A frequent topic in this Commentary is how lenders are responsible for only a small portion of the affordability issue. A big hit to affordability is insurance, and thank you to Kevin K. for passing along this story focused on fire resilience and home upgrades and how they may address insurance costs. Trying to plan for natural events is a full-time job that occupies many, as is thinking about the future of technology. On today’s Last Word presented by TRUE at 1PM ET, Brian Vieaux, Courtney Thompson, and Kevin Peranio break down a busy week across mortgage and capital markets, including hot takes on technology amid recent industry shifts. The panel also examines Venezuela’s potential market impact, shares projections for 2026, and wraps with each host offering their word or resolution for the year ahead. (Today’s podcast can be found here. Today’s has interview with loanDepot’s Jeff Dergurahian on the key data shaping 2026 forecasts, challenges to market consensus on rates and volume, and how originators can translate economic uncertainty into trusted, client-centric guidance.) PHH Webinar Series PHH Mortgage is excited to offer free webinars (live and on-demand) on a variety of topics. Next week, they will host two webinars on PHH’s non-Agency product line, FlexIQ. On Tuesday, January 13 at 1 pm EST, “PHH Mortgage Presents: Introduction to FlexIQ,” and on Thursday, January 15 at 12 pm EST, “PHH Mortgage Presents: FlexIQ Bank Statement Essentials.” Register for these courses or view archived courses here.

On Thursday afternoon with less than an hour left to trade, Trump announced he would be directing his representatives to buy $200bln in mortgage-backed securities (MBS). No matter what one’s personal opinions may be regarding bold announcements from the President, this one is definitely serious.
How do we know?  
First off, if you don’t want to apply any critical thought to the matter, simply consider that the MBS market reacted immediately and forcefully.  In other words, traders have done the mental heavy lifting for you. They wouldn’t have been moving billions of dollars of MBS at a time of day typically reserved for playing Angry Birds on the train back to the burbs.
Those who want to dig a bit deeper can do just a little bit of math. Trump said “$200bln.” Incidentally, as of the most recent monthly filings, the GSEs (Fannie and Freddie, who would be the entities buying this MBS) have $202.9bln of room on their balance sheets before hitting their current regulatory cap.  In other words, $200bln is a carefully chosen number and not some random, off-the-cuff remark.
Last but not least, the FHFA director has already confirmed it
Does the president have the authority to do this?
In a word, yes. Under the existing regulatory and conservatorship authority, FHFA can direct the GSEs to buy MBS up to the caps set forth in the PSPAs (the legal documents that govern the conservatorship). In fact, this has already been happening over the past 7 months as GSEs ramped up MBS holdings significantly. 
Do the GSEs have the money for this? Where would it come from?
Recent filings show the GSEs have nearly $200bln in cash equivalents (actual cash + short term liquid securities). The money does not come from Treasury or the Fed, etc.
How big a deal is $200bln?
This depends on a few factors, but the reaction in the MBS market is enough to tell you that it matters. Also consider that we can assess the impact of that $50bln of additional purchases over the past 7 months and see what it’s done to spreads between mortgage rates and Treasuries.  
Conventional wisdom will have most people comparing mortgage rates to 10yr Treasuries, but that’s not the right way to assess spreads these days.  5yr Treasuries are currently a better benchmark and will provide a more realistic idea of what that $50bln in MBS buying did for spreads. Granted, there are some other factors at work that can account for the tightening of mortgage rates to 5yr yields, but during the time that MBS purchases were ramping up, that spread tightened by about half a percent (50bps).

There are diminishing returns to additional MBS purchases as this spread continues to compress, but it’s not overly optimistic to think it could result in another 50bps of tightening in the best case.  This means that today’s 6.125% mortgage rates could fall to 5.625% without any movement in the broader bond market.
But the true impact depends on the details of how this is conducted. We know the MBS market is definitely already reacting, but that reaction will continue to be volatile and unpredictable as traders rush to price in the unknown impacts of unknown implementation details. It’s been very messy so far, and you can expect much larger-than-normal swings without any new provocation.
Just this morning, MBS rallied by more than half a point only to lose the whole thing an hour later and gain half of that back in about 30 minutes.  These were all real trades backed by real volume.

