In this episode of Optimal Insights, Jim Glennon invites Mike Vough to share insights from the MBA Chairman’s Conference, highlighting key themes discussed among industry leaders, including the growing influence of AI, evolving credit models, and the importance of delivering a differentiated borrower experience. They explore how concepts like the “eight Ds” of real estate transactions reinforce that mortgage demand is driven by life events beyond interest rates, underscoring the need for a more consultative approach.

James Cahill and Alex Hebner also cover current market dynamics, including inflation trends, geopolitical developments affecting oil markets, and expectations for Federal Reserve policy. They examine how recent CPI and PPI data suggest continued pricing pressure across sectors, while global events may influence the pace of relief in energy-driven inflation.

Additional discussion includes regulatory and policy topics such as Basel III implications, title insurance considerations, and ongoing conversations around credit scoring methodologies. The team emphasizes the importance of adapting strategies to a purchase-driven market while leveraging technology and insights to better serve borrowers.

Key Points

• Mortgage demand continues to be driven by life events beyond interest rates
• Inflation remains elevated across sectors despite potential energy relief
• Industry leaders are focused on AI, credit evolution, and borrower experience

Chapters

• 00:00 – Market Update and Inflation Trends
• 05:30 – Fed Outlook and Oil Market Developments
• 14:00 – MBA Chairman’s Conference Insights

Optimal Insights Team

• Jim Glennon, SVP, Hedging and Trading Operations
• James Cahill, MSF/MSR Account Manager
• Mike Vough, SVP, Corporate Strategy
• Alex Hebner, Hedge Account Manager

Production Team

• Executive Producer: Sara Holtz
• Producers: Matt Gilhooly & Alex Kreuter

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

Welcome to Optimal Insights. I'm your host, Jim Glennon, Senior Vice President of Hedging and Trading Operations at Optimal Blue. Our clients and industry partners have long relied on Optimal Blue for trusted insights and commentary. And these podcasts are an evolution of our commitment to keeping the industry informed. Let's dive into today's episode.

Welcome everybody. We have a great show for you today in the interest of making sure you know what to watch out for as an originator, a capital markets person, or just someone interested in the mortgage industry, and some great commentary. Stay tuned. We've got some good subjects coming up. We will kick it off as always with a timely market update. And then I get to talk to Mike Vogue, our head of corporate strategy, who was representing us at MBA's chairman's conference last week in the great state of Maine.

So we'll talk about some highlights there and some things he learned and some things I think will be very interesting to all of you. though, in the way of just high level data, our OBMMI, conventional 30 year, still hovering around that six and a half mark. You know, as long as the this uncertainty around the war in the Strait of Hormuz exists, we'll probably be about in that range. Ten year, again, about two points lower. Ten year treasury is about four and a half percent. hasn't quite breached that.

previous record yet, but still hovering around that four and a half mark. Let's talk to James and Alex now and see what's going on in the market.

morning Alex. morning it's just myself, James Cale, and Alex Ebner. ⁓ Jim is out of the office, so we'll be tackling the econ updates. Luckily it was weekend, no, you know, world changing events unless I blinked and missed something. Anything, Alex?

thanks, James. was some developments over the weekend. seeing the the long-awaited movement on the ⁓ Iran US conflict ⁓ ceasefire peace deal. It's it's being touted as a peace deal right now, but what we're looking at that that will be signed ⁓ later this week, ⁓ so long as things go to plan, is an additional sixty day ceasefire, with the the the real ⁓ big bullet point on it being that the the straight upward moves will be will be reopened to shipping traffic.

under Iranian and Omani supervision, which is is is different than what it was before the war, but it does mean that ⁓ ships will will be in transit again, which is what the market's really been waiting for. market seems to be pricing this particular peace deal extension of the ceasefire pretty well. equities have rallied pretty strongly today. And in addition to that, the bond market ⁓ seen rates fall a little bit, a little bit of a bull steepener this morning.

