environment, since the average down payment program contribution of $18,000 can materially change qualification outcomes, lower loan-to-value ratios by an average of 8.8 percent and reduce or eliminate mortgage insurance premiums.
“Equally important, retaining as much as $18,000 in liquid funds goes a long way in offsetting the inevitable costs of homeownership that can strain a household budget during the critical first year of ownership.
“DPA underutilization is not a product problem. Substantial programs exist. Borrower need is real. Some suggest the problem is a communication gap with lenders who do not understand the opportunity these programs could provide their borrowers. That is not it. Lenders are smart and they will learn anything that helps them close deals and earn more business. The true underlying issue is a data capture and workflow problem. Adding DPA program contributions to loan origination is so cumbersome and time-consuming that lenders develop genuine antipathy toward it. They do not so much resist DPA as fail to remember it, the way the human mind responds to anything that is deeply frustrating and counterproductive.
“DPA underutilization is an operational friction issue. Reducing operational friction is MISMO’s mission. Your readers should ask what standardization would actually look like. We are not proposing that MISMO standardize DPA eligibility algorithms, program update protocols, or the intelligence layers that technology vendors build on top of program data.
“We are proposing something deliberately narrower and more durable: a thin, vendor-neutral data standard built around the core definition of what a DPA program is. The essential data points include repayment terms, first-time homebuyer definitions, program type, funding status, eligible property types, eligible use of funds, application requirements, homebuyer education requirements, and similar foundational attributes.
“How should those data points be universally represented and distributed so that any LOS, POS, CRM, or PPE can consume them consistently? That is the standard we are asking MISMO to help define. The analogy worth keeping in mind is Google Maps. Google did not win the navigation market because roads were standardized. Roads are public. Addresses are public. GPS is standardized. Google won because it built predictive routing, real-time traffic monitoring, crowd-sourced hazard alerts, and accurate ETAs on top of those public standards. Standardized infrastructure enabled private innovation.
“The same logic applies here. A common DPA data layer does not commoditize what technology vendors build on top of it. It creates the foundation that makes those capabilities more powerful, more interoperable, and more accessible across the market.
This approach protects the industry while advancing it. A deliberately thin standard avoids IP creep. The core attributes of a DPA program are not proprietary. What is proprietary is the intelligence, eligibility logic, workflow integration and decisioning capability that companies like Down Payment Resource build on top of that data. Standardizing the foundation does not touch any of that. It simply ensures that the foundation exists in a form every platform can use.
“The downstream benefits are real and broad. A MISMO standard would give every LOS vendor a clear specification to implement, removing the burden of bespoke development and creating a path for consistent DPA support across platforms. Point-of-sale systems and CRMs could surface DPA eligibility earlier in the borrower journey, at the point of initial inquiry rather than after underwriting. Standardized DPA data would allow program terms and structures to be consistently represented across loan files, improving secondary market confidence in DPA-assisted loans.
“And when DPA eligibility flows through the origination process automatically, loan officers spend less time researching programs manually and more time advising borrowers.
It is not unlike the state of credit evaluation before FICO, or the fraud environment before automated underwriting systems created shared infrastructure the entire industry could rely on. Public infrastructure with returns that accrue to the entire market.
“Down Payment Resource is not asking MISMO to endorse a product or our company. We are asking MISMO to recognize DPA data standardization as an industry priority and to give us a seat at the table to help get it right. We have had our ear to lenders for decades and are deeply familiar with the pragmatic barriers to DPA adoption.
“Specifically, we are proposing three things. First, a home within the MISMO structure. We ask that MISMO identify the most appropriate existing body, whether a Community of Practice, working group or other forum, to take on DPA data standardization as a formal initiative. Down Payment Resource is prepared to contribute subject matter expertise, program data, and lender use cases to support that work, within whatever structure MISMO determines is the right fit.
“Second, a panel or session at the January 2027 MISMO Summit. An opportunity to present the case for DPA standardization to the MISMO community, including lenders, technology vendors, and work group leaders, as a first step toward building the coalition this initiative requires. Third, ongoing collaboration. A structured path for Down Payment Resource to contribute to the standards development process, working alongside MISMO staff, work group members, and other industry stakeholders toward a durable, vendor-neutral outcome.” Thank you, Rob.
