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The Mitchell Group was going to settle accusations that it participated in an alleged kickback scheme with Rocket Homes by paying $200,000 to the Consumer Financial Protection Bureau. Doing so would make a potential headache go away. But the brokerage's CEO Jason Mitchell decided that since his company did nothing wrong, he would take his chances and try to prove that in court.In a video address posted on Linkedin, Mitchell accused the CFPB of unleashing a "witch hunt" and cryptically hinted that the bureau was trying to get his brokerage to divvy out information that would make going after Rocket Companies easier."They want the big fish and they want the little fish to go against the big fish," Mitchell said. "I was close to [agreeing] just to be done with this….but I couldn't do it. The reality of the situation is that we did nothing wrong. I could have very easily been done with this thing and put it behind us, and I chose to fight because we're right." Mitchell added that he and the CFPB "have been going back and forth" for over three years regarding the allegations. And after the executive disagreed with the settlement proposal, litigation was filed by the bureau soon after.The suit filed by the watchdog in Michigan accuses Rocket Homes, the real estate arm of Rocket Cos., of initiating a kickback scheme between itself and The Mitchell Group to boost origination business.The watchdog claims Rocket Homes gave referrals and other incentives to brokerages under an agreement that they would refer business to Rocket Mortgage and Amrock, the megalender's title, closing and escrow company.The Mitchell Group was an "enthusiastic partner" in the kickback scheme and allegedly referred thousands of clients to Rocket and Amrock. Some of these referrals were egged on by the promise that agents referring the most business to Rocket would receive a $250 gift card, the CFPB claims.Rocket has also vehemently denied the allegations. In a statement, a company press person called the bureaus claims "false and a distortion of reality.""Director [Rohit] Chopra's transparent ploy to bolster his political agenda before the changing of administrations is a reckless and shocking misuse of public resources," a press person for Rocket Cos. said.The CFPB's lawsuit will have negligible impact on Rocket Cos., according to an investment banking firm.A note from Keefe, Bruyette & Woods called Rocket Homes' mortgage revenue "incremental" and "de minimis" compared to the $79 billion in mortgage banking revenue Rocket Cos. generated in 2023."To the extent the company needs to change any business practices as a result of this lawsuit, the earnings impact is likely to be minimal," the note said.The investment bank also suggests that CFPB Director Rohit Chopra will be removed from his position and that a new Trump term will see less enforcement actions, increasing the likelihood that the case will be tossed.

Mortgage rates headed upward over the Christmas holiday week, running counter to Federal Reserve policy that might suggest movement in the opposite direction.The 30-year fixed-rate mortgage came in at an average of 6.85% for the seven-day period ending Dec. 26, according to Freddie Mac's weekly Primary Mortgage Market Survey. Economic trends provided lift, as the latest number rose 13 basis points from a 6.72% average a week earlier. This week's mean is also higher from one year ago when the 30-year rate finished at 6.61% in 2023's final survey.Meanwhile, the 15-year fixed rate average landed precisely at 6% to end 2024, climbed up 8 basis points from 5.92% seven days prior. The average was also up from 5.93% compared to the same week a year ago. "Mortgage rates increased for the second straight week, rebounding after a decline from earlier this month," Freddie Mac Chief Economist Sam Khater said in a press release. Rates jumped to counter the latest Federal Reserve move that might provide downward pressure. As expected, the Fed cut its benchmark rate 25 basis points, but the effect of the central bank's reduction was already baked into markets prior to the Dec. 18 announcement, housing researchers previously noted. Views on the necessity of such a cut diverged, though, even among members of the Federal Open Market Committee, supporting the arguments of some investors regarding the wisdom of reducing rates in the current economic environment. Markets appeared to instead react to signals of a still-robust economy illustrated by consumer sentiment readings earlier this month and signs of spending leading up to the holidays. Yields of 10-year Treasurys, which influence the direction of mortgage rates, reflected the sentiment, increasing to 4.63% on Thursday morning compared to 4.57% at trading close one week earlier. Data released this week, though, indicate consumers see headwinds forming as they enter the new year and the beginning of a new presidential administration. While strong consumer spending might boost mortgage rates higher to buyers' disappointment, Khater also pointed to positive outcomes for housing supply if latest trends hold. "The market remains plagued by an overwhelming undersupply of homes," he said. "A strong economy can help build momentum heading into the new year and potentially boost purchase activity."Earlier this month, Freddie Mac forecasted a slight and gradual decline of mortgage rates throughout 2025, which would also contribute to increased sales volumes. Similar year-end signs of emerging growth were noted by other housing researchers, including  Mark Fleming, chief economist at First American in its monthly Home Price Index. "As the housing market adjusts to the new normal of higher mortgage rates, buyers and sellers are gradually returning, supported by a healthy labor market and more homes for sale compared to last year," he said.Other mortgage rate trackers registered similar upward movement alongside Treasury yields and Freddie Mac over the past seven days. Lender Price reported a 30-year fixed average of 7.24% as of midday Thursday, according to its data on National Mortgage News' website. The rate was up from 7.12% a week earlier.Zillow's rate tracker showed a larger 15 basis point jump from the pre-Christmas week based on offers coming through its platform. The 30-year fixed average stood at 6.72% Thursday morning compared to a mean of 6.57% last week. 

