Transcription complète de 7.2.26 Agency MBS Performance; First Lien Capital’s Bill Bymel on Distress Signals; June Payrolls Miss

true stress in the market. 00:02:57.919 --> 00:03:04.479 So I really think we're at we're coming up on the eighth or ninth inning of a much longer cycle. 00:03:04.639 --> 00:03:20.719 If anything, you could say we're in the 16th inning, and we're just, you know, we just keep waiting for someone to hit the ball out of the park or someone to steal home, and it'll really kind of end this long cycle of of inflated values. 00:03:23.199 --> 00:03:26.000 Thanks to this week's podcast sponsor, Experian. 00:03:26.479 --> 00:03:35.199 From lenders and landlords to employers and consumers, Xperian helps connect the housing ecosystem with the data and insights needed to make faster, confident decisions. 00:03:36.000 --> 00:03:38.159 Lead a smarter housing journey with Experian. 00:03:39.199 --> 00:03:42.719 To learn more, visit Xperian.com slash mortgage. 00:03:45.599 --> 00:03:48.000 What do they call the Fourth of July in nursing homes? 00:03:48.879 --> 00:03:50.879 In depends today. 00:03:52.560 --> 00:03:54.080 Plenty of people are hitting the roads. 00:03:54.159 --> 00:04:06.080 Hopefully, some of them are visiting elderly relatives, and what better conversation topic than the Office of the Comptroller of the Currency reporting on the performance of first-lean mortgages in the federal banking system during the first quarter of 2026. 00:04:06.800 --> 00:04:18.879 The OCC mortgage metrics report showed the 97.7% of mortgages included in the report were current and performing at the end of the quarter, a slight increase from 97.6% in 2025. 00:04:19.519 --> 00:04:20.560 The foundation of U.S. 00:04:20.720 --> 00:04:22.959 housing finance remains remarkably resilient. 00:04:23.279 --> 00:04:30.560 Agency lending continues to provide liquidity, credit remains broadly available, and homeownership remains accessible by historical standards. 00:04:30.879 --> 00:04:33.360 However, the economics of participation have changed. 00:04:44.720 --> 00:04:55.199 Success increasingly depends on scale, capital, strength, and the ability to attract specialized talent across disciplines, ranging from capital markets and servicing to technology and risk management. 00:04:55.519 --> 00:05:06.000 As a result, consolidation is no longer merely a cyclical response to difficult market conditions, but the logical outcome of an industry where operating complexity is now a competitive differentiator. 00:05:06.240 --> 00:05:14.800 The lenders' best position for the future are those treating servicing, technology, and strategic investment as core business imperatives rather than operational enhancements. 00:05:15.040 --> 00:05:23.839 Servicing has re-emerged as a stabilizing force, providing durable revenue streams and deeper borrower relationships at a time when refinance activity remains constrained. 00:05:24.160 --> 00:05:34.399 Concurrently, rising costs from credit reporting to regulatory compliance are exposing inefficiencies that can only be addressed through automation, AI, and

workflow redesign at scale. 00:05:34.879 --> 00:05:46.319 Beyond just technology, sustainable growth requires thoughtful integration of talent, disciplined capital deployment, and regulatory frameworks that support housing finance rather than add complexity without measurable consumer benefit. 00:05:46.879 --> 00:05:57.839 The defining challenge for mortgage lenders today is adapting their organizations to an industry where capital, talent, technology, and operational discipline have become the primary determinants of long-term competitiveness. 00:05:58.800 --> 00:06:05.360 Agency mortgage-backed securities posted their first monthly loss in three months during June with excess returns of negative seven basis points. 00:06:05.920 --> 00:06:12.480 The loss reflects historically weak seasonal trends, persistent inflation concerns, and expectations for a more hawkish Federal Reserve. 00:06:12.720 --> 00:06:15.759 Although the sector remains solidly positive year to date. 00:06:16.079 --> 00:06:21.120 Strong mortgage-backed ETF inflows, steady bank demand, and higher issuance helped support the market. 00:06:21.759 --> 00:06:26.560 Performance was strongest in higher coupon 30-year securities, particularly 6% coupons. 00:06:27.360 --> 00:06:35.199 Trading activity has remained subdued amid uncertainties surrounding the new Fed leadership and global events, both of which have been talked about ad nauseum. 