But yeah, we should see ships moving again, but again at the same time, it's only another sixty-day ceasefire. And th they they need they need to continue to negotiate a full peace deal. And on top of that, ⁓ in my opinion, you know, the the real ⁓ the ostensible reason for the beginning of this conflict, Iran's nuclear program and and you know how much they are enriching uranium, that has not yet been ⁓ resolved as a as an issue on the table. ⁓ so there's definitely still some stumble stumbling blocks out there in regards to

this conflict, you know, the wild card of of the the proxy conflict that's occurring at the same time between Israel and Lebanon and ⁓ Iranian backgrounds that operate inside of Lebanon, particularly Hezbollah. so so, you know, it seems that there's maybe, you know, peace on the horizon, but I I could see us backtracking at the same time. So it's really anyone's guess at this point. but right now ⁓ it's expected that we will have ⁓ wet ink on perhaps digital paper ⁓ by Friday.

Agreed. So I I saw, you know, around Friday that we were expecting a deal signed Sunday. Sunday I saw the True Social tweet saying let the oil flow. as of this morning it seems the actual deal will be signed on Friday, assuming all things hold.

But the deal will get oil flowing again. Now, as we've been saying, it's going to take a while to get everything, spigots all turned back on, all the infrastructure that has been hit rebuilt. So this is not, even if this 60-day ceasefire, we immediately roll into another 60-day and then 120-day, and then we resolve everything. We should not expect gas prices to plummet. I have seen talk that.

Yeah, the futures are predicting prices coming down, but they might actually be a little ⁓ presumptuous or a little early, just being that the biggest stumbling blocks, the causes for the war, have not yet been resolved and agreed to. But hopefully that's a smooth path over the next sixty days.

Hopefully so. Hopefully so. I'm with you. it should be it'll be a it won't be a fall off the cliff in regards to energy prices. It'll be a a slow and steady decline, which if you look at futures contracts on on oil, you that that is reflected pretty well, just just kind of tailing off to the to the right. so I'm with you there. It it ⁓ this conflict and its effects will will take quite a bit of time to resolve. But hopefully we can in the meantime begin to see some relief on the inflation front, which has been, I think, the

number one domestic pressure that that this conflict has created. we got the May CPI and PPI numbers last week and ⁓ they came in quite warm, maybe, maybe hot, depending on your reading of them. what were your thoughts there, James?

last week of course was the story of inflation. So the expectation was that we're gonna land around four point two percent year over year for CPI, which is where we were. Now if you strip food and energy out of this, we're down to two point nine percent. So two point nine percent is not where everyone wants it to be, but it's not as brutal if these gas prices come back down.

The number that 2.9, if you do drill into it on the Bureau of Labor Statistics website, ⁓ you can see that ⁓ shelter, transport, and medical care all rose above three and a half percent. So what that tells me is the inflation in that 2.9% is not just

Oil and gas, right? It is actually things have bled through. It has become more expensive on the actual goods. The services are starting to raise their prices. So that's going to be a little bit stickier. That will take more time even as we progress. on the other side of this, a little later in the week, PPI, so the producer side, that was expected and did come in at about six and a half percent core. So stripping out.

oil and food is 5.1%. These numbers are much higher. This is not where anyone wants to see them. credit to the producers for so far eating this, taking it on the chin, ⁓ seeing that that number is much higher than what we're seeing in CPI, but it's nowhere near where we want to be. Again, if you look on the Bureau of Labor Statistics website, you can drill into these numbers a little bit. I suppose I would say on the upside in a way,

This number is very driven by industrial chemicals. Industrial chemicals, of course, have a base of oil, petrol, gas. So even stripping out technically food and oil for energy.

Oil has bled through in PPI, specifically in chemicals. So as those tankers get flowing again, that should begin to move. It's going to take time, but where the heart of the inflation for producers is, that is entirely around oil. That might more ratchetable in the medium term here.