A primer on the credit modernization/turmoil
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AnnaMaria Andriotis and Jasmine Li had some observations on the current credit situation facing lenders and investors and vendors. “For decades, FICO credit scores played a critical role in determining homeownership for many Americans. Now the mortgage industry is embracing another metric. Regulators and lenders recently opened the door to using rival VantageScore, a joint venture by credit-reporting firms Equifax, Experian, and TransUnion, for their mortgage underwriting decisions.
“It is the latest chapter in the Federal Housing Finance Agency’s crusade against Fair Isaac’s near-monopoly over the $13 trillion mortgage market, one that has sent the company’s stock down about 60 percent this year.
“FHFA chief Bill Pulte and President Trump have been trying to lower mortgage costs and increase home affordability, combating mortgage rates that have climbed to their highest levels in years just before the midterm elections. The administration says the credit-score change will make it easier and cheaper to get a mortgage.
“Bill Pulte said, ‘We do not care who wins. We just want [FICO] and Vantage to compete… not be a cartel or abusive monopolies.’ So far, the market is seeing the score changes as increasing risk, and there are early indications that it is leading to higher interest rates on some mortgages.
“The FHFA, Fannie Mae and Freddie Mac all said in statements that the changes would modernize the credit-scoring system, making it more predictive, and create a safer and sounder market. The changes have been brewing for the past year but kicked into gear last month when Pulte directed Fannie Mae and Freddie Mac to approve all lenders to use VantageScore 4.0. Rocket Mortgage, United Wholesale, PennyMac, Movement, Newrez correspondent, Fairway, and others are using combinations of FICO and VantageScore 4.0.
Recall that Freddie and Fannie don’t base the decision to purchase a loan on credit score. “At the core of the change are pricing grids meant to assess risk that Fannie and Freddie rolled out during the 2008 housing crisis. The grids determine the fees Fannie and Freddie charge based on borrowers’ credit score and loan size compared with the value of the house they are financing.
“The administration is now adding VantageScore to the equation. One iteration, released in early September, treated the scores as different. For instance, a 720 VantageScore should be thought of as a 700 FICO, the grid showed. Then, at the end of September, Pulte erased that differential. He announced there would be one set of pricing grids that treat FICO and VantageScore equally. ‘We are Simplifying Mortgage Pricing following feedback from lenders and consumers,’ he wrote on X, his preferred method of communication. It was akin to waving a magic wand and allows the lenders to choose the highest score available.
“FICO and VantageScore credit scores are crunched off different algorithms and with different data. In general, the FICO score that has long been used for Fannie and Freddie is a tougher bar for consumers to clear. For example, it requires that consumers have a lengthier credit history (about six months) than the VantageScore version.
“’I question whether or not Pulte knows what he’s doing,’ said John Ulzheimer, who has worked for FICO and VantageScore. ‘It’s like Fahrenheit and Celsius: to some extent you’re never going to have the same output.’ A 20-point drop in a FICO score increases the chances of default by 40 to 50 percent, according to FICO.
“’If one believes the prior grids accurately measured risk, then this means Fannie and Freddie are taking on more risk with each VantageScore loan without being compensated,’ TD Cowen analyst Jaret Seiberg wrote in a report. Bill Banfield, chief business officer at Rocket, said the company ran 1.4 million credit reports from May through September that pulled both scores. On the mortgages that Rocket originated, VantageScore 4.0 ran 11 to 12 points higher than FICO Classic on average, he said. ‘What that meant, in the simplest terms, was that the vast majority of people got the same price or a slightly better price by using VantageScore,’ he said.
“So far, the market isn’t treating the scores as equal. Mortgage-bond investors who buy bonds from Fannie and Freddie are now worried about their own models and ‘if they are being compensated for risk,’ said Scott Buchta, head of fixed-income strategy at investment bank Brean Capital. An analysis by Milliman found that during the pilot period, borrowers with similar credit score ranges were charged a higher interest rate (up to 0.2 percentage point more) when their loans were originated using VantageScore instead of FICO.
“’We think that ultimately, the price of a mortgage is going to go up,’ said Jonathan Glowacki, principal at Milliman. ‘The credit providers are going to try to offset that adverse selection, and the only way they can do that is raise prices.’” Thank you, AnnaMaria and Jasmine.
Modern avocados were primarily… created by a mailman who noticed a flyer. 100 years ago… sometimes the slightest coincidence leads to something that changes the world. Does the same thing happen in lending?
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, “Those Monthly Payments Go Somewhere.” “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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