Name: ACUMA Inside Track webinar, sponsored by Cotality™. How to Succeed in 2026
Uploaded: 2025-12-11T20:30:06.301Z
Duration: 1 h 30 min
Description: ACUMA Inside Track webinar, sponsored by Cotality™. How to Succeed in 2026

Transcript for "ACUMA Inside Track webinar, sponsored by Cotality™. How to Succeed in 2026": Hello, everyone. Welcome. We'll be starting up here in just a minute as, everyone joins. As a reminder, if you have problems with your sound, you can click in the lower right hand section, to turn on the closed captioning or go into light mode. Also check out the docs section, for some, copy of today's presentation and some other information. And then, we invite you to register for an additional webinar we're holding on January 22. You can click on that link for additional details. Again, we'll start here in just a couple of minutes. Hello, everybody. Welcome to the Acima Inside track hosted by our colleagues over at Kotality. We are really excited that you all are here with us today and that Kotality is sponsoring this webinar. As an Acuma affiliate member, we appreciate Kotality's commitment to educating credit unions. Stay tuned for some amazing insight from Cotality and Logic Federal Credit Union for an inside look at the road ahead for lending from the macroeconomy down to the specific regulatory changes impacting your daily operations. Also, everybody, we are wrapping up an amazing year here at Acuma, but have no fear, we are already working on everything for 2026. Stay tuned to our LinkedIn social media profile, our website as we kick off q one, and we have several virtual network meetings, webinars, and podcasts all coming up in the first quarter. We also are going to be heading to Dallas, in fact, to the Cotality Discovery Center in the March, where our first summit meeting will be held as well. So please plan to join us next year for our events. It's been a pleasure working with the team over at Kotality, and I'm looking forward to today's webinar. Sending everybody happy holidays, and, Sean, I'm going to hand it right over to you. Thank you very much, Krista. We, certainly appreciate this opportunity, and thanks to all who've joined us today. As always, we have our our legal notice, which you can look at later if you desire to do so. We have, our agenda today. We will be covering three sections of, of topics, economics, with Selma, credit score information with Mercedes, and then collateral with myself. And then we'll also, have time for q and a at the end. So if you have questions, go ahead and put them in the q and a section, and we'll get to those as we move forward. Introducing our our participants for today, we have Salma Hepp, who is the chief economist here at Cotality. We appreciate her insights as always. Mercedes Vela, who is our senior vice president over Credit Solutions and look forward to some up to date information there. And Nick Litvinoff, who is with Logix Federal Credit Union. We appreciate him being on today to give us some insights into how all of these changes are impacting the world of credit unions and your members. And I'm Sean Telford. I'm the chief valuation officer here at Cotality, and I'm, pleased to to share some information on the the updates to the appraisal world, including the uniform appraisal dataset. So with that, I'm going to hand it off to Selma who will go through our economic and housing outlook section. Selma? Thank you so much, Sean. Thank you so much for having me. Thanks, everyone, for joining us, and I would like to echo the, holiday sentiment. I wish everybody a wonderful holiday season and even better 2026. So with that, I'll start with my, overview. So I have, just a brief sort of overview of economic trends and some of the housing market trends and also, a little bit on our forecast for 2026. What I can say about this year so far or, you know, what 2025 turned out to be, it was a year of a lot of mixed results. It was a lot of fear that the economy would be very sluggish, but it turned out to be very resilient. It was really powered by high income households that, continued to spend throughout the year. There was concerns again about consumers spending overall and labor market as well. But high income households continue to spend, and, and and the other boost of the economy was the AI investment boom. So looking ahead, what we are facing is a little bit more headwinds from cooling labor markets and then some concerns around inflationary pressures. We have not yet fully seen tariffs play through the play out through the, prices, for US consumers. So we are still waiting to see how the impact of that plays out in 2026. In terms of the housing markets, it's been a year of a lot of volatility in terms of mortgage rates, not a lot of home sales activity, but some improvements for potential home buyers in terms of inventories and also slower pace of home price appreciation, which means that we have more affordability. As we go into 2026, we do expect mortgage rates to gradually very gradually decline, and remain in that, 6% range, a little bit lower where they are today. Though even today, when you when you look compared to 2023 and 2024, we are we we have made a little bit of progress, towards more affordability. In terms of home sales, I would mention that, you know, not just, the economy is, displaying these k shaped trends that you may have heard about, but housing markets, have been defined by k shaped trends as well, meaning that higher income households, have performed a little bit better, and there's been more home sales activity for higher income households than lower income households. In, you know, lower income households really constrained by affordability challenges, and and just the fact that, you know, home prices over the course of last five years have increased as much as they