Welcome to this week’s episode of Optimal Insights. In this episode, the team discusses the latest rate backdrop and upcoming economic catalysts, then turn to a housing policy deep dive with special guest Jeremey Shiers on executive orders, regulatory change timelines, and the Road to Housing Act, including the institutional investor ban debate. They share their expert opinions and insights into how these factors are shaping the industry and the broader economic landscape.

Key Points:

• The speakers review the rate environment and preview key data and events, including the Fed meeting and upcoming inflation and labor releases.
• Jeremey Shiers explains what executive-order driven regulatory efforts can realistically change, why durability matters, and what timelines look like.
• The Road to Housing Act discussion highlights reconciliation challenges, modernization areas, and tradeoffs around restricting institutional investor participation.

Chapters:

• 00:00 – Intro and rate snapshot
• 01:59 – Market update: Fed week, inflation, and key releases
• 18:48 – Special guest Jeremey Shiers joins: housing policy overview
• 20:06 – Executive orders: regulatory burden, priorities, and timelines
• 36:21 – Road to Housing Act and institutional investor ban debate
• 52:02 – Wrap-up and closing

Optimal Insights Team:

• Jim Glennon, SVP, Hedging & Trading Operations
• James Cahill, MSF/MSR Account Manager
• Alex Hebner, Hedge Account Manager

Special Guest:

• Jeremey Shiers, Executive Vice President, President of West Gate Bank Mortgage

Production Team:

• Executive Producer: Sara Holtz
• Producer: Matt Gilhooly

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

Mentioned in this episode:

Optimal Blue Study - MarketWise Advisors

Mortgage capital markets decisions have a direct impact on lender profitability, efficiency, and risk management. To better understand that impact, Optimal Blue commissioned an independent ROI study with MarketWise Advisors, analyzing data from hundreds of mortgage lenders, including banks, credit unions, and independent mortgage banks. The Optimal Blue ROI Study highlights consistent gains in operational efficiency, pricing accuracy, and financial performance for lenders using Optimal Blue technology. Key findings include an average $1,006 net financial benefit per loan, nearly 45% greater operational capacity, and strong return on investment reported by PPE clients, with results consistent across lender types. The full 2026 Optimal Blue ROI Study will be released in May and provides a data‑driven look at how mortgage capital markets technology can support better execution and decision‑making. 👉 Sign up to be notified when the full report is released: OptimalBlue.com/2026-study

ROI Study

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.

Hi, welcome everybody. Thanks for being here. We have a great show as always for you today in the interest of making sure that you know what to watch, whether you're an originator.

capital markets person or just someone interested in the mortgage industry and some great commentary. Keep listening. We'll do a market update here in a little bit with Alex and James. Of course, a ton to talk about. We got the Fed meeting coming up this week. There's some happenings over the weekend. We'll touch a bit on the conflict in the Middle East and then some interesting economic releases coming out as well. And we'll even preview a little bit of the unemployment report coming out next week.

After that, have a special guest, industry luminary Jeremy Shires will be joining us from Westgate Bank. We'll talk through some issues that are sort of flying under the radar right now in terms of laws and regulation around our industry. There's obviously a ton going on geopolitically and other things going on in the news. So we will spend a little time just focused on what's going on in our industry. First in the way of data, we have the OBMMI at roughly six and a quarter percent right now. So a little higher than we'd like to see it.

higher than that five handle that we were seeing late last year. The 10-year treasury is at 4.33. So still seeing a little bit of compression in the spread between mortgages and treasuries, but still would like to see both of those numbers a little bit lower. All right. Let's go check in with James and Alex to see what's going on in the market.

Alex and James, welcome. Excited to talk to you today. I have a few things in the news. Some of them kind of scary things, but some of them potentially encouraging. Yeah, I mean, we're, you know, not much of a reaction to the security breach at the correspondence dinner over the weekend, but that was big news. I believe that was Saturday night. That was, that was kind of scary. Hopefully you all saw that. If not, take a look at the.

at the news roundup on Sunday morning. But yeah, James was just telling me here that, you know, we were kind of contemplating what the succession plan would have been had, you know, God forbid that had gone a lot worse and ⁓ grassly, I believe you said would be running the government today. Had there been a horrific end to that situation?

Yeah, they're like...

the next in charge who wasn't in that room. if something, again, as you said, really horrific had it's like 94 year old Democratic Senator Chuck Grassley would have been in charge. So we would have had the oldest president ever again. And he would have beat it out by like a decade. So that would have been definitely more of that.

Right.

But luckily Secret Service did. ⁓

Good bit.

I did catch the runner.

Yeah, did an amazing job. Thank goodness that it worked out the way it did. yeah, that would have been, we'd be looking at a completely different world had that gone differently. So that is kind of sobering. no market reaction to that seemingly, but.