Absolutely, absolutely. No, I I'm with you there and and I and I do agree. We've we've begun to see three months in here the the bleed in effect into across the board, ⁓ different different products across the numbers that are tracked for these inflation metrics. ⁓ we were saying from the get-go that ⁓ you know hydrocarbons are essential to modern life and and that it wouldn't just be limited to to fuel prices, that it that it would eventually be seen in just about every sector.

turning towards this week, we are looking at I think the number one thing that everyone's looking forward to, keeping their eye on, is Wednesday. It's ⁓ the FOMC decision. are not expecting any change to that federal funds rate this time around. In fact, on the back of the peace deal we were just talking about, ⁓ it's expected that the the the rate hike that was expected for late in the year, perhaps December, actually has been kicked out a little bit.

He will be deferring in the way he acts in regards to ⁓ his successor, pal, how he answers those questions during the press conference. And ⁓ what I'm especially interested in seeing is his new toolkit. ⁓ there was a lot of questions during his ⁓ congressional testimonies on on what he would do to make ⁓ make over the Fed. He has ⁓ really said they they need to kind

Stop looking at so many backwards ⁓ data points. He he he definitely wants to make the Fed nimbler, more lean. and then the one thing that I'm keeping my eye on is if he's going to use ⁓ I kind of see as his ruler for inflation, which is it's called trimmed mean PCE. this is a number that's put out by the Dallas Fed. And essentially, you know, give or take a few percent, it whacks the top third and the bottom third of.

those inflationary items from every report. And so you end up with just the middle third of of items and how much they changed. to give you kind of a some context to where trend mean PCE lands in comparison to your your base PCE and your core PCE. Right now, the PCE number last time around came around 3.6, 3.8%, I believe.

And right now the trimmed PCE number for the last release in May came out at 2.3%. So so over a full percentage point difference. by that ruler, we'd be showing that we're trending ⁓ near near near that two percent target inflation. I'm yet to be convinced on this one, and and I do wanna see if Warsh is even gonna pull it out of the toolbox and and reference it. ⁓ so that all s stands to still be seen.

So I suppose the argument on this trimmed mean is, hey, there's these outliers around the far edges that we really shouldn't consider. ⁓ random days that are a little too high, number comes in a little too hot, so strip those out. And in doing so, it reduces the mean quite significantly and puts us at, you know, much closer to the target.

Correct, correct. The idea behind it is that it strips out any sort of geopolitical tensions. If it's it's it's filtering out the oil shock entirely so far. as as you were just covering, we're beginning to see the costs of of raw fuel and raw hydrocarbons bleed into industrial products and in the sort. but that hasn't yet been reflected in that trend being PCE number, the latest of which came out at the end of May. might see that pop a little bit in June.

in in line with what we saw from CPI and PPI in June. but that still remains to be seen. and yeah, just to just if you want to get into the real nitty-gritty of it, Tremmean PC on average takes off the top 31% of items at the bottom 24%. So it's actually understating a little bit. It it is biased a little bit to the underside as it's it's removing less of the the downside items from the number.

So again, it just remains to be seen if if Warsh is gonna really pull this one out of his toolkit, but that's what I'm looking for from this meeting.

Definitely that it would be an interesting change to how the regime works there. If that gets pulled out, that's the new measure. It I'd I'd be interested in how he'll sell the rest of the ⁓ governing body there on it. But something to look forward to.

Absolutely. Absolutely. It remains really to be seen how how hawkish or dovish it will be. He's been dovish throughout his life. ⁓ so we'll have to see how he's currently viewing today's situation.

Well that might be the ⁓ the end of our major topics. A lot to look forward to. Hopefully, you know, come Friday we'll have settlements, oil will start flowing, we'll get, you know, the wheels greased, moving a little bit healthier again. I'm sure we're all looking forward to peace. any other major items from your end, Alex?

not outside the normal course of events, we will get ⁓ initial jobless claims, which have trended up just a little bit recently, just about to scrape two thirty, I believe, last week. And the expectation this week is two twenty-nine. so keep an eye out there. we're seeing re-emergent labor market concerns, but aside from that, this should be a pretty quiet week outside of that Federal Reserve meeting.