have. Inventory was an improvement this year from the prior two years when we bottomed out in terms of the improvement in in inventory, but I would say that, there's been a lot of variation across markets. So some markets have seen quite a bit increasing in majority as well, others have not. And that also had an impact on what we saw in terms of home price appreciation. So an overall cooling in our most recent, home price index by totality, we see home prices up only 1% in 2020, in October 2025 this year, so over the course of last year. And then when you adjust that for inflation, that means a decline in home prices and, again, improvement in affordability. But very bifurcated markets, Northeast, Midwest continuing to see robust gains of large single digits. And on flip side, you see, Sunbelt and Western markets in decline. And then in terms of the risks that have sort of evolved over the course of last year and are persist are expected to persist going forward. It really has to do with insurance costs, non mortgage costs rising overall. So that does include insurance, property taxes, utilities now making part of that as well, and HOA fees in some markets that are really, putting some pressure on on prices, particularly in Florida when you think about the condo market there. So we do see a slight increase in mortgage delinquencies, and so that is something to keep an eye, out looking into 2026. Okay. So let me spend a little bit more time on the economy, just mostly focusing on job growth, and, you know, the k shaped trends, because this is really what we expect, will define, demand for 2026. If we see large increase in a rate of unemployment, that means, obviously, that, there are not that many people out there, being able to buy a home. So as you can see from the forecast here, the rate of unemployment is not expected to see a significant increase, only from about 4.4 to about 4.5. The reason being is that both the demand for labor and supply of labor has significantly slowed over the course of last couple of years. If you look at the bars here going down from 2022 into 2025, we were creating about 165,000 jobs a month, in in those early couple of years ago where now we're only needing about 45,000 jobs a month being created or added, for the rate of unemployment to remain steady. In the next chart here, I wanna spend a little more time talking about the k shaped economy. Specifically here, what's interesting to see is, you know, how much both, in terms of spending and and wealth creation, the two income groups have differed. So on the left hand chart, you're looking at spending. You can see the blue line. That's the higher income households spending much more, over the course of last five years since the onset of the pandemic compared to lower middle class, households or middle income households. And then on the right hand side, it's the wealth creation that mirrors those trends as well. So for the bottom 50% so the in the median, households have only seen about $3,000,000,000,000 increase in their wealth, whereas for top one percent or top 10%, the increase has been as much as $20,000,000,000,000 So, obviously, this is where, that drive, consumer spending drive comes from, is from more affluent consumers. In terms of the mortgage rates, I mentioned, you know, not a lot of break there. Looking into 2026, we have sort of couple opposing trends. One is the expected rise in unemployment or just weaker overall growth in terms of wages and and number of jobs jobs being added. But on the flip side, you're looking at, you know, expected continuation of higher inflation, and then debt, government debt, which impacts pricing of ten year treasuries, those being, those pushing up higher. So you can see the forecast, the range of the forecast at the blue area is pretty narrow, meaning that a lot of the we look at the consensus of five different forecasts, and and, generally, everybody's on the same page that, we won't see a big break, but at least some gradual improvement towards 6%. Okay. Now higher mortgage rates have, meant that we've seen, a building of more mortgage market potential, meaning that a lot of mortgages that have been originated over the course of last couple of years or three, four years, that's the magenta portion of the left chart, those are now in the monies, in in other words, to be refied. And and we do see every time mortgage rates do drop that, people are rushing in to refi at those lower mortgage rates. The other thing that, that is creating the potential is that we have a lot of tappable equity. Homeowners have become significantly more, house wealth wealthy, because of the increase in home prices over the last few years. So there is a significant amount of tappable equity, and we do see that in the data as well that people are more likely to be tapping into the equity. So so taken together, maybe not the the equity portion, but just in terms of mortgage originations and refi activity, here is our forecast. You can see sort of the three interesting periods, last three interesting periods, where we saw boom in in refi activity, as well as purchase activity, and now a little bit slower trend since 2023. Now we do anticipate about a 25% increase in mortgage originations over the course of next year, and a lot a bigger share of that coming from refi or at least a larger increase, coming from refi than from purchase. But overall, 25 increase in mortgage originations. On the home sale sale side, increasing inventory have, certainly provided buyers with advantage. We do see markets with some markets with a lot more inventory. Those would be markets on the left hand side in a map here, whereas markets in purple are still, sitting way back, below, 2039 or that period before the pandemic trend. And that's what's impacting the the the the pressure