1.30.26 Fed Chair Nomination; Z Technology Solutions' Suha Zehl on Lending Certainty; Ice Fishing

Welcome to the Christmas commentary, DailyMorge News Podcast. I'm your host, RubyKrisman. Topics on StaysUp, so to include, Trump's nomination for FedChair. My view with prudent AIs, Suhazel, and moving certainty to the front of the lending process to reduce operational friction. And in the capital markets, let's see how Bond yields are reacting to some recent announcements. Do that true work is the one verification solution to replace in-house waterfalls? Verify any borrower with a VOIE solution that automates the entire process to quickly deliver the most accurate and complete reports with broad GSE coverage. To learn more, visit truework.com. This morning, President Trump announced that he will nominate Kevin Worsh for Federal Reserve Chair to succeed Drone Pell. Worsh, 55 years old, is married to the Donner of Ronald Lauder, heir to the S.D. Lauder, Cosmetics Fortune, and a long-time donor in Compton on of Trump's. Although it is a nomination process, it's expected that he'll sail through. The pick likely wouldn't ripple markets because of his past Fed experience in Wall Street's current due that he wouldn't always do exactly what Trump wanted. He's not an economist and has been a critic of the Federal Reserve. And the market wonders how he'll fit in with the other 18 members of the Federal Open Market Committee. But the markets don't expect much action from the new Chair. Traders are pricing in a most two more cuts this year before the Benchmark Fed funds rate lands around 3%, which policymakers have indicated is the long-run neutral rate than neither boosts nor hinders economic growth. Though chairs historically have resigned their Fed positions after being removed as Chair, it may not be the case this time since Powell has two years remaining in his governor term, and he could choose to serve it to push against Trump's efforts to compromise Fed independence. The Supreme Court is currently considering Trump's or any President's ability to fire. Fed Governor Lisa Cook, a case that ultimately could decide what powers the President has of Fed board members. As it turns out, Treasury yields are higher in those prices as well as MBS prices or lower on what investors viewed as a hawkish pick. Trump emphasized Worsh's academic credentials, private sector leadership, and international policy influence, noting his reform were adopted by the Bank of England and his role representing the Fed globally. He praised Worsh's exceptionally qualified and expressed strong confidence that he would become one of the greatest Fed chairs in history. He may do what Powell would have done anyway should the nomination go through. U.S. Treasury is rallied yesterday with gains across the curve of pushing five and ten year yields back below the 200-day moving averages to spinarily dip after slightly weaker than expected jobless claims, which dipped to 209,000 while continuing claims fell to the lowest level since September 20th, where flat productivity data which came in unchanged at a strong 4.9% and unit labor costs down 1.9% as well as wider trade deficit which poses a drag on Q4 GDP. Bond yields ultimately finished the day near session highs even after a soft $44 billion period of seven year treasury auction. Mortgage rates rose again in this week's Freddie Mac primary mortgage market survey. For the beginning January 29th, the 30 year and 15 year mortgage rates increased 1 basis point and 5 basis points to 6.10% and 5.49% respectively. From year ago rates are 85 basis points lower and 63 basis points lower. For today's interview, I want to welcome the show Sue Azel to talk about moving, certainly due to the front lending process to reduce operational friction, eliminate late stage surprises, and allow lenders to scale volume, protect margins, and serve complex borrowers without adding staff. She's more than three decades of experience spanning financial services, mortgage lending, technology, business intelligence, and higher education. She's found her presence of Z technology solutions of consulting firm that helps organizations, harness innovation and data to transform how they lead, serve, and grow. But I think brand ambassador, I think, like a influencer, like, oh, you should really try this Aeroan smoothie, and I get all these people to go to Aeroan and the rep-- what does a brand ambassador mean for the mortgage industry? How do you view your role? So that's a very interesting question, then. I'm so glad that you kicked off with it so that we could clear the error on that. So I hate the term influencer. I actually wrote a post about it, somebody actually accused me of wanting to be an influencer, and that's like the last thing I ever want to be. I want to share knowledge, and I want to share what I believe matters to my clients, to the people out there, especially when it comes to technology and AI, because that's my focus. And so when you ask me what does brand ambassador mean to me as a consultant, which is what my role is, I really try to stay very agnostic and not say this is what you should do, or this is the brand you should buy, or this is the best-cooled technology that you should have, because I wanted to make sure that I'm leveling the playing field for everybody. Except this product, I've known the prudent team for quite a while, I've been working with them, we've had multiple conversations, this is a product that is necessary, critical for our industry, really helps in so many aspects that I felt I was comfortable putting my name against it. And so for me, brand ambassador doesn't mean this influencer thing, it's more about what am I, what do I trust, and what am I willing to put my name alongside with and partner with them. And that's why I partnered with prudent, because I really truly believe that their product is solving a problem that our industry has. Yeah, I guess I'm overstaying the obvious in 2026 here, but if anybody's going to vouch for a product, they should believe in the product, maybe that that's not how traditional influencers have worked, but it's how you work, so I like that example that you're setting here. But let's dive into the discussion in earnest here a little bit, because for years, lenders