Nov. 18: A joke that sums up my life; EPO penalties; hit song writing age; Costco & customer satisfaction; Saturday Spotlight: Blend

This morning I was somewhat despondent about Snoop giving up smoking weed. But I quickly rebounded and became excited when I received this email: “Honorable Mr. Chris. I hope this email finds you well. I have a project of $24,904,000.00USD that I would love to introduce to you. Kindly respond back to me and I will explain more to you.” Who doesn’t want to be introduced to a project of that magnitude? On a more serious note, what about all of your elderly parents who receive emails like that throughout the week? What a nightmare. Uninsured motorists are a nightmare of another type, and here’s something to give you gray hairs. Thank you to Newrez’s Nigel F. who points out some information on driver stats around the nation, including Florida. “Per the 2021 Insurance Research Institute, 20-21 percent of Florida drivers are uninsured. But the Florida Insurance Commission suggests it is north of 22 percent.

Saturday Spotlight: Blend… Introducing Composable Origination


In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).

Born out of the ashes of the great recession, in 2012 Nima Ghamsari and his co-founders saw an opportunity to transform the complex and paper-based mortgage process by harnessing the power of technology and data to make financial services simpler and more transparent. Blend is a leading technology company based in San Francisco with a remote-first workforce. We are dedicated to working with financial services providers to streamline workflows and transform banking experiences with our cloud-based platform. Fast forward to 2023, while remaining laser-focused on our mortgage customers, Blend decided to enter our next chapter and focus some of our investments and resources on our Blend Builder platform and Composable Origination.


Blend emphasizes the role of technology in simplifying the lending experience. How does Blend and its technology support the borrower, loan officer and real estate agent relationship in this purchase market?


Blend’s technology simplifies the lending experience for borrowers, loan officers, and realtors in a number of ways.


For borrowers: Blend’s platform makes it easy to apply for a mortgage, track the progress of their application, and communicate with their loan officer. Borrowers can also use Blend’s tools to get pre-qualified for a mortgage, get an estimate of their monthly payments, and compare different loan options.


For loan officers: Blend’s platform provides them with the ability to improve productivity, helps them to automate tasks, and enables them to collaborate with borrowers, LOAs, Processors, realtors, and other stakeholders. This can help loan officers to be more efficient and productive, and it can also help them to provide a better customer experience for their borrowers.


For real estate agents: Blend’s platform provides them with tools to help them track the progress of their clients’ loans and to provide their clients with timely updates. These tools include a dedicated mobile application to enable agents and loan officers to better work together. This can help real estate agents keep their clients informed about the status of their loans, and it can also help them to build stronger relationships with their clients.


Blend enables some of the biggest lenders in the nation to process an average of nearly $4 billion in transactions each day. How does Blend integrate with the Loan Origination System and what are some best practices you see loan officers adopting when they leverage this technology in support of their book of business?


Blend has deep and powerful integrations with loan origination systems (LOS) through its modern API infrastructure. This allows lenders to seamlessly integrate Blend’s platform with their existing LOS, which makes it easy for them to adopt Blend’s technology and enables LOs to increase their productivity by working in Blend and staying out of the LOS.


The overarching best practice that Blend’s most productive LOs are tapping into is merging loan advisory and loan manufacturing workflows into one unified workflow. How? Through a simple-to-use set of tools we call LO Toolkit.


At the prospecting stage, LO Toolkit is designed to help drive new business by mirroring the most common ways LOs and borrowers interact. Starting each new opportunity in the Blend app, whether on the go or on the couch, helps kickstart deals for highly productive LOs.


The natural next best practice is to simplify the path to rate lock and ITP. When workflows are rooted in Blend, LOs have access to time-saving lifesavers powered by AI and automation. LO Toolkit brings manual tasks upfront, surfacing the right tasks at the right time and place, while Blend’s intelligent platform automates many background tasks.


Finally, as we push to streamline the path to close, highly productive LOs are using data, not documents. Whether data is sourced automatically from known information or pulled instantly through simple sign-ons to 3rd-party sources, the key is to ensure that data is validated and accurate. And when that data is backed by Blend’s industry-leading verification tools, top LOs can proceed with confidence.


As we look towards the future of the mortgage industry, what key technological advancements or trends do you anticipate? 


The mortgage industry is constantly evolving, and there are a number of technological advancements and trends that we anticipate in the future.


The continued adoption of cloud- and platform-based technology: Cloud-based technology is becoming increasingly popular in the mortgage industry because it is scalable, flexible, and cost-effective. Platform technology unifies historically disparate processes into a unified system, breaking down data silos and isolated workflows.


The use of artificial intelligence (AI) and machine learning: AI and machine learning are being used to automate tasks, improve decision-making, and provide personalized customer experiences. The AI boom is here in many other industries, and mortgage will be no different.


The flexibility to measure market changes technologically: Most lenders need to make recurrent personnel decisions in reaction to changes in rates. When technology is flexible enough to meet the demands of any market, lenders can focus on retaining staff and upskilling them to successfully sell, process, and close in any conditions.


Blend is focusing investment its R&D efforts in these and a select few other areas to meet these trends head on with the ultimate goal of improving the mortgage experience — for everyone.

(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)

Do you feel old?


A new analysis of the top 100 bestselling musical acts found that the median age at which they released their bestselling album was age 29, with 52 of the 100 acts releasing their bestseller before the age of 30. This has led me to the distressing and disappointing conclusion that perhaps my chances of becoming a multi-platinum recording sensation despite barely knowing any actual musical instrumentation are, at the very least, diminishing somewhat. Of every number one single on the Billboard Hot 100 from 1958 to 2020, 95 percent of those were by artists under the age of 30. All hope is not lost: 61 of the 100 artists released their final platinum album after the age of 40.