on home prices in those markets. And then, you know, overall, nationally, despite this increase in inventory, you can see that we're still sitting relatively low when adjusted for numbers of, households out there, when adjusted for population growth. So we still have ways to go in terms of inventory, improvements in inventory needed. For price appreciation, this is home prices or, Cotality HPI. The magenta line on the left hand side, that's the trend over the course of last year. You can see it's pretty flat compared to last couple of years, especially over the last, three to six months period, when, again, coming into spring home buying season, mortgage rates jumped and really cooled home buying demand. So as a result of that, only about 1.8% overall appreciation for 2025 and little bit more in 2026, My last couple of slides, you know, I mentioned a lot of bifurcation. This is bifurcation in terms of the home price appreciation, and this map is very similar to the map of inventory. So in other words, where we do see a lot of inventory, we see lower rates of home price appreciation, even declines. Those would be markets in yellow. And then, in purple markets in purple is where you have significant, single digit increases. You can see on the right hand side there, Connecticut, parts of, areas surrounding New York City and Midwest where we saw, most significant appreciation over the course of 2025. And then lastly, just in terms of our forecast for home sales, this includes for both existing home sales and new home sales about a 7% increase. So gradual pre pickup for the rest of the decade, again, being really constrained by affordability, in most markets, but then opportunities provided through more inventory is in other markets. With that, I will now pass it back to Sean. Thank you very much for for your attention. Yeah. Thank thank you, Selma. As always, it's a incredible amount of information, and it's it's all I always enjoy looking back a little bit and kinda seeing where we've come from, but certainly appreciate your insights as to what might be coming down the pipe as we say. So, Nick, as as we look at that information from Selma, I mean, obviously, as you sit with your institution, the the lock in rate with the rates, you know, sticking around 6%. and maybe coming down a little bit, you know, are you seeing that your members are becoming comfortable that, hey. This is the new norm, and if I'm gonna do things, I'm gonna need to do it now. And or are you getting creative with, you know, different types of loan programs or or other ways to help your borrowers get the access to the funds they need. Sure. Thank you, Sean, and, thank you, Selma, as well for your presentation. I think it's a combination of both, really. You know, as a lender, we've heard about rates coming down for the last few years and every year I hear, you know, this is gonna be the year where volume really picks up and, you know, it really hasn't translated significantly within the last couple years. So for us, we really have to think about what we can do for our membership in terms of products to make, those decisions easier and having more options for our members. You mentioned arms in particular. It's something that we've really specialized in at Logix and the different arm products. I recently had the opportunity to work on, the five five arm, which is like a traditional credit union product, and we had suspended it for a while. We revisited that product, made some improvements, brought it back, and, I think it's significant because, you know, it provides members with the stability that they look for with the fixed rate mortgage, Mhmm. but the rate the rate is lower. You know, it only adjusts once within the, you know, within the first ten years of the loan, so most people don't even have their loan that that long. So it really makes it more attractive to homeowners that they can get that slightly lower rate. They do get an arm. We educate them about it. So, it it's really an opportunity and also with exception products, an issue with arms is the qualification rate. You have to qualify members sometimes, you know, their no rate plus 2%. So in certain cases, we look at that and provide exceptions to our members as a portfolio lender if they qualify under the no rate. We're able to be flexible with them and provide, you know, those different opportunities. Very good. Yeah. It's certainly interesting times as we've we've, been through the over the last few years. So, thank you for those those insights, Nick. So with that, we'll continue through here. And thanks again, Selma, for your your insights. We'll jump forward in the material here and, invite Mercedes to join us and and, begin talking about, so what's going on in the the credit score world and, borrower world. So, again, thank you, Mercedes, for being here, and, we'll turn it over to you. Thank you, Sean. I am happy to be here with you all. Mercedes Bell, and I'm responsible for the credit business at Cotality. So I'm here to talk about the credit score modernization initiative today. And this is also known as the credit credit scores models and reports initiative, which is an ongoing effort to evolve the scoring practices in The US mortgage finance industry. For about thirty years now, both Fannie Mae and Freddie Mac have required lenders for conforming loans to submit the classic FICO score to them. Earlier this year in July, the FHFA released a statement that basically indicates to lenders that they will be permitted to use the lender's choice model, which means they can continue to use the classic FICO score, or they will be able to submit the Vantage 4.o score. So you'll be hearing more updates, but it the statement was released that they've made that decision, and they'll be bringing lender's choice model to production for