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HOME2023-01-22T13:43:33-07:00

“Damn, there is so much great knowledge out there. Did you know that “BOOKS” are full of smart?? No, I mean like life changing, I-wish-I-knew-that-years-ago type stuff.

I know that I was waaaayyy late to the game figuring it out. And I know that a lot of you are too busy to read as much as you ‘should’. And that is why you need me.

I still remember how it started for me. It started in June of 2008. After 11  years …..Click to continue

Mortgage Today (PM) - 10/26/26 {{catlist}}
October 26, 2026 READ MORE **WTMS Blog Today = What's up in Mortgage Today (PM) - 10/23/2026** Mortgage rates finally caught a break this week as technology stock turmoil sent investors fleeing to the safety of U.S. Treasury bonds. The 10-year yield dropped sharply from 5.36% to below 4.96%, marking the best day for Treasuries since August 2025 and lifting mortgage-backed securities higher for the first time in weeks. This rally provided meaningful relief after rates had climbed to 20-year highs on persistent inflation fears and geopolitical tensions, though borrowing costs remain elevated by historical standards. Lenders reported improved pricing power as MBS spreads tightened and borrowers who had paused their searches showed renewed interest in locking rates. The AI sector selloff, particularly in companies like Coreweave that heavy investors had bet on for artificial intelligence infrastructure, sparked genuine flight-to-safety demand that overshadowed hawkish Fed signals and hotter-than-expected inflation data. President Trump signed a housing executive order targeting mortgage costs through proactive mortgage insurance cancellation pilots, expanded title insurance alternatives, and reduced loan-level price adjustments on qualifying refinances. The order directs FHFA to make title insurance waivers permanent across both Fannie Mae and Freddie Mac, potentially saving borrowers $500 to $1,500 on refinances. However, the final version narrowed the most ambitious provisions from the draft—the mortgage insurance pilot now applies only to future originations rather than retroactively canceling premiums for existing borrowers based on current valuations. The MBA separately released its own affordability roadmap proposing single-bureau credit reporting for scores above 700, lower annual FHA mortgage insurance premiums, and reduced loan-level price adjustments, estimating borrowers could save $1,000 to $800 annually on respective transactions. Both initiatives acknowledge the affordability crisis while targeting existing homeowners and refinance activity more than first-time buyers struggling with down payments and home prices. Meanwhile, Fannie Mae and Freddie Mac have diverged significantly on artificial intelligence governance requirements that lenders selling to both GSEs must now navigate. Fannie's revised Information Security Supplement employs "Super Intelligence" terminology and takes a stricter principles-based approach to AI model governance, data controls, and technology lifecycles effective January 18, 2027. Freddie Mac's requirements, already in effect since March, remain more prescriptive on audits, executive approvals, and vendor liability frameworks. Lenders cannot simply comply with one GSE's standards and expect alignment with the other, forcing many to redesign policies and vendor agreements before Fannie's deadline. The divergence highlights how rapidly agency expectations are evolving and how compliance costs mount when the two largest mortgage purchasers develop separate AI rulebooks instead of coordinated standards. September mortgage origination volume declined sharply with the MBA reporting total applications down 37.5% year-over-year, pushed lower by rates climbing to 7.5% and a refinance environment offering minimal savings for most borrowers. The MBA's 2027 forecast predicts total origination volume will drop approximately 5% to just under $2 trillion, down from the $2.1 trillion expected in 2026, with purchase originations barely growing at 0.8% while refinances collapse by 17%. Existing home sales data revealed an unprecedented imbalance—home sellers now outnumber buyers by 63%, the widest gap since records began in 2013, with just 928,892 buyers on the market against 1.51 million sellers. Home affordability remains a structural problem, with ATTOM data showing buyers need $90,191 in annual income to purchase a median-priced $368,000 home, roughly $10,657 above average worker wages, and ownership costs consuming nearly 32% of median wages even with 20% down. Real estate credit conditions show stress emerging, with GSE repurchase activity climbing 19.5% in the second quarter and sub-700 FICO loans hitting their highest share of 2026 UMBS issuance at 11.4%. **Locking vs Floating** The bond market's recent rally appears driven more by temporary equity market distress than confirmed fundamental improvement. Investors reduced expectations for Fed rate hikes next year, but that shift remains fragile and could reverse quickly if technology stocks stabilize or new inflation data disappoints. Persistent oil prices above $110 per barrel, elevated Treasury issuance, and foreign capital outflows keep upward pressure on longer-term yields. Borrowers closing within 30 days should strongly consider locking rates at current levels rather than floating into the Q4 closeout period when demand may spike and margins compress. **Today's Events** Core PPI Month-over-Month (September): 0.7% vs. 0.3% forecast, 0.2% prior Building Permits: 1.400M vs. 1.390M forecast Housing Starts: 1.221M vs. 1.300M forecast **Bond Pricing** **UMBS 30 yr** | Coupon | Price | Intra-Day Change | **GNMA 30 yr** | Coupon | Price | Intra-Day Change | **Treasuries** | Term | Yield | Price | Intra-Day Yield Change |

