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US Treasuries retained most of their recent gains as anticipation of Federal Reserve interest rate cuts held firm after the central bank's preferred gauge of inflation matched economist estimates.Yields were mixed across tenors following Friday's release of July personal income and spending data, with short maturities little changed after falling from session highs while longer-dated yields were several basis points higher on the day. The report embeds price indexes for personal consumption expenditures, or PCE, including the inflation rate that Fed policymakers aim to keep at around 2%.READ MORE: Fed independence hangs on meaning of 'for cause'That rate was unchanged at 2.6% in July, while the core PCE price index — which includes excludes food and energy — rose 2.9% from a year earlier, compared with 2.8% in June. The report left intact expectations that the Fed will cut interest rates twice this year, beginning as soon as next month, in response to signs of a softer labor market even as inflation remains above the 2% target. "Core PCE was mild enough that a Fed cut is still the most likely outcome" for September, said Bryce Doty, a bond fund manager at Sit Investment Associates. "The two-year yield is so low it's telegraphing what the Fed is going to do for sure."READ MORE: Mortgage rates hit 10-month low as Powell hints at Fed cutSwap contracts that predict Fed rate decisions are pricing in about 20 basis points of easing for Sept. 17, about 80% of a quarter-point rate cut, and a cumulative 55 basis points by the end of the year.Rate-cut expectations rocketed higher in early August after employment data registered a sharp slowdown in job creation through July. A poor August jobs report on Sept. 5 "might put a 50-basis-point cut on the table" for September, Doty said. Two-year yields declined to session lows after revisions to the University of Michigan's August consumer sentiment survey showed lower expected inflation rates than the preliminary findings did. Fed Governor Christopher Waller, who along with Governor Michelle Bowman dissented from last month's decision to leave rates unchanged in favor of cutting them, in a speech last night said he supports a September rate cut and anticipates additional reductions over the coming three to six months.READ MORE: Higher mortgage rates slow refi application volumeTwo- to five-year Treasury yields, more sensitive to Fed rate changes than longer maturities, touched the lowest levels since early May this week, partly in reaction to efforts by US President Donald Trump to install new central bank policymakers committed to monetary easing. Created via a Tuesday auction at a yield of 3.641%, the latest two-year note rallied to 3.61% the next day, and traded at around 3.62% Friday.Most of this week's drop in short-maturity yields "was driven by the news from President Trump calling for Fed Governor Cook to be fired and the question of Fed independence going forward," said Molly Brooks, US rates strategist at TD Securities. Trump is attempting to unseat Fed Governor Lisa Cook based on unlitigated charges of mortgage fraud. Cook is challenging the action in hearing that began at around 10 a.m. in Washington.READ MORE: Pulte posts new criminal referral as Cook escalates lawsuitBenchmark yields other than the 30-year declined in August, leading the Bloomberg Treasury Index to a gain of more than 1% through Thursday. The 30-year is higher on the month, partly on concern about inflation arising from politically motivated monetary policy. Also, 30-year yields have risen globally, with those of Germany, France and Japan reaching multiyear highs.Longer-maturity Treasury yields rose Friday in part because the personal income and spending data show resilience on the part of consumers that's unlikely to persist while interest rates remain high, Doty said. Also, corporate bond underwriters expect a seasonal surge in supply next week — traditionally one of the market's busiest weeks of the year. Hedges to protect anticipated offerings from rising yields can involve sales of Treasuries or paying in interest-rate swaps, a negative for the market.The Treasury market may benefit Friday from bond-index rebalancing taking place at 4 p.m. New York time. The month-end changes have the potential to create demand for bonds entering the benchmarks from index funds and other passive investors. While dealers prepare for the event, limiting its market impact in many cases, the biggest rebalancings are on the last trading days of August, November, February and May, when the largest amounts of new Treasury debt are sold. 