00:06:35.680 --> 00:06:50.000 Looking ahead, seasonally challenging summer months, elevated inflation expectations, and a cautious Fed are expected to keep pressure on long-term yields, supporting a defensive stance focused on capital preservation, shorter duration, and lower premium mortgage pools. 00:06:52.639 --> 00:07:04.160 For today's interview, I wanted to welcome to the show First Lane Capital's Bill Bimel to talk about how insurance challenges, AI adoption and servicing, and key leading indicators are shaping the next potential cycle of market distress. 00:07:04.720 --> 00:07:16.480 He's a speaker, advisor, and investor, as well as CEO of First Lane Capital, a privately owned investment platform specializing in distress debt and mortgage workout strategies on residential and commercial real estate. 00:07:17.040 --> 00:07:24.639 Through First Lien Resolutions, he provides special assets expertise to banks and funds on portfolio risk, recovery strategies, and profitable arbitrage. 00:07:25.040 --> 00:07:28.000 I'm going to start this interview in a pretty open-ended way. 00:07:28.160 --> 00:07:30.480 What's been on your mind recently? 00:07:30.800 --> 00:07:45.199 Obviously, there's a lot going on out there in terms of uncertainty or different competing forces on markets or things behaving in ways that are aren't traditional when it comes to asset classes. 00:07:45.360 --> 00:07:47.120 Just what's what's been on your mind lately? 00:07:47.439 --> 00:07:50.959 Well, uh, untraditional is definitely top of mind. 00:07:51.199 --> 00:07:58.720 And

you know, you really did hit the nail on the head when you say that like we are in an unusual time. 00:07:59.279 --> 00:08:14.879 Um, I was inspired to write my book, the newest book, The Storm, about three years ago when I went to a think tank in DC, and I was sitting there with insurance professionals and the broad range of the political spectrum. 00:08:14.959 --> 00:08:19.920 So you had private equity guys who, for the most part, lean more conservative. 00:08:20.160 --> 00:08:24.160 You have climatologists who obviously lean more progressive. 00:08:24.399 --> 00:08:30.079 Uh, you have government lifetime administrators who ironically are pretty apolitical people. 00:08:30.240 --> 00:08:36.960 Most of the people that work inside the federal government for long periods of time are very moderate folks. 00:08:37.200 --> 00:08:43.279 And the rule of this was to leave your politics at the door and have a really serious conversation. 00:08:43.519 --> 00:08:51.360 Loan servicers, they were there, insurance companies were there, and they were pointing to the facts of how the world had changed in 2020. 00:08:51.519 --> 00:09:04.960 And I don't mean COVID, it's it just happens to be that in 2020, the earth started to act in different ways, that we started to see an increase in these storms. 00:09:05.039 --> 00:09:13.279 You know, you'd see tornadoes covering a much broader swath of the US versus just Tornado Alley. 00:09:13.440 --> 00:09:16.720 And so that was what kind of inspired me to do the book. 00:09:16.960 --> 00:09:20.879 And then I spent a few years writing it and doing the research for it. 00:09:21.360 --> 00:09:30.559 And what now, as I released it this May, what's on my mind more is the effects, the additional convergences. 00:09:30.720 --> 00:09:55.519 The book's about the convergence of the rising cost of insurance, the fact that there's all this world like earth volatility that's destroying property and causing insurance rates to go through the roof, come right at a time when interest rates have gone up significantly in the last few years, and at a time where we are at the highest debt levels as a country, as a nation, and as individuals that we have ever been. 00:09:55.679 --> 00:10:03.279 And I the storm is about that convergence and the potential dislocation that it will recreate. 00:10:03.440 --> 00:10:10.159 Well, coming out recently to answer your question, um, there's additional factors. 00:10:10.399 --> 00:10:24.159 Uh, I wrote this book, Knowing AI, but the experience of AI in the last 90 days, for instance, just since the beginning of the year, is a completely set, you know, is a whole different thing. 00:10:24.320 --> 00:10:29.519 I probably should have written an entire chapter about AI, but then again, what do I know? 00:10:29.679 --> 00:10:30.000 Right. 00:10:30.159 --> 00:10:36.960 And then the global geo, the geopolitical in instability that we have on a global scale. 00:10:37.120 --> 00:11:09.919 Um, what's on my mind this

