Several of the mortgage industry's biggest story lines from 2025 are expected to take clearer shape in 2026, according to industry participants who shared their outlooks with National Mortgage News. Among the developments gaining traction are the potential arrival of the 50-year mortgage, the full rollout of credit score modernization and further consolidation after a year marked by notable deals.
Why a 50-year mortgage may be closer than it seems
Roby Robertson, executive vice president at LoanLogics, said his own forecast points to
"We definitely have an administration that's eager to expand access to homeownership, and I do think they see the 50-year mortgage as a way to do that," Robertson said. "If they believe it's the right move, there's enough support to make it happen."
Robertson said many of the questions now being raised about the 50-year mortgage echo those asked when the 30-year loan first emerged as the industry standard.
But given where home prices are today in some portions of the country, the 50-year is the only way
As for the future of the GSEs, a lot of indicators show they
"Obviously it's a long road [ahead] if they're going to do that," he said. "It's not necessarily, will they go private, it's how will that look," including where will the dollars from the effort go.
Credit score modernization advances
This presidential administration's motivation to make things happen quickly also applies to
Vantagescore says it can score more consumers and this fits in with the administration's goal of getting more people access to credit.
"When you look at non-QM, you look at Vantagescore, you look at the 50-year mortgage, really, what does it all speak to?" Robertson said. "It speaks to, we are trying to go to the edge of the different credit boxes to kind of find a buyer that is still credit worthy, still a quality buyer, but they are just not fitting into the kind of old school, traditional box."
Lender consolidation leads to vendor amalgamation
This year was
Right now, and for 2026, the mortgage industry is in a "natural cycle" where it makes sense for companies to take control of their own vertical, Robertson said.
But it won't just be lenders, because as those entities combine, vendors are affected as well.
The industry might be suffering from "vendor fatigue. They don't want 25 vendors, they want a vendor," Robertson said.
A lot of conversation in the technology side around consolidation is taking place right now.
"It's a motivation to the vendor space to say, 'Okay, well, how do we go about grabbing another piece of this kind of very bifurcated process?" Robertson said. "And how do we do more with the same client base?"
Why 2026 will be a market reset year
It will be a market reset year, argues Phil Crescenzo Jr., vice president, Southeast Division at Nation One Mortgage.
"This is the year it's going to kick up," he said. "We're ready to go now," but also noting the market was supposed to shift in a positive direction the last two years.
But now, the pent-up demand among consumers has been compounding and is ready to act. But Crescenzo added it might not be as strong as in the past, for economic reasons.
"These people that need to move [with] families growing and other needs start to swell to where the demand is bigger than just waiting for the perfect time," Crescenzo said. "There's always a kickoff to the new year, because we didn't get it done last year."
Even a bit of fear of missing out or general restlessness in the marketplace, combined with mortgage rates having softened in the past three months.
"Things are starting to get more affordable," Crescenzo said. "At the same time you have
How lenders will deal with the pesky rate environment
Mortgage lenders are feeling margin pressure with the current "pesky higher rate environment," said Michael Merritt, senior vice president, head of default and customer care at BOK Financial.
"As we look at what will happen with rates over the next three or four months, we think there is going to be some refinance volume, we think there will continue to be some home equity opportunities," said Merritt. "So we're very focused on making sure that we have that complete offering and that we're recapturing everything that we can."
Even though rates are expected to move lower, for many consumers they are still going to be higher than their current loan, and this is why home equity products will be strong in 2026, he said.
BOK is looking at how it supports existing customers, educating those who are wanting to buy a first-time home, offering those products where it can, Merritt said.
This leans into "how do we partner with people in our communities, those supporting builders, supporting nonprofits that help with down payment assistance and things like that," Merritt said. "Affordability is one of those things people want a simple fix, and there's no simple fix. So we're trying to make sure that we're involved in all of those different aspects."