One aspect of a law that takes effect in Connecticut on Oct. 1 was designed to improve the surety bond cancellation process by fully automating it, but making that possible will involve a procedural change that servicers who are also lenders in the state will need to understand."The bill generally requires surety companies to give all their cancellation notices electronically for the bonds they issue to certain banking department regulated entities," according to Connecticut's Office of Legislative Research.The state only requires lender-servicers to have one license on the nationwide industry platform states use, which also has a registry component. However, Connecticut has two separate surety bond requirements: one for lending operations and the other for servicing.So to ensure surety bonds can be cancelled through automation on that platform, avoiding delays that occur through a manual process that would involve mailing, lenders in this situation will need to create a second registration for their servicing operations.Why completing the process is importantIndustry attorneys are urging lender-servicers working with mortgages in Connecticut need to complete this process by Oct. 1 because the surety bond process is essential to maintaining their license.Loss of a surety bond at Connecticut lender 1st Alliance led to the company's closure during a legal disagreement with regulators over how it licensed individuals. (The Consumer Financial Protection Bureau's case against 1st Alliance was dismissed earlier this year.)The origins of surety bond use in the mortgage industrySurety bonds came into broader use in the mortgage industry after the Great Financial Crisis, driven largely by the Secure and Fair Enforcement of Mortgage Licensing Act, which created the Nationwide Multistate Licensing System and Registry and generally made them a requirement.The aim of surety bonds is to ensure that mortgage entities comply with laws and regulation, allowing for claims to be filed against it for compensation if there are injured parties. Surety bond cancellations can occur for a routine reason like expiration but also due to contingencies such as nonpayment of premiums.

Wholesale lender AD Mortgage has launched a borrower-facing portal in order to improve the experience of their broker's clients, the company said.AD Home gives consumers "a smoother, faster and more intuitive way to manage their loans," the company's announcement said.AD is known as a non-qualified mortgage lender, but it also offers conventional and government products, according to the press release. The new portal offers:Navigation through a streamlined interface that helps borrowers find what they need;A user-friendly design that makes accessing and understanding loan details easyBorrower payment scheduling Until recently the company was marketing itself as A&D Mortgage. It is the latest mortgage industry company to rebrand this year, joining a list which includes Fairway and Rocket.In January, the company acquired the third-party originations business that had been owned by Flagstar as Mr. Cooper, who purchased other assets elected to pass on this business.National Mortgage News reached out to AD for further comment."When their borrowers are taken care of, our partners can focus on what they do best — growing their business," said Max Slyusarchuk, CEO of AD Mortgage, in the press release. "This isn't just an upgrade — it's our way of making sure every client our partners serve enjoys a smooth, modern and secure loan experience."Earlier in August, AD released AIM Assistant, an artificial intelligence-powered tool designed to make daily operations inside the company's AIM Partner Portal faster, clearer and more convenient for mortgage brokers.AIM Assistant allows mortgage brokers to request loan changes from any portal page; ask the guideline assistant for real time answers about non-QM offerings; and connect to partner support or schedule a training session instantly.