I don't know, in the way of geopolitics, is there really anything notable today in the way of the war? mean, there's more, it's just more kind of hearsay of possible discussions about reopening the strait, ending the war, but I don't know, oil's up again. So I feel like if you're following the money, there's almost no credibility to any of this talk over the weekend.

Yeah.

Yeah, we had it into the weekend looking a bit better. sounded, there were rumors that Jared Kushner and Steve McCofford headed back to Pakistan for a second round of potential peace talks. And then I think it was Saturday sometime that it was announced that those were canceled. So that's, that's led to the run of the oil we've seen, but really there hasn't been any change to the situation from, from last week. The fighting is not active on the.

Mm-hmm.

Iran, US front, there's some skirmishes between Israel and Lebanon, or rather Hezbollah in Lebanon. But from a US market's perspective, it's steady as it goes in regards to just waiting for some peace talks to develop. Then as of right now, there's nothing on the books.

All right, so we'll keep you apprised there obviously. We'll probably have a bonus cast if something big happens, but I don't know. What do you think, James? What's the best case scenario? What are we looking forward to right now with the war in the Middle East?

Yeah, I know.

you

Well,

they'll move forward, right? They'll be negotiating by phone, which that sounds a lot like ⁓ some will they, won't they romances that ⁓ I've seen people having their lives and those have been less on and off than this. It seems like we're going to be stuck here for a while, which is not good news for anyone.

Yeah.

Gas prices nationally, it's about $4.10. California and the West Coast are worse than that. The middle of the country is doing better. They're in the mid three and a halves, but still it's up quite a bit from this time two months ago. No real end in sight.

Mm-hmm.

Yeah, yeah, still almost completely choked off more than 20, 20 ish percent of the world's oil or energy, you know, unable to make it through the straight. know, you know, Denver's a little bit insulated. We have a refinery here. We actually drove by it the other day and my wife was, ⁓ you know, kind of regretting the smell that the refinery makes when you drive by. I said that, you know, that's, that smells got to be good right now. I think it's a reason why our gas is about a buck cheaper than it is anywhere else.

And I think, believe our energy exports are also up, I mean, weird kind of positive side effect because we do have, you know, produce relatively large amount of energy given the population of our country. It's not, probably not sustainable in the long run, especially when you get into the different types of oil that are traded around the world, the type that we produce versus the type that we refine. But nonetheless, again, we're a bit insulated, not just geographically, but also in terms of the energy crisis that's

going to hit Europe here pretty hard in the very near future, I think.

Agreed. Yeah. I don't know if we talked about it last week, but there's just been rerouting of ships that have been waiting to enter the straight-up form. It's all this time in the past eight weeks or so. Those have been rerouted towards, towards golf ports here in the U So yeah, it'll put more demand on U S exporters where we are in that energy exporter at end of the day. But at the same time, from everything I've read, doesn't seem that the U S oil majors are pumping at full capacity right now either. So there's probably still a little bit of supply to unlock.

Mm-hmm.

Mm-hmm.

but they're also, they're taking their profits right now.

Yeah, that's, you can kind of name your price in a market like this, right? As long as this disruption continues, we'll probably continue to see oil prices go up and that will encourage more capacity coming online, right? It just encourage more production as long as, especially if these huge oil tankers are coming into the Gulf and they're hungry for it.

All right. What did we get in the way of releases last week? Any numbers that we should be focusing on here? Maybe not just numbers. think James, you had a couple of interesting factoids from the BBC.

Yeah,

I mean, you know, the only real number from last week was consumer sentiment being revised.

It was pushed up to 49.8. It was 47.6. That's still the lowest it's ever been recorded, but we are at war and there is an oil crisis. So it makes some sense that that should be a little scanty as a number. the only real big release from last week. But I do have, know, unless you're a ⁓ big Beatles fan and you saw Ringo Starr released his latest album, ⁓

49.

Mm-hmm.

long, long road. So that's a major release from last week from my end.

That's pretty, it's pretty important, especially for the folks across the pond there. I think that's worth noting. I mean, how old that guy's gotta be? He's gotta be almost as old as Grassley at this point. And he's turning out, you know, his 22nd album. That's pretty impressive.

Yeah, he should run for Senate.

You

Uh, this week, we've got a few things this week. We've been talking about the Fed. We do have the Fed meeting coming up on Wednesday. I mean, roundly expected to be kind of a nothing event. I think other than it almost certainly at this point being Jerome Powell's final meeting as the chair of the Fed, no rate cut or rate hike expected.

Maybe a change in language, hopefully something around how the Fed is viewing energy prices and just general economics around the war. But anything else you all think we should be paying attention to in this FOMC announcement on Wednesday and subsequent press conference?

My only thing I'm looking for is in the crash conference, seeing Powell likely continuing to pivot the narrative towards a focus on inflation as he did it is at the last meeting. We were joking after the last meeting about how inflation was running higher than they would have liked it to, and they didn't get it down to where they would have liked it to, which was an admission that was many years probably in the making. But yeah, this is Powell's final likely.

