With chestnuts roasting on an open fire, Federal Reserve Chair Janet Yellen is nipping at the noses of mortgage industry professionals with one interest rate hike in the bank this year and two or three more likely on the way in 2017.

Merge that scenario with a new president in Washington, D.C., and a healthier U.S. economy, and 2017 really does shape up to be a barn-burner for mortgage industry professionals and home financing consumers.

What can both parties expect to see happen next year in the mortgage sector? Here are five likely scenarios, delivered by veteran mortgage industry experts:

Expect higher lending rates - Bill Dallas, co-founder and CEO at Cloudvirga, a Los Angeles-based mortgage workflow technology firm, says improvement in wage growth along with a strong job market will give support to consumer spending, which should help boost U.S. gross domestic product. "We expect GDP to increase to 2.1% in 2017 and 2.0% in 2018, which in turn would cast an upward pressure on mortgage rates," he notes. Dallas says he expects 30-year fixed mortgage rates to rise to 4.2% for the full year 2017 and 4.6% in 2018. "Under that scenario, more households will be discouraged to refinance," Dallas adds.

Fannie and Freddie privatized - Michael Taylor, branch manager at First Home Mortgage Corporation, in Millersville, Md., says 2017 will see Fannie Mae and Freddie Mac begin the process of privatization. "The agencies have paid back their TARP loans and have been paying the U.S. Treasury," he says. "Now it's time to spin them back into the private sector."

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