“It's going to be a tough balancing act,” said Steve Skancke, chief economic advisor at Keel Point. “They want to have full employment, they want to contain inflation, and certainly, certainly, the imposition of tariffs will contribute to inflation, both with the immediate price increase and with the disruption of supply chains.” Monetary policy in 2025 remains unclear as the Federal Reserve will deal with still-sticky inflation and the uncertainties from policy in a second Donald Trump administration, analysts said. As such, projections for rate cuts range from one to four."It's going to be a tough balancing act," said Steve Skancke, chief economic advisor at Keel Point. "They want to have full employment, they want to contain inflation, and certainly, certainly, the imposition of tariffs will contribute to inflation, both with the immediate price increase and with the disruption of supply chains."Still, he sees tariffs as "the stick" since in his first presidency, Trump tried "the carrot," which did not work to get cooperation from some nations. As for Mexico, Skancke said, "I think it will be effective, because a 25% tariff on goods coming from Mexico would put them in a recession. It would crush their economy. And so, they'll get with the program."Still, he sees 100 basis points of rate cuts in 2025 (a prediction made before the newest Summary of Economic Projections calling for two cuts was released).And while Fed Chair Jerome Powell will finish his term, Skancke said, "I'd be really surprised" if he's renominated. "I also don't think that Powell would want to do it again," he added. "Eight years is a long time … And Trump is just going to be abusive going forward."Brian Rehling, head of global fixed-income strategy at Wells Fargo Investment Institute, agreed. "I think it's pretty clear that at least at this point, President-elect Trump will let Powell complete his term. I would be surprised however if Powell is renominated."Rehling sees one 25 basis point rate cut next year (also speaking before the latest SEP), and expects the Fed's importance to the market will "diminish" in 2025. Wells Fargo expects inflation will be higher and the economy will be better, leaving little reason for rate cuts.Wells Fargo Investment Institute President Darrell Cronk said President-elect Trump's proposed tariffs will be a negotiating tactic. "You should take President-elect Trump seriously, but not literally," Cronk said.Ryan Swift, U.S. bond strategist at BCA Research, expects more than two rate cuts in 2025 since the Fed's "2025 median inflation forecast looks too high and its 2025 median unemployment rate forecast looks too low."The Fed projections suggest it will cut rates by 50 basis points while core inflation is tracking toward 2.5% and the unemployment rate is tracking toward 4.3%, so "it is safe to assume that more cuts will be warranted if inflation moves below 2.5% and the unemployment rate moves above 4.3%," he said.Swift "certainly" sees a pause in January, but "wouldn't rule out a 25-basis-point rate cut in March. There will be two more PCE inflation prints between now and the March FOMC meeting, and we expect the Fed will cut rates if they average 0.2% or lower." Ryan Swift, U.S. bond strategist at BCA Research, expects more than two rate cuts in 2025 since the Fed’s “2025 median inflation forecast looks too high and its 2025 median unemployment rate forecast looks too low.” How will tariffs impact? "Tariffs have the potential to send core inflation higher for a few months as the prices of impacted goods adjust," he said. "However, this temporary increase in inflation is more than offset in the subsequent months because of the large drag on manufacturing activity."After the SEP was released, Brian Rose, senior U.S. economist at UBS Global Wealth Management, said he adjusted the firm's rate cut forecast in line with the new dot plot. "We now look for 25bps cuts in only June and September next year, or 50bps total for the year, rather than our previous expectation of one cut in each quarter for a total of 100bps," he said.Bad news on the labor front in early 2025 could put a March rate cut back on the table, he said.D.A. Davidson Director of Wealth Management Research James Ragan said, "I think two cuts is still possible," depending on data. "I think the Fed still wants to cut next year and [I] believe that it can" since inflation numbers will improve. The base case is two cuts, Ragan said, but fewer are possible if data don't support two moves.While inflation will continue to trend lower in 2025, hitting 2% next year would be an "optimistic forecast," he added.In her 2025 outlook, Seema Shah, chief global strategist at Principal Asset Management, said, "The central bank will likely become increasingly cautious about its easing path. The key implication of all this is that, come early 2025, rather than reducing policy rates at each meeting, the Fed is likely to slow its cutting pace to every other meeting — with some risk that rates don't fall as far as either the Fed or the market initially envisioned."Further, she noted, "Unfortunately, interest rate relief will likely be shallow and restricted for U.S. pockets of weakness, exacerbating the bifurcated U.S. economy."University of Central Florida economist Sean Snaith expects fewer cuts in 2025. The December rate cut was more about the Fed's credibility than data, he said.Subadra Rajappa, Societe Generale head of U.S. rates strategy, said, "The strong job market and sticky inflation argue for a more cautious and data-dependent approach to policy in 2025."Societe Generale expects four 25 basis point cuts next year, but Rajappa said, "it is hard to argue that the market, which is currently pricing in just two 25bp cuts next year, is underpricing cuts."Growth may slow in 2025, but inflation should remain sticky, Rajappa said, "especially as the focus shifts to tariffs and immigration with the incoming administration."The BNP Paribas 360 Markets team said, "Uncertainty and the return of inflationary pressures in the second half of 2025 look set to keep the U.S. Federal Reserve on hold throughout 2025."