Mm-hmm.

much more likely final meeting. ⁓ got the DOJ dropped the charges against Powell, which was the kind of self-imposed hurdle that the Trump administration has put themselves in at this point, wherein Powell's being investigated. Senator Tillis, who's on the Senate banking committee, said he wouldn't allow any of Powell's successor candidates to be passed through the committee until that case was resolved. The case has now been resolved. It was dropped.

I don't see any reason that we won't see a Warsh confirmation at this point.

Right. Yeah, that's huge news. That was hanging out there for a while and folks are kind of wondering what gives. Like somebody has to back off or Powell sits in office or the White House figures out a way to fire him or whatever, you know, which just seems like a big old distraction that nobody really needed. thankfully those charges, criminal charges against Jerome Powell were dropped. So yeah, it will be his last conference almost certainly. Yeah, you almost wonder though, maybe he does have some final words.

It's been a pretty long tenure for him. He's been a little more open, a little more candid in these last couple meetings. Maybe he gets extra candid. Maybe it would be interesting and possible a little bit of drama there in his, you know, the way that maybe an outgoing president might have words for the nation, just words, whether it's words of caution or with the inflation thing, it sounded like words of regret almost. Like we kind of almost admitting that we could have done

A lot better than we, than we did. Anyway, it's worth, it'll be worth a watch.

Absolutely. But yeah, from the rate front, we're expected to sit at the market rate for a good while here. So no, no change expected there.

Otherwise we do have PCE coming out coincidentally the day after the meeting. And that is the fed's preferred inflation metric. It's expected to be up obviously like every other inflation metric right now, mostly because of energy. Right. I think the year over year expectations is 3.5 well above the fed's mandate. Yet we probably still won't see a rate increase because I believe the fed would still consider

this type of inflation to be transient, which is a word they probably won't use again because of some of the jokes around it from the previous bout of inflation that we had after COVID.

Yeah, transient and then largely supply driven, supply side shock driven. There's really nothing they can do about a shortage of oil. You know, they can hike rates, but that's just going to cause more damage to the economy than what we're already feeling from that oil shortage. So they kind have to sit on their hands in a situation like this.

Mm-hmm.

Mm-hmm.

All right, so watch for that number Thursday. then Kevin Foley's favorite number also comes out on Wednesday. We will get quarter one GDP. Sorry, that's Thursday, I think. Quarter one GDP, which yeah, Kevin has kind of pinned as a throwaway number just due to a lot of dynamics around things like seasonal adjustments and holiday spending and this sort of thing. But nonetheless, that's coming out.

been pretty good at triangulating GDP. GDP is rarely ever a surprising number, right? And that's one of the other reasons I think that people don't like to look at it too closely unless there's a major deviation, because you can kind of get there with a lot of other releases that come out pre-GDP. Is that right? Is that how you all would look at GDP these days?

I would agree. It's also, it's difficult to translate GDP as a headline number into it means for the average citizen, right? Like per capita GDP is a little bit more telling. We're all producing $150,000, $200,000 worth of stuff every year, sure. But that GDP number is driven by imports and exports a lot right now. So, you know, what does that have to do with you working your nine to five? It's the number could be really high or really low and it's not very reflective of.

how the average citizen is doing. it's a little bit of a more and more of a washed out number right now.

Right? Yeah. Unless it's negative for multiple quarters in a row, right? Then you can say that we're in a recession or that the economy is shrinking, but otherwise it's, yeah, how much does the average American care about how quickly the economy is growing? Cause you can get that from a lot of other things like company earnings, which we're getting a deluge of that right now, which is pretty interesting to seeing the pretty significant increase in earnings, like across the board in corporate America has been pretty.

I guess encouraging, you know, it's almost as if, I don't know if it's kind of the after effects of inflation or, you know, you look at the big banks, it's a lot of just a ton of trading going on, whether the market's up or market's down, just a lot of trading activity, just revenues are up, earnings are up. Some of that's attributable to AI, but it seems very unlikely that that's a major contributor right now. Just, I don't know, corporate America just seems to be happy at the moment. Again, how does that translate?

To us average joes, hard to say, but it does feel like the stock market gains that we've seen over the last few years are potentially coming true, at least so far.

Yeah, great. If you're looking at earnings, the picture looks pretty strong. Margins are strong. And this week, if you're keeping anything on your radar, number of the big tech companies are all reporting on Wednesday. ⁓ Google, Peta, the ones with massive AI capex, which is going to be a good metric for the equities markets for sure, since they tend to be the front runners.

