Portland Mortgage Market Update — November 14, 2025

Wow, when it rains it pours! After a couple weeks of wondering what the heck I was going to write about each week, this week delivered in spades. First and foremost would be the end of the record long government shutdown. Earlier this week, a handful of democrats opted to end the stalemate and allow the government to get back to work, at least for the next couple of weeks until they have to vote again in January. That being said, it is going to take a bit longer for things to get back to normal. For instance, on Wednesday it was announced that the October Jobs and CPI reports likely won't ever be released, which took the wind out of a market that was riding high on some weaker ADP numbers that were released showing about 11,000 job losses each week in October. A Fed rate cut in December is now at basically a coin flip, and mortgage rates worsened as a result.

One loan for the rest of your life? Trump announced potential plans for a 50 yr mortgage this week, which effectively went over like a lead balloon. Critics on both sides of the aisle panned the idea, citing concerns about the dangers of paying almost double the total interest over the life of the loan to save a couple of hundred bucks each month. Basically, to agree to this kind of term would be akin to agreeing to pay rent to the banks. That being said, a 50 yr loan is in direct violation of the Dodd-Frank Consumer Protection Act, which was set in place after the great financial crisis. So in order to push 50 yr loans to market (which is an already assumed to be an unwanted product that does not favor the general consumer) the administration would have to modify or repeal an act that was set in place specifically to protect consumers. Logically, it doesn't make sense for them to expend the political capital to make this work.

No More FICO Requirements? The FHFA, who oversees Fannie Mae and Freddie Mac, also announced they were removing the minimum FICO score requirement for conventional loans. Sounds great! Except there is a catch. Conventional loans (well, all loans, really) have Loan Level Price Adjustments. LLPAs are the added expenses that are applied to rates to offset perceived risk. That is why am 800 credit score borrower gets a better rate than the 660 credit score—the lower score is a higher perceived risk so there are more LLPAs applied to their rate. Currently, a borrower with a sub 640 credit score can expect to pay almost 3 points for the same rate a 780+ credit score borrower does (assuming 20% down). One can only assume that when we get into the 500 range of credit score these rates are going to get prohibitively expensive. That being said, FHFA Director Bill Pulte has been very vocal about revising the LLPA structure with the goal of making lending more affordable, which would lead to improved rates for everyone.