In September, Zillow came out with an enhanced natural language search feature for potential homebuyers.As a result, it was able to gain additional insight beyond the broad characterizations and come up with 2024's most unique home search trends. Here are some of the more unusual aspects that consumers are looking for in a home that everyone in the mortgage manufacturing ecosystem could see when they look at loan applications in the coming months, based on what Zillow found.

Freddie Mac's latest economic forecast, while noting the policy uncertainty in the market right now, still calls for the Federal Reserve to keep to its "implied rate cut path" in 2025.Its outlook was informed by what Freddie Mac defined as the top three trends in the housing market in 2024: jobs, rates and insurance.While its November forecast did not take the election results into account, back then Freddie Mac felt economic conditions would keep the Fed on course for rate cuts going forward.Mortgage rates are expected to decline gradually during the year which will boost home sales slightly over 2024, the December outlook notes. Unlike other forecasters, Freddie Mac does not provide detailed numbers in its outlook.It also calls for home price appreciation to continue to moderate."This modest growth in house prices, and the increase in home sales should support the purchase market in 2025," a blog post from the Freddie Mac economics team led by Sam Khater said. "We also expect refinance volumes to increase mainly based on declining mortgage rates."As for those three underlying trends for 2024 impacting next year's market, first was the resilient labor market. "Job openings and hiring rates stabilized compared to the post-pandemic recovery," the post said. "As of November 2024, 1.98 million jobs were added to the economy, equating to 165,000 jobs per month."Next is the interest rate volatility for the full year, as the markets dealt with uncertainty around when the Fed would embark on a rate reduction program as well as the elections.Since the Fed made its first cut in September, mortgage rates have climbed, ending November at 6.81%, Freddie Mac pointed out.The 30-year fixed did decline in late November and early December, but for the week of Dec. 19 rose 12 basis points to 6.72%.Even as Freddie Mac expects rates to "very gradually" decline next year, other forecasters, including Fannie Mae, say movements will continue on their wild ride in 2025.The third and final theme for 2024 was the rising costs of homeowners insurance.An average borrower paid an annual homeowners insurance premium of $1,761 as of August. This was 13.6% higher than they did in 2023 and 61.8% higher than in 2018.Lower income property owners are more affected by the increased cost of homeowners insurance compared with moderate- and high-income borrowers.Low-income borrowers spent 3.4% of their monthly income on premiums, as of August. This compared with 1.7% for the average borrower."The impact of high interest rates and home prices affecting the principal and interest payments is much larger than the net impact of insurance cost, but it is still a significant burden on marginal borrowers trying to get into the housing market as well as homeowners with fixed incomes," Freddie Mac said.