Yeah, right back to betting on the Magnificent 7 or whatever you want to call them, right? Big tech, big banks. So looking forward to that. guess the only downside of that for our industry is it becomes less likely that we see lower rates in the near term. still bouncing around six and a quarter for 30 year mortgage, which is not the best, but nonetheless, we're seeing decent volume continuing to come through even with that elevated rate. We're just seeing the new normal.

start to pick up speed where, you know, whether it's life changes or, ⁓ just different dynamics in the market. The purchase, you know, market right now for homes is, is, is pretty healthy and seeing, you know, supply continued to creep up, seeing people like I read the other day that, rent is finally kind of cooperating from a renter's perspective. Rent is kind of flat year over year, which means that wages have slightly outpaced rent. That was.

You know, increases in rent was a saga for many years that it was just getting more more expensive to buy or to rent a home or to rent an apartment. But there's been just a ton of supply that's come online by the way of new build apartment buildings, but also you can read into it that some homeowners are choosing to buy a new home and rent out their old home. There's a, there's a increasing number of those. So to keep that three percent interest rate on the

on your rental property, spend six and a quarter on your new property. Again, adding to that supply of homes for rent. So that was, think that's a welcome development, especially for inflation numbers for our industry, just for activity. Just thought that was interesting that the, I don't know, the home ownership slash rent market just continues to reshape itself or reinvent itself, right? And it's just different every month when you look at it differently.

That ties it up. Anything else, gentlemen, you'd want to cover here this week?

Just looking ahead to next week, we'll have the unemployment report next Friday. And throughout the week, we'll see new home sales and construction spending. So just a little bit of building, sale color, and then leading into unemployment.

Very good. Yeah, we'll cover the unemployment report or give kind of a preview to that this coming Monday. Good call there. Yeah, it'll be on the 8th of May. I cannot believe we're already talking about May, but we'll see if, you know, if the employment picture has changed at all due to, you know, inflation from the war. It seems a little bit premature for there to be any effects there, but still the labor market is another that keeps reinventing itself every month. So we'll learn more about that going into next week.

All right, gentlemen, as always, great discussion. Thanks for being here and we'll talk again next week.

All right, Alex and I have a rare treat for you all today. We've been talking with our friend and our client, Jeremy Shires. Jeremy is the executive vice president and president of mortgage at Westgate Bank, as well as the chairman of the secondary and capital markets committee of the MBA and just a general overall industry advocate that we work with and that does a lot to better our industry.

Jeremy's been out there learning, monitoring, and advocating for the mortgage industry. So we thought it would be good to have him on the podcast to school us on some relevant happenings in the government that affect the housing and mortgage industry. So welcome, Jeremy. Thanks for being here today.

Thank you,

gentlemen. I appreciate being on the program.

So Alex, why you kick it off? ⁓ You know, we've got a lot of questions for you. We want to kind of prioritize in our brains what we should be paying attention to. Cause you know, you've got the war in Iran, got energy prices, you've got the drama with the Fed, you have an assassination attempt again, but there's a lot of stuff going on that directly affects our industry that we want to at least take some time to focus on. And we want to kind of weed through that, some of that with you to prioritize that for our own education. So go ahead, ahead, Alex.

Absolutely. Thank you for being here, Jeremy. know, I'm going to start off with a little appetizer here. It might sound dense to begin with, but I'm just talking about some executive orders that were signed. I believe it was late last month in March in regards to regulatory burden and access to credit. Could you run me through just ⁓ what they're seeking to achieve with these in addition to how on the ground it's looking to be achieved?

Yeah. So the executive orders are really focused around trying to pave the way to make the home buying and home building process easier in the country. Without the executive order, there are few reasons that the regulatory agencies have that allow them to open rules up for

rulemaking and modification. Some of those rules are out there that allow them to make those changes, economic incentive, Paper Reduction Act, some of those things allow them about every 10 years to reopen a rule and look. The executive order allows them to open these up sooner in the process, allows them to get started faster. And it's extremely broad-based. So this impacts

The way the executive orders rode impacts everybody from the Securities Exchange Commission to the bank regulatory agencies to the CFPB, kind of all the way up and down the line. Supt nuts, anything that could potentially touch housing or housing finances is kind of lumped into this.

You were saying before the call that actually these executive orders and you just hinted at just there. They're extremely broad. Is that correct?

Right, yeah, the breadth that they have really creates a little bit of a challenge from an advocacy standpoint over.

What do we ask for first? So we're trying to pick our spots in what are the things that we're asking the regulatory agencies to touch? What are the things that are going to be the most meaningful and the most impactful while understanding the timelines and time constraints? The rules when it comes to doing these things, they have to go through a proposed rule and then get comment. And then after the comment, they issue a final rule and all

that takes time to work through. Sometimes prior to rulemaking, they have to do a request for information. So those RFIs take time. So these things are things that just because the president issued an executive order doesn't mean something changes tomorrow. And in fact, in a meeting I was at a couple of weeks ago, we were talking with some representatives from the CFPB and they were expressing their...