this month here in early summer is when this is is we haven't yet felt the effects of the tightening of oil supplies and the destruction of major uh byproduct chemicals like these um uh these chemical plants in the Middle East and the UAE that have were destroyed by Iran, um, they supply a lot of very important fluids to the production and manufacturing industry here in the US. 00:11:10.159 --> 00:11:14.240 And we're gonna be on a shortage later this summer that we have yet to see. 00:11:14.399 --> 00:11:19.919 So that's really it's like there's additional convergence points that have yet to be realized. 00:11:20.159 --> 00:11:26.799 The the the effects of the oil shortage that exists now, uh, the effects of AI. 00:11:26.879 --> 00:11:29.519 And I'm not a doom and gloomer about AI. 00:11:29.679 --> 00:11:31.840 I do believe it's gonna take a ton of jobs. 00:11:32.000 --> 00:11:46.799 I also think it's gonna create a lot of productivity and create new jobs, just like any industry, just like environmental and you know, energy efficient companies and the you know, the Teslas of the world created new jobs, AI will create that as well. 00:11:47.039 --> 00:11:52.399 But that said, uh, we're still living in la la land economically. 00:11:52.559 --> 00:12:17.840 You know, there's just the P price to earnings ratios of these companies in the stock market, the huge overvaluations of a few central companies and having a bulk of the of the um the the of the increase in the stock market value coming from you know a handful of companies and the mispricing of of a lot of real estate assets and other types of assets. 00:12:18.000 --> 00:12:21.919 I think I think there's a reckoning, unfortunately, due to come. 00:12:22.000 --> 00:12:24.639 And and that's what I'm I'm concerned about most right now. 00:12:25.039 --> 00:12:28.080 Well, you at the end there, you mentioned the the mispricing of real estate assets. 00:12:28.159 --> 00:12:32.879 And obviously, this is a podcast for mortgage professionals. 00:12:33.279 --> 00:12:34.879 Thoughts on what you're seeing in the mortgage market? 00:12:34.960 --> 00:12:43.039 And obviously, you have good background to discuss this because you've been a residential and CRE loan buyer for decades. 00:12:43.200 --> 00:12:48.799 You've worked as a special servicer and fiduciary advisory, you've resolved to stress mortgage portfolios. 00:12:48.879 --> 00:12:53.519 What are you seeing when it comes to the mortgage market or housing and real estate market in general? 00:12:53.679 --> 00:12:56.320 You mentioned mispricing of assets, maybe some other things catching the eye. 00:12:56.559 --> 00:12:59.759 Yeah, there's still a lot of dumb money out there looking to be deployed. 00:12:59.919 --> 00:13:11.039 So, you know, the so much of the private equity and the institutional money management world, it's grown so significant, and there's a lot of money sloshing around. 00:13:11.440 --> 00:13:32.320 In the hands of folks that are only thinking in one direction, there is, for instance, I see non-performing loans, both private lending loans as well as Freddie Mac, Fannie Mae loans, that are actually selling for more than the loan sold for when it was a performing loan. 00:13:32.559 --> 00:13:36.399 And that is a that is a dislocation that makes no sense. 00:13:36.639 --> 00:13:40.960 There is a certain amount of cost that goes into foreclosing a loan. 00:13:41.120 --> 00:13:59.120 And no matter whether you're at a 60 LTV or not, you as a lender are going to uh lose money through additional expenses that aren't going to get charged back to the loan, not to mention the the cost of that capital as it sits non-performing on your book. 00:13:59.279 --> 00:14:09.120 Uh so to see Freddie Mack and Fannie Mae be able to sell non-performing loans at 103 of UPB, it really doesn't make sense. 00:14:09.279 --> 00:14:11.600 And the same is true in the RTL space. 00:14:11.759 --> 00:14:27.759 Uh RTL being the residential translation loans, the the private money bridge loans, the industry that has grown significantly, the Kiavis and Renovos of the world, uh, as well as the same they have folks in the CRE space. 00:14:27.919 --> 00:14:38.080 Um, they are still going on the assumption that real estate, you know, it was for I think people's memories are short. 00:14:38.240 --> 00:14:43.120 Uh, there was a time when Alan Greenspan went before Congress. 00:14:43.440 --> 00:14:44.000 Rest in peace. 00:14:44.159 --> 00:14:45.120 Rest in peace, Alan Greenspan. 