Today’s episode includes a look at the performance of first-lien mortgages in the federal banking system during the first quarter of 2026. Plus, Robbie interviews First Lien Capital’s Bill Bymel on how insurance challenges, AI adoption in servicing, and key leading indicators are shaping the next potential cycle of market distress. And we close with the latest payrolls figures, which missed expectations.<br>Thank you to Experian. From lenders and landlords to employers and consumers, Experian helps connect the housing ecosystem with the data and insights needed to make faster, confident decisions. Lead a smarter housing journey with Experian.<br>The Chrisman Commentary is your go-to daily mortgage news podcast, where industry insights meet expert analysis. Hosted by Robbie Chrisman, this podcast delivers the latest updates on mortgage rates, capital markets, and the forces shaping the housing finance landscape. Whether you&#x27;re a seasoned professional or just looking to stay informed, you&#x27;ll get clear, concise breakdowns of market trends and economic shifts that impact the mortgage world.

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

Chrisman Commentary - Daily Mortgage News

# Full Transcript

**Podcast:** Chrisman Commentary - Daily Mortgage News

## Participants

- **Robbie Chrisman** (Chrisman LLC)
- **Bill Beimel** (First Lien Capital)

## Transcript

Welcome to the Chrisman Commentary - Daily Mortgage News. I'm your host, Robbie Chrisman. Topics on today's episode include the performance of First Lien Mortgages, its payrolls, and my interview with First Lien Capitals Bill Bymel on how insurance challenges, AI adoption and servicing, and key leading indicators are shaping the next potential cycle of market distress. Here, take a listen to a little preview.

You yourself host a podcast on real estate and debt cycles. When we look at real estate in aggregate, and when we look at debt cycles, where do you feel like we currently are in America? Hmm, that is a great question. Where we are on the spectrum, I would say that we are in the seventh, we're just past the seventh inning stretch of the real estate.

of the cycle. I would like to think that we had woken up at some point to the realities of, you know, cap rates are important, and debt loads are important, and that, you know, that it's time to kind of, you know, reset the clock.

The federal government has given a lot of tools or has has a lot of tools that they have instituted in the industry to prevent a catastrophe of a huge buildup of debt levels. But the reality is, is that they had to end that at some point. So Fannie Mae, Freddie Mac, their servicing guidelines that basically allowed borrowers to call up with a cold and get a modification.

That rule that rule that was put in post COVID ended September 30th of 2025, just about whatever, eight months ago, right, nine months ago. Since then, behind the scenes, we are seeing a significant increase in the number of foreclosure starts.

And so now with that guardrail down, we're going to see a reality set in the 2% of default rates that the media speaks about in residential mortgages.

It's just not true. I've seen multiple economists that basically say that the default rate of residential mortgages, even on the Fannie Freddie portfolio, is probably more like 5% to 6% because of the fact that the servicers have had this ability to kick the can down the road for so long. And we're starting to see that those defaults increase, not just in like low quality paper.

And that's the difference. My friend Melody Wright, she studies the GSE reports and you're seeing an uptick in the low interest loans increase. That means there's a true stress in the market. So I really think we're at, we're coming up on the eighth or ninth inning of a much longer cycle.

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. Thanks to this week's podcast sponsor Experian from lenders and landlords to employers and consumers.

Experian helps connect the hou...

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

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

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.