Will rates impact the latest MBA origination forecast of $2.2 trillion next year? Sure, although… The Federal Reserve has cut overnight rates, but longer-term rates (like 15- and 30-year mortgages) have done little or have gone up. Recently news came out that Freddie and Fannie are buying securities that they produce. If GM is buying its own cars, should its stock price go up, or does the price of its cars go up? Do GSE MBS purchases really move rates? The recent news that the GSEs have been purchasing mortgage-backed securities raised predictable questions about affordability and rate relief. Conceptually, it sounds supportive. In practice, I am skeptical about the impact, and my son Robbie observed that there is an important distinction between the Federal Reserve purchasing assets and the manufacturers of mortgage credit purchasing their own output. “Market driven mortgage rates respond to investor demand, spreads, and broader macro forces. They do not meaningfully move because someone decides they should. Rates have remained largely unchanged despite these actions. That alone suggests the market is signaling skepticism. Good intentions do not automatically translate into lower borrowing costs.” (Today’s podcast can be found here and this week’s are sponsored by Gallus Insight, which is transforming employee analytics into actionable insights. Gallus’ ROI tool for learning and development activity is the most powerful in the world, and also the easiest to use. Hear an interview with Amergy Bank’s Bill Dawley on how top originators are winning business in today’s environment and where affordability initiatives and fair lending intersect.)
Lender and Broker Services, Products, and Software
In an open letter reflecting on a landmark 2025, Polly Founder and CEO Adam Carmel shares a powerful message of gratitude and strategic evolution. The company has spent the past year leading the market in enterprise innovation and Generative AI, continuing to demonstrate that the era of stagnant, legacy tech is over. This is more than a milestone report; it's a call to action for an industry at a crossroads. Carmel reflects on the profound impact and shared success achieved alongside Polly's customer partners and looks ahead to a 2026 centered on intentional innovation and new product frontiers. Whether you're a long-time partner or industry observer, this letter offers a transparent look at the future of capital markets technology. Read the full open letter to explore Polly's 2025 milestones and their bold vision for the year ahead.
Still deciding how to spend that year-end budget? Join Optimal Blue and industry leaders at the 2026 Optimal Blue Summit, February 23–25 at Talking Stick Resort in Scottsdale. This client-exclusive event is where mortgage expertise meets modern innovation to shape what’s next. The agenda is live, featuring MBA’s CEO Bob Broeksmit and Chief Economist Mike Fratantoni, HousingWire Editor-in-Chief Sarah Wheeler, Optimal Blue leadership, Olympic legend Michael Phelps, and more. Every session is designed to deliver measurable ROI, from AI and automation strategies to hands-on tech showcases and exclusive product unveilings. Use your remaining budget to invest in insights and strategies that will transform your business in 2026. Register now and use code CHRISMAN for special discounted pricing. Seats are limited, so secure yours today at Summit.OptimalBlue.com. Start 2026 ahead of the curve: join Optimal Blue in Scottsdale!
With AI suddenly showing up in nearly every mortgage POS pitch, more lenders have been asking how to pressure-test those claims before getting deep into demos and roadmaps. LenderLogix recently released a concise eGuide that has been picking up traction as a practical reference point during these conversations. The Mortgage Lender’s Guide to Evaluating AI Powered POS Solutions outlines how lenders can sanity-check AI functionality, identify common red flags, and ask better questions in the evaluation process. It also includes a simple checklist teams can keep handy when reviewing vendors. For lenders who want to walk into AI conversations more prepared, the guide is available here.
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.
loanDepot Case Developments
Yesterday the Commentary noted the ongoing class action case involving loanDepot, which includes plaintiffs’ allegations about LO compensation violations, and defendant’s allegations about plaintiffs’ counsel’s ethics and discovery and use of confidential information. Specifically, the Commentary referenced information from a motion filed by loanDepot in November asking that the plaintiffs’ attorney Ari Karen and his law firm be disqualified. Last week, an “Opposition to Motion to Disqualify,” was filed by Mr. Karen and his firm: Case 1:25-cv-02294-JRR Document 41 Filed 12/18/25.