00:14:45.360 --> 00:14:47.120 Alan Rest in Green, yeah, we love Alan Greenspan. 00:14:47.360 --> 00:14:53.200 Rest in R I P Allen, but you know, he went in front of Congress in 2005. 00:14:53.840 --> 00:15:04.320 And when the markets were starting to be feel frothy back then, before the financial crisis, before real estate stalled in 07 and crash started crashing in 08. 00:15:04.720 --> 00:15:28.639 Alan Greenspan, which is, you know, most would say is the you know the smart, one of the smartest guys in the room uh in finance, went before Congress and said that while there may be areas of the country that were seeing some some slowdown, there's no reason to believe that real estate, residential real estate uh can ever really decline on a national level. 00:15:28.799 --> 00:15:36.159 And this was two and a half years before the great financial crisis, where we saw prices drop as much as 40% across the board. 00:15:36.480 --> 00:15:38.480 So memories are short. 00:15:38.639 --> 00:15:45.600 And then since then, since 2008, we've now been on an 18-year streak of upward valuations. 00:15:45.759 --> 00:15:54.320 There's many reasons for why I think that we've fueled the flames of asset values with low cost of capital. 00:15:54.720 --> 00:15:59.519 But that is really where I'm seeing a misunderstanding right now. 00:15:59.679 --> 00:16:02.960 And as far as CRE is concerned, you're starting to see some shakeout. 00:16:03.120 --> 00:16:06.240 But CRE is

just an investor real estate game. 00:16:06.399 --> 00:16:20.799 And when you have, and most landlords, whether you're a residential landlord or a commercial landlord, most landlords operate under a gross lease or a limited net lease uh theory. 00:16:21.120 --> 00:16:25.840 Meaning you are charging one amount for rent to your tenant. 00:16:26.000 --> 00:16:34.480 And then out of that, you've got to pay your mortgage, you've got to pay the taxes, you've got to pay the common area, and you've got to pay insurance. 00:16:34.639 --> 00:16:38.799 And there are cases for where you can have increases in common area expenses. 00:16:38.879 --> 00:16:43.120 That's common in commercial real estate, but not really a lot of triple net. 00:16:43.200 --> 00:16:47.200 There are triple net leases out there, the 1031 space, different story. 00:16:47.440 --> 00:16:57.039 The bottom line is the majority of landlords have to absorb the additional costs of rising property taxes because their property is worth more. 00:16:57.200 --> 00:17:00.960 The additional cost of insurance increases. 00:17:01.200 --> 00:17:14.079 And if you're a landlord that got yourself a 5% mortgage on a 12-unit apartment complex seven years ago, chances are you're coming up on a maturity wall uh that where you have to refinance that loan. 00:17:14.240 --> 00:17:18.400 And there's just no way for you to get a standard 5% bank loan anymore. 00:17:18.559 --> 00:17:21.680 So now you're getting squeezed by another factor. 00:17:21.920 --> 00:17:26.559 And um, that's really where I think the misunderstanding about real estate is right now. 00:17:26.880 --> 00:17:32.160 So this industry is known for having four-year, five-year memories, and seven-year market cycles. 00:17:32.559 --> 00:17:37.200 Maybe that has done people some good over the course of time, but it certainly could be troubling. 00:17:37.279 --> 00:17:51.359 And not to use too many avian analogies here or phrases, but I'm I'm wondering if you feel like we've seen the canary in the coal mine at this point, if it's there or if things I mean, it's kind of this new normal of well, things that would have triggered warning signs back then. 00:17:51.440 --> 00:17:52.960 It's we kind of plow through them now. 00:17:53.119 --> 00:18:04.720 Or excuse my second avian analogy, phrase when the chickens will come home to roost on some of this troubling background noise and storm clouds that are out there. 00:18:04.960 --> 00:18:07.200 Yeah, that is a great question. 00:18:07.440 --> 00:18:08.880 I think both are true. 00:18:08.960 --> 00:18:24.160 Uh, both, I mean, both we've seen a canary in the coal mine, some of us are paying attention to, and the chickens have yet to come home to roost because obviously we're still the majority of the industry is still headed thinking in one direction. 00:18:24.480 --> 00:18:27.839 And part of that is just a lack of experience. 00:18:28.000 --> 00:18:34.000 If you're a 35-year-old managing director at Blackstone