What’s this going to do for mortgage rates in the near term?
Not as much as you might think based on the MBS movement.  Yes, it’s true that rates are based on MBS, but there are other considerations. Volatility costs lenders money to insure against.  The higher the volatility, the less of an impact an MBS rally will have on rates. Case in point, even though MBS prices are up more than half a point from yesterday morning, rate sheet prices are only reflecting about half of that improvement so far today.  Moreover, that’s just the average lender. Some lenders barely budged.
This could eventually come out in the wash if volatility stabilizes and the details of the bond buying plan become locked in.
What’s the bottom line for now?
This is not Fed-style QE. It’s not an ongoing commitment to steadily buy MBS until further notice. That said, it’s definitely something and it definitely suggests rates will be left in a better position than before. 
Estimates will vary quite a bit on what the total eventual impact might be. Use the example of the past 7 months as your guide (but keep the diminishing returns in mind). A mere 50bln in additional MBS buying led to a 50bp (0.50%) tightening of mortgage rates to Treasuries over the past 7 months. Even after diminishing returns, it’s not outrageous to think another 50bp is possible.  That said, it’s unlikely that it would be too much more than that due to the finite nature of this bond buying commitment. We also don’t yet know what the timeline of purchases will be and whether there will be any unforeseen roadblocks.
Bottom line: it’s good, not bad.  Exactly how good remains to be seen.  Don’t expect an overnight miracle.  Expect volatility.  Expect certain lender rate sheet changes to NOT fall in line with what you’ve come to expect over the years. 

The jobs report came out mixed with payrolls falling 10k short of the 60k forecast and the unemployment rate ticking down to 4.4% vs a 4.5% forecast. The unemployment rate decline is mitigated somewhat by the decline in labor force participation.  All in all, this is not a lopsided report with any chance of sparking a rapid move in bonds.  That said, MBS are moving rapidly higher and it has nothing to do with data and everything to do with last night’s announcement of the administration’s plans to buy $200bln in MBS.  Simply put, Treasuries are roughly unchanged while MBS are up half a point. 
The chart below shows the dichotomy. Note that MBS prices have been inverted to show correlation with TSY yields (i.e. lower blue line = stronger MBS):

Yields across maturities were higher by less than three basis points after rebounding from session lows.

US President Donald Trump said he was directing the purchase of $200 billion in mortgage bonds, which he cast as his latest effort to bring down housing costs ahead of the November midterm election.

The rule, effective July 7, puts into place requirements similar to those for banks, except nonbanks do not have to make community investments or grants.

Across-the-board decreases across all loan types drove the Mortgage Bankers Association’s full credit availability index to its lowest in three months.

The 30-year fixed remains in its current range, but most expect the rate to reach 6% for 2026, and one observer feels it could actually break under this point.

“Warning: don’t use your pet’s name for your password. We were hacked, and had to change our dog’s name.” “Experts” are saying that passwords will be on the way out in 2026 as passkeys take over. Good, as I am tired of carrying around a notebook with my usernames and passwords for dozens of sites. For fans of artificial intelligence (AI), we have news that a) AI generated weather predictions are making up new towns, and b) Utah is allowing AI to prescribe medicine to humans. (Taking that to an extreme, is sure sounds like the plot of a sci fi movie where us humans are unwitting slaves to computers through drugs in our food.) OpenAI has launched ChatGPT Health which wants access to your medical records. What could possibly go wrong? On the mortgage side of things, Newrez has made an investment in HomeVision to create an AI-driven mortgage underwriting platform, enabling an industry-first solution designed to deliver real-time mortgage decisions across loan types. Meanwhile, Volkswagen is bringing back physical buttons to its dashboards. Yay! (Today’s podcast can be found here. Today’s has an interview with the Texas Stock Exchange’s Jeff Karcher on the origins of the TXSE, why its founders believe U.S. markets need more competition, and how its 2026 launch aims to reshape capital markets through technology-driven trading and long-term vision.) Lender and Broker Products, Software, and Services Primis Mortgage is excited to announce the launch of its latest innovation in home financing: the Access Total Mortgage (ATM) loan, a principal-first lending solution designed to give mortgage professionals a more flexible option for today’s borrowers. The ATM loan combines a mortgage, checking account, and a HELOC into one integrated account, allowing deposits to immediately reduce principal while maintaining access to funds, without refinancing. Structured as a non-traditional, 30-year HELOC with an integrated sweep-checking account, the ATM loan supports ongoing liquidity and efficient cash-flow management. Funds can be accessed through standard banking channels, providing flexibility for evolving borrower needs. This solution is available to qualified borrowers with a minimum initial draw of $150,000 and reflects Primis Mortgage’s continued focus on innovative, relationship-driven lending solutions. Learn more about the ATM loan and how it fits into Primis Mortgage’s forward-looking lending platform.

Mortgage rates were just a hair higher for the average lender on Thursday. The underlying bond market lost some ground following a stronger weekly Jobless Claims report and in sympathy with global bond market weakness overnight.  Because rates are based on bonds, when bonds are weaker, rates move higher. There are many different economic reports that deal with the jobs market, but none more important than the Employment Situation released by the Bureau of Labor Statistics–the one typically referred to simply as “the jobs report.”  This month’s jobs report will be released at 8:30am ET on Friday morning. Mortgage lenders don’t set their rates for the day until the 9am hour at the earliest, and that’s plenty of time for the data to send the bond market on a wild ride. If the jobs report is stronger than expected, rates will likely be higher, and vice versa. One final note: any economic report with high volatility potential can also have a limited impact. It all depends on how the data comes in. All we can know ahead of time is that the range of potential movement in rates is higher after reports like this.