Premier Member Q&A: SitusAMC’s Michael Franco Discusses His Outlook

Michael Franco is Chief Executive of SitusAMC, which offers comprehensive services and technology supporting residential mortgage originations, warehouse lending, secondary market executions and ongoing portfolio management. Learn more here.  

Mortgage rates fell to their lowest level of the year in September, following the Federal Reserve’s 25-basis point cut in the federal funds target rate. SitusAMC Chief Executive Michael Franco recently discussed his outlook for the rest of the year and 2026 with MBA NewsLink, including major shifts and opportunities he sees in the market, and ways lenders are evolving in this dynamic environment. 

MBA NewsLink: What factors are you closely watching for their impact on the residential mortgage markets the rest of this year and into 2026? 

Michael Franco: The biggest areas of impact are the steepness of the yield curve and interest rate spreads. Although the Fed cut rates as expected on Sept. 18, the impact to the overall steepness of the curve is still to be determined. For instance, we saw the Fed cut 100 basis points at the end of 2024, but the 10-year Treasury didn’t really move much, and consequently residential mortgage rates didn’t either. If the 10-year comes down, you’ll see an opportunity for more residential activity, including an uptick in refinancings and more home sales as buyer come in from the sidelines. However, if the 10-year does not move or the yield goes up, you’ll likely see higher mortgage rates and a continuation of the current lower volume environment. 
 
MBA NewsLink: Data is critically important with single-family mortgages on the residential side. What trends are you seeing in this space? 
 
Michael Franco: Market participants have always been in the weeds trying to leverage as much data as possible to find out about the financial health of borrowers and the value of underlying collateral. Lenders are constantly monitoring their portfolios to find opportunities for borrowers to refinance, take out a Home Equity Line of Credit (HELOC), etc. More and more secondary market participants are leveraging technology to help centralize and organize portfolio and loan-level data, so they can extract the intelligence needed to maximize value.
 
MBA NewsLink: Where are you seeing opportunities in the residential secondary market going forward? 

Michael Franco: Secondary markets have always drifted to where the opportunities are, and over the years it’s changed a lot. From 2015 through 2019, we saw large pools of reperforming loans and non-performing loans, and a lot of players interested in bidding on those assets. In 2021, bouncing back from COVID-19, we saw first liens coming into focus (jumbos, non-owner occupied, non-QM, etc.) given the low-rate environment. Given higher rates today, clients are focused more on alternative products. So, we’re seeing more activity in non-QM and lease products (e.g. SFR), second liens, and HELOCs.

MBA NewsLink: What trends are you seeing in warehouse lending?

Michael Franco: We have seen some creative destruction over the last few years with several players leaving the space, being acquired, or changing their business plans. These changes made room for new entrants. Now we are seeing warehouse lenders who offer a broad array of financing options for their borrowers and a sense in the broader community that they want to be ready for a more active lending market in 2026. As a result, we’ve been helping clients upgrade their infrastructure and move to some of our more robust SaaS solutions like ProMerit Cloud, where we can not only provide technology but also a layer of operational support through our Warehouse Administration Solutions group which helps these lenders scale their businesses without needing additional headcount.

MBA NewsLink: What are you most optimistic about? 

Michael Franco: We’re in a unique place in the market, but also in history given all the new technology being introduced. I think the next five years are going to be about human and technology interactions, and how to leverage that symbiotic relationship to drive efficiency, speed and better outcomes.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)