Market Data Mortgage Today (AM) - 10/26/26 {{catlist}}
October 26, 2026 READ MORE **WTMS Blog Today = What's up in Mortgage Today (AM) - 10/26/2026** Mortgage rates dropped below 5 percent this week as technology stock turmoil triggered a safe-haven rally in Treasury bonds, marking the 10-year yield's sharpest decline since mid-September. The flight to quality came despite persistent inflation data and elevated oil prices near $100 per barrel, signaling that investor concerns over artificial intelligence funding stress now dominate market direction. UMBS 6.0 securities rallied meaningfully, gaining ground as the 2-year/10-year curve flattened to around 30 basis points and volatility became the defining feature of the week. Mortgage application volume continued its decline, falling for a seventh consecutive week as elevated rates and high home prices keep borrowers sidelined despite the modest relief. Producer prices surged unexpectedly, core PPI rose 0.7 percent month-over-month, and housing starts plunged 5.2 percent, all reinforcing that the housing market remains under pressure from affordability constraints. President Trump signed an executive order directing the GSEs and federal agencies to lower mortgage insurance cancellation costs, expand title insurance waivers, and reduce USDA and VA loan rates, though implementation remains uncertain and could take months. Non-QM production continues to grow as borrowers unable to qualify under traditional agency guidelines pursue alternative loan products with higher DTI tolerances and flexible documentation standards. Lenders are reporting strong demand for adjustable-rate mortgages and temporary buydown products, which together now account for significant share of production mix as borrowers adapt to higher rate environments. Home equity demand is surging, with some lenders closing HELOCs in as few as five days, and servicers are seeing continued pressure from GSE margin compression. Builder confidence fell to its lowest level since June 2012, driven by construction cost inflation, labor shortages, and buyer pullback from elevated financing rates. Fannie Mae revised its 2027 mortgage production forecast down 18 percent to $1.86 trillion, citing expectations that rates will average 7.5 percent through year-end, while the MBA similarly projects rates staying between 7 and 7.5 percent. Loan officer retention remains top-of-mind for lenders facing volume challenges, with many examining whether their entire workforce can remain sustainable through slower market conditions. Credit quality metrics show stress building in certain segments, with Ginnie Mae borrowers carrying DTI ratios above 45 percent experiencing serious delinquency rates of 5.1 percent compared to 3.2 percent for those below that threshold. GSE repurchase activity jumped 19.5 percent in Q2 2026 to $465.2 million in unpaid principal, with Fannie Mae initiating repurchases on 83.2 percent of resolved demands versus Freddie Mac's 53.1 percent. Alternative credit scoring models like VantageScore are gaining traction as lenders seek cost reductions, but investor acceptance remains fragmented and execution risk persists for originators who rely on alternative scores when investor acceptance is uncertain. The FASB's proposal to include borrower recapture value in mortgage servicing rights valuation continues to generate debate, with major banks opposing the change while MSR holders argue it reflects economic reality. Appraisal standards shift to UAD 3.6 effective November 2, requiring lenders and AMCs to update review policies and prepare teams for significantly longer, more complex reports. FHFA Director Bill Pulte signaled possible movement toward reducing credit report requirements from three to one or two by year-end, which could meaningfully lower closing costs if implemented. Capital markets professionals watch a growing divergence between equity weakness in technology stocks and bond strength, indicating that traditional risk-off correlations may be reasserting after months of disconnect. The 10-year Treasury yield broke below 5 percent for the first time in three weeks on safe-haven demand triggered by concerns over highly leveraged AI data-center companies and geopolitical tensions in the Middle East surrounding Iran. Short-covering, hedge fund position unwinding, and potential convexity-related selling in technology equities created intraday volatility while MBS lagged Treasuries on a spread basis. Mortgage spreads remain mixed despite the sharp Treasury rally, limiting rate relief for borrowers and keeping execution complexity high for secondary market teams. The yield curve continues its bull-flattening pattern with the 2s/10s spread compressing to historic lows, raising questions about sustained demand for longer-duration assets. Prepayment risk remains elevated in discount MBS pools as financially pressured borrowers pursue cash-out refinances despite unfavorable rates, driven by record home equity and deteriorating household finances. **Locking vs Floating** Lock strategists face two-sided risk: further rate increases could widen MBS spreads and reduce lock profitability, while a sustained Treasury rally could force costly hedge adjustments as duration shortens. Pipeline hedgers must balance conviction on inflation trajectory against uncertainty over Fed timing and geopolitical escalation. Current volatility argues for disciplined, position-sizing approaches rather than aggressive bets in either direction. **Today's Events** Chicago Fed National Activity Index for September releases this morning, followed later by the Dallas Fed Manufacturing Business Index for October. Treasury auctions begin with $69 billion in 2-year notes at 1 PM ET. The Federal Reserve's Open Market Committee meets Wednesday with a hold widely expected, though markets price roughly 80 percent probability of a 25-basis-point hike in December. **Bond Pricing** **UMBS 30 yr** | Coupon | Price | Intra-Day Change | **GNMA 30 yr** | Coupon | Price | Intra-Day Change | **Treasuries** | Term | Yield | Price | Intra-Day Yield Change |

