Halloween: Banks’ role in mortgage; home equity & AI; Third party product rollouts; Saturday Spotlight: The Reno Gal LLC

For better or worse, alcohol consumption is part of most of the world. Statisticians, analysts, and economists follow the numbers. Household spending on alcohol in the United States is at a record low, with alcoholic beverages accounting for 0.77 percent of average expenditures in 2025, just $630 per household. The lowest since this state was first tracked in 1984, it surpasses the depths logged in 2020, when the pandemic led to a sharp curb in alcohol spending, accounting for just 0.78 percent of household spending.

Saturday Spotlight: The Reno Gal LLC

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Renovation lending requires specialized expertise. Accessing that expertise shouldn’t have to be expensive.

That idea was one of the driving forces behind founding The Reno Gal LLC, a consulting firm dedicated exclusively to helping mortgage lenders build, improve, and scale renovation lending platforms.

The need for this type of financing is increasingly clear. Limited housing inventory, affordability challenges, and an aging U.S. housing stock are forcing buyers to look differently at the homes available to them. Renovation financing can help turn properties that might otherwise be passed over into viable housing options.

It can also be a valuable business line for lenders. Renovation loans can offer higher profit margins than traditional mortgages, tend to be less price sensitive and can generate significant referral opportunities. They can help salvage transactions threatened by property-condition issues discovered during an appraisal or home inspection, open doors with real estate professionals, support recruiting and potentially contribute toward CRA objectives. With relatively little competition and a transaction that depends heavily on specialized knowledge, human interaction and problem-solving, renovation lending also offers resilience against both consumer-direct competition and AI disruption.

But offering renovation loan products and building a successful renovation lending platform are two very different things.

Deciding to enter renovation lending may be easy. Planning and implementing are not. Who will oversee the program? Which products and delivery strategies make sense? Does the LOS support the necessary workflows and calculations? Who needs training? How will contractors and Consultants be vetted and monitored? Who owns draw administration after closing? Are accounting, appraisal desk personnel, underwriting, closing, and post-closing prepared for their roles?

Getting those decisions wrong becomes considerably more expensive once production begins.

The Reno Gal LLC was created to help lenders solve those issues before they become problems.

Rather than requiring a lender to immediately hire full-time specialized leadership, The Reno Gal® provides access to more than two decades of renovation lending experience when and where it is needed. Engagements can range from helping develop a new renovation lending platform to reviewing an existing one, identifying process gaps, developing workflows and documentation, enhancing LOS processes, training sales and operations teams, evaluating prospective renovation lending hires, solving draw administration challenges or helping an established program scale.

There is no single blueprint that works for every lender. Production goals, staffing, technology, delivery strategy, product mix, and existing infrastructure all matter. The objective is not simply to help a lender offer renovation loans. It is to help build a platform capable of supporting them successfully and sustainably.

And there is a larger purpose behind the work. Making specialized renovation lending expertise more accessible can help more lenders confidently enter the space. More lenders offering renovation financing means more opportunities for American families to address the inventory, affordability and property-condition challenges affecting today’s housing market.

If renovation lending is already on your radar for 2026 or 2027, the best time to talk isn’t after you start encountering obstacles. It’s before you begin planning your roadmap.

Visit TheRenoGal.com to learn more and book a discovery call.

(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.) 

Home equity lending and artificial intelligence

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U.S. homeowners hold more than $35 trillion in home equity, yet fewer than half of HELOC applications ever fund. Figure CEO Michael Tannenbaum and VP of Marketing Alysse Guitar argue that’s not necessarily because borrowers lack interest, but because paperwork, uploads, and password resets stall applications and consume loan officer time.

Figure built an AI loan officer assistant to handle those tasks. In a few months, it has helped fund roughly $250 million in loans. A cohort study found that loan officers using the assistant funded 52% more loans and 37% more dollars than those working alone. Average loan size dipped 10%, a sign the assistant is capturing smaller loans that would otherwise be overlooked.

“This is essentially found money for any company in mortgage.”

The takeaway: AI performed best as a partner to loan officers, not a replacement. Figure’s strongest results came from pairing the two, with AI handling the routine follow-up and originators focusing on ready borrowers. The assistant is now live with Figure’s wholesale partners.