There are two sides to every story, of course, and the “other side” to loanDepot’s Motion must be allowed to be is heard as it was in the Opposition to the Motion. (If you’d like a copy, please let me know.) In the Opposition to the Motion, Mr. Karen and his firm dispute the factual and legal allegations in loanDepot’s Motion to Disqualify. Specifically, the Plaintiff points out that loanDepot did not allege that Mr. Karen had previously represented it and had switched sides but rather is seeking disqualification because he should be deemed to be in conflict with his own former clients for whom he previously had sued loanDepot and that disqualification was not appropriate in these circumstances.
There’s a lot to unpack in the details, but Mr. Karen’s Opposition to Motion concludes with, “Disqualification is a drastic, disfavored remedy. Defendant has not shown, and cannot show, an actual or likely conflict, the misuse of Former Client confidences, or any switching of sides. Its Motion is strategic, untimely, and contrary to the ethics rules that protect a client’s choice of counsel and a lawyer’s right to practice. The Motion should be denied.” Stay tuned!
ICE on Mortgage Delinquencies
ICE Mortgage Technology’s November First Look report shows a sharp rise in mortgage delinquencies largely driven by calendar effects, as the month ending on a Sunday delayed end-of-month payments into December. Past-due loans increased by 275,000 to 2.3 million, pushing the delinquency rate to 3.85 percent, the highest level in more than four years, though ICE notes this increase is consistent with historical patterns seen in similar calendar years.
Newly delinquent borrowers surged to 609k, the largest monthly inflow since May 2020, while prepayment activity pulled back 18 percent from October’s multi-year high. Foreclosure activity eased modestly on a monthly basis due to seasonal factors, but foreclosure starts, sales, and active foreclosure volumes all remain significantly elevated compared with last year, underscoring continued stress in pockets of the mortgage market.
LO’s Looking at 2025 Trends
Recently I received a note “LO VieauxPoint” from Ethan Vieaux, VP, Customer Success at Finlocker, looking back at the year: Stabilization, Mix Shifts, and the Quiet Re-Sorting of Mortgage.
“If you spent 2025 waiting for the market to ‘come roaring back,’ you probably left disappointed. This was not 2020 or 2021. It also was not 2022’s hangover. But it was not the free-fall mood of 2023, either. 2025 was the year the industry proved it can operate in a normal-rate environment, even if ‘normal’ now means a 30-year fixed that starts with a 6.
“The market did not need a miracle to improve. It needed stability, and it needed consumers to stop waiting for the perfect headline. That showed up first in the refinance channel. MBA data cited by AP showed refinance applications made up 59 percent of total applications, the highest share since September.
Production-wise, for a credible directional read, the MBA’s July 17 Mortgage Finance Forecast projected total 1- to 4-family originations of $2.021 trillion in 2025, up from $1.779 trillion in 2024.
“The real story is the type of volume. In that same MBA forecast, purchase originations were projected at $1.357T in 2025 (vs $1.288T in 2024), while refinances were projected at $664B (vs $491B). (MBA) Purchases grew, but modestly. Refinances grew much faster, mostly because they were coming off the floor. 2025 was not ‘the refi year,’ but it was the year refis became a real business line again.
“Distribution mattered, too. According to a December MBA NewsLink, brokers accounted for nearly 20 percent of residential mortgage originations in Q3 2025, up from 19 percent in Q2. That is not ‘brokers took over,’ but it is a clear signal: the broker channel held share and even gained a little when the pie was not expanding dramatically.
“On licensing and headcount, social media narratives tend to get dramatic. Early in the year, National Mortgage News reported that 158,152 individuals had requested MLO license renewal as of January 1, 2025, versus 160,893 the year prior, citing CSBS/NMLS data. (National Mortgage News) That is not a mass exodus. What we do not have, at least from publicly summarized sources in a clean, comparable way, is a simple ‘net new versus unrenewed’ figure for the full 2025 cycle, so I would avoid over-claiming that point in print.
“In 2025 we saw better performance without a rate tailwind, purchases were steady, not easy, still capped by affordability, refinances returned enough to matter, even without a wave, and channel share kept rebalancing, with brokers drifting back toward 20 percent.