for mortgage originators. Now what they haven't done is neither the g of the GSEs have released a timeline as to when they're going to be able to technically be able to receive a Vantage score through their system. So and a lot of the LOSs are also working through the programming of being able to accept a Vantage score four point o. A little bit about the benefit of the Vantage four, Datto score is that it is using rental payment, and it will use utility information that appears on a credit report. So it is intended to to provide broader access to affordable credit. So that's a really positive thing. Now what the bureaus are doing right now is to really encourage adoption and encourage lenders to start using the new score and understanding how it relates to the classic FICO score is for 2026. They're gonna offer this score at no additional charge. So the purpose of this, of sharing this information with you guys is that if you're interested in receiving the Vantage four point o score, you can reach out to your credit, report provider, and you can ask them to enable the score. Now what we're doing here at Cotality is because a lot of our customers are not ready to take on a new score with their production, they're not ready for their loan officers to see it, or their LOSs are not ready to ingest the new score, is we provided suppression capability where we go and we order the score and we get the data and we keep it in our database. And what we're doing is we're creating a repository for our customers so that on a regular basis, whether it's weekly or monthly, we're able to give a customer output. We can give you loan numbers. We could give you the FICO score. We could give you the VantageScore. And what that does is it allows you to begin to understand how it relates to the classic FICO score. So I encourage you, if this is something that's of interest to you, to reach out to your credit provider to get more information on having the ability to to view and and start using the the Fancher score, if nothing else, for evaluation purposes at this time. From there, I will switch now and talk about the homebuyers privacy protection act that, will go into effect here very soon early in January 2026. Sorry. Actually, March 2026. So the Homebuyers Protection Act is an act that was signed, by the president on September 5 and goes into effect six months from now. And, really, what it does, it's it's intended to ban the credit trigger leads so that when consumers apply for a mortgage loan, they're not getting bombarded by hundreds of calls of lenders reaching out to them, giving them solicitations for either better loan programs, better rates, etcetera. So, the it is intended to really stop that practice. In some cases, it's looked at predatory, trigger or lead practices. So there was a lot of lenders. The MBA was in full support of having, this this, law go into effect. Now there are some exceptions to the rule here that will still continue to allow some entities to receive, trigger information or alert information when some consumers apply for credit. And the first one is if there's consumer consent. So if any entity obtains the consumer's consent, they will have the ability to continue to get information when the consumer is out there shopping for credit. The other one is if they have an existing relationship. And by that is if it is the original mortgage originator of the loan, then they have the right to continue to receive this information. If it is the servicer of the loan, they continue to be excluded from the ban and can still receive this information. And the other third item is if there is a depository relationship with a with a, with a consumer, which is ideal in the credit union space. Right? Because these members, you have depository relationships, so you're still gonna have the benefit of being able to obtain this information. There is a requirement with the act that if you do get a trigger lead, you will have to also send a firm offer of credit to the consumer along with with receiving that trigger lead. So you will have to, execute the firm offer. You'll be able to send the firm offer via an email, you know, snail mail, or, telephone is also, applicable as well here for to present the firm offer. So the reason we're bringing this to your attention is because we do think there is a benefit for credit unions. Right? Because you have customers that are applying for a mortgage with you, and they they get, phone calls, they get messages from a lot of other lenders. So the chances of the number of outreach they're gonna get will decrease because of the act. But, additionally, if these are your work, depository relationships and you wanna monitor these, your members, you'll be able to do so. You'll still be able to get a list, and you can also qualify that list of your members through their credit criteria to see who you would offer credit to for a mortgage. And when any of those consumers are out there shopping and if they're originating a mortgage with somebody else or a credit inquiry happens, you can get notified. So the purpose of us bringing this to your attention is just to let you know that you are in the area where you are able to get an exception to the ban, and you're able to to obtain this information about your members should you choose to do so. So, again, what is optimal for the relationship that you have with your members is it is, proven to be a higher conversion rate. When somebody a consumer gets outreach from an entity and it's an entity that they have a relationship with, they're more likely to open, look at the look at the message, and and have more conversations. And because you are that trusted entity for your, credit union members, we think this is ideal, and we wanted to ensure that you were aware of of this new, benefit with regard to