“Seminar ‘How to avoid frauds’ is canceled. Tickets are non-refundable.” Collectively, we don’t want mortgage fraud, right? It’s a non-partisan issue. A grand jury rejected a new mortgage fraud indictment against New York Attorney General Letitia James. Meanwhile, it must be difficult living under a constant microscope, and yesterday a story broke that “Trump’s Own Mortgages Match His Description of Mortgage Fraud.” (Government watchers also noted that Treasury Secretary Scott Bessent announced that he has “divested” himself of North Dakota soybean farmland while President Trump has announced a $12 billion aid package for farmers impacted by trade policies.) Capital markets staff are focused on many things, including combatting fraud since it is illegal and impacts everyone from borrowers to investors. Today’s Capital Markets Wrap, at 3PM ET and presented by Polly, the group addresses many of the general topics facing the industry: the December slowdown in MBS trading, the Fed meeting, 2026 forecasts that hint at brief refinance openings, higher conforming loan limits, record home equity, first-time homebuyer trends, and how new trigger-lead rules may affect recapture strategies next year. One topic unlikely to be covered is artificial intelligence, but don’t worry: In his latest heavily footnoted Mortgage Musing, attorney Brian Levy offers his unique perspective on the role of AI in the mortgage industry and the hard work needed to lower the cost of mortgage loan production. (Sign up for free to get an email from Mortgage Musings whenever Levy posts a new one by subscribing here.) (Today’s podcast can be found here and this week’s are sponsored by Lenders One. Lenders One is dedicated to helping independent mortgage bankers, banks and credit unions reduce costs, improve profitability, and operate competitively in the mortgage industry and within their communities. Hear an interview with Fairwinds Magda DeMauro on how lenders can overcome regulatory and operational barriers, use education, adopt strategic overlays, and embrace emerging tools to offer more flexible, innovative credit decisions that help better support borrowers seeking new or alternative paths to homeownership.)

Lender and Broker Services, Products, and Software

In today’s fast-paced lending environment, time matters. ICE Flood provides comprehensive, automated flood determination reports to lenders in minutes. Even better, lenders only pay for the flood report if and when the loan closes. This means reduced origination costs, faster loan closings, and a smoother experience for borrowers. Integrated into the Encompass®

loan origination system, ICE Flood helps lenders save time without compromising accuracy or compliance. Gain access to ICE’s nationwide public property records and property assessment data, manage flood zone determinations and experience a fast and easy implementation process. Explore how ICE Flood can help you streamline the origination process, lower costs, and expedite the time to close.

While the holidays bring plenty of hustle, MQMR is working to make compliance feel just a bit easier. Introducing MQMR’s Master Servicer Virtual Binder, a structured review schedule designed to clearly define when and how a Master Servicer should perform key servicing activities. This comprehensive guide covers all components of residential mortgage servicing including billing statements, escrow, collections, and foreclosure to support consistent and well governed oversight. Each section outlines what information to collect, how to act on it, and how to report it to management or the Board, helping teams streamline operations and strengthen compliance foundations. As we look toward 2026, we’re excited to share this glimpse into what is ahead. When paired with MQMR’s Servicing QC and Sub Servicer Audit solutions, Master Servicers can enter the new year with greater clarity and confidence. If you want to learn more, reach out to MQMR and let us make your compliance season just a touch brighter.

The worst time to build a strategy is the moment you need it. When the market shifts, lenders who recapture best are the ones who already put the right people, processes, and technology in place. In his recent MBA Newslink article, LoanCare COO Brent Potter outlines seven actionable steps lenders can take now to strengthen retention for when sustained refinance volume returns. Don’t feel ready? Don’t worry. LoanCare is built to operate as your servicing department, integrating into your business. Your priorities become theirs. Their team becomes yours. See how LoanCare delivers servicing that feels like your own and helps you stay ahead of what’s next.

“With the Homebuyers Privacy Protection Act regulation set to begin in March 2026, capturing borrower intent will be more challenging if you don't have the right tools. Total Expert Customer Intelligence gives you access to data from Experian, Equifax, and TransUnion, so you can identify buying signals sooner, spot more in-market borrowers, and protect relationships before competitors ever enter the conversation. Pair this expanded data with our AI Sales Assistant to automatically engage contacts with timely, personalized messaging. The result: faster engagement, more meaningful conversations, and higher conversion rates. Stay one step ahead with Total Expert Customer Intelligence.”

The Chrisman Marketplace is a centralized hub for vendors and service providers across the mortgage industry to be viewed by lenders in a very cost-effective manner. We’re adding new providers daily, so check back often to see what’s new. To reserve your place or learn more, contact us at info@chrismancommentary.com.