Change Lending is seeking over $1 million in damages from a mortgage banker it says violated a servicing purchase agreement.The plaintiff firm, a large player in a government-sponsored lending program, is suing Village Capital & Investment over transactions involving government-backed loans. Village allegedly owes Change a combined $1.3 million in part for failing to complete its 2023 purchase of a pool of an unspecified number of servicing assets. "Through its wrongful actions and tortured interpretation of the PSA, VIllage Capital obtained a windfall at Change Lending's expense," the suit, referring to the pool of loans, said.The lawsuit was filed Wednesday in a Nevada federal court, and a summons was issued Thursday to Village, which is based in the Las Vegas suburb of Henderson. Neither company nor an attorney for Change responded to requests for comment Friday morning. Village, a servicer which originates government-backed refinance products, reported over $4 billion in loan volume in 2024 according to Home Mortgage Disclosure Act data. The Change Company, parent of Change Home Mortgage, is a large non-qualified mortgage lender and is a designated member of the Treasury's Community Development Financial Institutions Fund.What bills does Village Capital allegedly owe Change?The breach of contract case stems from a June 2023 contract in which Village agreed to purchase the servicing assets. Although Change serviced the loans in an interim servicing period through August 2, Ginnie Mae didn't recognize the switch to Village until September 1, the lawsuit said. Change, at the request of Ginnie Mae, on August 21 remitted a principal and interest payment advance of $2.6 million. When informed of the payment, Village allegedly withheld $659,464, suggesting Change was responsible during the interim servicing period. "Village Capital did not make the payment to GInnie Mae, yet kept the reimbursements received from mortgage borrowers," an attorney for Change wrote.Further, Change claims Village has withheld the remaining 10% of purchase price of the MSRs, across two scheduled payments totalling $642,704. The counterparty allegedly never provided required document exception reports on the loan pool, and later accused Change of not satisfying other contractual obligations. The total sum also includes another $18,170 Change advanced to the Federal Housing Administration during the disputed interim servicing period, which the FHA reimbursed to Village later on.Village is one of the industry's largest holders of Department of Veterans Affairs-backed loans, with nearly 11,000 in 2024 representing nearly $3.9 billion. The Anaheim, California-based Change Company in June touted a massive judgment against a former employee it blamed for causing the lender to temporarily lose its CDFI certification in 2023.

The battle between Federal Reserve Board Governor Lisa Cook and the Trump Administration over mortgage fraud allegations and their implications intensified this week.Cook filed a temporary restraining order and issued court summons to several high profile officials in a lawsuit filed to block attempts to fire her over alleged misrepresentation, and housing regulator Bill Pulte posted a new criminal referral suggesting additional instances of mortgage fraud.The new allegations and court filings keep the mortgage industry in the middle of a political and legal maelstrom that could play a key role in determining the industry's outlook as Democrats defend and Republicans criticize the historically independent Fed's interest rate policy.What Pulte's second criminal referrals allegesThe new redacted referral Pulte posted on social media involves properties Cook purchased in Cambridge, Massachusetts.In the referral, Pulte alleges that four months before Cook took out loans that were the center of previous accusations that she represented more than one property as her primary residence, she represented a condominium property in Cambridge to be a second home.The alleged concern that Pulte flagged related to the Cambridge condo was that several months later she represented it to be an investment property she would rent out in other government filings."By potentially falsely representing the property as a second home, Cook may have received savings by not declaring it as an investment property," Pulte said in his referral.Second homes the owner lives in some of the time carry less risk for lenders than investment properties where the renter may have less incentive to continue making payments. As a result, lenders tend to set a higher rate for loans on investment properties than those on second homes.Democrats have criticized Pulte's intervention related to the Federal Reserve Governor and urged him to "do his job" and turn his focus to broader housing measures. Pulte has said that the Cook allegations are part of a broader effort to more aggressively weed out fraud.Fraud can present a concern for lenders doing business with government-sponsored enterprises that Pulte oversees and which buy a large number of mortgages in the United States because those GSEs may demand housing finance firms buy back such loans.Cook files summons to Trump, Powell, and Bondi in TROOn Wednesday, federal court filings in Cook's lawsuit seeking to block her firing show summons issued to President Trump, Fed Chair Jerome Powell, Attorney General Pam Bondi and others.Any "officer or employee of the United States" summoned must "serve on the plaintiff an answer to the attached complaint or motion" within 60 days or face "judgment by default" for the relief the complaint demands, according to the court filings.Bondi's office and the Federal Reserve Board of Governors also received summonses and were held to the same conditions.The filing calling for an emergency TRO to be put in place until the courts can consider the case seeks to enjoin the Fed board, collectively or individually, and Chairman Jerome Powell, from "effectuating in any manner Governor Cook's illegal purported removal."