Mm-hmm.

earnest interest in focusing on rules that they could change, that could be impactful, that could be finalized and be durable during the remaining term of this administration. that means that they want things that can withstand the Congressional Review Act. They want the process to be buttoned down so it can withstand lawsuits and potentially alleging violations of the Administrative Procedures Act. You may have heard those be called arbitrary and

preaches. So those are things that are very aware of. There's also things that as an industry we have to be aware of if we're going to ask them to make changes. If there are changes made to trade for example, if it impacts the forms, the loan estimate or the closing disclosure.

those model forms from a regulatory process take three to five years to get finalized to make changes. So the CFPB was very hesitant to do anything that would make a change to a form because they can't guarantee it can be done in time to be wrapped up during the current administration.

So what's the worry there that if it drags on into the next administration that these efforts would just be killed anyway so the two and a half years worth of work would just be kind of useless?

Right. And to give an example, and we can talk about the fallout from it later. If you recall in the last year of the previous administration, the Biden administration, there was a set of published bank capital rules known as Basel III in-game. Basel III in-game was not going to be friendly to the mortgage market, was not going to be friendly to banks and mortgage. And

Mm-hmm.

It got a big enough backlash from the industry that the regulatory agencies did not quickly push to finalize it. And almost immediately the current administration rolled it back and took it off the table. So carryovers like that can easily be pulled off very quickly, no matter how good or bad we think it is from an industry standpoint to do so. you know, they're really focused on what can they accomplish

Mm-hmm.

Mm-hmm.

in the next less than three years to be truly functional about it because they want to these things done in a way that they're durable.

Right. So a lot of decision-making to be done and way too many things to accomplish without some heavy discussions around prioritization, right? Because as you said, the executive orders are extremely broad. So CFPB and others really have to pick and choose what they want to focus on. not just because there's so many options, but also because they have to decide on what's going to be durable. actually going to, can they get done and is going to withstand all the reviews through Congress and the chambers.

Right. Yeah. This is, this thing is broad enough that it is very much like walking up to an all you can eat buffet. And even if I really like a type of pudding, I might skip that in order to take the steak. ⁓ and, and that's really the prioritization that as an industry, we have to help the regulatory agencies identify what's pudding and what's steak. And we may have to understand that we don't have time to eat the steak. We might have to take the chicken.

Mm-hmm.

Mm-hmm.

Right. Great analogy. That definitely is helpful. Yeah, as always, it's one thing to throw an executive order out there. It's another thing to actually have some sort of effect on anything, in this case, our industry.

Yeah.

And let's say

that things continue apace. They get through the review process and then these new rules are put into place. What sort of timeline would we be looking at ⁓ in a class half full scenario?

Glass

half if some of the industry groups are able to provide some template model language to some of these regulatory agencies to jumpstart their thought leadership around how to change some of these regs.

the election go against the current regulatory agencies as far as who's the party in power in the White House and on the Hill. kind of where I would look at the timeline. You're not gonna see any meaningful changes probably for the rest of 26, but as you get into 27 and into 28, you'll start seeing things come together at pace.

Good to know, good to know. No, that's a good timeline, but they need to stick to that timeline, because as you said, once we're into the latter half of 28, could run into some... Yes, yes.

election time.

Yeah, mean, again, glass half full, just to tie a bow on it with the executive orders. I mean, high level, we're just looking to hopefully see less regulation, right? Less capital requirements, better access to credit. So, I mean, that's what it means to the borrower and to the originator in our industry, right? That's kind of what all these things come together to hopefully provide.

Right. And ⁓ a number of things that are in the EO that ultimately we believe have the best chances of being durable and being able to be implemented in a fairly short period of time are things that can lower costs to borrowers, families that are trying to buy homes. And while they might not seem like much,

individually, ⁓ some of these regulations are death by a thousand paper cuts. You you start stacking one operational thing on top of the next. So things like simplification and changes to the enforcement side of HMDA is an example. You know, there's a lot of originators spend a lot of money to get HMDA compliance correct. And if you've ever

Mm-hmm.

If you've ever been through compliance exam and your HMDA law wasn't accurate, you will gladly spend whatever money is necessary to make it accurate because it's not a fun process. Things around TRIID, tolerance cures, and whether or not we can make sure that...

the appropriate parties wind up paying the costs for their transaction. So that way we don't have to charge all families for an oops on somebody's particular transaction.

Yeah.

was not Sometimes you see, and oftentimes you'll see purchase agreements have something buried in an addendum somewhere, and that's usually where some of the biggest tolerance gears come from. And those are just things that are hard to find at the time that you do the disclosures on the initial LE, on that loan estimate. And as an institution, you're stuck with that problem. And so you have to charge everybody else to make it up.

that that should be more Some things that could be done in regulation are around ability to repay and the qualified mortgage and should non-

government guaranteed loans be allowed to have some level of ability to do a streamlined refinance? Is the fact that you've been making your mortgage payment for the last 36 months on time every time sufficient to say that you have the ability to repay?