Broker and Correspondent Loan Products

Expand Your Partnership with Cenlar: HELOC Purchase Program Now Open! With first-lien mortgage rates locked at historic lows and over $35 trillion in tappable U.S. home equity, homeowners are increasingly turning to equity extraction products over refinancing. Rising demand for home equity products is driving the need for strong, committed partnerships, and Cenlar is here to be your takeout partner. Cenlar is actively purchasing floating-rate Home Equity Line of Credit (HELOC) loans. This new product expansion marks a significant milestone in our commitment to supporting your business growth. Whether you’re looking to monetize originations or gain liquidity and capital relief, our Mortgage Purchase Offering Program is designed with flexibility and performance in mind. Solutions include bulk, flow, retained, released and participation transactions. If you’re ready to explore a transaction, contact Keith Dyer, Vice President, Mortgage Acquisitions (267) 685-7156.

“At FirstClose, we’re investing in the people who power innovation. In 2025, we strengthened every corner of our organization with industry leaders who bring decades of mortgage and fintech expertise. We welcomed VP of Sales Alex Sirpis to accelerate revenue growth and deepen lender partnerships, Director of Professional Services Adam Nicholson to elevate implementation excellence, and promoted Andria Lightfoot to VP of Client Success to expand strategic support and deliver measurable lender impact. We also grew our sales force with seasoned professionals across the country, ensuring lenders receive best-in-class guidance in a rapidly expanding home equity market. These additions reinforce our commitment to faster turn times, stronger partnerships, and technology that help lenders unlock new revenue opportunities. Ready to transform your home equity experience? Visit firstclose.com and contact us to get started.”

If your borrowers are stuck behind a home sale contingency or running into DTI limits, join Flyhomes’ live webinar tomorrow, Dec 10, to learn how Buy Before You Sell with the Flyhomes Guaranteed Backup Contract can help them reduce DTI and qualify for up to 50 percent more. With this solution, borrowers can buy before they sell and make stronger offers without home sale contingencies. This nationwide solution requires no loan, offers a competitive tiered flat fee, and can be ready in 24 hours. Save your spot for the webinar now or book a call today to learn more. Flyhomes has helped 5,000+ buyers over the past 10 years, and LOs using this program close an average of 1.2 more loans per month.

Acquisitions and Mergers Continue

There is no reason to think that mergers and acquisitions among companies involved in residential lending will stop in 2026. In fact, I was speaking to Garth Graham at STRATMOR (who has been involved in a number of deals this year) and he said that the full year 2025 M&A market will be more deals (over 40!) in 2025 vs the previous two years despite the market improving in the second half of 2025. This is not an M&A market of only weak companies selling.

Milliman, Inc., a leading global consulting and actuarial firm, announced the acquisition of MorVest Capital, a premier provider of mortgage servicing rights (MSR) analytics, risk management, and advisory services. “This strategic move reinforces Milliman’s commitment to delivering comprehensive analytical solutions to the mortgage sector and expands its capabilities with MSR valuation, financing, hedging, and brokering. MorVest Capital, founded in 2013 and headquartered in Dallas, Texas, is recognized for its deep industry insights and client-centered approach to MSR strategy. The acquisition brings together Milliman’s renowned analytic and consulting capabilities with MorVest’s MSR expertise, creating a comprehensive offering for lenders, servicers, and investors.”

Credit Costs in 2026

“Webinar: 2026 Market Projections… Why Credit Pulls Are Your Biggest Conversion Opportunity! Market shifts are inevitable. The question is whether your team is positioned to navigate them and capitalize on new opportunities. Join CreditXpert.”

A petition has begun circulating, demanding reductions to the cost of credit reports. The subject of lenders charging potential borrowers up front for the credit pull is slowly gaining momentum, as there are plenty of other costs lenders absorb when a loan doesn’t fund with that lender.

Recently I received a note “LO VieauxPoint” from Ethan Vieaux, Vice President, Customer Success at FinLocker, addressing the topic of the credit report squeeze (and what it means for your process)

“If it feels like credit reports have quietly become one of the most painful parts of doing business, you’re not alone. The subject was recently highlighted and addressed just how fast credit report costs are climbing, with resellers signaling yet another big increase coming in 2026. At the same time, Freddie Mac’s latest cost-to-originate update puts the average production cost around $11,800 per retail loan. Even when lenders win back efficiency with automation and better workflows, some savings are eaten up by vendor categories like credit. “That’s why you’re seeing more lenders and brokers rethink something that used to be automatic: when, how, and how often they pull a tri-merge.

“Some are starting to charge borrowers upfront for the full report and relying more heavily on application data and public information to coach people first. Others are keeping the “charge at closing” model but shifting the early part of the journey to soft-pull credit. In those shops, the tri-merge doesn’t get ordered until the borrower is further along, sometimes not until they’re under contract.