National Mortgage News is now receiving nominations for its fifth annual ranking of the Best Mortgage Companies to Work for, a survey and awards program devoted to celebrating employers in home lending and providing employee feedback to those companies. The Best Mortgage Companies to Work for is a partnership between National Mortgage News and the Best Companies Group, which conducts substantial employee surveys and reviews employer reports on benefits and policies. Winners are also broken out by size, naming the best small (15 to 99 employees), medium (100-499 employees) and large (500 or more employees) mortgage companies to work for. Mortgage companies must opt-in to be considered. The deadline is October 17, 2025.APPLY BY CLICKING THIS LINK Participation is open to companies that meet the following criteria:Be a for-profit or not-for-profit business or government entityBe a publicly or privately held businessHave a facility in the United StatesHave a minimum of 15 permanent employees working in the U.S.Must be in business a minimum of one yearMust be a standalone mortgage lender, mortgage broker, or mortgage servicer, or mortgage unit of a diversified financial services firm (employees' responsibilities must be concentrated on mortgage operation — i.e., not general staff in a retail bank branch)Only one entry per parent company. If an origination and a servicer apply and are controlled by the same company, you must enter as one organizationInvestment banks, securitization firms, government sponsored entities, mortgage technology companies and mortgage insurers are not eligible (although distinct origination or servicing arms of such companies may apply under the same conditions as above)The survey is conducted in two parts. First, employers will complete an in-depth questionnaire. Second, employees will have the opportunity to offer their honest feedback by taking part in a company-wide survey. Both portions of the assessment must be complete in order to be considered for recognition.SEE LAST YEAR'S LIST OF WINNERSOnce both portions of the assessment are complete, the data is analyzed and participating organizations will be ranked. Winning companies will be notified in writing whether or not they made the list in December. The final rankings will be published by National Mortgage News in February. Non-winning companies are not publicly revealed.For more information about the Best Mortgage Companies to Work for program, please visit bestmortgagecompaniestoworkfor.com.

I sometimes forget your average homeowner doesn’t know it all when it comes to mortgages.They’re complex and confusing and what might seem obvious to me isn’t to others.Latest case in point was an email my friend received from his loan servicer about tapping his equity.It listed his estimated home value and estimated “cash available” if he were to take out a second mortgage, such as a home equity loan or HELOC.He was confused because the numbers didn’t add up based on what he owed.Lenders No Longer Let You Borrow 100% of Your Home’s ValueThe confusion might lie in how lenders’ risk appetites have changed over the years.Back in the early 2000s, it was very common for banks and lenders to let borrowers take out loans at 100% LTV/CLTV, meaning every last dollar was cashed out.For example, if your home was appraised for $500,000 back when, a lender may have let you borrow the entire $500,000!In retrospect, this clearly wasn’t a good idea for what seems like very obvious reasons today.Zero skin in the game, high borrowing costs, little reason to stick around if the going gets tough and/or the property value suddenly declines.And that’s exactly what happened. Making matters worse back then was the prevalence of adjustable-rate mortgages and even negative amortization loans and second mortgages up to 125%!We all now know it was super bad lending that hopefully never gets repeated. That situation led to one of the biggest housing crashes in history.It also led to new mortgage rules, including the ATR/QM rule, which puts a lot of guardrails in place to prevent another major crisis.Without getting too convoluted here, let’s just say lenders are a lot more cautious today, thankfully.What this means is you can no longer take out a mortgage for 100% of the property value. Lenders want a buffer.Most Lenders Cap Home Equity to 80% or Less NowadaysBecause of the most recent mortgage crisis, banks and lenders remain a lot more conservative.They want to ensure the loans they make aren’t too risky, and even if the borrower falls behind, they can recoup any losses.The best way to accomplish this is to require a buffer between what the borrower owes and what the property is worth.That way if they have to foreclose, there is hopefully some equity and the property won’t sell for less than what it’s worth.It was common back then for borrowers to have negative equity, also