the Home Privacy Protection Act that is, gonna be available to you. So, again, I encourage you to reach out your to your credit reporting agency to obtain more information about, prospect triggers, and, and I'm sure they'll be able to give you more information on what to do next to get started. Thank you, Mercedes. I've got a couple of questions here for Nick, about the the topics that that you've covered. So, Nick, as as Mercedes, talked about with the Vantage four point o score becoming available and, you know, all the the the discussions that we're seeing on that and the buy merge requirement as well. At Logix, do you see this as a a path to, reach out to, potential new members or members that might not have been well served in the current models? And and, also, are you concerned about the technical integration challenges that Mercedes mentioned? Yes. Thank you, Sean. Definitely a a little bit of both is top of mind. So really, I think for me, working on processes, procedures, workflows in my organization, that's where my mind goes. It's really how do you juggle that, new model where you're working with VantageScore, you're working with FICO. How does this affect our process on the front end, on the back end, and, you know, even portfolio management, things of that nature. So, I do agree that it's an opportunity. You are able to offer products and loans to members with a thinner credit profile than than traditionally. I like the fact that you're also able to work with the agencies and sell these loans. So you may have a borrower who's got a thin credit profile who qualifies, and maybe you don't wanna keep that loan, as a portfolio, but you are able to still do that transaction for the member and and sell it on the secondary market. It also makes me think of other opportunities that are available with other, loan products. What comes to mind is is HELOCs right now is a huge topic, for us and other credit unions. So, there's very thin margins on HELOCs. So it just makes me think about what we could do there if we could utilize VantageScore in that arena, or utilize less credit bureaus, do like a one or a two credit bureau pool because, you know, the credit pricing as many folks on this call probably know has just been increasing year after year and it's difficult for lenders. So any opportunities that are available, we're definitely considering, and I and I love what Mercedes touched on regarding the, you know, suppression capability being able to maybe not utilize VantageScore yet, but collect that data and just hold it and see what you could do and where are the missed opportunities to see where can you really utilize that, should you bring it, and start using that information. Yeah. There you know, with, obviously, the the the efforts that entities put into retaining, you know, customers and members are are significant, which leads right into the next question around the, changes in the HPPPA regulations. So with these coming, soon, it it on the surface, it looks like a really good win for for members, for consumers on from your seat there at Logic, do you see this as solving a big frustration that you've you've been dealing with over, you know, since before this? And do you plan to leverage these changes as a selling benefit to your customers? Yes. And I think I I definitely hear rumblings and frustrations from members who, you know, a lot of folks don't understand the mortgage process the way that we do. So when they apply for a loan and, you know, next thing you know, they're getting ten, twenty calls a day from various lenders that are not the institution that they applied with, you know, they raise the complaint to us, like, hey. What are you doing with our information? Are you selling our information? We have to answer those phone calls and explain to them that, no. This is just something that's beyond our control. So I think this is a real benefit for us. You know, we we put member trust in that member relationship top of mind, and we wanna expand that member relationship to other products. We wanna be their primary financial institution. So I think this definitely helps us by, you know, it it enhances that member trust that they know that they don't have to deal with these other institutions or get these random phone calls. And it also gives us the information, the data that we need to potentially offer them additional products to deepen that relationship to offer products, when the member needs them the the most. So that information, that data is critical, and I definitely see it as a win for for Logix and and other credit unions. Excellent. Excellent. Thank you for your insights, and and thanks for that information as well, Mercedes. So we'll continue on in the, agenda for today. It'll be, it's my opportunity now to talk a little bit about the subjects near and dear to my heart in collateral valuation and, all things pertaining to collateral. So it's certainly no secret that the last couple of years have had tremendous amount of activity in the collateral valuation space. A lot of these changes that we're seeing now and and really have been seeing are driven from the GSE, modernization initiatives. So Fannie and Freddie working to update, how they look at collateral and how they collect data and information about collateral. We're in the midst of the transition to the new UAD, which is, they called UAD 3.6, which mirrors the, to align with the MISMO standard, three dot six version for valuation. And this will be a move away also from appraisal forms. So the old 10 o four or ten seventy three or whatever the form might be, those are going to go away as we transition to this new three six, which will be a single uniform residential appraisal report that will encompass all different property types. Certainly, something of this large nature will impact