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Fed Week
By Jeff Walton & Kelly Guest
Table of Contents
Our beleaguered banking policymakers get together this week; we’ll see if predictions of a cut come true. Prediction season has begun, and realtor.com’s chief economist Danielle Hale hit the cable news networks to deliver this gem: “It’s a good market. It’s not going to be great [next year], but it’ll be good for everyone.” Speaking without really saying anything is apparently not limited to the political arena.
CHATTER
RICO, But Not Suave…
NMN Reports on RICO Allegations Against DR Horton, DHI Mortgage
A group of 7 plaintiffs filed suit against the builder and its mortgage subsidiary lobbing serious allegations of using inaccurate tax base info to lure buyers with lower than actual mortgage payments. Plaintiffs allege the builder and lender used the land value as the property tax basis versus the finished home assessment, and buried the real costs in the paperwork. Borrowers say they were hit with back taxes and higher payments once loan servicers audited their escrow accounts.
Conforming Loan Limits Raised 3.26%: FHFA
The Federal Housing Finance Agency - aka U.S. Federal Housing, is boosting the conforming loan limits by 3.26% for 2026 based on the annual change in home prices using an expanded data set.
The new limit of $832,750, is an increase of $26,250 from the 2025 limit of $806,500. The high-cost ceiling for one-unit properties will be $1,249,125, which is 150% of the new limit. This will also be the baseline limit for Alaska, Hawaii, Guam, and the U.S. Virgin Islands.
Will US Mortgage Markets Follow UK & CA?
Portable Mortgage Idea: HW Roundup of Experts
Freddie Mac 2025 Cost to Originate Study – Differs a Bit from MBA’s Numbers
The Q2 2025 financial results for retail-only mortgage lenders paint a cautious picture. While lenders have reported the highest pre-tax net income per loan of $900 since 2021, production costs continue to trend upward.
Our analysis of retail-only lenders’ financials reveals the average cost to produce a mortgage in Q2 2025 was approximately $11,800. While this is certainly an improvement as compared to Q1 results ($13,400), the costs are still about $200 higher when compared to the Q3 2023 period ($11,600).
A ‘Vieaux” on Credit Scoring
“We’ve Got a Guide for That!” MISMO Publishes Credit Scoring Guide
“The Credit Score Implementation Guide is a new resource that provides backward and forward compatibility guidance for the implementation of MISMO standards to support the industry-wide, credit reporting modernization. This guidance is intended for those that use the MISMO reference model and are working on implementing the new credit scoring models into their systems.” - MISMO President Brian Vieaux
MOVING & SHAKING
Guaranteed Rate Affinity promoted Jaime Joyce to Chief Operations & Strategy Officer.
Mortgage Bankers Association named Christy Soukhamneut as head of the Residential Future Leaders Program.
Federal Home Loan Bank of NY elected Stephen Romaine to serve as vice chair of its board of directors. He's served on the board as a member director since 2019.
Fidelity Direct Acquired byAbsolute Home Mortgage(NMP)
MARKET/INDUSTRY
Important Week: Interest rates are at the best levels of the year and the Fed is expected to cut rates. BUT, there’s more brewing out there according to Bill Bodnar in his latest Master the Markets segment.
Mortgage Rates Move Down: Freddie 12-4-25
Mortgage rates decreased for the second straight week, emerging from the Thanksgiving holiday. Compared to this time last year, mortgage rates are half a percent lower, creating a more favorable environment for homebuyers and homeowners.
Mortgage Applications Decreased 1.4% from One Week Earlier: MBA Weekly Survey for the week ending 11-28-25. This week’s results include an adjustment for the Thanksgiving holiday.
The Market Composite Index decreased 1.4% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 33% compared with the previous week.
The Refinance Index decreased 4% from the previous week and was 109% higher than the same week one year ago.
The seasonally adjusted Purchase Index increased 3% from one week earlier. The unadjusted Purchase Index decreased 32% compared with the previous week and was 17% higher than the same week one year ago.
Pusillanimous Prognostication
Not Exactly Bold: realtor.com 2026 Housing Forecast
The forecast predicts mortgage rates will average 6.3% across 2026, a slight improvement from the 6.6% full-year average expected for 2025
Nationally, home prices will continue to grow 2.2% through the end of next year, after rising by 2% in 2025, the forecast indicates.
Incomes and overall inflation are expected to continue rising faster than growth in home prices, delivering a slight boost to affordability.
After existing-home sales hit a 30-year low in 2024, the forecast estimates they will improve slightly through the end of 2025, rising 0.1% to 4.07M.
Total existing-home sales will rise 1.7% to 4.13M in 2026 as affordability improves. While that would be an improvement on the past three years, it's still well below the 5.28M annual average seen from 2013 to 2019.
It’s Not Just the Stock Exchange: “Delistings” Jump 28%, Highest Since 2017 - Redfin
The number of home listings that were pulled off the market rose to a historically high level in September.
Sellers are delisting because so many listings are going stale; many homeowners would rather stay put than accept a low offer. The increase in delistings is propping up home prices.
Nationwide, 5.5% of total listings were delisted in September, the highest September rate in a decade.
1 in 5 homes that are delisted are re-listed.
Sellers who had owned their home for under 5 years are most likely to pull them off the market after listing.
Delistings–and stale listings–are most common in Florida.
Nearly 85,000 U.S. sellers took their homes off the market in September, up 28% from a year earlier and the highest level for that month in eight years.
What the HECM?
NMP Reports on MBA’s Proposed HECM Reforms
The trade group sent a letter in response to an FHA/Ginnie Mae RFI on how to modernize and strengthen HECM and HMBS programs. These are their main suggestions:
Restructure the Upfront Mortgage Insurance Premium (MIP)
Adjust the Principal Limit Factors (PLFs)
Modernize Valuation Methodology
Revise Life Expectancy Set-Aside (LESA) Requirements
Enhance Counseling Access