“The beatings will continue until morale improves!” Rumors over many months of employees at Freddie Mac and Fannie Mae fearing for their jobs and “walking on eggshells” may be founded as at least 10 high-ranking officials are leaving Fannie Mae, raising concerns about more turmoil at the Agencies. Word of the senior departures spread across the industry yesterday, creating worries that Fannie’s ability to provide stability to prices and activity could be hampered. (More below.) Fannie certainly has loan programs designed for seniors, and as it turns out, the U.S. is greatly in need of more housing for seniors, whether that’s subsidized affordable housing for people on a fixed income or independent living with amenities needed for older adults or assisted living. The median age at which someone enters senior care is 84, and with the oldest baby boomers just turning 80, the number of Americans in their 80s is projected to double to 29.4 million by 2045. The immediate need is clear: 582,000 more units by 2030. There’s one significant bloc standing in the way of more housing for seniors, and it is, ironically, seniors, who are consistently the most significant and organized opposition to new development and affordable housing in communities where they own homes.
Will slashing Agency staff help home ownership?
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At least 10 high-ranking Fannie Mae officials are leaving the company, creating significant concern within the mortgage industry about instability at Fannie. Will Freddie be next? According to the Journal, news of the senior-level departures began circulating through the mortgage industry Friday. People come and go from companies, but what is unusual is the number and seniority of the people departing at roughly the same time. Some of the exits reportedly stem from positions being eliminated rather than executives voluntarily deciding to leave.
The jungle drums are saying not to expect a return email if you reach out to people like Dana Brown (LIHTC), Michele McCarthy (regulatory affairs), Laurie Coleman (EVP), Mark Palim (chief economist), Dave Bohley (SVP public affairs), Tim Judge (data modeling), Brian Hansen (CFO of multifamily), Peter Gallagher (executive recruitment), Devang Doshi (head of capital markets), and Chuck Walker (COO). Of course, anyone looking for employment can post their resume at no charge on the Chrisman LLC Job Board.
There’s little reason for lenders who sell to Fannie to be happy about the news, or eager to celebrate the cutting of staff. Uncertainty inside Fannie can potentially affect mortgage liquidity, MBS execution, lender confidence, and ultimately pricing throughout the mortgage market. There is no reported change today to Fannie pricing, LLPAs, g-fees, underwriting guidelines or loan eligibility. Organizational and leadership risk has certainly popped back up. The concern is what happens if the turnover begins affecting Fannie’s execution, policymaking, operational continuity, or ability to function predictably in the secondary market.
F&F continue to make billions, and talk of the future of Fannie Mae and Freddie Mac, and possible efforts to eventually move them out of conservatorship and return them to public-market ownership, has died down dramatically.
Thoughts on loss mit
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The Mortgage Bankers Association reported in its Q2 delinquency report that delinquency decreased slightly across all loan types in the second quarter of 2026. Donna Schmidt, President & CEO of DLS Servicing, has some thoughts.
“Part of the decrease in delinquencies for the 2nd quarter is that the FHA new waterfall Trial Payment Plans were at full maturity, meaning that elevated delinquency rates we saw beginning in October 2025 as a result of all loss mitigation loans being put on TPP were finally balancing out. Those approved for a loss mitigation option in October and November would not be brought current until March and April, after the three payments were made. It would take at least three more months before the typical reinstatement cycle, post-TPP, would resume.
“Some of the improvement may be credited to the return to more responsible loss mitigation requirements (post COVID era leniency). Borrowers finding that they have either exhausted loss mitigation options or no longer qualify for options that afford a lower payment, have opted to sell the property that they had been struggling to afford.
“Our data, over the last 15 years, indicates that we see lower loss mitigation applications in the 2nd quarter. Generally attributed to income tax refunds and lower spending after the holidays. Applications begin to rise modestly beginning in July and spike in September through the end of the year, typically a result of back-to-school costs and preparation for winter and holidays.” Thank you, Donna.
Who is going to change LO comp?
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“Rob, are you seeing comp plans all over the map? Some lenders have caps which help them stay competitive in the jumbo business, yet brokers don’t have established comp plans or caps and two points is common. Yes, IMBs who run branch P&Ls have LOs that earn the loan amount multiplied by the compensation, but we’re seeing competitors comp based on the product. With Congress pretty much doing little until 2027, and the CFPB gutted, who’s going to do anything?”