And a ⁓ short week at that as well. Anyone following the SIFMA calendar, we will have Friday, Juneteenth, off this Friday. So it'll be nice to get a three day weekend and then you know, coming into it, two weeks away, America's two hundred fiftieth anniversary, fourth of July coming up.

Looking forward to it.

Well thank you very much for the time, Alex, and I'll talk to you next week.

As always, appreciate it, James. We'll talk soon.

Okay, as promised, our own head of corporate strategy was at MBA's chairman's conference this last week in Maine. This conference is one of those that seems to fly under the radar a little bit. I honestly did not know this very specific conference existed, but it's definitely been out there for many years. Ton of influential people there ⁓ from our industry sharing ideas. And I'd love to get a little peek into that with Mike. So welcome, Mike. Thanks for being on the pod again.

thanks for having me, Jim. Yeah, it was a it was a great event. It was the first time I've attended this one. It's a it's a little bit of a smaller, ⁓ a smaller audience and it's it's focused for C-suite and senior executives at both mortgage lenders, tech providers, and ⁓ folks who are working within the MBA. not one of those conferences where you have 20 or 30 meetings over a two or three-day period. It's a little more kind of like focused on naturally

Networking, which is a little bit of a change for some of these conferences that we go to where you're speed dating the whole time. with that like senior level of people in place and of those guidelines, it's it's a little bit more relaxed, but we're talking about a lot of the trends and that could be impacting ⁓ the mortgage world these days.

Mm-hmm.

That's great. Yeah. I I I went to one in in Beaver Creek, Colorado, right up the road from us here. It was the midwinter conference. And I think it was pretty similar. It was tended to be exec types. It wasn't a ton of there wasn't like an exhibit hall. It wasn't sessions all day long. It was a lot of networking, but also a lot of really good like the sessions that they did have were were pretty amazing and very I don't know, you felt a little bit like you were getting a little inside baseball because it was a more intimate group.

of people and it was a little bit interactive. I thought that was cool and and the obviously Beaver Creek's a beautiful spot. You were in Maine, right? Which that looked I saw some of the pictures on online. That looked pretty amazing.

Yeah, it was a fantastic venue and it was a beautiful time ⁓ of year up there in Maine right now. So it was in Portsmouth, Maine, which is about an hour south of Portland. So I even rented a car. I haven't rented a car in years. flew into Portland and then rented the car and drove down and definitely had some great couple of the sessions where the you know senior folks at the agencies spoke and when when Bob Rokesmith gave his kind of like policy state of the union, they they asked us to keep a lot of it inside those four walls. I'll I'll

try and share what I can but it was one of those things where folks are getting quite candid about opinions on the industry and but you can't really break that that trust or you lose that candidness right so there's a a little bit of give and take there but it it was really helpful to be in there as we kind of think about our our strategy here at Optimal Blue going forward. So it's really awesome to have that those insights.

Yeah. Yeah, it's that inside baseball, right? So believe Zach Cass was there and he gave a presentation. So he was formerly with OpenAI. That's a pretty cool get, I think, for the NBA and for that conference. Like what'd you think of that ⁓ presentation?

It was quite memorable. read a lot of books and before we went in there, they were passing out free copies of his book, and I kind of just pushed it to the side. I was like, I'd I've got enough things I'm reading right now. I don't need another thing to add to the the list of books I don't finish. And ⁓ after the presentation, I ran for his book. It it was one of those where know he asked everybody to turn their phone down like over g and get really ⁓ invested in the presentation. And he formerly was the head of go to market at

Yeah.

Open AI, and you know, I think he kind of deems himself like an AI futurist. And the big things that he took away that he wanted to kind of plant in our heads were were both the to to kind of be a little bit of both of an AI doomer ⁓ and also optimist. And so, he would talk was talking about things such as: hey, like, you know, anybody who tells you how busy they are, go look at how much time they spend on their phone.

Mm-hmm.