Market Data What the Trump Housing Order Actually Means for Your Pipeline {{catlist}}
October 26, 2026 READ MORE
 

What the Trump Housing Order Actually Means for Your Pipeline

If you've been fielding borrower questions about the October 22 executive order on housing costs, you already know the gap between a White House fact sheet and a funded loan. The order directs federal agencies to pursue several cost-reduction measures, but none of them take effect immediately. What matters now is understanding what the order actually does, what it leaves to agency rulemaking, and how to talk about it with clients without promising savings that may not materialize.
An Executive Order Is a Direction, Not a Law
An executive order manages the operations of the Executive branch. After the President signs it, the Office of the Federal Register publishes it. It is not legislation. It does not change underwriting guidelines, fee schedules, or closing requirements on its own. Instead, it directs agencies—in this case, the Federal Housing Finance Agency, the Department of Agriculture, and the Department of Veterans Affairs—to consider or develop specific programs. Those agencies must then write guidance, propose rules, and determine how to implement the directive within existing law and their safety-and-soundness mandates. That process takes time, and the final version of any program may look different from the order's language. For loan originators, the practical instruction is straightforward: do not change how you do business, quote costs, or set borrower expectations until the relevant agency publishes its guidance. The order is a signal of intent, not a switch you can flip today.
What the Order Directs: Four Main Actions
According to the White House fact sheet, the order contains four primary directives. First, FHFA must create a pilot program for proactive mortgage insurance cancellation. Under the pilot, Fannie Mae and Freddie Mac would use current property values to cancel borrowers' private mortgage insurance once they meet equity requirements, reducing monthly payments. The pilot would apply only to loans originated after the program begins, which limits relief for existing homeowners. Second, FHFA must make its title insurance waiver pilot permanent, allowing more borrowers to use lower-cost alternatives to traditional title insurance during refinances. Third, the Secretaries of Agriculture and Veterans Affairs must reduce interest rates on single-family home loans made directly by their departments; no target rates were specified. Fourth, the order establishes a Task Force on Manufactured Housing Innovation to improve quality and lower costs for factory-built homes eligible for federal programs. Earlier draft reporting mentioned reviews of loan-level price adjustments, appraisal requirements, and the use of artificial intelligence by the government-sponsored enterprises. The published fact sheet does not mention those items, so treat them as unconfirmed until the full order text appears.
The Mortgage Insurance Pilot: Why It's Narrower Than It Sounds
The mortgage insurance provision requires a close read. The pilot calls for proactive cancellation based on current property values, but it covers only loans originated after the program begins. That timing restriction means existing homeowners who might benefit from appreciation-driven equity gains will not see relief under this pilot unless they refinance into a new loan after the program launches. Private mortgage insurance is already designed to be temporary. Under current rules, servicers must cancel MI when a borrower reaches 22 percent equity based on the original amortization schedule, and borrowers can request cancellation at 20 percent equity. FHFA Director Pulte recently aligned the GSEs' policies to allow servicers to proactively contact borrowers who may qualify for cancellation through home price appreciation. The pilot would automate that process using automated valuation models, but only for new originations. U.S. Mortgage Insurers noted that private mortgage insurance premium rates have fallen roughly 25 percent since 2017, driven by competition and tax policy changes. If the government suddenly makes cancellation much easier across the board, insurers will adjust pricing on new loans to offset the revenue lost when more borrowers cancel sooner. That could raise costs for first-time buyers while lowering them for existing homeowners—a trade-off worth understanding before you explain the program to clients.
Title Insurance Waiver: Refinance Cost Reduction