Good questions. I am not seeing comp based on product, as that’s a violation of Dodd Frank, but most everyone seems to be seeing varying compensation due to lead source and abusing different buckets for competitive reasons. For example, some companies have different comp “buckets” that loan officers can choose from. Maybe a branch is given a price and the manager reduces the comp by x bps and takes less compensation, and applies that to a lower interest rate. It can be a slippery slope, and lenders trying to adhere to LO comp rules have to compete.
Others will say that brokers also have an advantage of having different compensation agreements with various lenders. Let’s say 275 bps with one or two companies that they’re brokering to, then 250, 200, etc. with others and they can flip from one to another as need be. In addition, brokers can start a loan as “lender paid” and then, if the borrower shops, flip to “borrower paid.”
Some companies cap compensation, others don’t. the industry standard was $7,500 a few years ago but with the conventional conforming loan amount of $832,750 in a non-high-cost market, x 100 bps which, per STRATMOR, is the average for self-sourced loan officers at an IMB, you already exceed the cap, and the LO actually receives lowered comp of roughly 90 bps instead of the full boat.
Now when it gets to DSCR loan, which is a business purpose loan and not truly a residential loan, I don’t believe the LO comp rule applies and LOs make whatever their agreement is. But it seems that not everyone treats it as a “business purpose” loan. If opened, disclosed, and reported as a residential investment property, then LO comp rules would still apply if it were reported to HMDA as such. Some may treat it as business purposes for Compliance testing, but there is disagreement whether that, in and of itself, would allow for varying compensation.
As for other non-QM products (brokered or banked) the comp rules would still apply as normal, given it’s a closed-end transaction. Non-QM doesn’t exclude (or excuse) LO comp rules as they apply to QM. Brokered/Banked, LO comp still applies and LO must make the same comp.
Some companies pay a percentage of the brokered loan comp, but if the loan is originated, underwritten, and sold via a correspondent channel, then their normal comp plan would apply. For example, an LO originates a bank statement loan through ABC Wholesale, and their comp agreement is x percentage of gross revenue, and the LO receives a percentage of the net revenue. But if the company also offers the same product though a correspondent relationship, then their comp could be different as it would be on bps x loan amount. And on and on…
The role of the LO when affordability is a problem
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For years, mortgage affordability has been measured primarily through the relationship between income, home prices, interest rates, and the monthly mortgage payment. That framework is becoming harder to defend as homeowners’ insurance costs rise far faster than wages in some markets. When insurance premiums increase by roughly 30% while wages have grown only a fraction of that amount, the financial strain does not end at the closing table. It follows the borrower into homeownership, potentially turning a payment that looked manageable at origination into a much heavier obligation at renewal. We need to start treating insurance as a more meaningful part of the affordability conversation, including asking whether borrowers should be stress-tested for the possibility of rising premiums in the same way we already consider other risks.
That also creates an opportunity for the mortgage industry to think differently about the role of the loan officer. Rather than treating insurance as another figure that gets collected during underwriting and then forgotten, it can become part of an ongoing conversation with the homeowner, including check-ins before renewal and discussions about how changing costs affect the household’s finances. That kind of consultation becomes particularly important when the pressures on homeowners begin to compound, because insurance, taxes, healthcare, and other expenses all compete for the same limited household income. The industry should be thinking not only about how we help someone qualify for a home, but how we help them remain financially capable of keeping it. If insurance continues to become a larger component of the monthly cost of homeownership, understanding that expense and helping borrowers plan for it will become an increasingly important part of responsible lending and long-term borrower relationships.
Just because it’s a law…
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We all learned that when Congress passes legislation, if a president doesn’t sign it, the law still becomes a law after 10 days. Having a housing bill become “law” and seeing its effects reach builders, lenders, and homebuyers are two very different timelines, and that gap is easy to underestimate.
Robbie Chrisman sent, “The Road to Housing Act spans 12 titles and roughly 60 provisions, touching at least 12 federal agencies, along with state and local governments and institutional investors, with some deadlines beginning this year and others extending over the next decade. Full implementation will therefore be a process rather than a single event, making the focus now less about the legislation itself and more about how quickly and faithfully its provisions are carried out.