Banks have a mortgage advantage…

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… but only if they use it. Fifth Third’s Head of Mortgage Banking James Sias has some thoughts on origination channels. “Banks have a structural advantage over independent mortgage bankers: they already know millions of potential borrowers before those customers begin shopping for a home loan. Fifth Third Bank has more than six million customers, yet only about 5 to 7 percent of its deposit customers have a mortgage with the bank, leaving substantial room to grow through existing relationships. The opportunity is not simply access to deposits or cheaper funding, but the ability to recognize major financial moments, from a first home purchase to a relocation or home renovation, and offer the right lending solution when customers need it.

“Fifth Third has spent the past several years building toward that opportunity, growing its mortgage sales force from a low of 223 mortgage loan officers to more than 300 and ranking first in its bank peer group for monthly loans closed per loan officer, at 4.4, in STRATMOR’s first-half 2026 results. The strategy has also produced market share gains in 23 of the bank’s 24 core markets during the first half of the year, demonstrating that a bank can expand its mortgage business even when higher rates and affordability challenges make the market difficult.

“That advantage disappears, however, if banks rely on branch referrals instead of actively converting customer relationships into mortgage business. Sias says independent mortgage bankers remain formidable competitors because they can move quickly, focus their technology on the loan experience, and pursue borrowers directly, while banks can be slowed by organizational complexity and regulatory requirements.

“Artificial intelligence could help banks identify purchase signals and life events, and Fifth Third has already reduced appraisal review time by about 40% on selected reviews and accelerated construction draw management by roughly 25%. But Sias cautions that automation alone will not resolve an industry cost-to-originate figure that has remained near $12,000; lenders must integrate technology into actual workflows while preserving the loan officer’s role when borrowers face complex decisions or urgent closing problems.

“For banks, the larger opportunity is to combine customer data, local loan officer relationships, and portfolio lending to serve borrowers who may not fit agency guidelines, including young doctors with substantial student debt and self-employed borrowers whose tax returns understate their earning power. The winners will not necessarily be the institutions with the most technology or the largest customer base, but those that turn those assets into better service, more productive employees, and mortgage relationships that can endure for decades.” Thank you, James.

Third party provider/vendor products roll on

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The future of residential mortgage funding is shifting from traditional wire transfers toward real-time payment networks such as FedNow and The Clearing House’s RTP, offering near-instant, lower-cost, and equally reliable settlement. The more transformative opportunity, however, lies in ISO 20022, which allows payment instructions to carry supporting transaction data (e.g., title clearance, ownership transfer, and closing-condition verification) so funds can be released automatically once all requirements are satisfied. By combining the movement of money with proof that contractual obligations have been met, lenders could eliminate administrative delays, increase funding certainty, and meaningfully compress the traditional 30-to-45-day closing process. Lenders that pair rigorous pre-payment verification and human oversight with automated, data-rich payment execution will turn real-time funding into a competitive advantage by reducing fraud, compressing closing timelines, and lowering origination costs.

The MBA Says 2027 volume will shrink five percent. CredEvolv says lenders are already sitting on the fix. The Mortgage Bankers Association delivered a tough outlook at its Annual Convention in Chicago this month. It projects total originations falling 5 percent in 2027 to $1.99 trillion, refinances dropping 17 percent, purchase volume growing less than 1 percent, and 30-year rates staying above 7 percent. For lenders, that means more competition for fewer borrowers. But CredEvolv says the borrowers lenders need most are the ones they’ve already turned away. “Lenders are spending more than ever to find new borrowers while letting the ones they already paid to acquire walk out the door,” Maria Vergara, Head of Business Development at CredEvolv, said. “We don’t source new leads. We recover the volume lenders lose every day to applicants who just aren’t ready yet.”

Most denied or stalled applicants are never heard from again. In fact, Freddie Mac consumer research found that only 17 percent of denied applicants who had not yet been approved expected to reapply with the same lender.

That gap points to a lack of active lender follow-up and nurturing. The flip side is just as telling: 78 percent of borrowers who are provided a path toultimately get approved went back to the same lender. Borrowers stay loyal to the lender that helps them get there.

CredEvolv is a fintech company that connects these borrowers with HUD-approved nonprofit credit counselors who build a personal plan to qualify, then sends mortgage-ready borrowers back to the lender who referred them. CredEvolv sees upwards of 5-10% of these consumers will go on to close a loan. For a lender that denies 1,000 applicants a year, that’s 50 to 100 recaptured loans, or roughly $17.5 million to $35 million in origination volume at an average loan size of $350,000.

The usual workaround has been to hand applicants over to a for-profit credit repair company. Many of these companies court lenders and originators with referral payouts, yet deliver little measurable improvement for borrowers. The industry also faces ongoing regulatory enforcement and federal restrictions on upfront fees, which puts the lender’s name next to risk it can’t control. CredEvolv was built to remove that risk by connecting borrowers with HUD-approved nonprofit counselors, and lending enterprise legal teams are thankful for the compliance-first approach.