And the idea being is if you're so busy, you wouldn't have five to six hours of a day spent on your phone, or however many how many hours you spend a day, right? the importance of the physical world, which I think is an interesting thing for us to think about as people in the mortgage industry, like the desire for housing, even in a world where AI is more ubiquitous and out there, it's probably not going away. ⁓ and then also like what we what we know and understand not only about AI today, but also

how we think it could be like the idea of screens and social media can be impacting ⁓ our children and generations coming forward. So he he he recently, Zach recently has had his first child and that kind of has been like an awakening for him in terms of of the impact of screens and social media and and AI as well. And I thought I I definitely sympathized a lot with that with having three young kids of my own and you know we're trying to figure out the right amount of screens. It's impossible to escape. But

But

it's you also don't want to just let it run rampant, because you know, sometimes when we get off our trips and off the top the tablet away from my kids who d normally don't have one, they're like zombies, man. You have to kind of like bring them back to reality. it takes a couple of days to do that. But but generally it was just a very thought provoking I'm I'm really excited to get through his book next on my list. And you know, I I sometimes these presentations that you get from you know celebrities.

celebrity type people at these conferences, they could either, you know, say a lot or say a lot but say nothing. And this was one of those where I I I have a a whole page of notes. One of them which I I I put on my LinkedIn post was the screen is a demon. And like that was that was an interesting

Mm-hmm.

Yeah.

One, I think I'll be saying that in my house when my kids are at begging for their tablets. and just in general, you know, we have to consider a world where, hey, we're all stuck to our computers and our and our screens. Well, what happens if we don't need to do that? Like, where are we gonna find value? Where is this next like renaissance gonna come from? And that's the title of this book, The Next Renaissance. If we're all like unshackled from computers and screens because of AI, does that allow for a world where

we could we could spend more time on the arts and the humanities and and and things like that. So it was a an interesting way to think about it, especially for somebody who's like poured his life into screens as a as a professional. What will I do next if I don't need to be in front of a screen?

Yeah, that's I mean, that that take has been out there and it it's I mean, first of all, the the the screen thing, the screens definitely turn my kids into demons. They wouldn't like me saying this and one of 'em's actually here right now, that my ten year old. she spends a weekend on the screens cause we're busy, we're doing stuff, you take it away Monday, she turns into that, right? And I think we're we all have a little bit of that addiction in us and it it can get with kids, they don't know any better, right? It's they like it, it dopamine's their brain. You take it away, it causes a problem.

but I also like the conversation. And we could have many podcasts about this, and many podcasts have have already kind of contemplated this and nobody knows ultimately how it will play out. But it it is interesting to think that we could go the other way with screens because the AI is doing the work. We don't need the screens, we don't need to be on the screens, except maybe for some form of entertainment. But then what do we do with our lives? That's that's always that's the question that scares everybody a lot, I think, is what does life look like when you

What's your purpose if the AI is doing all the work and we're super productive somehow as a nation, as a country, as a as a world, a I again nobody knows the answer, but it is is he what what's his you said he was kind of optimism, but also doom. Like what's the doom scenario for him, do you think?

Yeah, I think the doom scenario is mostly, us as a as a population potentially getting dumber, AI. ⁓ you know, he has a a whole slide in his presentation about the moody the movie Idiocracy. I don't know if any if if if our listeners have ever seen that. he is quite concerned about just like a lot of the testing scores that are being tracked out there for

gen Z, the Gen Alphas, it does seem that yeah, at least the way that we tracked intelligence previously, ⁓ seems the testing scores are going down, comprehension's going down. just saw a tweet this morning where some professor at some college was quoted saying that hey I used to assign a hundred pages of reading a week I now only assign 35 pages of reading a week.

Hm. Cause that's all.

And so the the fear

there is just that AI makes us dumb. which sometimes I find myself even thinking that today when I use Claude or OpenAI or any of these products where I'm like, instead of like doing this the old-fashioned way, I just ask Claude to solve my problems for me or find me the research or find me the information. There's a counterbalance there, because I've been so part I've been in my career for a while now. I'm a little I'm established, but if you don't like get those bumps and bruises from learning how to do things and like

Yeah.

And taking one step back and two steps forward, and vice versa. Like, does that stunt your development? I I I could see that potentially, but that was his main concern.