stakeholders throughout the entire ecosystem for valuation, whether it's the appraisers, needing to learn the new standard of of how they will report their observations and opinions value to the lender side. All types of lenders will be impacted by how they underwrite appraisals, how they, look at appraisal documents, and when their borrower might interact with the new appraisal report, what you know, helping them understand it differently. And and then certainly it changes how, the loans the appraisals are submitted to the the GSEs when they're sold, to the GSEs either directly or or through an aggregator. So why does all this matter? What's what's this about really in the end? It's about improving the quality of the appraisal process and the appraisal data that's in the mortgage ecosystem, and that'll be certainly, this will provide much more data and information for lenders to use. And at the same time, it's to eliminate some of the friction that we see in processes today, Some of the back and forth to get appraisals corrected or updated or, additional comments. A lot of that will likely go away with these changes. So the, again, the GSEs are a large driver here, and they wanted to raise the bar. And because they have such a a an influence in the collateral valuation space, in the mortgage space, these these approaches and standards will really kind of become the de facto standards. The GSEs have been really pushing hard on the lending community and the appraiser community to up up their game in terms of appraisal quality. Of late, the for example, they've been asking appraisers to do a better job of supporting adjustments and clarifying why they chose particular comparables. They've also asked the lending community to do a better job of underwriting the appraisals and validating the appraisers, work and ensuring that there were no omissions, from that process. And this is a big deal. And and as we move forward, Fannie and Freddie have pushed hard on the lenders also to adopt these changes. We're just at the beginning of that process. There's been a lot of, webinars and outreach activities from Fannie and Freddie and others, around getting ready and preparing. The limited production, really, you could think of it in terms of a pilot of this, started in September, and that pilot will conclude at the January 2026, that that limited production, I should say. And then, beginning in January, 01/26/2026, lenders can begin to submit these new appraisal reports if they desire, and they must complete that process by the by the, November 2, mandate. We look at this at Cotality as a big opportunity to maybe modernize and update some of the back end processes and things that have been really in place for a long time and and cause a lot of friction. As a quick little insight as to what this looks like, on the right hand side you see here, this will be, what the new appraisal reports look like. This is a the first page of of every report will contain a brief summary of the property with some salient information, including the the date of the value, the value estimate, a photo of the the front of the subject property, as well as any conditions or requests from the appraiser such as repairs or follow-up inspections. So from a readability standpoint, it'll be much easier for an underwriter or loan processor or even a borrower to understand what's going on. Additionally, there won't be any more addendums. The appraisers will put all of their commentary about the home or an attribute of the home in a specific section. So for example, on this next page here is a couple additional pages. On the left hand side, you see some descriptions of the the attributes of the home. If the home has a basement, the appraiser will input that information. If the home doesn't have a basement, those fields and data points will not show on the report. So it simplifies that only things that are relevant to the particular property will be be viewable in the final report. The sales compared comparable section that you see on the right, the appraiser is no longer constrained to a fixed number of rows in how they might describe the property's relevant characteristics and adjustments. They can add as many rows as they need to to describe the property and make appropriate adjustments. So a much better process from an underwriting perspective. As I mentioned, Fannie and Freddie have been pushing really hard for the lending community to come up to speed. So if you haven't already, take advantage of these trainings that are out there. There are, lender specific trainings that are available on either GSE site with no additional, you can go, no cost, I should say, and you can go at your own pace, to learn about the new UAD. There are also at, classes that the GSEs have sponsored and helped to put out there for appraisers so they can come up to speed and get continuing education while they're at it. The timeline, as I mentioned, the limited production is where we're at right now. The broad production will be all pretty much all of next year with the mandate at the end of the year. So if you haven't worked through your process, there's still time, which we'll talk about here in a second. But, this is out there. And if you certainly, you can always go to the GSEs for more detailed information. So some of the impacts that might specifically be on the credit union space. So anyone any loan that's going to be sold to the GSEs either directly or through an aggregator will be impacted. We know that FHA and VA have both indicated they will adopt the new UAD 3.6, though they haven't set specific dates. FHA indicated in the spring. VA has not given any dates yet. So, you know, at at totality, our systems will allow the current processes, the legacy, as well as the new process to continue on indefinitely, side by