“Lenders shouldn’t have to choose between helping a borrower and protecting their compliance record,” Jeff Walker, CEO and cofounder of CredEvolv, said. “We give them a way to do both, and to get the loan in the end.”

CredEvolv is the only platform that combines lender integration, HUD-approved nonprofit counseling, real-time transparency, and a direct path back to the originating lender. (For more information contact Maria Vergara.)

First American Mortgage Solutions, a part of the First American family of companies, announced the launch of its new equiLite™ policy, a title insurance solution designed to help lenders manage title risk on home equity lines of credit (HELOCs) and home equity loans through a streamlined one-owner search process. The new title insurance policy expands First American Mortgage Solutions’ equiSolutions™ product suite, providing lenders with greater flexibility to make informed collateral decisions, manage title risk and accelerate loan closings.

nCino introduced its Loan Officer Productivity Suite, a comprehensive set of AI-driven tools designed to boost mortgage originator productivity by putting faster answers and automated actions directly into the nCino Mortgage Solution. 

Floify, the mortgage industry’s leading point-of-sale (POS) solution, today announced the launch of Verification of Assets (VOA) within Floify Verify, its native verification service powered by Argyle.

Down Payment Resource (DPR), the housing industry’s leading affordability intelligence platform, released its Q3 2026 Homeownership Program Index (HPI) report, identifying 2,833 programs nationwide. The total is up 87 programs, or 3.2%, from 2,746 in Q2 2026, marking a new survey high. 

DocMagic’s recent article “Configurable compliance: a practical guide for mortgage lenders”  covers how to reduce friction while still maintaining strong oversight, align compliance with your risk tolerance and business model, and how to back up your decisions with clear, audit-ready logic.

RiskSpan announced the release of RiskSpan v.4.6.7, bringing you powerful new capabilities and improvements to enhance your workflow and analysis. Highlights include added functionality to apply group-level assumptions for CMBS, added support for SBA securities, and more.

Tavant launched Tavant Mortgage Data Foundry, a solution that enables lenders to lower the cost of originating a loan and close more of the business in their pipeline. The Mortgage Data Foundry integrates data in real time from mortgage enterprise systems into one governed, AI-ready foundation targeted to be deployed on the lender’s cloud data platform and anchored to MISMO standards.

Optimal Blue announced that its direct lock functionality now integrates with Fannie Mae’s Pricing & Execution, Whole Loan® (PE – Whole Loan) platform. The integration allows lenders using Optimal Blue’s product, pricing, and eligibility (PPE) engine to execute best efforts locks with Fannie Mae through real-time, system-to-system connectivity without leaving Optimal Blue.

Friday Harbor announced Safe Harbor QC, a new pre-closing quality control solution that combines a comprehensive loan review with a warranty backed by a global insurer rated A+ (Superior) by AM Best with the agency’s highest financial size category (XV).

Mortgage Capital Trading, Inc. and Dark Matter Technologies announced a new data integration between MCT’s platform and Dark Matter’s Empower® loan origination solution (LOS). The integration, now available for existing mutual clients, streamlines the flow of loan data between origination and secondary marketing, giving lenders a faster and more reliable path from commitment to delivery. 

Docutech updated the Spanish-language version of the Toolkit (Cx21032) to the CFPB’s August 2026 version.

The MBA announced an important new member benefit designed to help mortgage companies reduce cyber risk and respond more quickly when incidents occur. Through FTI Consulting, MBA members will now receive preferred access to cybersecurity assessments, threat monitoring, and incident response support.

LoanPASS launched LoanPASS AUS, a configurable, rules-based automated underwriting system designed to help lenders automate complex credit decisions without forcing their products into a standardized credit box.

MBA posted a press statement regarding its advocacy update on the GSEs granting temporary flexibility on UAD 3.6 Implementation.

Docutech posted a Compliance News Alert regarding CFPB’s recent revisions of Your Home Loan Toolkit available on the Docutech website.

After trick-or-treating on Halloween, a teen takes a shortcut through a cemetery.

Halfway across, he’s startled by a tapping noise coming from the misty shadows. Trembling with fear, he spots an old man chipping away at a headstone.

“I thought you were a ghost,” says the relieved teen. “What are you doing working so late?”

“Oh, those idiots,” grumbles the old man. “They misspelled my name!”

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.)