And therefore we can do a streamline refinance for you without having to re-verify income, re-verify credit and go through the whole process. Potentially. Today, nobody gets to make that decision because the CFPB's ability to repay and QM rules disallow it. So again, that's something that's out there. And maybe if they get time, they'll get to some changes to LO compensation that will allow

Mm-hmm.

law officers to lower their compensation in order to compete on the marketplace. So that way they don't lose a transaction just because, you know, the XYZ lender down the street is offering a little better rate today because rates moved down in the last two weeks. We think that's important to have. It also would allow

⁓ lenders that are currently not participating in first time homebuyer programs to come back into those because so often those first time homebuyer programs are not highly enough compensated for the originator in order to make it make sense for their institution to do because their model just doesn't support that.

So we think there's some real possibilities of some good things coming out of the executive order to benefit the whole industry. some folks may be familiar enough with it that the executive order really called out for these regulatory changes to be focused on small originators and small financial institutions, small players in the marketplace.

And we actually think that that's a misnomer, that rule changes should be broad-based and should be for the benefit of the entire industry. Otherwise, you wind up running split tech stacks. You wind up with a lot of different costs and expense. The standardization up and down that we have today ⁓ actually is helpful in lowering costs to originate a loan.

Mm-hmm.

and not counter. So having multiple sets of rules is not generally the best way to create efficiency and cost savings.

Right.

Agreed. That makes

sense. I mean, just historically, I think really what we're talking about here is there was a ton of regulation that went into place after the great financial crisis, right? And that was done for a lot of good reasons, but it was kind of very high level, very stiff guardrails. So what we've been dealing with the subsequent 20 plus years, including right now with these executive orders, is trying to put a little more common sense into

You could call it loosening or just sort modernizing some of those rules and allowing there to be some flexibility in there. Is that basically the gist of it?

I would say so. It's lightening it up and loosening it up a little bit make it a little less onerous, have fewer gotchas. That is something from an examination perspective. When you're dealing with these examiners, the regulatory agencies, there's always so many

Mm-hmm. Yeah.

gotchas that are out there and it depends on the, I'll say the jerkness of the examiner, whether they want to pull out the gotcha cards or not. And if they do, there's really not much you can do about it. So that forces us to...

Mm-hmm.

Yeah.

act in a way that ultimately increase costs for families to buy homes because we have to charge them more because we're either paying for outside compliance services, we're paying for fee generation engines, we're paying for other services in order to avoid the gotchas. And as an industry, all of that expense gets pushed onto the families that are buying homes. It's just how it works.

Has to be. Yeah. The overhead of regulatory compliance since Dodd-Frank has been well documented and is the reason why a lot of, is one of the reasons a lot of mortgage companies didn't make it. Like obviously there was the, the, the putbacks to the bad loans and all that 2007. But then from there, was the regulatory burden was just huge. You had to have inside council. You had to spend thousands of dollars per loan just to remain within those guardrails and survive those.

Right.

those audits. So yeah, makes sense to put some common sense to it now 20 years later.

Yeah, yeah, it's amazing that we're approaching 20 years post. mean, things started to go bad in 2007 and that really ramped up in 2008 from the financial crisis standpoint. And here we are 18 years later in 2026.

something else I want to cover, I want to be sure we get to here is the housing bill, the affordability bill that's been bouncing its way through the chambers, through kind of the typical bureaucracy of our government. There's a Democrat version, there's a Republican version now. I believe the Republican version is in the house kind of stalled in terms of voting. We've talked about it a bit on our webinars. I don't know that we've talked about it much on this podcast, but what is...

I don't know, what are some takeaways for this group when paying attention Road to Housing Act?

Yeah, the 21st century road to housing act right now, the two competing bills that are out there that are the biggest issue is the house has passed a version and the Senate has passed a version, but they are not the same. So without having a full on conference to get those onto the same page, which they haven't done a full on conference. I heard a few weeks ago.

Mm-hmm.

It was like 2010 or 2011 was the last time we had a true full House Senate Conference Committee. So it's like a lot of these people didn't even know how to do that anymore. ⁓ So they have to revise these bills so that way they match. So there's going to be some horse trading between the two chambers to get that done. And from a housing standpoint,

Interesting.

Mm-hmm.

There's lots of good that's in these bills, whether it's some provisions for modernizing the rural housing service, know, USC's rural housing ⁓ all kinds of ⁓ cleanup items that are out there that are just good to do and should be done anyway from modernization, updates to...

Manufactured housing, significant updates to manufactured housing as far as what's eligible, what's not eligible, removing some of the more dated requirements around fixed chassis and other things that are out there. Some of those provisions are good. It may blur the lines a little bit between manufactured housing or modular housing, and we could do a whole program just probably devoted to the differences between those two products in the marketplace, because they are different.

to the casual observer that are the same. But modernizing manufactured housing is going to be good. ⁓ That can be part of how we fix some of these housing issues in the country.

Mm-hmm.