today, you were like a teenager. 00:18:34.079 --> 00:18:36.480 You were in high school when the GFC hit. 00:18:36.640 --> 00:18:45.680 You may have known somebody who lost their home, or you know, maybe you you even had to move yourself, but you didn't really understand the implications of that. 00:18:45.920 --> 00:18:59.599 So there is a real lack of perspective just because of a lack of experience by a large portion of the industry, people in their 20s and 30s that just haven't lived through multi any type of downward cycle. 00:18:59.839 --> 00:19:04.559 The canary in the coal mine, you could point to, are a couple of things. 00:19:04.720 --> 00:19:11.680 Uh, we have seen some huge devaluations in large real estate deals. 00:19:11.839 --> 00:19:19.359 Brookfield walked away from office buildings in downtown LA two years ago, uh, handed the keys back to the lender. 00:19:19.519 --> 00:19:24.319 Uh, I think that they have yet to actually find a new buyer for that deal still. 00:19:24.480 --> 00:19:32.000 You saw the failures of a couple of banks, Signature Bank Republic, you saw Silicon Valley Bank. 00:19:32.079 --> 00:19:33.119 That was three years ago. 00:19:33.359 --> 00:19:36.240 Fed stepped in and somehow calmed the nerves. 00:19:36.559 --> 00:19:42.640 You've seen some valuation declines in parts of the country already. 00:19:42.880 --> 00:19:50.880 Places like Austin and Boise that saw huge that were already like Austin, for instance, was already an inflated market. 00:19:50.960 --> 00:19:58.079 And then when COVID hit, everyone from California, Tech World, and LA said, well, I want to go move to Austin. 00:19:58.319 --> 00:20:03.039 And so it just fueled the fire of overvaluation. 00:20:03.200 --> 00:20:09.759 And I've got friends in Austin now that can't sell their property for 20% less than they thought it was worth two years ago. 00:20:10.000 --> 00:20:11.839 So you are seeing that. 00:20:12.000 --> 00:20:14.480 But the chickens have not come home to roost. 00:20:14.640 --> 00:20:20.880 You've seen some private equity firms like the UK MFS firm that went down uh for mortgage stuff. 00:20:21.039 --> 00:20:25.200 You've seen a family office in California that was more fraud related. 00:20:25.359 --> 00:20:32.079 Uh, you're starting to see some fraudulent, a lot of fraudulent mortgages come out, especially in the private lending space. 00:20:32.160 --> 00:20:34.079 There was a whole case in Baltimore. 00:20:34.319 --> 00:20:44.079 But I think that what will ultimately be the inciting incident will be maybe not even something in real estate. 00:20:44.319 --> 00:20:49.599 Because if anything, real estate is the one asset class that actually is something, right? 00:20:50.160 --> 00:20:50.799 Yeah. 00:20:51.200 --> 00:20:54.799 It's different than owning a security, even on real estate. 00:20:54.880 --> 00:21:12.319 It's you know, owning a loan or owning the title to real estate is much different than owning a participation in a in a loan or

you know, and stuff that is unsecured, um, you know, a loan on a loan, you know, against you know, you use a loan on private equity. 00:21:12.480 --> 00:21:18.000 That's risen up that there's all these people that are borrowing against their private equity investments. 00:21:18.319 --> 00:21:24.480 So I think that the let alone my my NFT of an ape as part of the ape club or whatever. 00:21:25.680 --> 00:21:26.319 That's right. 00:21:26.480 --> 00:21:26.880 That's right. 00:21:27.119 --> 00:21:29.599 Do you have the gold phone too and stuff like that? 00:21:29.680 --> 00:21:31.119 I mean, like, you know, who knows? 00:21:31.279 --> 00:21:33.039 Who knows where to put your money these days? 00:21:33.119 --> 00:21:35.359 But I would say, if anything, hard assets, right? 00:21:35.440 --> 00:21:37.680 So real estate is a hard asset. 00:21:37.920 --> 00:21:44.400 What I think we're gonna see is um private credit, uh, which is really private equity, right? 00:21:44.480 --> 00:21:46.799 So private credit, private equity, same thing. 00:21:47.039 --> 00:21:51.839 We're gonna see more of that intertwined dislocation. 00:21:52.240 --> 00:21:59.519 And we're gonna see words coming out now that the UK failure of the mortgage company. 00:22:00.079 --> 00:22:03.279 Now, a new report came out on Bloomberg just over the weekend. 00:22:03.440 --> 00:22:08.319 About 300 million of the loans were never recorded in the public registry. 00:22:08.400 --> 00:22:10.640 So they literally don't have collateral. 00:22:10.799 --> 00:22:15.759 And the people that lent against this are supposedly the smartest guys in the room. 00:22:16.000 --> 00:22:18.720 People like Atlas SP, owned by Apollo. 