Housing affordability has become a major issue heading into Tuesday's midterm elections. But for mortgage lenders and originators, some of the decisions that could matter most in 2027 are already underway, regardless of which party controls Congress.
The Trump administration is pursuing changes to refinancing costs and mortgage insurance cancellation, while the Mortgage Bankers Association is pushing for lower credit-reporting expenses, more flexible loan officer compensation rules, and reductions in government-backed loan costs.
The common thread is money. Washington is looking for ways to make mortgages less expensive for borrowers, while the industry is pressing for changes that could also make loans cheaper to produce.
And not all of those changes require an act of Congress.
Lower Costs, Fewer Requirements
President Donald Trump's Oct. 22 executive order directs federal agencies to pursue several measures aimed at reducing housing finance costs.
Among them, the Federal Housing Finance Agency is directed to consider waiving certain appraisal, income re-verification, and documentation requirements for eligible limited cash-out refinances. The agency is also instructed to consider reducing or eliminating certain loan-level price adjustments and other fees on those transactions.
The order calls for expanding a title-acceptance pilot that could allow Fannie Mae and Freddie Mac to accept alternatives to traditional lenders' title insurance on qualifying refinances.
For lenders, fewer requirements could mean lower production costs and faster processing. For originators, reduced closing expenses could make refinancing more attractive to borrowers whose potential monthly savings are currently too small to justify the transaction.
The order also directs FHFA to establish a pilot using automated property valuations and other data to identify eligible borrowers for mortgage insurance cancellation. The pilot would apply to loans originated after its establishment, subject to eligibility and safety-and-soundness requirements.
The proposals have drawn different reactions from the industry.
MBA welcomed the administration's efforts to reduce refinancing costs, while the American Land Title Association cautioned that expanding alternatives to traditional title insurance could expose borrowers and lenders to additional risks.
UWM President and CEO Mat Ishbia also welcomed the administration's focus on reducing borrowing costs. Ishbia pointed to automated mortgage insurance cancellation and expanded title insurance alternatives as potential sources of savings.
"The President is pushing to make things better in our industry," Ishbia said. "Some of these ideas will help, some of them won't help."
The debate illustrates a central challenge: reducing the cost of a mortgage transaction without shifting expenses or risks elsewhere.
The Industry's Bigger Wish List
The executive order overlaps with several recommendations in MBA's October Affordability in Action roadmap.
The association wants lower FHA mortgage insurance premiums, reduced Fannie Mae and Freddie Mac pricing charges, and changes to credit-reporting requirements for lower-risk borrowers.
It also wants greater flexibility under LO compensation rules, potentially allowing lenders more room to compete on pricing.
MBA estimates that reducing FHA annual mortgage insurance premiums by 20 basis points would save a borrower with a $400,000 loan nearly $800 annually.
For mortgage companies, the appeal extends beyond borrower affordability. Credit reports, compliance requirements, and other fixed production expenses can weigh particularly heavily on smaller loans, where the cost of originating a mortgage represents a greater share of the transaction.
That makes the industry's regulatory agenda as much about production economics as consumer savings.
The push also comes amid the growing competition between FICO and VantageScore, with lenders increasingly evaluating how alternative credit models could affect qualification, pricing, and operating costs.
Ishbia also pointed to FHFA's consideration of moving from three-bureau to two-bureau credit reports, along with potential changes involving FICO 10T and other scoring models.
"They're looking at ways to save costs for consumers while still being able to evaluate the borrower's readiness to buy a house or get a mortgage," he said.
Congress Still Has A Role To Play
The next Congress will inherit the implementation of the bipartisan 21st Century ROAD to Housing Act, signed into law July 11.
The legislation includes provisions intended to expand housing supply, improve access to financing, and address challenges associated with smaller-balance mortgages.
Those smaller loans are particularly relevant to originators. Fixed production expenses can make them less profitable for lenders, even as affordable housing remains a priority for policymakers.
Implementation is already underway.
On Oct. 23, the Treasury Department published a proposed rule addressing restrictions on large institutional investors purchasing single-family homes.
The restrictions are scheduled to take effect Jan. 7, 2027, with exceptions involving certain housing development programs, mortgage servicing, loss mitigation, and debt-related transactions.
Those exceptions could matter to lenders and servicers handling distressed properties and foreclosure-related transactions.
Congress will also influence the direction of housing finance reform, including oversight of Fannie Mae and Freddie Mac and legislative proposals affecting mortgage regulation.
But agencies such as FHFA retain authority over important parts of the lending system. That means certain pricing, credit-reporting, and refinancing changes could advance through administrative action without waiting for new legislation.
What Matters After The Votes Are Counted
For lenders planning their 2027 strategies, the practical questions are already taking shape.
Could lower refinancing costs bring more borrowers back into the market? Will changes to credit-reporting requirements reduce upfront expenses? Could greater compensation flexibility help lenders compete for business without squeezing margins?
Those are the operational implications behind Washington's affordability agenda.
The election will help determine which legislative priorities move forward and how existing policies are overseen. But the industry won't have to wait for a new Congress to begin evaluating the changes already on the table.
The test is whether Washington's efforts to lower housing costs translate into cheaper loans to originate and more opportunities to close them.
