Brokers weigh in on potential benefits, drawbacks of portable and assumable mortgages
Unlike the idea of the 50-year mortgage, which elicited more negative feedback than positive, brokers have been more receptive to the idea of Fannie and Freddie providing assumable and portable mortgages.
However, while more loan professionals haven’t dismissed the idea right away, there are serious concerns that would need to be addressed before these products are accepted.
Among those concerns is the possibility that predatory lenders will take advantage of customers who don’t understand how assumable or portable mortgages work.
Also, these loans would likely cost significantly more to originate, both because of the work involved and because they may reduce the amount of revenue-earning loan churn in the industry.
From a technical standpoint, there are also significant questions around collateral, especially with the portable mortgage.
Deborah Lee Switts (pictured top left), CEO and founder of Good Friend Mortgage, isn’t opposed to the idea, but believes consumer protections will be needed. Of course, that’s assuming there is anything left of the Consumer Financial Protection Bureau (CFPB) after the latest efforts to end it.
“The more options the consumer has, the better for the consumer,” Switts told Mortgage Professional America. “That said, there are learning curves for consumers, and bad actors feed on that, thus the need for the CFPB. The CFPB protects the consumer if the CFPB stays viable, and as long as the technology for disclosures to consumers is in place.”
Collateral issues
One of the biggest issues with portable mortgages is that the collateral backing the loan can change during the term, according to James Hawkins (pictured top right), president of Golden Oak Lending.
“A portable mortgage has a lot of questions, though, especially because you change the collateral mid-term,” Hawkins told Mortgage Professional America. “I don’t see how you can put a value on the mortgage if you don’t know what collateral will be used later in the life of the loan.”
Switts agreed with the collateral issues and also noted that portable mortgages aren’t really designed for the secondary market that Fannie Mae and Freddie Mac serve.
“The challenge with a portable loan is the collateralization,” Switts said. “The GSEs would be challenged with non-cookie-cutter loans, as the secondary market is not designed for portability and would require extensive legal review to format such a feat.”
Mass-produced loans vs. luxury product
The costs involved with a portable loan are another issue. Loans sold on the secondary market are largely straightforward, which keeps costs in check. Portable loans would almost certainly require more work to get approved, which would cost borrowers more in fees.
In addition, as Hawkins points out, lenders will want to charge a premium for the product because they know they’re setting a customer up with a product that will keep them from taking out another mortgage anytime soon. So the lenders will try to recoup future lost fees in this portable mortgage.
“It is also comparable to GE making a light bulb that never burns out,” Hawkins said. “Why would they do that unless they were going to charge 10-20 times the initial cost to buy one? They would essentially be cutting off all their future business. Same with issuing a portable mortgage.”
A portable mortgage would be priced like a high-end item rather than the run-of-the-mill conventional mortgages currently sold in the secondary market, Switts believes.
“There is no financial incentive for the lender, and if there were a financial incentive, the consumer would have to cough up the cost for the transfer and for the actual product to exist,” Switts said. “Our system is designed in such a way that if we keep as much cookie-cutter as possible, the consumer pays less, and money flows quickly. Portable loans will cost more, and will resemble a luxury market portfolio.”
Kevin Hassett revisits 50-year mortgages. Gret Uttal of Cyberlink Software Solutions calls it a stepping stone, Deborah Lee Switts of Good Friend Mortgage proposes AI recasting, and Deb Veilleux of Starlink Realty, Inc limits it to refinance use.https://t.co/grcuG4L3m0
— Mortgage Professional America Magazine (@MPAMagazineUS) November 13, 2025
Switts said these drawbacks don’t mean that assumable and portable mortgages shouldn’t exist. It just means that brokers will need to educate borrowers on the risks and costs involved. It also doesn’t mean that adding these loan options, along with 50-year mortgages, will magically fix affordability issues.
“Should these options exist? Absolutely, they should,” she said. “Just keep in mind, everything has its cost to manage and orchestrate. Is there a viable market for either of these? If a lender chooses to specialize in exotic or luxury products and a small percentage of the population is willing to pay for that, then it works. Are either of these options the solution? No, but more options should exist for the primary homebuyer.”
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