Yeah, it's a muscle that that we we used to have to use all the time to be creative or to come up with something simple like a a an outline for a presentation and and now that kind of just happens and you get to move on to the next thing, which is cool, but it does ⁓ you don't you're not flexing that muscle as often as you could be. And yeah, I love the idiocracy I'm overdue to watch that movie because people have brought this up over the past couple of years, just how it's

amazingly right? It's it's coming true, and that movie is at least twenty years old, I believe. So

Yeah. There's a ⁓ there was a scene making the rounds on online recently, 'cause I think there's been some talk out there about just like declining birth rates. And there's a really funny scene in there about who are on one end of the spectrum not having children and people on the other end of the spectrum having a lot of children. And it's ⁓ it's just like a funny it was portrayed in like a really funny way. you know, I think it there's a lot of through lines to that movie today, which is like quite quite interesting.

No.

Spooky man. All right. Well, that's it it's cool that that Zach kind of came in broadly, right? It's I think it's a little bit even more difficult to try to predict what AI is gonna do for our industry or even the finance industry or real estate. So he went kind of broad. He went, What's it gonna do to the planet and people and children? What's it doing to children already? that's just an interesting keynote. That's that's fun that he was there to to speak. So

Sounds like a great conference. And and you you were in a a panel as well. You were on a panel a couple of folks and it sounds like there was a pretty good discussion that was had and you you had a couple of takeaways that you thought might be interesting for our listeners around I believe it was the eight D's of real estate.

Yeah.

so I I shared the stage with Graham from from Stratmore we basically took a version of a presentation that Garth did at our summit that Opmo Blue hosts and we adjusted it for this conference and updated and co-presented.

With with another another person who was man moderating the panel. And the idea here that kind of generated the eight D's of real estate transactions, which I'll get to in a second, is this idea of how to differentiate yourself in this new world of AI and technology. there's this ⁓ this book by this gentleman named Will Gordera, and it was unreasonable hospitality. And this idea of how do you get to that, how do you differentiate in this new world where well you have to you have to go to that next level of customer.

Customer support or ⁓ or customer success. And what we were framing this was the you know the loan officers and folks on the production side who are gonna differentiate themselves in the future are the ones who go above and beyond with support and advice and and making the transaction feel very special. And in a world where rates rates are trending up, you know, the folks who just focused on smiling and dialing for refines are probably not gonna be successful. So one

of the big keys on why we thought the eight D's wasn't was important was going back to this why, like why are people doing this? You know, very you know, very ⁓ infrequently if you try to apply for a mortgage online, you know, they're asked they ask for all these documents, they ask for all these questions from you, but they really ask you why. Like, why do you want to do this? And so ⁓ Garth's been working on this idea of the eight D's. And so some of these I've even said before,

Mm-hmm.

when talking about like the difference between of rate or prepayment versus life effects, right? And there's always been this idea of like a natural four of like a CPR or a prepayment rate due to these factors. And so the eight D's we have diapers, right? So people having new babies and needing new space. We have we have divorce, which is like the splitting of households. have downsizing from empty nesters ⁓ who are retiring.

right? Closer to work or remote work, we've seen a bunch of trends. have death, right? So you have estate sales or or any type of inheritance. diamonds, right? It kind of goes maybe hand in hand or maybe a precursor to babies, but marriages and new couples. you have debt, so financial stress. And then and then the last one was good, right? So you just wanna you've been doing well professionally and you have the ability to to upgrade a home, or maybe you get a second home.

Sure, marriage. Yeah.

Hm. Let's see.

And so there's these non-rate-based factors that drive people to buy new property. And in the mortgage industry, I feel like we sometimes get down in the dumps because ⁓ rates are up on their 50 basis points. And this like siren song of easy refines is a little bit further away from us. But there's still a lot of like natural flow.

In the business world from just these transactions that are life events, right? Like there's always new houses, new households being formed or dissolving. There's always people ⁓ being born, people passing away, people doing well, people not doing well, maybe from a debt standpoint. There's a lot out there still. And so it shouldn't just be all storm clouds and rain and shadows because rates are up a little bit higher. loan officers and production folks who are doing well really understand that why.