Costco, income, and customer satisfaction


Independent mortgage banks make their income on the warehouse spread, fees, servicing, and price difference between best efforts and mandatory. Banks earn money from the difference between what they pay you on deposits and where they invest your deposits. What about others? In a service industry, customer satisfaction drives revenue.

A while back Frank P. sent me, “Costco derives 75% of its revenue from membership fees. With 2017 revenue of $129 billion, that leaves $32 billion of revenue from product sales! Costco thrives on very narrow product sales margin vs. most retailers but manages to book $1,200 of sales per square foot vs. $600 or less for competitors. It does this by providing customers with exceptional value, and it retains about 90% of its customers. The key to their success is knowing how to keep 90 million customers happy. That’s a customer satisfaction model worth emulating in our business, even if they’re not going to dominate the mortgage market any time soon. Customer satisfaction drives revenue, and Costco is just one example.

What if our response to the prolonged market downturn was less about waiting it out, and more about learning and improving? What if we became learners and doers, not just survivors? In his November Customer Experience Tip, STRATMOR CX Director Mike Seminari talks about the need for being active in the downtime, building relationships, gaining product knowledge, reading books and listening to podcasts, always in pursuit of self-betterment and excellence in customer care. He shares three lessons that 2023 has taught us and how we can parlay them into success in 2024. Check out, “Top Three CX Lessons That Will Drive 2024 Success.”

If a loan pays off in a few months, so what?


I received this note from a long-time originator now retired in Texas, regarding early payoffs and their penalties.

“Regarding your comments recently on the question from the LO about lenders refinancing loans right away, that is why lenders have EPO’s of up to 180 days. This was instituted by FNMA and FHLMC as I recall during the 2nd refi boom of my career. I remember in 1991 to 1992 when no cost loans came about and FNMA and FHLMC lost billions of dollars from LOs refinancing people almost every month because rates were dropping so fast (I remember doing loans for people twice in one month because rates dropped ½ percent that quickly).

“Since then, with EPOs, lenders (and many times the LO themselves) are required to pay back a portion, if not all the commission made on a loan that is refinanced too quickly. People complain about the EPOs, but they make sense since there are LOs out there that will churn their portfolios for 1/8 percent which is not necessarily a benefit to the borrower, just another commission for the LO and loan company.”

Yes, take it from a capital markets guy: there are two basic reasons mortgage rates have run 1.5-3.0 percent higher than Treasury rates, credit risk and prepayment risk.

So, what’s the “trader talk” out there given the recent bond market volatility, and might it indicate where volumes and current mortgage rates are? Here’s a recent excerpt:

Supply closed at $2.5 billion yesterday, one of the highest prints of the month, and pulled the rolling average to north of $1.9 billion. We reiterate that the pipeline continues to exhibit positive convexity at these rate levels. The sharp rally / steepener, post-data, would normally dampen supply as individuals in the pipeline would reprice at lower rates and decrease pull through.

“Instead, new demand dominates the vector of Originator hedging, and lower rates shake out more demand. Borrowers are not overly rate sensitive, but more refis will start to trickle in soon if we keep rallying (refi borrowers are most rate sensitive/cause changing pull throughs).

“The move yesterday was obviously drastic, as the new par coupon (nearest to 100) is now much closer to the 6 percent than the 6.5 percent (Down to 6.06% from 6.3% pre move). If rates remain in this range, we expect a lighter supply day on the heels of yesterday. Holidays are coming… supply will soon show the signs of plummeting demand.”

Recently, I was diagnosed with A.A.A.D.D.: Age Activated Attention Deficit Disorder. This is how it manifests.

I decided to wash my car. As I start toward the garage, I notice that there is mail on the hall table. I decide to go through the mail before I wash the car. I lay my car keys down on the table, put the junk mail in the trashcan under the table, and notice that the trashcan was full. So, I decided to put the bills back on the table and take out the trash first.

But then I think, since I’m going to be near the mailbox when I take out the trash anyway, I may as well pay the bills first. I take my checkbook off the table and see that there is only one check left. My extra checks are in my desk in the study, so I go to my desk where I find the bottle of coke that I had been drinking. I’m going to look for my checks, but first I need to push the coke aside so that I don’t accidentally knock it over. I see that the coke is getting warm, and I decide I should put it in the refrigerator to keep it cold.

As I head toward the kitchen with the coke, a vase of flowers on the counter catches my eye–they need to be watered. I set the coke down on the counter, and I discovered my reading glasses that I’ve been searching for all morning. I decided I better put them back on my desk, but first I’m going to water the flowers. I set the glasses back down on the counter, fill a container with water and suddenly I spot the TV remote. Someone left it on the kitchen table. I realize that tonight when we go to watch TV, we will be looking for the remote, but nobody will remember that it’s on the kitchen table, so I decided to put it back in the den where it belongs, but first I’ll water the flowers. I splash some water on the flowers, but most of it spills on the floor.

So, I set the remote back down on the table, get some towels and wiped up the spill. Then I head down the hall trying to remember what I was planning to do. At the end of the day: the car isn’t washed, the bills aren’t paid, there is a warm bottle of coke sitting on the counter, the flowers aren’t watered, there is still only one check in my checkbook, I can’t find the remote, I can’t find my glasses, and I don’t remember what I did with the car keys.

Then when I tried to figure out why nothing got done today, I’m really baffled because I know I was busy all day long, and I’m really tired. I realize this is a serious problem, and I’ll try to get some help for it, but first I’ll check my e-mail. Do me a favor, will you? Forward this message to everyone you know, because I don’t remember to whom it has been sent.

Visit for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. STRATMOR’s current blog is titled, “Listening to Real Estate Agents Can Pay Off for Originators”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).


(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to Copyright 2023 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)


Rob Chrisman