AI can accelerate onboarding by providing recruits with real-time feedback, support compliance by flagging documentation issues, and close the confidence gap by offering reliable answers on the spot writes the CEO of Friday Harbor

The megabank’s net income declined by 13% during the fourth quarter as a result of a $1.2 billion pretax loss on sale related to the divestiture of its remaining operations in Russia.

The latest Lower acquisition comes after several previous mergers with lenders as well as two last year that incorporated technology and real estate platforms.

The San Francisco-based banking giant reported solid gains in credit card and auto lending as credit remained in check and quarterly operating costs declined from a year ago.

The contract rate on a 30-year mortgage dropped 7 basis points to 6.18% in the week ended Jan. 9, according to Mortgage Bankers Association data released Wednesday.

Existing-home sales posted a notable year-end rebound in December, jumping 5.1% to a seasonally adjusted annual rate of 4.35 million , according to the National Association of Realtors (NAR). After adjusting for seasonal factors, December sales were the strongest in nearly three years, marking a broad-based improvement across all four regions. “2025 was another tough year for homebuyers, marked by record-high home prices and historically low home sales,” said NAR Chief Economist Lawrence Yun. “However, in the fourth quarter, conditions began improving, with lower mortgage rates and slower home price growth. December home sales, after adjusting for seasonal factors, were the strongest in nearly three years. The gains were broad-based, with all four major regions improving from the prior month.” Inventory tightened sharply during the month, reflecting typical winter seasonality. Total housing inventory fell to 1.18 million units , down 18.1% from November, though still 3.5% higher than a year ago. The months’ supply of unsold homes dropped to 3.3 months , down from 4.2 months in November. “Inventory levels remain tight,” Yun added. “With fewer sellers feeling eager to move, homeowners are taking their time deciding when to list or delist their homes. Similar to past years, more inventory is expected to come to market beginning in February.” Regional Breakdown (Sales and Prices, December 2025)

Trading levels in the bond market directly impact the rates that mortgage lenders can offer. This is why rates moved so much lower after last week’s news regarding planned purchases of $200bln in mortgage backed bonds.  But bonds aren’t the only input for rates, and those other inputs can make for days like today where bonds are noticeably better while mortgage rates refuse to follow. Those other inputs aren’t as easy to observe and quantify as the objective trading levels in the bond market, but in the current case, we can assume that at least some of the explanation has to do with mortgage lenders quickly becoming too busy to handle more volume. “Busy” isn’t necessarily the right word, but in this case, it’s a catch-all term for the side effects of rapidly originating a much higher volume of new loans. One aspect has to do with the flow of funding. Lenders don’t have unlimited cash to accept new lock commitments.  As they approach those limits, they will raise rates (or not lower them as much as their peers) to deter new business. A slightly more esoteric aspect has to do with deterring borrowers who recently acquired new mortgages from refinancing. Early payoffs (which mostly occur via refinancing when rates unexpectedly fall) cost lenders money because, on average, lenders pay more than the principal amount to originate a loan.  They then rely on earning interest to offset that expense. An early payoff means they won’t be able to collect that interest. As such, they have an incentive to avoid setting rates at low enough levels to entice recently minted mortgages from refi’ing. 

Some Asymmetric Risk When it Comes to Locking vs Floating

Bonds improved today mostly in response to heavy stock losses creating some safe haven buying demand. Data wasn’t heavily traded, but it didn’t do any harm. Producer Prices were mixed, with an upward revision in September being offset by lower-than-expected inflation in November. Retail Sales (also November data) beat at the headline, but the control group (excludes autos/gas/building materials) was in line with estimates and October’s number was revised lower. Despite the bond gains, mortgage rates were unchanged. This offers a potential clue about lenders being resistant to the notion of offering meaningful improvements from current levels in the short term.