have treated agency and non-QM analysis as two separate worlds. And siloing them has led to operational and business costs across the industry. I wonder if you can outline some of those just to paint a picture for people of the problem here today. You're absolutely right, those things have always been viewed as separate, and partly because the agency's really don't purchase non-QM loans. Their mandate is to just purchase QM loans, qualified mortgage loans. But what has happened is prudent began to see where the puck is heading. I mean, I don't know if you've heard the Wayne Gretzky saying, "I skate where the puck is headed, not where it is today." And that's really what prudent has been doing. They've been monitoring what's happening in the industry, and they've seen this convergence begin to happen. We've seen this breakdown of the silos, especially in 2025 and 2026, when lenders, IMBs, are looking for ways to increase their production and reduce their costs. And so that was kind of like an aha moment, if you want, if you will, that said, you know what? We need to really start looking at how we can provide a solution to our industry before it even knew it needed it. They were that forward thinking. That's from my conversations with them, you know, as we were going through seeing what the product is. And what prudent has done is they really have built a, I'm going to say, like a proactive system that really combines everything. I mean, one of the things that blew my mind, and I'll be very honest, one simple screen that they showed that actually listed all the products and showed the qualified income for each of them in one place, Robbie. I mean, that has never been done in our industry. People have had to go back and forth, jumping from one system to another to see, how is it in FHA? How is it in VA? What about the agencies? What about what's happening on the non-QM side? You see it all in one place. And that gives you clarity and allows you to make the right decision. So from a cost perspective, you know, you're talking about cost and it really isn't about the cost. It's about the clarity. It's about that forward thinking of saying, this is where our industry is headed. And we know it's going to need this down the line. So we're going to provide it now ahead of everybody else and go to market with it first. Yeah. Skating to where the puck is going. And much like the Wayne Gretzky quote, you miss 100% of the shots you don't take, which is actually a Michael Scott quote. I'm going to start telling people that you need to skate to where the puck is going as a Suha Zell quote. So I got, I got you now, but I've, I've long said that we should be able to bring things further forward in the origination process, whether that is, you know, underwriting at the point of search, whether that is insurance, further in the process, figuring out these things. So it's, it's very cool. What prudent is doing, you know, it's positioning up front income as shifting certain deep from the back end of the process to intake it. It seems like second nature to me, I'm not some sort of technological genius here, but it seems like it makes intuitive sense that you want to be able to figure these things out as soon as possible in the process. Why is it such a structural change for lenders knowing qualified income on day one? Because it has never been, I mean, the statement that I hate the most is when somebody says, well, this is how we've always done it. I hate that. I absolutely, it's like I'm in the, you know, in the, in the, in the field of, if it ain't great, broken, break it and make it better. And that's exactly what prudent has done here. They have this shift left mindset, which when I first heard it, I was like, what the heck does that mean? But you know, when you think about it, think about the whole process, think about restarted, you know, application taking and go all the way to closing, that shift left mindset is moving all of that that you talked about to the beginning of the process. And why is that important? Because you create the best customer experience by giving your customers the clarity that they need, by giving your loan officers the tools that they need so they can better serve their customers, changing them from, you know, income calculators to actual relationship builders, to actual trusted advisors. By showing them, here's a qualified income for your customer. Here's what it is at FHA, at VA, at all of the different loan products. Now you can have a knowledgeable conversation with your customer. You could tell them, you qualify for this, you qualify for that, these are the options that you have. What's in your best interest? And that's really what we want to make sure that the LOs have at their hand. It's eliminating the friction that happens downstream when you don't know what the income is. I mean, if you think about it, there's four, there's the four C's. We all talk about the four C's in loan in mortgages. We talk about capacity, which is their ability to repay, which is based on their income. We talk about the collateral, which is the property. We talk about their creditworthiness, their financial situation, and we talk about their capital assets. These are the four points in that process where something could go wrong. An income represents such a big part of it. So by bringing it up stream, by letting the LOs, by letting everybody involved in the process, have that clarity from the get go, that gives you so much more ability to actually help your customers. I'm excited over here because it's nice to see that what's in the best interest of the lender is becoming what's in the best interest of the borrower and seeing those two merged together is exciting. And she got a single workflow, whether that's FHA, VA, USDA, non-QM programs. How should it change the way lenders think about serving complex borrowers without slowing down their core production? Friction is the word. Use everyone's trying to eliminate friction. Yep. Well, by breaking down those silos, by actually making it so transparent that you could see everything in one place, that's really eliminating that friction. That's creating the transparency that you as a loan officer or you as a lender can offer your customer. Not all originators are created