side. I think most vendors are taking that same approach. It's it's a the whole industry is gonna be impacted. And, certainly, you know, we are encouraging people to not delay their planning process and and getting figured out how you're gonna do this. Certainly, if if you were to miss on the level of effort, it could significantly impact your ability to, sell loans to the GSEs if you miss the deadlines. And, certainly, if you're working with multiple investors that you might sell your, loans to, it's important to work with them to understand the timing for when they will expect or accept these new three six files. There's certainly in our world here, we focused across all of the different enterprises, lenders, appraisers, AMCs, and the secondary market in getting ready. And, certainly, as you work with your vendors, you'll want to, you know, follow-up with them on where they're at if you haven't. The majority of the the vendors, I know are well along in their processes of getting prepared. And, certainly, we're we're happy to help and support for our clients or or anyone else as we as we all together as the industry move through this process. So you may ask yourself, okay. I'm not sure we're ready. But now what? Is it is it time to panic? The good news is no. There's plenty of time to get yourselves ready and your enterprise ready, so definitely start now. The guidance that's out there is very useful. The GSEs have lender readiness toolkits as well as a lot of other specific information. Make an inventory of the systems that you have that you know are, touching appraisal. Make sure that there's an owner to determine if there's any gaps or if you need to work with a vendor and begin that process. So it's it's simply, the inventory with the plan is where you get ready. And, of course, follow-up with your vendors. Again, I know the appraisal community is just coming up to speed as the appraisal software providers are are are coming online over the next month or two. AMC's and the loan origination systems are as well. Alright. Thank you for listening there. I know, Nick, I I got a a question here I think might be relevant for you to address in terms of this. So, obviously, the the UAD three six is a is a big deal as I've been mentioning here, as well as an operational lift potentially. So at Logix, how are you guys looking at this transition to the new data standards? And do you see as an opportunity, or are you just still trying to sort through, what to make of this? Thanks, Sean. I I think it's really an opportunity in my opinion. Based on my initial research on these changes, I think it's gonna lead to a smoother, more efficient appraisal process with less revisions. It's gonna be, like you mentioned, easier for borrowers to understand, for appraisers to work through, for our underwriters and our processors to work through is more straightforward. It's clear cut. If there's, something significant within the appraisal that we need to look at or review, like, let's say it's an ADU in California, we have a lot of those. Like, it's very easy to see and and kinda work through that file, the way that it's kind of revision. So, I think there is gonna be some potentially some heavy lifting involved with the implementation of this process. I have been formally tasked with this initiative by my boss for 2026, So I definitely need to go to the Fannie website and review a lot of that information and, materials that they have provided for lenders to look at. So, you know, I definitely gotta get on the ball with that, but I think it's definitely anything appraisal related where it makes it faster, more efficient, I still think there's a lot of opportunities for the GSEs to make things easier. So I think this is definitely a step in the right direction and, we are looking forward to it. Excellent. Yeah. It's, the the our friends at the DSEs like to point out that the the current forms were actually designed when typewriters were the source of input. So it's, it's about time to make an update there. So okay. I think with that, we can jump to the q and a section of our presentation today. So we did receive, a handful of questions here. So we'll we'll bring, other folks on or, Selma and Mercedes back and see if there's anything relevant there. So, the first question looks like it might be in your space here, Nick. So it's a question about the five five arms. What has been your production volume on the five five arm compared to your fixed and past production, if you could share anything there. Sure. You know, this this is, again, a relatively, new product because we just reintroduced it, I would say, like, a few weeks ago. So, it's kind of a little too early to tell. I've been watching, like, application trends, and and they are kinda trickling in here and there. But we definitely seen a lot of interest in arms. I think the five six arm is, like, one of our more popular products that is the silver arm, which has a lot more adjustments than the five five. So I think there's definitely an opportunity for, like, our loan officers to educate our members more about the benefits of the five five and, you know, the that there's less adjustments. So, basically, I mean, it it it's a little bit too early to tell, but if if it's anything like the success that we've had with the other arm products such as the five six, I think it's definitely gonna be a a a very important tool and product for, our loan officers to give to our members in 2026 if volume does increase the way that we hope it will. Excellent. Thank you. Alright. Next question here. This this might be, looks like one for you, Mercedes, around the score. The question is, do you have any stats on the scoring spread between FICO and Vantage? We don't we don't have any stats that, we can publish. I know that the GSEs have both released