A former PNC Bank loan officer is suing the bank for wage claims for damages allegedly exceeding $5 million. Alla Gurevich filed the class action lawsuit last week in a New Jersey federal court, accusing the Pittsburgh-based lender of violating state wage laws. The short filing does not include many details, but seeks to certify a class of at least 50 LOs who worked for PNC in New Jersey from 2019 to the present.Neither PNC Bank nor attorneys for the parties responded to requests for comment Tuesday. The lawsuit is similar to numerous unpaid wage claims against mortgage lenders, with other complaints also seeking reimbursement for work-related expenses. While lenders have batted some cases away, other companies have moved to settle. Some of those suits also remain pending in state courts.Lenders in those lawsuits often argue plaintiffs are exempt from overtime pay under the Fair Labor Standards Act and state labor laws. Gurevich's lawsuit only said class members were entitled to New Jersey wage law protections.Gurevich worked at PNC between 2018 and 2020, according to the filing. She was paid a fixed salary of $3,000 per month, plus commissions for originations. Like other proposed class members, the former LO said she often worked over 40 hours per week.The employees "regularly did not record all hours worked because of a common policy and practice by defendant of discouraging the recording of all hours worked," the lawsuit said.A summons to PNC Bank was issued Monday. The company is one of the larger mortgage lenders in the banking space, recording over $19 billion in origination volume last year according to Home Mortgage Disclosure Act data. It is also a major home equity line of credit lender, accounting for 5.1% of all such volume in the industry in 2023.

Suspensions and arrears on mainstream mortgages hit relatively high levels for the year, which suggests alignment in the two indicators, but a new working paper indicates they have two different drivers.The Mortgage Bankers Association reported Monday afternoon that forbearance rose for the sixth consecutive month in November to 0.5%, while a separate report showed Freddie Mac delinquencies manifest a similar trend during the same period, rising to a year-high of 0.56%. Both of these add to the list of historically healthy loan-performance indicators showing slow, consistent deterioration, but a Federal Housing Finance Agency study released the same day points to evidence that the drivers of delinquencies and payment suspension do differ."Underwriting characteristics at origination, such as credit scores or debt-to-income ratios, are by themselves insufficient predictors of forbearance participation," according to the FHFA working paper."Instead, we argue realized changes in economic circumstances, along with subjective expectations about needing help, morality about prioritizing one's self interests, financial literacy, and perceived economic uncertainty, are central to take-up," the paper's authors added.The findings in the paper by Justin Contat, William Doerner, Michael Seiler and Scott Weiner draw in part on the large forbearance datasets that became available due to its widespread use during the pandemic. All four are members of the FHFA's economic team.While the MBA found pandemic hardships have diminished as a forbearance driver, accounting for only 2.8% of outstandings in November, the paper also examined 2022 data reflecting areas with high flood risk. Disaster risk drove nearly half of outstanding forbearance last month.The FHFA economists also examined borrowers with credit hardships and no forbearance in their study.Death, divorce or disability generally accounted for the remaining half of recent forbearance that the MBA studied.Underwriting has been contracting in response to slow deterioration in delinquencies as reflected in Freddie Mac's data. MBA's Mortgage Credit Availability Index fell in November to a level that marked the closest its been to a benchmark level of 100 since April 2023.The MCAI's benchmark level of 100 reflects credit conditions in 2012.The FHFA paper examined statistics from the National Mortgage Database, which reflects origination and ongoing performance numbers from a representative sample of closed-end, first-lien loans. It also draws on data from the American Survey of Mortgage Borrowers.The agency and the Consumer Financial Protection Bureau jointly surveyed borrowers for the ASMB between 2020 and 2024, with distribution conducted on a targeted basis to groups relevant to the analysis involved, first focusing on COVID-19 and then flood areas later.New or more widespread methods of addressing borrowers in distress like forbearance proliferated during the pandemic, with some of this adopted for more long-term use in a manner that improved loan performance by some measures but also complicated its analysis.Loss mitigation will continue to evolve with a Republican-dominated administration and Congress next year, particularly in the Federal Housing Administration insured market prone to first-time buyer and financial concerns.Associations representing mortgage bankers, depositories and servicers last week called for streamlined FHA loss mit in line with a proposal to update the agency's handbook. The groups also seek an extension of the existing procedure into early 2026 to ease implementation.