00:22:18.880 --> 00:22:28.960 You know, and you see the chairman of Apollo get on TV a couple of weeks ago after the Milk Institute saying, well, we're worried about private credit. 00:22:29.039 --> 00:22:34.160 We're worried because we we think people aren't making as you know good, they don't make as good a decision. 00:22:34.319 --> 00:22:38.559 Other people in the industry don't make as many good decisions as we do. 00:22:38.799 --> 00:22:41.680 But the reality is they've all they're all intertwined. 00:22:41.839 --> 00:22:44.079 They've all they're everyone's a lemming. 00:22:44.240 --> 00:22:51.359 And these organ, these private equity groups are so large that they don't know what they have and they don't know what they don't know. 00:22:51.599 --> 00:22:56.640 So I think the inciting incident will be either a stock market realization. 00:22:56.799 --> 00:23:11.039 We wake up and the people just chase liquidity and the machines just go berserk, or a major private equity firm that you know will go down and it'll cause kind of a cascade within financial markets. 00:23:11.359 --> 00:23:23.759 Real estate's interesting because for all the the talk of the lock-in effect with rates, I'm almost thinking the new lock-in effect is people not willing to list their house because they can't get what they think it's worth. 00:23:24.079 --> 00:23:26.559 If I live in Austin, I my house is a million-dollar house. 00:23:26.640 --> 00:23:32.079 Well, if I can only get 700 grand, I'm not gonna sell it because I don't want to realize I don't want to realize anything with that transaction. 00:23:32.400 --> 00:23:34.559 Talk about holding on to a sinking ship, right? 00:23:34.720 --> 00:23:35.359 Yeah, yeah. 00:23:36.400 --> 00:23:38.960 As an owner of real estate in Austin, don't don't talk to me over that. 00:23:42.480 --> 00:23:43.119 No, no, you're good. 00:23:43.200 --> 00:23:49.599 So I I do want to be maybe a little more positive here as as we as we wind toward the end. 00:23:49.680 --> 00:24:11.119 And and I'll talk about your time in in loss mitigation, because when when things start to become troubled, kind of what I don't know how you are positive about loss mitigation, but but when it comes to helping institutions or investors navigate uh troubling times or troubled assets, thought thoughts on best practices or things you've learned there? 00:24:11.440 --> 00:24:12.400 Wonderful question. 00:24:12.559 --> 00:24:16.720 Um, my first book that I wrote in 2017 called Win-Win Revolution. 00:24:16.799 --> 00:24:18.559 It's like my big short story. 00:24:18.880 --> 00:24:24.880 I fell into buying mortgages in the summer of 2008, three months before the fall of Lehman Brothers. 00:24:24.960 --> 00:24:29.279 I was a real estate investor and a commercial real estate broker in South Florida. 00:24:29.440 --> 00:24:35.920 I get a call from a fund manager saying, I can buy these mortgages from the FTIC for 28 cents on the dollar. 00:24:36.079 --> 00:24:37.839 I don't know if that's a good deal. 00:24:38.000 --> 00:24:43.359 And that was like my light bulb moment because I didn't know what the secondary mortgage market was. 00:24:43.599 --> 00:24:48.960 I also did not, in my wildest dreams, ever want to collect debt or be a debt collector. 00:24:49.119 --> 00:24:55.119 So then all of a sudden in 2009, I'm managing thousands of mortgages for a private equity firm. 00:24:55.279 --> 00:24:58.960 And it was very, and it was like, okay, so how do we do this? 00:24:59.119 --> 00:25:07.759 How do we create a new paradigm for managing these distressed loans in such a way that you create this win-win effect? 00:25:07.920 --> 00:25:27.599 So we created a paradigm that uh basically set the groundwork for a lot of the rules that the CFPB created in 2033, 2014, making sure that a borrower actually gets listened to, that you don't just send them a default notice and send them to foreclosure and not talk to them. 00:25:27.759 --> 00:25:40.240 So, like when we would buy a pool of mortgages post-GFC, the first 30 first thing we would do is see who could retain, who could actually afford the loan because of maybe maybe there was a misprice. 00:25:40.319 --> 00:25:49.519 Like back then it was a lot of strategic defaults because they people had$300,000 mortgages