known as an underwater mortgage, because of the high maximum LTVs/CLTVs and the rapid home price declines.Today, you’re generally going to be capped at say 80% CLTV when taking out a second mortgage like a HELOC or home equity loan.This ensures there’s at least 20% in equity if things go sideways. Or perhaps home prices drop!So when my buddy was doing the math, he was confused because he only owes something like $800,000 and it said his home was worth $1,700,000.In his mind, that meant he could tap something like $900,000, much more than the $474,000 mentioned.If we do the math, this means his particular lender is capping the max cash out at 75% CLTV.Roughly $1,275,000 divided by $1,710,000 is just under 75%. So in this case, a 25% equity buffer.That’s smart for the lender because it gives them a solid cushion. It’s also good for the health of the housing market if home prices fall and/or borrowers fall behind on payments.It helps us all avoid another scenario where homeowners get in over their heads and completely sap their equity, which would make a traditional sale very difficult.Read on: How to compare HELOCs from different lenders. Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.Latest posts by Colin Robertson (see all)

A group of Democratic lawmakers called on Federal Housing Finance Agency's Director Bill Pulte to "do his job" and focus on finding solutions to make housing more affordable, rather than concentrating on matters outside his purview — such as who runs the Federal Reserve.In a letter Friday, U.S. Sens. Elizabeth Warren, D-Mass., Chuck Schumer, D-N.Y., and Cory Booker, D-N.J., criticized Pulte's prioritization of "aiding the President Donald Trump's illegal campaign to take over the Fed," and called on the FHFA head to lower housing costs instead. The group went as far as outlining a handful of ways Pulte could go about doing so."Instead of spinning rumors about the Federal Reserve Chair's retirement or taking credit for credit scoring actions and title insurance pilots created by former FHFA Director Sandra Thompson under the Biden Administration, you could demonstrate an actual commitment to improving the everyday lives of the American people and work to make housing more affordable for them," the lawmakers wrote in their letter to Pulte. In their address to the FHFA director, the three Democratic senators highlighted that house prices increased 3% since last year, while median asking rents were 41% higher than in 2020."We urge you to reorder your priorities and begin taking meaningful actions to bring affordable housing and homeownership into reach for the American people," the lawmakers said.FHFA's Pulte previously made headlines after accusing several prominent Democrats, including Sen. Adam Schiff, D-Calif., of mortgage fraud, but tensions reached a fever pitch last week after he accused Federal Reserve Governor Lisa Cook of committing occupancy fraud prior to being sworn in to serve on the central bank's board. Shortly afterward, Trump said he would remove Cook from the Fed and the governor responded by filing a lawsuit against the president.The senators outlined eight suggestions Pulte could take to potentially curb rising housing costs, including conducting a study to see how the re-privatization of Fannie Mae and Freddie Mac might impact consumers and the housing market.Expectations have been building for a Fannie-Freddie IPO, with President Trump recently dropping hints that it may come as soon as this fall, but there could be potential downsides for borrowers. Privatizing the two housing agencies could push mortgage interest rates up, at least in the short term, mortgage industry stakeholders have previously noted.Senators also suggested that Pulte increase money appropriated to the Federal Home Loan Banks' Affordable Housing Program, an initiative that supports development and rehabilitation of affordable housing for low- and moderate-income households. Most recently, Pulte moved to reduce the number of FHLB board director seats at most of the 11 Federal Home Loan Banks, with the steepest reductions at institutions located in heavily Democratic cities. For now it is uncertain how and if the reduction will impact the FHLB's investments into housing and community development.They also suggested that the FHFA support affordable multifamily construction and rehabilitation lending."Housing and the American dream of homeownership are the backbone of this country. Now is the time to deliver emergency price relief, as the President has called on you to do. We thank you for your attention to this critical issue," the letter said.Pulte in a statement Friday blamed "Elizabeth Warren, Jerome Powell, and Joe Biden" for making housing less affordable over the past four years."We are doing everything we can to reverse this damage, including removing mortgage fraud," Pulte's statement concludes. 