their, stats on the Vantage score, so they basically compared how a loan would perform if they would have scored it with a Vantage score. That information is available on the FHFA website for download, but we we don't have anything specific with regard to a a comparison against the two models. Alright. So more more to learn there for sure. Alright. Next question here, looks like for for, Selma. It's what what are your thoughts on what has to occur to increase inventory knowing that the resale numbers are unlikely to increase based on rates remaining stagnant? Yeah. So I think that it's gonna remain one of the most challenging, fundamentals for the housing market is that we really don't see existing inventory increasing that significantly across all markets. Right? I met I showed you the map where some markets have seen an increase. And in markets that have, been showing more inventory, it's a combination of things. One is that, you know, there's been also a lot of new construction. So people have actually places to move to if they want to move, to, move and sell their home. So there is other inventory to work with. Because a lot of times what we hear is, like, I would move, but, you know, I there's no inventory out there. Now, yes, low mortgage rates are holding some people back, and that's gonna remain the case, especially too if you think about going forward when people refi, you know, even to lower rates than, you know, what they purchased in last couple of years. So, lock in effect, I think, is here to stay. But what we do know is that, you know, life happens, people, people's situations change, and people then decide to move, whether it's for a job, you know, newborn or, you know, growing family, small family, whatever the case may be. So, the and then the last thing in terms of the inventory, what we do see is, I mentioned markets that do have more inventory. In those markets, we also saw inventory coming from, investors. Like, you know, over the last few years, investor activity has been really high. And then but at the same time, the cost of holding on to those properties have grew has increased too. You know, insurance costs have jumped, property taxes have surged, and so cost of holding on to properties have gone up. And that's, moving some people into, making that decision to to sell. And, again, particularly, that's been the case a lot with investors or those, that have very limited budget or constrained, you know, fixed budgets. Mhmm. Yep. Yeah. Thank you. Yeah. Certainly an interesting time economically. There's a couple of questions here. I think these are probably in your space, Mercedes. I may lump them together, and you you can answer them as if able. But one of them is around how will lenders be required to request consumer consent? And, related to that, it it's, you know, outside of credit, what else is required to properly issue a firm offer? Yep. So, let's go with the first question first that how will lenders be required to request consumer consent? So they have to just have an actual consent from the consumer that is auditable that they've taken the consumer's consent. So I imagine if somebody is on a website and they're talking to a lender about potentially, understanding rates and so forth, there could be some language there that the consumer then gives the consent for that particular lender to get information about them when they're interested in credit. So there's different ways. It could be when taking an application. Right? It could be somebody who has a relationship or is establishing an account of some sort with the borrower, and they take consumer consent to to get this information. The regulation is not prescriptive other than they do have to obtain consent from the consumer. So I think that leaves it to the discretion of the, credit unions should really be discussing with their compliance teams to understand what consumer consent means to them and how they can take the consent. If you do get set up for a prospect trigger program because you have the consumer's consent, then that program is basically subject to being audited by the credit bureaus to ensure that you do have the consent. So you'll have to have proof to indicate that you got the consent. And with regard to issuing a firm offer of credit, this is a requirement where when a lender receives information about a consumer and getting a trigger that says that the consumer is out there shopping for a loan, that's considered a consumer report. So when you obtain a consumer report, then to do to get that, you have to reach out to the borrower with a firm offer of credit. How most lenders operationalize this is they may start with a list of borrowers that they wanna monitor. So in this case, it would be your members. What you're gonna wanna do is credit qualify them. So which ones have a FICO score, have the things that you're looking for. So if you're gonna do a firm offer of credit for a certain type of loan type, then you want to ensure that they are credit qualified because you will only want to send out firm offer of credits for those consumers that are credit qualified. And that way, when you get the trigger, then you act on the trigger and you extend a firm offer of credit to them. So that's what's it's really important is that you go through that first step first and conduct the credit qualification. Got it. Got it. Thank you for those insights. So, that that reaches the the questions we received from the audience, and we we thank you very much, audience, for your input and and questions. It's a exciting time with all the opportunities coming next year. So Nick, Selma, and Mercedes, thank you very much for participating today and and, Krista as well and and Acuba. And we we, wish you all happy holidays, and thank you for joining us today. Happy holidays. Thank you.