on houses that were now worth$150. 00:25:49.759 --> 00:26:00.240 So we would find these people, we would say, if you can afford the loan, the mortgage at the property value,$150, we'll tell you what, we're gonna put you in a payment plan. 00:26:00.319 --> 00:26:14.559 And if you make six payments, while not only are we going to put you on a permanent modification at a lower interest rate, but we're also going to forgive the 155 above the 145. 00:26:14.880 --> 00:26:17.519 We're gonna put you back in an equity position. 00:26:17.680 --> 00:26:20.720 Uh so we save thousands of homes this way. 00:26:20.880 --> 00:26:26.400 For the middle 50% that couldn't afford to stay, allow people to exit with dignity. 00:26:26.559 --> 00:26:31.279 They they they really create work with borrowers as the lender. 00:26:31.440 --> 00:26:40.400 Uh, and by the way, we were private equity, you know, my uh thank God I had good partners that didn't want to be vultures, allowing people to exit with dignity. 00:26:40.559 --> 00:26:52.000 Take some of that savings we got from the purchase of the loan, from buying the loan at a discount to the ultimate real estate value and pass that back to the troubled borrower and then foreclose when necessary. 00:26:52.160 --> 00:27:03.839 So this is what win-win revolution was about was about creating a paradigm for how, you know, really in the world of loss mitigation, when a borrower has trouble, they need conversation. 00:27:03.920 --> 00:27:11.200 And they need someone who isn't just going to read a Miranda about everything they say will be recorded and used against them. 00:27:11.440 --> 00:27:15.119 They need someone that isn't going to just say, you owe us$40,000. 00:27:15.440 --> 00:27:17.039 When are you making the payment? 00:27:17.279 --> 00:27:23.039 They need someone to listen to what their scenario is and find a resolution that works for them. 00:27:23.200 --> 00:27:41.759 And so that's really what my company has embodied for six, 18 years since the GFC is taking the discount I'm getting by buying that these loans from banks or private equity firms or the FDIC, and then passing some of that through and working with borrowers. 00:27:41.920 --> 00:27:48.079 Now, the same can apply to a lender who has given a regular loan, same can apply to banks. 00:27:48.240 --> 00:28:02.240 What often there's this attitude amongst lenders, amongst the banking world that you can't, you if you somehow communicate that you're willing to work with the borrowers, that somehow the whole industry is going to fail. 00:28:02.319 --> 00:28:03.839 And that's just not the case. 00:28:04.079 --> 00:28:10.640 The reality is that yes, you want to, you always have enforcement as a tool. 00:28:10.720 --> 00:28:25.519 Um, but call but the old methods of collecting and bugging borrowers and scaring them with credit reports and and and not or worse, just not talking to them and sending the lawyers after them, that just doesn't work. 00:28:25.839 --> 00:28:46.160 So we have really kind of we have really tried to teach the industry how we do it and how you can treat borrowers with dignity, listen to what they're saying, as long as they have a you have a cooperative borrower that's not hiding in there with their head in the sand, you can come up with a solution that works for everyone. 00:28:46.319 --> 00:28:48.960 And that's what First Lean Resolutions now does. 00:28:49.359 --> 00:28:50.559 Ton of really good stuff today. 00:28:50.640 --> 00:28:52.799 Bill, I really appreciate you making the time. 00:28:52.960 --> 00:29:00.319 And uh, like I like I said at the start, his newest book is The Storm Markets Meet, Mother Nature. 00:29:01.039 --> 00:29:02.319 Thank you very much for the time, sir. 00:29:02.640 --> 00:29:03.519 My my pleasure. 00:29:03.680 --> 00:29:05.119 Great to be with you, Robbie. 00:29:07.680 --> 00:29:08.640 MBS and U.S. 00:29:08.720 --> 00:29:20.240 Treasuries extended the recent losses to begin July, but recovered slightly after Federal Reserve Chair Warsh reiterated a data-dependent policy approach and noted that inflation risks have eased, even though inflation remains above target. 00:29:20.960 --> 00:29:33.680 Markets faced a volatile mix of risks this week, lingering geopolitical tensions, a closely watched jobs report, more on that in one second, and thin holiday trading conditions, all increasing the potential for outsized moves and interest rates. 00:29:34.319 --> 00:29:41.759 While investors are currently assuming Middle East tensions will remain contained, any renewed spike in oil prices could quickly push treasury yields higher. 00:29:42.240 --> 00:29:52.480 With many market participants on the sidelines ahead of the July 4th holiday, reduced liquidity could amplify market reactions, making even routine news a catalyst for larger than normal swings in rates. 