Daily Rate Briefing:

RATES HOLDING GROUND

Most loan officers can’t clearly explain where a mortgage payment actually goes, but after 18 minutes today, you will. I am breaking down escrow, where interest flows, how Fannie Mae, Freddie Mac, and Ginnie Mae get paid, and how Wall Street slices one payment into different investor returns. This is one of those topics that makes everything else click.

Register here for Ride With Jack Mortgage Tours: Follow The Money – This Morning 10:45 AM Central Time – Anyone is welcome.

So, on to the MBS market. As you may have noticed, I was on vacation last week so no morning updates last week. We’ve been fairly steady without much turmoil since April 8th as the Strait of Hormuz stalemate continues. To put that in perspective, yesterday’s close was identical to April 9th close. Plenty of volatility in between, but we’re ending the month right about where we started.

The stock market has told a different story. After recent highs, we’re up roughly 4,000 points over the last 30 days. That’s a solid run, and the fact that mortgage pricing hasn’t taken a major hit alongside it is a positive. Not a bad time to take a look at your investments.

Oil is a bit elevated, sitting just under $100 a barrel. Close enough to matter, but at least we’re still under that psychological level.

One upcoming change to keep on your radar. This is Fed Chair Jerome Powell’s final FOMC meeting this Wednesday. His term runs through May 15, 2026. That said, markets will still be watching closely this week as expectations and tone from the Fed can always move rates. Kevin Warsh is looking to receive Senate Confirmation to replace Powell after May 15th.

What to watch this week. Iran headlines, Wednesday’s Fed decision, Thursday’s GDP and PCE which is a key inflation read, and manufacturing data on Friday. Not a slow week. Stay aware if markets start to move.

Keep originating and know you got what you got. The only thing you can control is how you adapt each day to every moment and opportunity.

DYK – Mortgage Playbook:

SCORE KILLING DEALS

Here is a little secret you likely have never thought about. I do both agency and NQM loans these days as an AE here at AD Mortgage and boy do I wish I had these options earlier in my career. I am willing to bet that a majority of you do not realize the options you have. Here is one that hopefully makes you go hmmm.

Using NQM loans when an agency deal is getting hit with high LLPAs or refer findings because of a lower score co-borrower.

Here is how NQM works at AD Mortgage. Not all lenders do it this way.

On NQM DTI loans, think Bank Statement, ITIN, P&L, Full Doc, 1099, WVOE…

The score that drives the loan is the primary wage earner.
The borrower with the highest monthly income, NQM uses their middle score.

Not the lowest score on the file. Not an average. The middle of the primary wage earner.

On Non-DTI loans (DSCR).

We use the highest middle score of all borrowers. This is huge if you are doing an investment property conventional with a lower score co-borrower.

All borrowers still need to meet the minimum score for the program.
But your LTV, pricing, and overall qualification follow the allowed score.

If a co-borrower is holding back an otherwise solid deal, and you have good LTV or down payment.

NQM can be a different path using the same borrowers.

Jackism – A Thought For Today:

OFF GRID PEACE

As some of you know, I went on a 7-day Caribbean cruise last week and decided to truly disconnect, which is not easy when your phone is your itinerary, clock, and connection to everything happening on the ship.

So, when we boarded Sunday, I turned my phone off and did not turn it back on until we returned to port the following Sunday. No texts, no calls, no schedules, no pictures no checking in. Just turned off. My wife did the same thing with her phone. Both of us. Off the grid.

We traveled with another couple and had no way to find each other, so if we ran into each other, we ran into each other.

And here is what surprised me. Here is the lesson and the truth that I learned. We had zero stress the entire week. Yep, not many other lessons learned. Only a week of completely zero stress.

That got my attention because my world is built on urgency. I put out fires for a living, where everything feels important and needs attention right now, yet even removing access to my family and friends created no stress. They knew where I was and could reach me through the cruise line if something truly mattered, and the truth is in a real emergency there is nothing I am going to fix better than 911 anyway.

So what was I really holding onto? Control, access, and the illusion that I always need to be available. This is not news to anyone. What it is though is actually doing it.

I have been testing this in small ways for quite some time. By leaving my phone at home if I take my wife out for lunch, keeping it on the charger in my home office if I need to do a short errand, and leaving it upstairs in my office at night while I am downstairs with no knowledge of what is coming in. I do not know what I am missing, and that is exactly the point.

Sitting on that ship watching almost everyone still tied to their phones, I just smiled. Not judging, just noticing how good it felt to be where my feet were.

My biggest stress all week was figuring out what to do when nothing needed me. That is a different kind of problem.

Here is the takeaway. Peace is not found when everything around you calms down. Peace shows up when you stop letting everything around you take away your calm.

Give it a try. Even if it is just for an evening, leave your phone in another room and watch how often you reach for it. You might be surprised how attached we really are and how much lighter life feels when we are not.