And so that was kind of like our challenge to the audience was, you know, when you go back, make sure that you understand that why and being able to present different scenarios. And this is where I I brought in things that we're doing really well at Alpha Mobile Blue, ⁓ using our originator assistant, using our our product capture for originators, clearly presenting all the different options that folks have, but then also being able to advise them on the things that they're just missing, right? Our originator assistant helps loan officers.

You know, know about those products that might save them a little bit more if they just did X, Y, and Z, maybe from a credit perspective or from a down payment perspective, or any loan characteristic. So being able to kind of show this like theoretical thing that folks should think about and then get it down to like a practical, how do I do this in my normal day-to-day by blocking and tackling using technology?

Yeah. I mean the loans are out there, right? We talk about it a lot on the podcast and just need to get creative around it and and potentially use the right tools to to find the right ⁓ borrower, find the right borrower to contact, or find the right product for a borrower. And I love the eight D's. That's that's creative. again, we talk about it a lot here.

Buying houses for all of those reasons that you mentioned and pe or or they're refinancing debt because that's one of the one of the D's. So I yeah, I love that take on it. It is it is not I don't think it's overly optimistic. I think we see it happening. People just need to focus more on what you c can control, which is the people that are that are making a move and how do we help the best way we can.

Yeah, Mike Frantantoni, the ⁓ chief economist for the NBA, who I'm sure everyone listening knows, ⁓ he presented ⁓ a couple a couple couple things. One of them was ⁓ he he did use a couple of of Optimal Blues charts in his presentation, one talking about non-QM, which was a great to see. And the other chart he showed was just basically volume trends. And yes, we're materially down from 20 and 21, but we're not that far away from 2018, 2017, 2019 levels of.

Love that guy. Yeah.

volume so so yes there was this this big boom but we are kind of in that we're almost in that new normal I would say like it it wasn't we're we're maybe ⁓ a half point to a point maybe higher than where we would want but you know if we were if we stayed at that high five from an optimal OBMMI perspective I think everybody would be pretty pretty happy with that

Yeah. No, the market was screaming. ⁓ it was moving pretty well early first quarter, late fourth quarter of last year. And and obviously, yeah, half a point makes a difference. And we will probably get there at some point. I just don't know if it's gonna be in the next couple of years. But yeah, that's a good that's a good take. So, I mean maybe to close it out, what what was the

What was the highlight? What were some of the highlights for you? Like what was the one major thing where you were and maybe it was the AI discussion, maybe it was the eight D's. Is there something else that you found really interesting that happened or that that you witnessed or talked about at the conference?

Yeah

I'll I'll probably pick on two two things that c that came up in a in a couple of different venues. had ⁓ these like closed door sessions with folks from the MBA and and Bob Brooksmith speaking, giving us the insight on policy. We actually also had Sonu from Freddie Mac and Jake from Fannie Mae, both the heads of single family for both those institutions there talking and you know what were a couple ⁓ like policy things that kind of stood out. Obviously, a lot of talk about folks are

are looking at you know all the different ways to look at both FICO and Vantage. You know, the other interesting tidbit that I don't think I ever realized but ⁓ came out during these conversations is that both like Fannie and Freddie both have their own internal kind of like credit scoring methodology. Yes, they price off of FICO and or Vantage, but when you run a loan through DU or LP, they they come up with their own credit risk metric that is completely different than FICO or Vantage that they use

For decisioning internally. That was interesting when that came out because there were folks in the audience who were like, why don't we just use those? Like, why do we have this disconnect then with with pricing? So that was so that was super interesting. And ⁓ and obviously credit's just it's it's at the top of tip of everyone's tongue right now. other areas that I thought were were were interesting that popped up were

Yeah.

I didn't know that, yeah.