00:29:52.799 --> 00:30:04.079 On the data front, the May Jolts report showed the labor market remained resilient, with job openings rising to a two-year high while hiring quits and layoffs stayed largely stable, reinforcing evidence of continued labor market strength. 00:30:04.559 --> 00:30:15.279 Consumer confidence, however, painted a more mixed picture as households reported weaker perceptions of current labor market conditions, despite easing inflation expectations and modest improvement in future outlooks. 00:30:15.519 --> 00:30:22.079 Weaker than expected, June manufacturing data, including declines in both the ISM Manufacturing Index and SP Global U.S. 00:30:22.160 --> 00:30:26.240 manufacturing PMI, reinforced signs of moderating economic growth. 00:30:26.559 --> 00:30:27.359 Your takeaway? 00:30:27.759 --> 00:30:37.279 Competing forces of labor market resilience and softer consumer sentiment support expectations that the Fed will remain a patient, data-dependent approach to monetary policy this summer. 00:30:37.599 --> 00:30:40.000 Today's economic calendar brought June employment data. 00:30:40.160

--> 00:30:47.599 Non-farm payrolls, which were expected at 115,000, were only 57,000 with some backward or downward backward revisions. 00:30:48.319 --> 00:30:57.119 The unemployment rate, expected to remain at 4.3%, was 4.2%, and hourly earnings were up 0.3% as expected, and up 3.5% year over year. 00:30:57.920 --> 00:31:04.480 The expectation was for a labor market that remains stable but not inflationary, with wage growth remaining modest and few signs of overheating. 00:31:05.440 --> 00:31:08.640 Due to the holiday tomorrow and early bond market close at 2 p.m. 00:31:08.799 --> 00:31:11.519 Eastern today, there will be no podcast tomorrow. 00:31:11.680 --> 00:31:15.119 We've also received weekly jobless claims in at 215,000. 00:31:15.680 --> 00:31:19.279 Later today brings May factory orders and weekly natural gas inventories. 00:31:19.759 --> 00:31:30.960 After the payroll's release, we begin Friday with agency MPS prices slightly better than Wednesday's close, the two-year yielding 4.13, and the 10-year yielding 4.46, after closing yesterday at 4.48%. 00:31:34.160 --> 00:31:36.480 Let's wrap up with a joke and some housekeeping. 00:31:37.039 --> 00:31:39.119 Here's how to sing the blues, a primer. 00:31:41.119 --> 00:31:45.039 If death occurs in a cheap motel or a shotgun shack, it's a blues death. 00:31:45.440 --> 00:31:48.799 Stabbed in the back by a jealous lover is another blues way to die. 00:31:49.119 --> 00:31:53.920 So are the electric chair, substance abuse, and dying lonely on a broken down cot. 00:31:54.240 --> 00:31:58.960 You can't have a blues death if you die during a tennis match or while getting liposuction. 00:31:59.759 --> 00:32:01.279 Some blues names for women. 00:32:01.599 --> 00:32:06.079 Sadie, Big Mama, Bessie, Fat River Dumpling, Caledonia. 00:32:06.480 --> 00:32:07.920 Some blues names for men. 00:32:08.240 --> 00:32:08.720 Joe. 00:32:08.880 --> 00:32:09.440 Willie. 00:32:09.599 --> 00:32:10.400 Little Willy. 00:32:10.559 --> 00:32:11.279 Big Willy. 00:32:11.440 --> 00:32:12.079 Leroy. 00:32:12.240 --> 00:32:13.440 Ramblin' Jack. 00:32:14.000 --> 00:32:21.359 Persons with names like Franny, Amber, Jennifer, Tiffany, Brooke, Brittany, Heather, can't sing the blues no matter how many men they shoot in Memphis. 00:32:22.240 --> 00:32:24.079 To make your own blues name. 00:32:24.319 --> 00:32:26.480 Think of physical infirmity. 00:32:26.799 --> 00:32:29.279 Blind, deaf, cripple, lame. 00:32:29.839 --> 00:32:32.640 Then go with a first name, plus the name of a fruit. 00:32:32.880 --> 00:32:34.559 Lemon, Lamb, Kiwi. 00:32:35.039 --> 00:32:35.519 Last name. 00:32:35.839 --> 00:32:36.720 President Jefferson. 00:32:40.319 --> 00:32:41.839 Jake Leg Lemon Johnson. 00:32:42.160 --> 00:32:43.519 Cripple Kiwi Filmore. 00:32:44.079 --> 00:32:45.440 Well, maybe not Kiwi. 00:32:46.079 --> 00:32:52.319 Oh, by the way, I don't care how tragic your life is, if you own a computer, you cannot sing the blues. 00:32:55.440 --> 00:32:58.319 Thanks again to Xperian for sponsoring today's podcast. 00:32:58.720 --> 00:33:07.839 From lenders and landlords to employers and consumers, Xperian helps connect the housing ecosystem with the data and insights needed to make faster, confident decisions. 00:33:08.480 --> 00:33:14.640 To learn more, visit Xperian.com/slash mortgage and lead a smarter housing journey with Experian.