Where R Rates / MBS Market Update

INFLATION #’S ARE IN

All eyes were on the CPI (Consumer Price Index) this morning. Read yesterday’s morning update for explanation of what the CPI is. 

We had a mixed reading, and the markets are not overreacting to the results. In the past 10 minutes we have seen the markets worsen a little bit. We went from minimal MBS losses to about 10-13 MBS losses across the rate sheets. That is $100 – $130 higher cost to borrowers per 100K in loan size.

Month over month core inflation (core is taking out food and energy costs) rose .2% month over month and 2.9% year over year. that is 1/10th better than expectation. Then headline CPI (Including housing and energy costs) came in .3% month over month and 2.7% year over year which was 1/10th higher than expectations. That is the mixed part. For verification that means overall we have had inflation of 2.7% year over year. The Fed wants to see 2% before truly lowering rates. 2.7% is pretty good though.

The interesting part is the sector where the inflation came from. 42% of CPI is made up of shelter expenses which is all things attached to housing. Within shelter expenses it was Insurance costs that rose 1.1% month over month. When you calculate that out that is 13.2% year over year increase in insurance costs. That is huge!

Many times, we receive the headline numbers and say well that is not so bad. Then you have to look at the root cause. This is what you can share with clients to show you are in the know. It will also explain why insurance costs are skyrocketing.

Stay tuned to see what happens next. We are hopefully finding a bottom to this rally we have had towards negative rates since July 1st.

GREEN is GOOD for Rates – RED is BAD for Rates

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Product & Guideline Highlights Ad Mortgage Products

MILITARY INCOME CHANGES

Each month Fannie and Freddie send out notices of changes they are making and the effective dates to do so.

I always like to update you with what is fresh off the presses.

This is not a big change, although it is one that most will never know happened.

Effective this past Sunday, July 13th this change was made by Freddie. Fannie did not announce any changes.

FULLTIME MILITARY
When a borrower is fulltime military, you were required to submit a YTD LES (Leave and Earnings Statement)AND A W2 OR A WVOE DOCUMENTING ALL YTD EARNINGS AND THE MOST RECENT CALENDAR YEAR.

As of this past Sunday you now only need a YTD LES OR a WVOE with current YTD earnings.

This means fulltime military just got a little bit easier. I think we can all be thankful when we get the opportunity to ask for less.

Jackism of the Day

WHO IS YOUR KING?

In ancient times, life was governed by the word of a king. Kings like David and Solomon ruled with unquestioned authority. When they spoke, their word became law—etched into scrolls or clay, and often sealed with the king’s signet ring. That seal wasn’t just a formality; it carried the full weight of the king’s power and intent. To disobey the written word was to disobey the king himself. There was clarity in that hierarchy. You knew who was in charge, what the rules were, and what was expected of you. Life had order because the king’s rule brought definition.

Today, we might not live under the authority of a literal king, but if you look closely, kings still rule our lives. Think about it. On a sports team, it’s the coach. In your home, who is the head of the household? In school, it’s the principal. At work, the king might be the company’s owner or CEO. In your city, it’s the mayor. In your state, it’s the governor. Nationally, it’s the president. And on a global scale, it’s organizations like the United Nations or economic alliances like the G7. Even in the digital world, tech giants and algorithms have become modern-day monarchs—shaping how we live, think, and interact. Kings come in many forms—but they still govern how we live.

Every area of our lives is influenced by someone—or something—that sets the rules we follow. And each of us chooses to submit to those rules, consciously or not. With so many voices and so many systems vying for authority, the real question becomes: Who is your ultimate king?

We all serve something. Some people follow a political leader. Others look to a mentor, a movement, or even their own moral compass. Some are guided by ambition, others by peace. Some surrender to fear, while others are ruled by love, truth, or a higher calling.

The king you choose determines the direction of your life.

This became very real for me as I was pondering something I saw and was determining what I would be obedient to. I asked myself does this align with what I know I have been created to be. It did not and I had to decide which rule and which King I was going to follow. For me it was an easy choice. I believe fully in one King and His Word is the ultimate rule that I live my life by, and I am so thankful that I do. It has completely transformed my entire life and one I will always be glad to serve under and be an heir to.

If that is not you then this does not have to be about religion—this is also about alignment. It’s about identifying who or what you place at the top of your value system. Who shapes your decisions? Who governs your character? Who writes the rules that you willingly live by?

Maybe for you it’s personal integrity. Maybe it’s your family legacy. Maybe it’s a figure who inspires you to be better, to serve others, or to lead with courage. Maybe it’s your faith or your vision for the future.

You get to decide. And once you do, clarity comes. Decisions become simpler. Life feels more intentional. Because when you know who your king is, you know which rules matter most. You live by them—not out of fear or obligation—but out of respect, alignment, and purpose.

So take a moment today to ask yourself: Who is my king? And once you answer that, commit to serving that king well—by living a life that reflects the values and truth they stand for.

We all serve a king. The power lies in choosing the right one.