“As we head into 2026, here are the practical things I’m watching in January. Does refi momentum hold if rates stay around the low-6s, or was the late-year spike mostly seasonal mix? Does broker share stay near 20%, or does retail regain ground as marketing budgets and lead funnels reset? Does purchase re-accelerate if inventory loosens, or do we stay in the “move-up only” dynamic? Who wins operationally, because in this market the difference between “surviving” and “growing” is often process, pull-through, and partner consistency, not a magic product.
“If 2024 was the year of endurance, 2025 was the year of re-sorting. The winners were not the loudest. They were the ones who built a model that works when rates are not a cheat code.” #VieauxPoint Thank you, Ethan!
Capital Markets
As 2025 draws to a close, U.S. rates markets are stuck in a familiar holding pattern, with holiday-thinned liquidity and a lack of meaningful data, both of which are combining to keep yields range-bound ahead of the January 9 payrolls report. Uncertainty around the timing and identity of Chair Powell’s successor has emerged as a source of volatility. What was once framed as an “early” announcement has slipped toward early January, and a broader slate of candidates has re-opened questions around Fed independence. Markets are less focused on personalities than on credibility: signals that reinforce the Fed’s inflation-fighting resolve would keep Treasuries range bound, while hints of political influence risk would push inflation expectations wider, even if only temporarily.
At the same time, the yield curve is poised to steepen driven largely by front-end declines as the labor market softens and the Fed moves closer to a neutral stance. That wasn't the case yesterday, however, as yesterday’s $69 billion 2-year auction, which opened this week’s front-end supply against a supportive backdrop, ended up being met with weak demand. It was a bit of a surprise, as December auctions consistently stop through with solid end-user demand. Expectations for a more dovish Fed under Trump’s next Chair, market pricing for multiple rate cuts in 2026, and improving disinflation and labor market trends continue to underpin front-end valuations even after the recent rebound in yields. Any curve steepening will be viewed as fundamentally bullish, reflecting easing policy expectations, though a credibility hit under a new Chair would shift the move toward a more bearish dynamic.
Looking beyond the turn of the year, 2026 presents more questions than answers: the base case envisions multiple rate cuts that take fed funds toward 3.00 percent well ahead of the Fed’s own projections, as labor market weakness gradually asserts itself without tipping the economy into recession. The most acute bond-bearish risks appear to have passed, allowing Treasuries to refocus on growth and inflation fundamentals rather than structural concerns… unless, of course, the labor market deteriorates more sharply than expected, in which case a faster pivot to outright accommodation would come back into play.
The MBA forecasts a period of stability rather than volatility across rates and housing markets. Mortgage rates are forecast to remain in a narrow 6.0 percent to 6.5 percent range as the Fed nears the end of its cutting cycle, while the unemployment rate edges modestly higher to 4.7 percent in early 2026. Elevated deficits and debt should keep long-term yields under upward pressure, with the 10-year Treasury remaining above 4 percent on average despite wide fluctuations. Housing conditions continue to normalize as inventory rises, supporting purchase activity and moderating price growth. Home prices are expected to stagnate nationally, slowing to about 1 percent growth by late 2025 and turning slightly negative in late 2026 as supply and weaker demand converge. Total single-family originations are projected to increase to $2.2 trillion in 2026, driven by a gradual pickup in home sales and episodic refinance activity amid rate volatility.
Today has quite a busy calendar ahead of tomorrow’s early close before Christmas Day on Thursday. We’ve already received October durable goods (-2.2 percent), the first read on Q3 GDP (+2.3 percent y-o-y; +4.3 percent annualized, much stronger than expected), and Philly Fed non manufacturing for December. Q3 PCE core was +2.9 percent annualized, and personal consumption +3.5 percent. Later today brings industrial production and capacity utilization for November, December consumer confidence, and Richmond Fed manufacturing and services. We begin Tuesday with Agency MBS prices little changed from Monday’s close, the 2-year yielding 3.50, and the 10-year yielding 4.16 after closing yesterday at 4.17 percent.
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