But one of the other things that's in road to housing, this guy get fixed between the two bills, is the Senate bill has a drafting error as it relates to multifamily housing lending limits for the GSEs. And the intent was to change.

Mm-hmm.

Indeed.

The other big one that's in there that the industry has to think through is what's called the institutional investor ban. This is a topic that is pretty hot right now. The president has made discussions and made speeches on wanting to ban institutional investors. I believe he actually signed an executive order stating such. This is a two-sided coin. ⁓

As housing values rise, the thought that you have large institutional investors that are buying homes and ultimately driving home values up further is pretty hard to take, especially if your family tried to get into a home and you can't afford one. banning institutional investors can make a lot of sense in that regard.

Mm-hmm.

large institutional investors that said these assets are too cheap and we're going to step in and prop the housing market up and buy them. Most all of those homes were turned into rental homes very quickly. And then over a four to five year period, a lot of those institutional investors divested to those properties and they're now in the hands of general homeowners. So while you may like the idea around banning institutional investors to stop

Mm-hmm.

values from skyrocketing, and I think all of us would like to find ways to stop values from skyrocketing, you run the risk of pulling away a piece of market support from the industry should values start to decline. And we never know when we're going to have a market event that creates that housing decline.

That's a super important point with that discussion. You know, it cannot be a simple black and white scenario and you've pinpointed exactly why. And it makes me wonder about just a lot of the moves that are being made. We live in this kind of boom and bust economy for better or for worse, right? And we're often addressing one side of that scenario, right? And right now we seem to be doing a lot of things to slow.

the appreciation of homes in a market where it's kind of happening on its own. And some of these things are things that will be difficult to take back, an investor, an institutional investor ban, right? Do we find ourselves five years from now in a cratering market saying, man, wish somebody, deep pockets that have more of a tolerance for risk and market exposure would come in and put a floor under some of these houses that are likely to be in some of the more underserved areas. I would imagine that's kind of what happened last time around, right?

Right.

lower cost housing, newer builds, condominiums, this sort of demographic. Meanwhile, we're doing so much to increase supply. Could we put, find ourselves in a situation where we've created another scenario where we have a housing bust? Hard to say, but you make a good argument for why we should be closely considering the long-term impacts of this band versus just saying the pitchforks are out.

It's the big banks that are kind of ruining everyone's chances of buying a home right now.

Yeah. And Jim, I would even say I wouldn't worry about it so much in five years because the institutional investors will have long tenured folks that understand.

home, one to four family real estate investments, the risks, the returns, the rewards that go with that in five years. That institutional knowledge will still be there. I get concerned about when you're 18 years from now, like we're 18 years post financial crisis and all of those people that had that experience and would be able to make that call even if there was no ban or not, no longer employed, because they're all retired, they've moved on. It's been years since we've done it.

Mm-hmm.

Mm-hmm.

Mm-hmm.

Right.

Now we can't even play even if we get the green light to do it because we're not sure how do we manage the risks associated with it. How do we actually run this play and make it make sense for the large investors because you've pulled the whole infrastructure out from underneath of it. Correct.

It's not an industry anymore. That's,

that is, that makes it even more interesting.

So five years, you could potentially flip that on a dime and still get it back or some form of it back. But if it's 20 years out, it's not coming back.

Mm-hmm.

Right, by necessity.

We've forgotten how to move that muscle. Yeah.

Right.

So, you know, I'm personally very leery about it. I'm not saying no, but I'm definitely not saying yes. ⁓

Right?

mean, the home builders are against it. The NBA, I believe is generally against it. Obviously institutions who, you know, buy homes are against But otherwise has a lot of support on, you know, both sides of the aisle and the rest of the bill though, generally bipartisan, right? Generally likely to be, likely to pass at some form here in the coming months.

Right.

very rare situation where there is universal support for the other things that are going on with the bill, such as just general deregulation around certain types of housing, making it easier to and faster to bring affordable homes to market, right? Which is something I think we all believe we've been missing over the last five to 10 years. don't know, optimistic that it comes out one way or the other. Obviously the institutional home buyer ban is that issue. So is, I believe the president has also attached a couple of

conditions to signing the bill into law eventually that are around things that have nothing to do with housing, which is kind of always a thing, but I believe they're around election reform is one of the things that may or may not make it into the final bill. I guess.

Yeah, the president

has been pretty firm that he doesn't want to sign anything without the election reform bill and without funding the Department of Homeland Security. you know, even though you've got in the Senate the current version of road to housing in the Senate past 89 to 10, are potential stumbling blocks to getting it done.

Right.

All right. So yeah, that's one, keep your eyes on the news there, everybody, because something will happen there. And you know, I think this kind of news gets overshadowed by a lot of the geopolitics going on in the world. This is a pretty important one. Long-term, this should be exactly what could be needed for just improvement on the supply side. And so just the lowering of costs, again, for borrowers, just making some of this stuff easier to get done.