The Marriner S. Eccles Federal Reserve building in Washington, DC, US, on Monday, March 13, 2023. US authorities took extraordinary measures to shore up confidence in the financial system after the collapse of Silicon Valley Bank, introducing a new backstop for banks that Federal Reserve officials said was big enough to protect the entire nation's deposits. Photographer: Al Drago/BloombergAl Drago/Bloomberg WASHINGTON — Banks and business trade groups sued the Federal Reserve board on Tuesday, demanding that bank capital requirements go through a rigorous notice-and-comment rulemaking process. The lawsuit, filed in an Ohio court, comes just a day after the Federal Reserve had sought to stave off the lawsuit by vowing to make changes to bank stress tests. The groups said the changes would address "some if not all" of their concerns, but they filed the lawsuit under the Administrative Procedures Act to "preserve their legal rights and to ensure timely reform to the current, flawed process." The groups — the Bank Policy Institute, the American Bankers Association, the U.S. Chamber of Commerce and two local Ohio trade organizations — said that they don't oppose stress capital buffer requirements, or the test to determine them. "On the contrary, Plaintiffs support such a buffer and the appropriate use of stress-test results to determine it," the groups said in the complaint. "Nor do Plaintiffs seek to upend banks' capital requirements or to disrupt the Board's application of the stress tests. Instead, Plaintiffs bring this lawsuit to help ensure that beginning in 2026, the Board subjects the components of the stress tests to public notice and comment and complies with other applicable legal requirements." Every year when the Fed conducts the stress tests, the board chooses a hypothetical set of economic conditions and uses internal models to project how banks would perform under those circumstances. "Adopted in secret, it produces vacillating and unexplained requirements and restrictions on bank capital," the groups said. The Fed does not disclose, for example, details about its internal models, and it makes changes to the tests every year. "The opaque nature of these tests undermines their value for providing meaningful insights into bank resilience," Rob Nichols, president and CEO of the American Bankers Association, said in a statement.The Fed declined to comment on the lawsuit. While the lawsuit is based on the Administrative Procedures Act, it highlights the growing influence of a June Supreme Court decision in Loper Bright Enterprises v Raimondo that eliminated judicial deference to regulatory agencies known as the Chevron Doctrine. The Fed referenced evolving attitudes toward agency rulemaking in its announcement on Monday. "The framework of administrative law has changed significantly in recent years," the Fed stated. "The board analyzed the current stress test in view of the evolving legal landscape and determined to modify the test in important respects to improve its resiliency."The Fed said it plans to disclose the models it uses to estimate hypothetical banks losses and revenues under the stress scenarios and to allow public commentary on them. It will also consider averaging results over a two-year period to even out some volatility of resulting capital charges. Fed Gov. Michelle Bowman called for similar changes in a speech earlier this year. "It is important that regulators consider the lessons learned from past tests and feedback from banks and other members of the public to ensure that stress testing is fair, transparent and more useful going forward," Bowman said in September.The changes also follow remarks from Rep. Andy Barr, R-Ky., a leading Republican on banking issues in the House Financial Services Committee. He led a subcommittee hearing in June on the topic. "Instead of running stress tests in an open and accountable manner, subject to public scrutiny, the Federal Reserve cloaks the stress tests under a veil of secrecy," Barr said at the hearing.  "This is no legal basis for this secrecy, and the perceived benefits of secrecy are illusory at best." Kate Berry contributed to this article. 

The pace of technology breakthroughs on a broad scale provided momentum for growth in efficiencies within the home lending community in 2024 despite ebbs and flows in loan volume.While digital adoption in the industry has rapidly accelerated since the Covid-19 pandemic, 2024 provided evidence of how essential it has become in home finance — with both positive and negative results to show for it — and an indispensable part of mortgage's future.Headlines frequently focused on artificial intelligence, but regulatory updates and cybersecurity trends also highlighted the role technology plays on a day-to-day basis.Here are a few of the key technology developments over the past 12 months whose influence will continue to be felt throughout all stages of mortgage lending in 2025. 

The real estate industry had a watershed moment in August, as terms of a legal settlement over the payment of buyer's broker commissions went into effect.Yet, this was not the finale to this long-running litigation or to the other suits involving the National Association of Realtors.But with the return of the Trump Administration, the current efforts to reopen the Department of Justice investigation into NAR over fees — discarding a settlement reached in 2020 — could soon come to an end.The following is a month-by-month recap of the highlights of National Mortgage News' coverage of these cases in 2024.