The order directs FHFA to make the existing title insurance waiver pilot permanent. That pilot allows certain refinance borrowers to use a lower-cost alternative to a full title insurance policy, reducing closing costs. The Broker Action Coalition estimates potential closing cost savings of approximately $2,390 on an illustrative $500,000 refinance, depending on borrower eligibility and the reforms FHFA ultimately implements. This is the Coalition's estimate, not a savings amount specified or guaranteed by the order. Expanding title acceptance beyond the pilot could streamline refinances and lower costs for qualifying borrowers. The order also directs FHFA to ensure that savings from the expanded program reach consumers and that lenders inform borrowers about the option. Implementation will determine eligibility criteria, which loans qualify, and how servicers and originators incorporate the waiver into their processes. Until FHFA publishes that guidance, the current pilot terms remain in effect.
Loan-Level Price Adjustments and Refinance Reforms Under Consideration
The order directs FHFA to consider reducing or eliminating loan-level price adjustments and other enterprise fees on qualifying refinances. It also calls for waiving appraisals and income re-verification where existing data support it. These provisions reach into both pricing and the work required to close a loan, but all of them are for FHFA to consider rather than changes that take effect automatically. MBA estimates that a 0.25-percentage-point fee reduction on a $400,000 purchase loan could save buyers $1,000 at closing. A 0.20-percentage-point reduction in annual FHA mortgage insurance premiums could save borrowers nearly $800 a year. Those figures illustrate the potential impact of fee adjustments, but they are not promises tied to this order. FHFA sets LLPAs for conventional loans, and any change must balance consumer cost, taxpayer risk, and GSE safety and soundness. The order does not address cash-out refinance LLPAs specifically, even though FHFA has the authority to adjust them. Whether the agency will reduce those fees as part of its implementation remains to be seen.
USDA and VA Rate Reductions: Direct Lending Only
The order directs the Secretaries of Agriculture and Veterans Affairs to reduce interest rates on single-family home loans made directly by their departments. These are loans the agencies originate and service themselves, not the guaranteed loans that flow through private lenders and make up the majority of USDA and VA volume. No target rates were given, and no timeline was specified. For most originators, this provision will not affect your pipeline. The direct loan programs serve a small share of the market compared to the guarantee programs. If your clients qualify for a USDA or VA guaranteed loan through your shop, this directive does not change their rate or terms. Watch for announcements from the agencies, but do not expect immediate changes to the loan products you deliver to Fannie, Freddie, Ginnie, or portfolio lenders.
What to Tell Borrowers Right Now
Borrowers will ask about the order because they will see headlines. Your job is to explain what it means without overpromising. The order directs agencies to build programs, not to cut costs today. No mortgage insurance cancellations, title waivers, fee reductions, or rate cuts are in effect until the relevant agency publishes guidance and updates its systems. If a borrower asks whether they should wait to refinance, the answer depends on their rate, equity, and goals—the same factors that mattered before the order. If waiting six months for a possible title waiver saves them $2,000 but costs them $3,000 in interest, waiting is a bad trade. Run the numbers based on what is real today, not what might happen later. National Association of Mortgage Brokers President Michael Farrell put it clearly: a signed order is a starting point, not the finish line. What matters now is how FHFA, USDA, and VA carry it out. NAMB will be at the table to make sure these changes actually lower costs for borrowers, stay within the law, and protect the broker channel that keeps this market competitive.

Your Next Step

Watch for agency guidance from FHFA, USDA, and VA. When those agencies publish their implementation plans, you will know which programs are real, which borrowers qualify, and how to incorporate the changes into your process. Until then, continue quoting costs and setting expectations based on current rules. If a program launches and your borrower qualifies, you can always adjust. If you promise savings that never materialize, you lose trust and waste time. The order signals a policy direction. Your value to clients comes from explaining what that direction means in practical terms and helping them make decisions based on what is real today, not what might be real later. Stay informed on implementation timelines and rule changes so you can advise clients with confidence when these programs go live.  
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