Econ Data / Events

Core Producer Prices MM (Nov)

0.0% vs 0.2% f’cast

Core Producer Prices MM (Oct)

0.3% vs 0.1% prev

PPI YoY (Nov)

3% vs 2.7% f’cast

PPI YoY (Oct)

2.8% vs 2.7% prev

Producer Prices (Nov)

0.2% vs 0.2% f’cast, 0.1% prev

Producer Prices (Oct)

0.1% vs 0.3% prev

Retail Sales (Nov)

0.6% vs 0.4% f’cast, 0% prev

Retail Sales Control Group MoM (Nov)

0.4% vs 0.4% f’cast, 0.8% prev

Market Movement Recap

09:11 AM No major reaction to AM econ data. MBS up 1 tick (.03) and 10yr down 1.6bps at 4.165

11:23 AM Best levels of the day with MBS up 5 ticks (.16) and 10yr down 4.2bps at 4.138

01:58 PM Little changed from last update. MBS up 5 ticks (.16) and 10yr down 4.7bps at 4.133

In our world, no one expects lender and/or vendor mergers and acquisitions to diminish in 2026, and in today’s Mortgage Matters at 2PM ET, presented by Lenders One, Garth Graham, Senior Partner at STRATMOR Group, will break down key M&A trends, recap the pivotal developments of 2025, and share insights on what lenders can expect in 2026. (Garth leads the firm’s M&A practice and advises many of the industry’s top independent and bank-owned mortgage lenders.) We’ve all seen the M&A that is going on in banks. Cashless banks? People get confused and society is going to the dogs when it’s full of caffeine-free coffee, gluten-free bread, and alcohol-free beer. (Today’s podcast can be found here and this week’s are sponsored by Figure. Take advantage of Figure’s technology and products like its fixed HELOC, DSCR loan, piggyback loan, and direct debt paydown, helping you serve more of your existing network and expand into new markets. Hear an interview with Key Mortgage Services’ Jen Poniatowski on how lenders should adjust borrower expectations in a falling rate environment, buyer leverage is shifting as inventory rises, and economic uncertainty is shaping first-time buyer confidence and product choice.) Products, Services, and Software for Brokers and Lenders It’s 2026, and AI is expected to undergo rapid evolution this year. That’s why lenders should gear up for the new year with tools that will evolve too. Floify’s Dynamic AI brings next-generation intelligence directly into your POS, functioning as a skilled digital assistant that manages document recognition, data cleanup, extraction, and automatic verification. Borrowers upload a document once (such as a paystub or W-2) and see verified data flow through their application without repeated steps or frustrating password resets, resulting in a smoother path to pre-approval. Lenders get cleaner files, fewer abandoned applications, and lower processing costs. And because Dynamic AI is embedded inside Floify’s platform, you gain all the benefits of advanced AI without adding new systems or rebuilding workflows. Yes, AI will move fast during 2026, but with Dynamic AI you’ll be ready to keep pace. Experience tomorrow’s workflow: request a future-ready demo.

As we reported last week, the announcement that Fannie and Freddie would buy $200bln in mortgage-backed securities led to a precipitous drop in rates last week. For most of Friday, the top tier 30yr fixed rate was at 5.99% for the average lender according to MND’s daily mortgage rate index–the lowest in roughly 3 years.  And that single day of ridiculously low rates was enough to visibly juice application activity. The Mortgage Bankers Association (MBA) reported a 28.5% jump in applications for the week ending January 9th. One small caveat: the prior week’s data included an adjustment for the New Year’s Day holiday, exaggerating the contrast, but the underlying rebound was nonetheless substantial. The Refinance Index surged 40% from the previous week and was 128% higher than the same week one year ago, marking the strongest weekly pace since October.  Purchase activity also strengthened meaningfully. The seasonally adjusted Purchase Index rose 16% week-over-week, while unadjusted purchase applications jumped 51% and remained 13% above last year’s level, signaling continued buyer engagement as rates moved lower. “Mortgage rates dropped lower last week following the announcement of increased MBS purchases by the GSEs. Lower rates, including the 30-year fixed rate declining to 6.18 percent, sparked an increase in refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Compared to a holiday-adjusted week, refinance applications surged 40 percent to the strongest weekly pace since October 2025. The average loan size for refinance applications was also higher, as borrowers with larger loan sizes are typically more sensitive to changes in rates.”