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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 40 August 2025 T H E E X C H A N G E loan at 80% loan-to-value unless you had a 700 or 720 credit score. The conservatorship discussions happening now are interesting. Some of them are projections, some of them are what if this or that could happen. It makes for interesting dialogue, but for investors, it makes the asset more attractive to offset some of these nega- tive fluctuations or added risk, knowing that there's government backing that removes some of that risk. However, government oversight always comes with heavy regulation, and you've got to play by their rules. But their rules aren't real-time with the market—they never are. They're always going to be a step be- hind, or they're going to be way ahead, off-topic, or they're going to be way behind and not reading the pulse of the marketplace. So, not everybody's going to get taken care of in those scenarios. If you had better economic conditions, then I would think that it would be very attractive not to have that government oversight. If you have negative economic fac- tors, you need to have government over- sight. When they took away quantitative easing, that was the first big change in interest rates and mortgage-backed security pricing in several years. But for a consumer and from an originator standpoint, we knew that day when that changed. An hour later, you got a different price, and then it leveled out. But that was significant. It was working for a while because in 2010, 2011, and 2012, there were still HARP loans. They were backing those loans to 125%, 150% loan-to-value ap- praisal waivers. No investor in their right mind would dream of taking on that loan without government backing. That was extreme then because we were digging out of a hole. People thought, "Hey, the government's buying these. As long as we don't get stuck with them, what do we care? Let's get them in and out and shift that asset over where we know we're secure." Now, we need to level out the middle, but we're also in a new administration. You have Trump shaking up the whole world economically in the short-term, but if you're an investor, you still have to make long-term calls and project out years in advance. Also, if the decision was made to privatize, you go right into the political spectrum where nobody's agreeing on anything. It's not going to be an open- and-shut case. Somebody's going to disagree, somebody's going to sue some- body, somebody's going to say, "Trump, you can't do that." And he's going to say, "Yes, I can." Even if they decided to move forward, you still must get the bodies on board because it's a compli- cated issue with the way it's government backed. Do the liquidity requirements change? Is it like we're saving 200 basis points because we don't have all these regulations and fees, and we can offer better rates in the marketplace? Every- body's trying to get to a more predictable market for a few quarters, which we haven't had in about three years. I think that shakeups are good, within reason, and they absolutely could create better offerings in the marketplace. But how do we know what investor sentiment is going to be? That's the biggest piece. If there's a market, companies are going to get something on the street and sell it. But if they're not sure, they're going to move in a more certain direction. I see very little move- ment. I see a lot of talk and minimal rate adjustments. Q: If a conservatorship exit does happen, how should lenders be preparing for that eventuality? Crescenzo Jr.: They need to be for- ward-thinking about how they're going to communicate that to their database and to their clients. First, they must figure out what's going on and how that affects the client, because in some sce- narios, it might not. It is the obligation of the originator not to confuse the client. There's a hunger for real, true commu- nication. They don't want to be sold or hyped. They're overstimulated. They just want the facts. So, my recommen- dation would be to think ahead about, if something like that happens, how you would relate it to the client. But more importantly, if it's not relevant to them and it's not going to affect them, then it should be minimized so that you can use the available time to focus on what the client needs, not what the lender thinks they need. Q: Beyond the question of conservatorship, what other changes or market shifts are you preparing for? Crescenzo Jr.: There are far more pressing issues that would take center stage ahead of this, but as far as the market goes, I'm planning on very little change. Focus on what we have today. There's too much talk about the past and about what's going to happen—the consumer's head is spinning. I like to keep it simple and say, let's just confirm where we're at today. This is what we know today. There are still some positives in the market. Equity gains are out of control in almost every area. The demand is still there. It's heavy, so that makes buying less risky. We're not going to be sitting on tons of inventory that can't ever move. That would be a much greater risk, which did happen in 2008, and its value dropped. We haven't seen it now because we have more people than homes in almost every area. They're moving, the market's helping, and that's what I'm stressing to the buyers that are coming through. And I think the customers are starting to get acclimated to a rate with a six in front of it—they don't like seven, and they're not asking for five. I expect by the end of the year we'll still be at six and a half, six and five eighths, barring anything major.