Daily Rate Briefing:

CALM AFTER STORM

Yesterday the mortgage market took a hit, but this morning we are seeing a little green on the screen. This is what I call the calm after the storm.

We lost 37 basis points yesterday. That translates to about $370 worse pricing per $100K in loan size for the same rate. This morning we are up about 12 basis points. That puts us still down 25 basis points from Tuesday’s close. Not great, but a lot more tolerable than where we were yesterday. Earlier this morning we were up 22, so we will see if we can claw some more of that back.

On the government side, we gave some up yesterday but gained it back overnight. Net result is we are essentially flat since Tuesday. Small wins.

We lost 300 on the DOW yesterday and this morning are up 365. We shall see where the day brings us in stocks.

So what actually moved the market?

Geopolitics stepped in. There were comments about potential re-engagement with Iran and possible military action. Oil reacted and is holding around $105 a barrel. That matters because energy feeds directly into inflation.

At the Fed, no rate cuts. Fed Chair Powell made it clear inflation is still running hot, largely tied to energy. He also indicated he plans to stay on as a governor after his Chair term ends. Meanwhile, Warsh has been confirmed as the new Fed Chair, so that transition is moving forward.

This morning’s data was mostly as expected. GDP came in right in line. The bigger focus was PCE (Personal Consumption Expenditures), the Fed’s preferred inflation gauge. Core PCE, which strips out food and energy, came in at 0.3%. Headline PCE which includes food and energy aka oil came in at 0.7%. Both were right on expectations.

When you annualize that, you are looking at roughly 3.6% on core and about 8.4% when including food and energy. Year over year sits at 3.5%. Again, nothing surprising but still high and not good for mortgage rates.

And when data meets expectations, you typically do not get big market moves. That is exactly what we are seeing this morning.

A quick note for your business. Mortgage applications were down 1.6% overall. Refinances dropped 4.4%, while purchases increased 1.1%. Translation. The purchase market is where the activity is right now. That is where your focus and your messaging should be.

DYK – Mortgage Playbook:

ASSETS SAVE DEALS

You ever have a deal that should work, but the income just does not quite get you there?

Not a bad borrower. Not a bad structure. Just tight on DTI.

Before you start changing the loan, cutting borrowers, or chasing a different product, look at the balance sheet.

Asset utilization is not just a guideline. It is knowing when and how to use it.

When does this make the most sense?

• Retired (62 or older) or near-retired borrower with strong assets but fixed income that will not stretch
• Borrower showing income on paper that does not reflect their true financial strength
• Deals where you are just short on DTI and need a clean, simple bump
• Situations where you want to avoid moving to a more complex product

Now here is the part most miss. Not all asset utilization works the same.

With agency, Freddie tends to give you more usable income because it spreads assets over 240 months instead of stretching it across the full loan term. Same assets. More monthly impact. Also, can use checking, savings accounts. That alone can be the difference.

And do not overlook this. There is no minimum asset requirement anymore.

You do not need a massive portfolio to make this work. Even moderate assets can create just enough income to get you across the line.

Then there is the NQM side. This is one of my favorite AD Mortgage products to present.

This is where asset utilization becomes a true strategy.

• No age restriction
• Shorter 60 month calculation window for income
• Ability to use a large portion of total assets

Which means significantly more qualifying income in the right scenario.

Simple way to think about it.

Agency helps you nudge a deal across the finish line.
NQM can completely reshape the file.

If you have a deal that is close and the borrower has assets sitting there, do not overlook this.

Sometimes the income you need is already in the file. Got questions, scenarios? Just hit reply and ask.

Jackism – A Thought For Today:

LIFE MATH CHECK

I had a moment this morning. The kind that makes you stop and really think about how you’re spending your life.

My day starts at 4:00 AM and I wrap work around 5:00 PM. I’m disciplined with it. I love my mornings. I get more done before 9:00 AM than most people do all day and I was not even in the Army.

Then Misty and I wind down early. We’re usually in bed between 7:30 and 8:00.

So when I actually did the math, it hit me. I’m giving about 13 hours a day to quiet time and work,
and about 2 to 3 hours to the one I love most. That doesn’t sit quite right when you say it out loud.

Then I thought about my late-night friends. The ones who give me a hard time about going to bed so early. And I laughed… but then I got curious. What if I flipped it? What if I worked a simple 9 to 5?

I could stay up until 1:00 AM, still get my 8 hours of sleep, and all of a sudden, I’d have 8 hours for work, and 8 hours for life. Eight hours with my wife. Eight hours with the people that matter most.

So I asked myself a hard question. Can I get done in 8 hours what currently takes me 13? And even more important, is the extra work worth the trade?

Work matters. It provides. It builds. It gives us purpose. But it’s only worth it if the life we’re building outside of it is strong.

We fill our calendars with work, commitments, responsibilities, even good things like community and hobbies. But how much time is left for the people we promised our lives to?

Not distracted time. Not “in the same room” time. Real, one-on-one, present time. For those with kids, I’d challenge you with this too. How much time is just you and your spouse? That number can get real small, real fast and can be a painful awareness. I love empty nester life.

So today, I’m not becoming a night owl. I’m not changing who I am. But I am taking a hard look at how I’m using the time I’ve been given. Because the goal isn’t just productivity. It’s presence. It’s making the moments we do have more intentional, more memorable, more meaningful.

So here’s the question I have today.

If someone looked at your calendar, your habits, your daily rhythm. What would they say your priorities really are?

For me, I want to do better, and I want more time with the ones I love.

What does that look like for you?