In 2023, Steve Thomas started a new correspondent lender, Futurewave Finance. His three decades in the mortgage industry include servicing as the senior managing director of mortgage capital markets at the Federal Home Loan Bank of Chicago, as well as time at Fannie Mae.

From his time in the FHLB system, Thomas learned that community banks want to participate in mortgage lending, but only if there's a way to compete with both the banks and the nonbanks in the space. That's why Futurewave is providing non-agency products for its bank customers. 

But this is where Thomas is seeing the mortgage industry disconnect from what is happening in the market: product innovation has gone by the wayside.

Much of this situation might be a consequence of the product offerings that many accuse of causing the financial crisis and the legislative/regulatory fall-out as a result.

But Thomas, who is the CEO at Futurewave, argues that innovation can be accomplished and is needed in today's mortgage business.

Questions and answers are from a discussion with National Mortgage News during the Mortgage Bankers Association Secondary and Capital Markets Conference, which have been edited for length and clarity.