equal. Not everybody knows all the nuances of all the loan products and what happens in FHA versus VA. This kind of level sets the playing field. You don't have to know all the nuances. It's going to do that upfront income calculation for you and show you what is the qualifying income. Not you having to know all the intricacies of everything. Now, that doesn't mean that the tool is going to make the decision for you. Not by a long shot. You are still the human in the loop. You are still the person reviewing those and having the conversation with your customer about the different things. I don't know if you remember the days where loan originators would carry their HP calculators. I have a modern one. This is a modern one. Everyone's were like this and they were wide and you would press and it would take a long time to calculate the payment and all of that. This tool eliminates all that. It's all built in. It provides that clarity. It provides that seamlessness. It removes that friction to help the allows be better. Which in turn, I mean, think about it. That helps them be more productive. That increases their revenue because they're not focusing on the things that they should not be focusing on. They're focusing on the relationship. They're focusing on surveying their clients, not calculating income relief. I'm not as much an HP 12C guy as I am a T84 guy. Maybe that's aging myself in a good way. But I used to play games on that calculator. That was so much fun. You can do the words and you flip it upside down and read them. I'm not going to tell you what words you flip up and down and read here. But it's good. You almost got me. So let's close here. I want to make this practical for people. I want to kind of move back from the from the trees and see the forest a little bit here. When we eliminate these late stage income surprises, it should enable lenders to scale volume protect margins and expand product offerings without adding a head count. Correct. Correct. It does. And I mean, really, honestly, the what prudent has put together is is providing a triple win to the lenders because it's going to create that cost reduction. Your team no longer has to work on loans that are not going to close. I think there's like a metric out there that says 25 to 30% of the loans don't move and don't close that you're working on. Think about all the work that goes into those 25 to 30% of loans. Whether it's ordering a appraisal, whether it's ordering credit, your underwriter working on it, the originator, the surprise that your customer gets three weeks before closing, saying, up, your income doesn't qualify. Or there's an issue. All of that gets eliminated. But not only that, you can actually convert some of those 25 to 30% that weren't going to close to actually possibly close because now you can offer them a different product. You have the visibility and the clarity to see the different products. So not only are you cutting costs by not spending time on things that are not going to go anywhere, you're actually able to convert those into actual production. Maybe not all of them. Maybe it's not going to solve everybody's problem, but that's going to help you with that. And by having the rep in warrants available to you, that's going to protect your margin right there. You're not going to have piebacks. We know lenders have to put aside reserves in case of potential buybacks. Well, when you have the rep in warrants, that's eliminated. That improves your liquidity position as a lender right there. And all of that, when you wrap it all together, you're getting an exceptional customer experience because you're not going to surprise that customer three weeks before they're starting to pack their house to move to their new house or give up their apartment as they're moving into their first time home, as a first time home buyer, you are setting the stage correctly from the get go for these customers, giving them the security, if you will, and the knowledge that you are working with them and that you've got this. I had always thought of ambassador as a noun. You have made it a verb for me today. It's a verb in my mind after this discussion. I can see how much you genuinely mean what you're talking about and it's been a real pleasure. So thank you very much for that. I'm looking forward to seeing you at dinner on Monday night at IMB, put on by Stratmore and T360. That should be very good and hopefully we'll have you back on the podcast. So thank you. Thank you so much, Robbie. Today's economic calendar kicked off with the rescheduled December producer price index viewed as old terms of news as it came in up 3.0 percent year over year, a touch higher than expected in a 0.5 percent month over month. Later today brings Chicago PMI for January and federal marks resume following Wednesday's events, including some from St. Louis's most lemon, vice chair for supervision moment. Earnings also continue from Wall Street. To begin the day with eight in CMS prices slightly worse from Thursday's close after the do you serve price numbers, the two year yielding 3.56 and the 10 year yielding 4.26 after closing yesterday of 4.23 percent. Let's wrap up with a joke and smells keeping. A man woke up early and kissed his wife good morning and good bye. He made a thermos of coffee and a thermos of hot soup as his car warmed up in the driveway. Practiced fishing gear and proceeded to drive out to the lake for some ice fishing. As he drove down the road he realized that his visibility was horrible. It was too dangerous so he turned around and went back home. Quietly he re-entered his house, he crept up the stairs and stripped down to his long jumps, slipping into bed and nestling beside his sleeping wife. Sleepily she said, "I didn't expect you so soon." He whispered in her ear, "It's a freaking blizzard out there, it's a mess." Which is why he whispered back, "Yeah, can you believe my idiot husband is out there fishing right now?" Thanks again to TrueWork for sponsoring today's podcast. It's the one verification solution to replace in house waterfalls and you can verify any borrower with a B O I E solution that automates the entire process to quickly deliver the most accurate and complete reports with broad GSE coverage. To learn more visit TrueWork.com.