Definitely some some talk about Basel III Endgame. I know the MBA has put out a bunch of comments ⁓ about that as a comment period ends. I think that the fear there is just another additional cost kind of getting pushed down you know people who are hedging in that world because of the capital requirements increasing for banks. And while they may not be originating as much as they used to, they a lot of those banks are providers of liquidity, you know, either through warehouse or through.

you know TBA trading out there. So I think folks were interested about that. And then the other last one, and this one personally impacted me recently. So I was I was nice to hear it was nice to hear about this is there is starting to gain some momentum for relief on title insurance for refinances. Fanny and Freddie are looking in the ways help there. And then also seen it where there might be some policy impacts there as well to help know

Make sense.

I did a refi in in February or March, right when rates t ticked down and I still had to pay X thousands of dollars in title insurance, even though I bought the house nine months prior. So that if you want to talk about cost to the borrower, they're gonna notice that more than a couple hundred bucks on on a credit pool. So there are there is still wood to chop there. I think the right I think the right people and the right things are are either in the room or being talked about for the industry, but there's still work to be done.

Mm-hmm.

help. And then a a lot of talk conversations about LL comp and and what what folks can do there. But that's obviously a very a very hairy issue.

Yeah, touchy subject. I mean, it you know, money doesn't come from nowhere. It's that that yeah, lowering yellow comp for refines, for instance, is something we've talked about on the podcast. Maybe the same reason that title insurance should be a little bit cheaper on a refi. There's just there's less that goes into that transaction. And maybe the borrower has done a a loan within the last couple of years and and it doesn't make sense to charge them the same amount each time you roll that that loan forward to give them cash or to to lower that rate.

Yeah, at least put a time a time requirement on. Yeah.

Yeah, I think at least the time requirement would be great. Like, okay, I I get it if you haven't, you know, done a transaction in six or seven years, but if you're, you know, refining within, you know, three years of your initial loan or something like that, like what what's changed? Right? Like, is there a reason to have to repool title? joke I make is that there's no one like on a horse riding over the mountain with the D tier house that's gonna like try and like get you out of it. So I I I I don't know.

No, it's it's an institution though and it it it just needs to some adjustment. So it and it all adds up to the bar where like you said, a few thousand bucks is a few thousand bucks. That's a ton of money over time, ⁓ that can balance out a slightly higher payment. Yeah, the credit thing is interesting. We talk about it a lot here. We're gonna have the vantage score folks on here, believe next month.

And Basel 3, we're also actually coincidentally gonna have a podcast about that. We'll have some experts on to talk about what that's really gonna mean for the industry. Because I I think there's two sides to it. there's MSR, there's liquidity, there's also investment in in MBS, which has an impact on mortgage spreads, as we know, spread between treasury and and MBS. so we'll have a couple guests on to talk through that. That's that's great stuff, man. That's that's a pretty compact conference. How long was the conference? Like how many days?

two days and it was the good thing about this was it was you had like the afternoon without any like scheduled like content. So you had like a jam-packed morning where they had all these great speakers and know scheduled from like seven to twelve. But then there was time in the afternoon to either network with your colleagues or one day I did I did more networking, the other day I did in my room just catching up on ⁓ what was going on in the world and a couple calls that I had.

Okay.

Uh-huh.

But that flexibility was super nice. It allowed you to kind of breathe a little bit and like have some, you know, work on your thoughts and work on like what, you know, different things you wanted to talk about or network. So it was a really well done event for sure.

Yeah, that's great. That that midwinter conference was very similar. I mean it was at Beaver Creek. So you you know, people wanted to do a little bit of ski, and even though we didn't have the best season out here in Colorado this year, I believe in previous years there was, you know, de very dense sessions in the morning. And then people got a chance to go out and ski together. That's a networking opportunity, but also a chance to clear your head. 'Cause two straight days like morning to night of sessions, I I believe is a is can be too much, right? Too much to to to absorb much of it or or get much value out of it.

Yeah.

Great man. Well that sounds like a great event. Really appreciate you representing us there, of course, but also coming back with some really good information to share with with our viewers and and maybe some inspiration for folks to to look into sending their execs to that event next year.

hopefully I get the invite next year.

Yeah, yeah. Thanks again, man.

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