“Underneath all of that is a simple question every LO has to answer for themselves: ‘Is a tri-merge part of lead generation, or part of final approval?’

“If you treat it as a lead-gen tool, you’ll keep pulling early and often, and your company will keep eating the cost on shoppers who never close. If you treat it as an approval tool, you need a different front end: soft pulls, basic debt and income review, and more honest conversations about where someone stands before you fire off the expensive report.

“That shift isn’t just about protecting your P&L. It’s also about how you position yourself with consumers. We tell buyers it’s smart to shop lenders and compare options. At the same time, if each of those lenders charges for a tri-merge, a shopper can end up paying hundreds of dollars in credit fees before they’re even approved. It’s hard to call that a consumer-friendly experience.

A more sustainable approach is to split the journey into two quiet stages in your mind: curiosity and commitment. Curiosity is where you lean on soft-pull credit, cash-flow and debt review, budgeting, and simple affordability ranges. Commitment is where a full application, a contract, and a tri-merge make sense.

“Tools that combine soft-pull credit, budgeting, and homeownership readiness (including platforms like FinLocker) are built for that first stage. They give you a place to work with people, show them their numbers, and give them a plan before anyone pays for a tri-merge.

“Credit reports aren’t just a line item anymore. They’re a strategy decision. The LOs who adjust their process now are the ones who will protect both their margins and their reputation with consumers as costs continue to rise.” Read Ethan’s full article here.”

Capital Markets

The inflation indices have been relatively stable over the past year, with the core rate finding a level just below 3 percent. Market fears of inflation returning to the 6 percent+ range due to tariffs simply have not materialized. That has to be a weight off the U.S. Federal Reserve’s mind, right?

“The Fed is cutting. Rates are coming down.” Sike. Ahead of the two-day Federal Open Market Committee (FOMC) meeting that kicks off today, there was selling pressure (due to inflation worries, rising yields in Japan, and expectations for a "hawkish cut" by the FOMC) that pushed yields higher across the curve despite some otherwise decent results for the $58 billion 3-year Treasury note auction. The high yield of 3.61 percent stopped through the when-issued yield of 3.62 percent on dollar demand that was in line with the prior 12-auction average. The indirect bid was strong relative to the prior 12-auction average.

As the Federal Open Market Committee meeting kicks off today, what is expected? Well, odds of a rate cut sit around 90 percent, but it is the last decision of the year and several FOMC members will likely dissent again. The Fed is scheduled to release a dot plot, but will likely be tight-lipped about the outlook for rates in 2026 given conflicting views among FOMC members (who love the veil of “data-dependency”). Recent meetings have featured multiple, mixed dissents. The Committee has a strong incentive to not leave the outlook for January open to either a pause or a cut. The FOMC probably will signal measures to support short-term funding markets after signs of tight liquidity in them in recent months.

Keep in mind that the Committee is likely to turn more dovish under a new chair (Kevin Hassett is the frontrunner), while markets still price two more 2026 cuts. This sets up an interesting SEP ("dot plot") comparison as Powell, now effectively a lame duck, delivers his remarks in the post-decision press conference. Markets will be closely watching the extent to which he stresses that the norm in 2026 will be decisions being made on a meeting-by-meeting basis.

We learned late last week that November prepayment activity slowed sharply, with Fannie Mae 30-year aggregate speeds falling 20 percent month over month to 8.4 CPR and similar declines across shorter maturities, despite largely stable mortgage rates and a steady drop in the MBA refinance index. Higher coupons in the UMBS 30-year stack saw the biggest percentage declines, though 5.5 percent borrowers remain marginally incentivized, while major Fannie 6.5 percent pools continued to prepay fastest even after double-digit slowdowns. Ginnie Mae II speeds also fell 16 percent overall, and rate incentives across conventional, VA, and FHA loans shifted only modestly, leaving roughly 13.8 percent of all 30-year borrowers in the money. Specified pools showed mixed behavior, with select FNCL 5.5 and 6.0 cohorts bucking the broader trend, and with a longer day count and favorable seasonality ahead, prepayment speeds are expected to rebound about 15 percent next month.

The economic data calendar this week, and at least through the end of January, will continue to play catch up now that the government shutdown is in the rearview mirror. Today’s economic calendar is underway with the NFIB small business optimism index for November rising more than expected. Later today brings Redbook same store sales, the delayed JOLTS job openings for October (after the September report was skipped due to the government shutdown), and Treasury activity that will be headlined by an auction of $39 billion reopened 10-year notes. Overnight, the Royal Bank of Australia was out with its latest decision, where it kept the target rate unchanged at 3.60 percent. We begin Tuesday with Agency MBS prices unchanged from Monday’s close, the 2-year yielding 3.58, and the 10-year yielding 4.16 after closing yesterday at a recent high of 4.17 percent