How lenders will deal with artificial intelligence
When it comes to the
Every servicer and originator are now looking at these tools, but in reality, he continued, AI has been available in the mortgage industry for decades.
Having agentic AI and generative AI are game changers. But thinking about the evolution of this technology, it is not for replacing humans, but allowing them to be much better at their jobs, Merritt said.
"Where people fail today is either picking the wrong model for the task that they're using it for — they're using models that that's not the strength of that model, or they go too big," he explained. "It's got to be step by step. Feel comfortable with what you have it doing, build on those processes, and just make sure you're never asking it to do more than the bot or than the model should be doing."
What will cause defaults to rise
Economic factors will lead to an increase in defaults, Merritt said. Property values play more of a role in foreclosure activity.
Still, when borrowers are faced with a hardship, servicers have seen a lot of success because of those higher values. If they cannot get them into a permanent workout, "the equity they have does give them a graceful exit," he said.
"The pull-through percentage is staying fairly low, which tells the story that mortgage companies are here to help."
The differences now versus the late-2000s are the borrower's equity position, as well as better underwriting standards.
"We've learned from those mistakes and no one has loosened those standards," Merritt said.
Why lenders need to still be concerned about compliance
With mortgage rates expected to hover around 6%, 2026 will be a largely purchase driven market. In this environment, from a compliance standpoint, it means more focus on marketing, around fair lending and on lead generation practices, said Robert Maddox, a partner and practice leader in the banking and financial services group at Bradley Arant Boult Cummings.
Regulators enforce those under the Equal Credit Opportunities Act and Unfair and Deceptive Acts and Practices rules.
Even though enforcement is lighter, those rules aren't going away. Rather than deregulation, Maddox calls it a "self-regulatory environment because fair lending laws haven't changed."
Look-backs of origination files can encompass years.
"Banks and mortgage originators are going to still follow the law and be prudent," Maddox said.
But some industry participants are saying they don't have the same concerns, to which he responds "sure you do."
For example, while disparate impact might be utilized by the current administration, it doesn't mean it won't come back again, "and that the analysis that we're using right now won't come back and be what's utilized against us," Maddox said.
Even with
"We may not have as many enforcement actions or many headline grabbing stories, but I still think that they're going to focus on origination, pricing, disclosures, data integrity, all those key issues that are so critical to the mortgage origination market," he warned.
More so, even with federal enforcement being moderated, private plaintiffs and state attorney generals are likely to step up to fill the void.
Meanwhile, the shift to a purchase market next year means servicing portfolios are likely to grow because of less run-off. This is likely to have from regulators more targeted examinations, reiterating his point that the UDAP and fair lending laws are still on the table.
"The laws haven't changed, and good prudent companies will be diligent," said Maddox. "Just because there aren't headline grabbing enforcement actions now, they're still going to have to mind the shop, because this cycle will also change as well."
Why the VA market will grow in 2026
Brandon Smith, a loan officer at Choice Mortgage Group, specializes in Veterans Affairs program lending. He is a veteran himself of 22 years in the Air Force, including 10 years in special operations as an enlisted person and 12 years as a reservist as a commissioned officer.
Fiscal year 2025 was a growth year for the benefit program, up nearly 27% in unit volume, according to data from Veterans United Home Loans.
Smith says
"A lot of the misunderstandings, misrepresentations that are 20-30 year-old adages have finally started to subside," Smith said. "Realtors and sellers are starting to realize that it's not a more difficult path to transaction."
Still, educating consumers and real estate sales people to break down those misconceptions will remain a part of his business plan.
Like all government products, VA loans are assumable if certain conditions are met. But when those discussions do come up, while in some cases it works out, more often than not, assumability is better in theory than practice, Smith said.
For borrowers, he pointed out that while the VA program has general guidelines, each lender can add its own overlays.
"Just because one lender might say no doesn't mean that it's not doable by the VA guidelines," Smith said. Whomever borrowers work with should be knowledgeable on the ins and outs and able to navigate the VA program.