“The provisions likely to have the fastest impact are those that require regulatory simplification rather than new federal funding. One notable example is the removal of the permanent chassis requirement for manufactured homes, which could reduce costs without requiring an additional congressional appropriation. That contrasts with the bill’s numerous grant programs, which could provide meaningful support for state and local efforts to expand housing supply but cannot move forward until Congress appropriates the necessary funding. The distinction is important: deregulatory provisions can take effect relatively quickly, while funded programs remain dependent on the appropriations process.
“Several implementation deadlines are particularly worth watching. HUD had an August 10 deadline to issue a Federal Register notice updating the CDBG-DR formula allocation methodology, while the institutional investor provisions take effect January 7 of next year. Under those provisions, qualifying institutional investors must notify HUD, HUD must establish a renter outreach resource, and HUD and GAO must produce impact reports two years after the ban takes effect. These hard deadlines provide some of the clearest markers for assessing whether implementation is moving forward as intended.
“The bill also shifts responsibilities between federal, state, and local governments. Federal regulatory reforms, including changes to environmental review, may reduce barriers to development, but they also place greater responsibility on state and local governments to execute projects within the new framework. Meanwhile, many of the bill’s grant programs will require future appropriations, meaning local governments can benefit from preparing projects and applications in advance so they are ready when funding becomes available.
“It is also important to recognize that passage of the law does not mean the regulatory framework is immediately settled. Many provisions still require agencies to publish Federal Register notices, conduct public comment periods, and issue final rules, while other provisions give agencies authority to act without necessarily requiring them to do so. Implementation will therefore depend not only on statutory deadlines but also on the willingness and capacity of individual agencies to move quickly.
“Perhaps the most significant feature of the legislation is its bipartisan foundation: it incorporates ideas from more than 60 pieces of legislation, roughly 36 of which had bipartisan sponsorship before being assembled into the broader package. That level of agreement suggests there is substantial room for additional bipartisan housing legislation, particularly because the bill does not address tax policy. For now, however, the most important takeaway is patience: the impact of the Road to Housing Act should be measured over six months, a year, and beyond… not in the first 30 days after enactment.” Thank you, Robbie.
Property tax calculations, home ownership, and community
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Last Saturday the Commentary had, in the “joke” section near the bottom, a critique of how some states calculate property tax, and the homeowner suffering because of it.
Greg Cook had some thoughts. “Rob, you definitely stirred an important conversation with this one. The frustration you’re naming is real, and homeowners feel it deeply. My only pushback is that property taxes aren’t actually tied to profit… They’re tied to the cost of belonging to a functioning community.
“When those two ideas get mixed, the whole debate gets emotional fast. Your piece is a great catalyst for that discussion, though, and it inspired me to explore the broader architecture behind why the system feels unfair.”
(Thank you to Gayle Z. for this one.)
A group of women were at a seminar on how to live in a loving relationship with their husband.
The women were asked, “How many of you love your husband?”
All the women raised their hands.
Then they were asked, “When was the last time you told your husband you loved him?”
Some women answered today, a few yesterday, and some couldn’t remember.
The women were then told to take out their cell phones and text to their husband: “I love you, sweetheart.”
The women were then instructed to exchange phones with another person, and to read aloud the text message they received, in response.
Below are some replies. If you have been married for quite a while… a sign of true love… who else would reply in such a succinct and honest way?
1. Who the hell is this?
2. Eh, mother of my children, are you sick or what?
3. Yeah, and I love you too. What’s up with you?
4. What now? Did you crash the car again?
5. I don’t understand what you mean.
6. What the heck did you do now?
7. Don’t beat about the bush, just tell me how much you need.
8. Am I dreaming?
9. If you don’t tell me who this message is actually for, someone will die.
10. I thought we agreed you wouldn’t drink during the day.
11. Your mother is coming to stay with us, isn’t she?
Visit www.ChrismanCommentary.com for more information on our industry partners, access archived commentaries, or subscribe to the Daily Mortgage News and Commentary. You can also explore the Chrisman Marketplace, a centralized hub connecting mortgage professionals with trusted vendors and solutions. If you’re interested, check out my periodic blog on the STRATMOR Group website. STRATMOR’s current blog is “Pricing That Can Help Borrowers.” The Commentary’s podcast is available on all major platforms, including Apple and Spotify.
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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes, visit the Chrisman Job Board. This newsletter is intended for sophisticated mortgage professionals only. There are no paid endorsements by me. For the latest mortgage news, visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.ChrismanCommentary.com. Copyright 2026 Chrisman LLC. All rights reserved. Paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)
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