Daily Rate Briefing:

MARKETS BEATING RECORDS

Another solid day in the markets, my friends. Mortgage rates saw a small bump — up 9 bps in the Conventional market — while Govies held steady with no movement either way. This morning we are down just a hair in both conv and govt but nothing tha would move rates from yesterdays close to morning rate sheets.

The DOW, S&P 500, and NASDAQ all notched record highs again yesterday. Most of that momentum came from ongoing trade talks with China and across Asia. Trump meets with China on Thursday, and markets are already pricing in optimism. Tech stocks loved it.

Japan, South Korea, and Taiwan also hit fresh highs on the same news. Of course, in true Trump fashion, he slipped in a 10% tariff hike on Canada — which could ripple through a few sectors if it sticks.

For now, we’re just watching the trade summit, tomorrow’s Fed meeting, and the government shutdown — all mixing together in the sandbox. Despite it all, the Treasury and MBS markets remain steady.

Yesterday’s 2- and 5-year Treasury auctions saw lower-than-normal demand, which isn’t ideal for rates. Those shorter maturities compete more with ARM pricing than 30-year fixeds since ARMs tend to pay off quicker.

Now, a quick side note: the M2 Money Supply Index comes out today. Think of it as a snapshot of all the money circulating in the U.S. economy — not just what’s sitting in checking accounts (that’s M1), but what’s in savings, CDs, and money market funds that can quickly turn into cash.

M2 came in around $22.2 trillion in August, up roughly 4.7% year-over-year — a far cry from the flood of cash during the pandemic, but still a healthy flow.

So why does that matter to us in the mortgage world? Because M2 gives the Fed a pulse on how much liquidity is out there — and that feeds directly into inflation and rate decisions. More money means more spending and pressure on inflation; less money means cooling conditions.

Today’s report probably won’t shake mortgage pricing much, but it’s one more clue about how much fuel is left in the tank. It’s also a great talking point with clients and referral partners — something few others will mention. Another feather in your cap to show you’re tuned in beyond just quoting rates.

DYK – Mortgage Playbook:

OMITTING PENDING SALE

Here’s a scenario that comes up more than you’d think: your borrower is buying a new home, but their current home hasn’t closed yet — it’s under contract and pending sale. The big question is, can we leave that existing mortgage payment out of their debt-to-income (DTI) ratio?

Good news — both Fannie Mae and Freddie Mac say yes… with a few conditions.

For Fannie Mae, you’ll need two things in the file:

Once those are in place, you don’t have to include the current home’s mortgage payment in qualifying.

Freddie Mac plays by almost the same rules but gives you one extra path. You’ll need:

Freddie also has a small bonus rule: if your borrower is being relocated by their employer under a qualified relocation program, that existing mortgage payment can be left out as long as the relocation requirements are met.

In short: both agencies let you exclude the old mortgage payment when there’s an executed contract and you’ve shown the deal is firm. Freddie just adds the option of using a lender commitment or relocation program.

So, if your borrower’s current home is set to close within 30 days and you’ve got your documentation in order, you can confidently move forward without that extra payment weighing down the DTI.

Just make sure your file tells the full story — contract, contingencies cleared, and timing lined up — and you’re good to go.

Jackism – A Thought For Today:

CURSE OF MORE

Last night I had a moment. I’d just shut off the TV, locked the doors, and grabbed my coffee mug — ready for my 4:30 AM start this morning.

Just as I headed upstairs, my phone rang. One of my long-time clients. It was 8:15 PM — yep, I go to bed that early. I almost ignored it, but after 18 years of doing business together (and a lot of late-night calls), I picked up. We had a nice, short chat. “Good night, buddy.” Click.

As I walked up the stairs, something hit me — I’ve got it really good.

The company I work for. The people I work with. The clients who still trust me after all these years. Sure, my volume is lower than it used to be. My income too. But maybe that’s not a bad thing. Maybe that’s a gift.

I used to think more was the goal — more clients, more loans, more recognition. But here’s what I’ve found: more often brings less.
Less time. Less peace. Less joy.

Today, I get to work with 20 to 25 companies I actually enjoy. People who know me, trust me, and don’t yell at me for things I can’t fix. We’re in it together. And you know what? That’s enough.

I could go all-in again. Chase growth. Try to be number one. But why? Top 10 sounds just fine.

So tonight, as I turn in, I’m thankful. For work that matters. For people I like. For the simple peace that comes when you stop chasing more and start appreciating enough.

If you keep reaching for more, ask yourself — what will it cost you?
And will the “more” you gain give you less of what truly matters?

I love Jesus. I love my wife. I love my family. And I love this season of life where doing less somehow gives me more. How about you?

Good night, friends.