Alright, what else do we have, Alex? Does that cover us?

I wanted to ask Jeremy what stumbling blocks he might see, and I think he answered it perfectly with regards to institutional investors I guess I'll ask the flip of that question, Jeremy. What do you think is the potential to be the most effective, in regards to national housing policy? Yeah, yeah, the game changer.

The game changer.

I think the biggest misnomer in the housing market and in the housing industry is that we can fix a local regional issue with national policy. So lack of housing supply was universal during the pandemic because we had so much demand. We are five years post pandemic or approaching five years post pandemic.

And the demand structure shifted and now housing has moved back to more of its historical local regional flare. So you have markets like Austin, have markets like Denver that are maybe approaching overbuilt. You have markets like Omaha that are not, know, the Northeast, they...

The Northeast has created so many barriers to building that they're not overbuilt and it is very difficult to become overbuilt there because it's difficult to build a house. So they're not seeing softening in housing values the way some of these markets that are maybe overbuilt are. Florida is starting to become overbuilt as a state. There's still pockets within markets.

Mm-hmm.

So to really think that we're going to fix a local regional problem with national policy is really short-sighted and it doesn't reflect reality. The reality is the national policy changes can make it easier for the local markets to self-help and make it easier for the local markets to flourish because they're not putting artificial limiters on them. But in and of itself, a lot of what we're trying to

Mm-hmm.

with road to housing or housing executive order.

secondary things when it comes to creating more supply and creating more homes for families. ⁓ It's really the local, state local, regional is where the rubber meets the road to the most part. And that's where the local lenders, the local real estate agents, the local people, the builder and community have to be engaged with cities, counties, states in order to

make the changes necessary to make it make sense for their area. just don't know any other way out of it because it's a local problem that was exacerbated during the pandemic and created a national campaign.

Right.

Absolutely,

no, I like that answer. I like that answer. It won't fix it, potentially, but ⁓ no, thank you. ⁓

It can't hurt.

It won't fix it, but it won't hurt.

Right, right.

And it creates the framework,

right? Like it's to your point, regulations around building codes is all local, at least at the state level, likely at the municipal, you know, the municipality level. So the way it was explained to me, some of this road to housing bill especially is that the federal government can sort of hand out, hand down a framework to build a neighborhood, for instance. This is how this neighborhood could be built. If you fall within these guidelines, this is kind of, can be universally accepted across the states.

you can versus what happens now, which is anytime you want to build a new development, you have to start on square one and you have to take however many months or years it takes to get all the approvals for the type of neighborhood you're building and the sewage, the electric and the building codes. This says, here's just what, if you do it this way, the municipalities had signed off on it. So there needs to be some either nationwide adoption of these codes or

There's also been an argument that there could be some incentives handed down by the federal government, whether it's a carrot or a stick, right? Could be, you know, it could be withholding highway money, which has been done in the past to say, if you don't conform to these new codes, then we're going to withhold highway dollars. Or there could be other things where they could say, we're going to subsidize such and such a ⁓ program if you adopt these, these programs just to kind of get, again, get those incentives out there. But to your point, it's just a framework at this point. It needs to be adopted at the state.

municipal level.

Right. And rightly so to an extent from the standpoint of I would expect the energy code and insulation requirements to be extremely different between Grand Forks, North Dakota and Tucson, Arizona. You don't have to build those properties the same way.

Florida.

But there are aspects of those properties that absolutely should be built the same way. you know, it's a lot more nuanced than we necessarily want to give it credit for, because it's an extremely complex to a large degree, it's kind of like a balloon. When you squeeze it, it starts to pop out someplace else.

Sure.

Mm-hmm.

you're not exactly sure where you're squeezing all the time.

Right? That's a good point. Another good analogy. All right. Well, that's probably as good a point as any to end this on. Jeremy, very much appreciate you being on, sir. This is very informative for me. Hopefully it was for everybody out there. Again, there's a lot of things going on right now on the Capitol Hill that affect our industry. And not all of them are getting a ton of press, but they all are super important. And it feels like there's I don't know, kind of a deluge of

of decisions that will be made here in the coming months that are going to affect us for years to come. So thanks for educating us on that and having this discussion.

No, I appreciate the invitation and you guys giving me a little bit of a platform to talk a little bit about a few things that I've got my eyes on these days.

Very good, very good. Glad we could help each other out and have this open kind of candid discussion. So we'll do it again soon. yeah, again, thanks Jeremy for the wisdom. Thanks Alex. Take care gentlemen.

time.

Thanks Jeremy.

All right, let's close this thing out. Thanks so much, James, Alex, and Jeremy. That's it for today. Join us next week for another episode of Optimal Insights, where we'll continue to provide you with the latest market analysis and insights to help you stay ahead. Check out our full videos on YouTube. You can also find each episode on all major podcast platforms. Thanks again for tuning into Optimal Insights.