In the May 23 episode of Optimal Insights, host Jim Glennon is joined by Alex Hebner, Vimi Vasudeva, and Kimberly Melton to discuss the latest developments in the mortgage industry, including market volatility, policy shifts, and key takeaways from the MBA Secondary Conference in New York City.

Key Insights:

Market Update & Economic Trends

• Interest Rates & Volume: Despite stubbornly high rates (OBMMI at 6.9%), mortgage volume remains strong – 20–40% above pre-pandemic levels – driven by purchase activity and a resurgence in cash-out refinances.
• Tariff Tensions: As of Friday, a proposed 50% tariff on EU imports by Trump has rattled markets. The EU, now a larger trading partner than China, could see significant economic ripple effects.
• Tax Bill & Deficit Concerns: A narrowly passed tax bill is raising deficit alarms, contributing to rising rates. As of Friday, the bond market is reacting negatively, with fears of increased government borrowing.
• Upcoming Data to Watch: Consumer confidence, Fed minutes, GDP revisions, and the PCE inflation metric are all on the radar for this week, with implications for rate direction and economic sentiment.

GSE Privatization Buzz

• Trump’s Comments: President Trump hinted at imminent action to release the GSEs (Fannie Mae and Freddie Mac) from conservatorship.
• Industry Reaction: FHFA Chair Bill Pulte echoed the potential for increased efficiency and affordability through privatization, though concerns remain about market disruption and implementation risks.

MBA Secondary Conference Highlights

Optimism Replaces Survival Mode:

• Last year’s “Survive till ‘25” mindset has shifted to strategic growth and innovation.

AI Adoption Accelerates:

• Tools like Ask Obi, Originator Assistant, and Scenario Optimizer are gaining traction in use by Optimal Blue clients.
• Larger firms are leading adoption, while smaller originators mention facing challenges in scaling AI solutions.

Non-QM & ARM Products:

• There seems to be rising interest in non-QM lending, with discussions around hedging strategies and bulk sales.
• Adjustable-rate mortgages (ARMs) could be poised for a comeback if short-term rates decline, improving affordability.

MSR Market & Consolidation:

• MSR values remain high; the Rocket–Mr. Cooper merger could reshape servicing dynamics.
• UWM’s move to in-house servicing signals broader industry shifts.

Creative Affordability Solutions:

• Increased focus on HELOCs and alternative lending products to address affordability challenges.
• Concerns about the future of government-backed affordability programs if GSEs are privatized.

Tune in to gain valuable insights to help you stay ahead and maximize your profitability in the ever-evolving mortgage landscape.

#OptimizeYourAdvantage #MaximizeProfitability

Optimal Insights Team:

• Jim Glennon, Vice President of Hedging and Trading Client Services, Optimal Blue
• Alex Hebner, Hedge Account Manager, Optimal Blue
• Vimi Vasudeva, Managing Director, Optimal Blue
• Kimberly Melton, Director of PPE Technical Support, Optimal Blue

Production Team:

• Executive Producer: Sara Holtz
• Producers: Matt Gilhooly & Hailey Boyer

Commentary included in the podcast shall not be construed as, nor is Optimal Blue providing, any legal, trading, hedging, or financial advice.

Mentioned in this episode:

Market Advantage Report – Newly Expanded With New Origination and Secondary Markets Data Points

Smarter Lending Starts with Smarter Data

Capture for Originators

Reengage Past Clients Without the Spreadsheet Headache