Navigating the Headwinds: Top Considerations in Today's Market
The residential lending landscape as of mid-2025 is still complex; there are constantly evolving market dynamics, persistent challenges, and yet still we find ourselves amidst emerging opportunities. In this two-part series we’ll highlight key considerations for Senior lending executives to use in successfully navigating the environment.
Re-evaluating GSE or Private Investor Relationships
Senior executives are keenly assessing their GSE (Government-Sponsored Enterprise) and private investor relationships. Fannie Mae and Freddie Mac continue to play a crucial role in providing liquidity to the secondary mortgage market. Their forecasts indicate a positive outlook for home sales and originations in 2025 and 2026. However, discussions around the future of the GSEs, including potential privatization, continue to shape the long-term landscape. For lenders, understanding the implications of these discussions and diversifying funding sources to include strong private investor relationships can mitigate risk and offer greater flexibility. The goal is to ensure a robust and adaptable capital markets strategy that supports both current lending needs and future growth opportunities.
Proper Product Mix
With purchase originations expected to increase in 2025, but affordability remaining a significant hurdle, a thoughtful product mix is critical. Lenders must move beyond traditional offerings to address the diverse needs of homebuyers. This includes exploring specialized refinancing products, hybrid lending solutions, and loan programs tailored to first-time homebuyers or those consolidating debt.
Just as importantly, meeting Community Reinvestment Act (CRA) requirements remains a fundamental responsibility. While the specific framework is subject to ongoing discussions and potential revisions, the underlying objective of encouraging institutions to meet the credit needs of their entire communities, including low- and moderate-income neighborhoods, is unwavering. Executives must develop strategies to ensure their product offerings and outreach initiatives align with CRA objectives.
Stay tuned for next week’s concluding article where we’ll evidence additional considerations to make in navigating the current market landscape. Or, if you have questions or would like to talk to SCA about achieving your goals with investor or GSE relationships and aligning your product mix, contact our Director, Bill Dolan, at wdolan@scapartnering.com or by phone at (617) 694-2617.
