As Halloween week unfolds, the mortgage industry finds itself navigating a landscape shaped by cautious optimism, regulatory shifts, and whispers of reform. In the latest episode of Optimal Insights, the team at Optimal Blue – Jim Glennon, Alex Hebner, Kevin Foley, and Vimi Vasudeva – deliver a timely breakdown of market conditions, policy developments, and insights from the MBA Annual Conference.
Here’s what you need to know this week.
Market Update: Rates, Volume, and Inflation Signals
Despite a quiet week for economic data, the mortgage market continues to show signs of resilience:
OBMMI Conventional 30-Year: Hovering around 6.125%, with a steady downward drift.
10-Year Treasury: Fluctuating near the 4% mark, with potential to dip below again.
Volume Trends: Activity is up 20–40% year-over-year, signaling a slow but meaningful recovery.
The CPI report came in at a flat 3%, slightly below expectations. While energy prices nudged metrics upward, the overall reading aligns with the administration’s goals and supports the case for rate cuts.
Trigger Leads and the Homebuyers Privacy Protection Act
One of the most consequential developments discussed was the recent legislation banning trigger leads – a practice that allowed credit bureaus to sell borrower data to competing lenders after a mortgage inquiry.
What Changed?
The Homebuyers Privacy Protection Act, signed into law last month, amends the Fair Credit Reporting Act (FICRA).
It prohibits credit agencies from selling consumer data without consent.
The law goes into effect in March 2026 and introduces an opt-in model for data sharing.
Why It Matters
Borrowers will no longer be inundated with unsolicited offers – some receiving over 200 calls or texts.
Servicers stand to benefit from improved retention, with early estimates suggesting a 20% increase.
According to calculations by Optimal Blue’s MSR experts, this could translate to an estimated 5 basis point increase in MSR value, potentially improving front-end pricing for borrowers.
FHFA, LLPAs, and the Pricing Puzzle
Social media buzz around FHFA and mortgage pricing reform took center stage, with Bill Pulte and Barry Habib reportedly in discussions about reconfiguring LLPAs (Loan-Level Price Adjustments).
Key Considerations:
LLPAs were designed to mitigate credit risk but may now be outdated given improved underwriting standards.
Potential reforms could include: Lowering G-fees to reduce rates across the board. Revisiting “mission score” LLPAs tied to policy-era incentives. Allowing GSEs to build portfolios again to influence spreads.
Insights from MBA Annual: Optimism Meets Innovation
The MBA Annual Conference in Las Vegas was marked by grounded optimism and a renewed focus on technology:
AI Adoption: Lenders should be reviewing vendors to distinguish between AI as a buzzword and solutions solving real world problems.
Non-QM Growth: More lenders are exploring non-qualified mortgage products.
Data Strategy: Banks and credit unions are becoming more sophisticated in leveraging internal data for customer acquisition.
Actionable Advice for Mortgage Professionals
Monitor FHFA Developments: Stay tuned to announcements around LLPAs and G-fees.
Prepare for Rate Cuts: The Fed is expected to cut rates by 25 basis points this week.
Refine Recapture Strategies: With trigger leads banned, servicers should double down on retention efforts.
Vet AI Vendors Carefully: Look for practical applications, not just marketing hype.
This week’s episode of Optimal Insights underscores the importance of staying informed and agile. From legislative wins to potential pricing reforms, the mortgage industry is at a pivotal juncture. As always, Optimal Blue remains committed to delivering clarity in a complex market.
Tune in to Optimal Insights for the latest perspectives from the experts at Optimal Blue. Available on all major podcast platforms: https://optimal-insights.captivate.fm/listen
The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of Optimal Blue, LLC.