Who’s Ready for ICE’s Encompass Deadline?

Larry Bailey has a Polymarket bet for you.

"There's going to be an existential crisis in November, probably right before Thanksgiving 🦃 , where lenders actually realize that they're completely screwed w/ using desktop because they haven't paid attention to this for the last four months," the Mortgage Workflow Partners founder told me. "That's my bet."

He's talking about ICE Mortgage Technology's Dec. 31 deadline to get off the Encompass SDK — the legacy Encompass framework that lets lenders & vendors customize the industry's dominant LOS to their heart's ❣ content — & onto modern APIs.

ICE already punted 🏈 on the deadline once, but all indications are the meter will start running Jan. 1, ‘27. Anyone still on the SDK will need a transitional-access contract w/ monthly fees based on usage.

In today's edition of The Mortgage Scoop, we detail who's prepared for the switch & what actually happens when the ball 🔮 drops on New Year's Eve. Also for today: how lenders are preparing for a better second half of '26, & tracking the latest MBS movements.

With less than 6 months to go, nobody I’ve spoken w/ believes the technology itself is the hard part. The real problem is that lenders spent two decades building undocumented customizations, the people who built them are long gone, & it's July. Everyone's busy trying to make money in a choppy biz climate, or they’re on vacation. They’re just not worrying about some tech stuff in the background.

"Most companies are slightly aware of what's going on," Bailey said. "Zero companies are worried about what they're going to do come December, b/c it's only July." (Disclosure: MWP is an advertising partner.)

A source at a mid-sized tech vendor said: “I talked to a mid sized IMB last week who hadn't signed his SDK transition order form yet. He just hadn't thought about it.”

ICE declined to respond to detailed questions & instead shared this statement. "We remain committed to communicating directly with our customers & vendor partners on the issues involved & are focused on that channel at this time.”

Ask the vendors & you'll hear the box is checked. Zach Sharkey of Sharkey Byte, one of the best-known developers in the Encompass world, says his product has been fully API-based for about 2.5 years, & the handful of plugin-heavy shops (Lender Toolkit, KensieMae & his own among them) are transitioning. His shop builds nothing on SDK anymore, period.

But nCino shows the gap between vendor readiness & full lender adoption. “ncino is fully GA for Encompass API, w/ many customers already utilizing an end-to-end experience,” General Manager Casey Williams told The Scoop. “The urgency to make the transition doesn’t seem to be as strong for reasons such as: summer buying season taking up employee bandwidth, APIs that don’t provide the same level of experience that the SDK historically has, & even some customers stating the timeline has been changed so many times they are unsure if the current one still holds true.”

From a tech perspective, Blend appears ready as well, sources said. Its API is actively working w/ Encompass, sources said. How many Blend clients are fully prepared to move over is unclear. Other leading POSs also told me they're ready from a tech standpoint.

Several sources said that there are no equivalent APIs for some SDK-based features/code, but most of it is relatively minor. That said, this is what keeps Bailey up at night: clients running 10–15 plugins where nobody knows who owns the DLLs or what they do. Take the batch-update plugin, one of the most common in the ecosystem. "Companies have no written documentation of who uses the batch update in their workflows," he said. "’We think secondary does it, we think compliance might do it, we think post-closing might do it’ — but they don't have that written down."

Sharkey sees the same thing w/ SDK "external applications" built years ago by departed contractors. Lenders don't know they're running, they don't have the source code or don't have the developers to rebuild them🫢.

Lenders w/ dev teams are "the least of my concern," Bailey said. "The folks that are going to get crushed are the smaller institutions that have been leaning on third-party vendors w/ SDK-based technology." His advice: get in writing from every SDK vendor exactly what your system will look like come December. (FWIW, several sources claimed that ICE has been somewhat slow to give developers the API access they need.)

Sharkey says security, full stop. SDK calls often hit the database directly ("extremely dangerous") & that brings w/ it security risks. He doubts a profit motive; cloud compute means APIs likely cost ICE more to run.

A different veteran Encompass developer, speaking on background, sees it differently: the SDK is "old tech debt that is costly," requiring fleets of dedicated servers, w/ Microsoft's eventual end of .NET Framework support as a ticking clock. Either way, the direct fees are trivial — roughly 70% of lenders would owe under $10/month, per several sources, w/ only ~50 lenders above the million-calls-a-month tier priced around $20. Three sources gave me that same figure.

What nobody can seem to get is a straight answer on plugins. One tech source says he's heard ICE people say plugins both are & aren't included in the transition — "I cannot get a clear answer" — & there's still no definitive public list of what will never be migrated. Business rules, for one, may never be extractable via API.

So, uh, cluster F or nothingburger? Bailey, for his part, isn't predicting doom, just embarrassment & last-minute scrambling.

"I don't think we're going to get stuck," he said. "But there's going to be a ton of employees that are completely pissed off b/c their companies didn't prepare them."

Mortgage lenders are feeling more optimistic about the 2nd half of ‘26, but they’re apparently not planning a major hiring spree. A new Mortgage Collaborative survey found that 83% of lenders are focused on growth & 89% expect origination volume to rise. Most project gains of 5% to 20%.

Their preferred strategy is to get more production from existing sales teams. Three-quarters said that is their primary growth plan, while 64% expect to recruit experienced LOs. AI remains more experiment than reality. While 83% are evaluating AI tools, just 17% have deployed them in live workflows. Trust in AI-generated outputs remains the biggest obstacle, along with concerns about fair lending and automated decisioning.

Lenders are also focused on cutting costs: reducing loan production expenses was the top operational priority for 86%, followed by vendor consolidation & faster turn times. Borrower retention & recapture ranked as the top secondary-market priority. Conventional purchase & non-QM loans were viewed as the biggest growth opportunities.

Total agency mortgage-backed securities issuance was $122.6 billion in May 2026, compared to $133.2 billion in April 2026 (a decrease of 8.0%) and $104.6 billion a year earlier in May 2025 (an increase of 17.2%).

Purchase mortgage issuance in May 2026 was $74.8 billion, a 5.8% increase month-over-month and 0.4% increase year-over-year. Refinance issuance in May 2026 was $47.8 billion, a 23.5% decrease month-over-month and 58.8% increase year-over-year.

Fannie Mae issued $32.8 billion in May 2026, compared to $40.0 billion in April 2026 (a decrease of 18.0%) and $28.1 billion a year earlier in May 2025 (an increase of 16.7%). Freddie Mac issued $37.2 billion in May 2026, compared to $38.2 billion in April 2026 (a decrease of 2.6%) and $30.7 billion a year earlier in May 2025 (an increase of 21.2%). Freddie Mac accounted for 53.1% of the conventional market share in May 2026 compared to 48.8% in April 2026 and 52.2% in May 2025.

Ginnie Mae issued $52.6 billion in May 2026, compared to $54.9 billion in April 2026 (a decrease of 4.2%) and $45.9 billion a year earlier in May 2025 (an increase of 14.6%). Ginnie Mae accounted for 42.9% of total agency securitizations in May 2026, up from 41.2% in May 2025.

This report is brought to you by Milliman. Milliman provides strategic and quantitative consulting services across the mortgage market with expertise in origination, servicing and capital investment.

Source: Fannie Mae, Freddie Mac, and Ginnie Mae MBS Data Disclosure

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