The evolving housing market has brought modular and container homes to the forefront as innovative solutions to various challenges. With their unique features, these housing types offer promising opportunities and come with notable risks. For lenders, understanding both the good and bad of modular and container homes in the housing market is important for future financing preparation on these unconventional properties.The benefits of financing modular and container homesAffordability and efficiency are two of the most appealing aspects of modular and container homes. These homes cater to a growing demand for cost-effective housing solutions by design, particularly in urban areas where affordability often takes precedence.Container homes are reshaping urban development by transforming retired shipping containers into functional, low-cost housing units. This trend addresses the shortage of affordable homes in cities while offering a flexible approach to land use.READ MORE: How factory-built homes could move the needle on affordabilityModular homes also stand out for their speed of construction. Unlike traditional building methods, where timelines are often unpredictable due to weather or labor shortages, manufacturers pre-construct modular homes in controlled environments and assemble them on-site. The streamlined process of building eco-friendly modular homes aims to cut construction time by up to 80%, making these homes a worthy investment in avoiding expensive delays. For lenders, this efficiency could mean faster loan repayment periods and reduced financial risk stemming from project overruns.Furthermore, the appeal of modular and container homes extends beyond affordability. Eco-friendly modular homes incorporate sustainable design principles, such as energy-efficient materials and renewable power options. These elements meet the growing consumer demand for greener living, potentially increasing the resale and investment value of these properties.The challenges of financing unconventional housingWhile modular and container homes offer exciting opportunities, they also introduce challenges for lenders. One significant concern is the valuation of these properties. Given their unconventional nature, appraising them accurately can be difficult, as traditional metrics may not always apply. This uncertainty can complicate risk assessments and affect the lender's ability to match financing terms with the borrower's needs.READ MORE: HUD plans overhaul of its manufactured housing programAnother hurdle involves zoning and regulatory approvals. Modular and container homes often face stricter scrutiny from local governments, with some jurisdictions imposing limits or additional requirements for their use. Long-term durability is another factor to consider. While some manufacturers repurpose container homes from sturdy shipping materials, they are not immune to corrosion issues, especially in harsh climates. Finding common groundDespite these challenges, modular and container homes remain a viable investment in a rapidly changing housing market. Their potential is clear in exploring research and data on container home market size, which estimates substantial growth fueled by increased demand for sustainable and affordable housing. For lenders, considering the good and bad of modular and container homes facilitates getting ahead of market trends and creating strategic partnerships with knowledgeable developers. Quality developers who specialize in high-quality construction and maintain open communication can continue to inform lenders about potential risks, allowing for the best pathway to success. With a balanced understanding of their benefits and risks, lenders can position themselves to capitalize on these innovative housing trends while mitigating the unique challenges they bring.

Homebuilder stocks are headed for their best monthly performance in over a year as the housing market increasingly shows signs of life. And Wall Street pros say the rally can keep going regardless of what the Federal Reserve decides to do with interest rates. READ MORE: Homebuilders encounter credit, supply cost headwinds"What we need is not necessarily for rates to decline," UBS Securities analyst John Lovallo said in an interview. "We need rate stabilization and consumer confidence to improve, both of which seem to be happening." An index that tracks US homebuilders soared more than 16% in August, far outstripping the S&P 500 Index's 2.3% gain. If the gains hold through the end of session on Friday, that will be the group's strongest such rise since July of last year.It's quite a turnaround for the group, which entered the month down 3.6% for the year. It's now up some 12% for 2025. Among August's biggest gainers are Champion Homes Inc., M/I Homes Inc., Lennar Corp. and D.R. Horton Inc.Despite 30-year mortgage rates at a relatively steep 6.6% and home buyers grappling with a lack of affordable supply, signs of recovery are emerging in the housing market. New and existing home sales in July topped forecasts as prices eased. Mortgage rates are drifting lower. And heavy incentives from homebuilders are enticing more buyers off the fence. READ MORE: New-home loan applications surge to three-month highHomebuilders have also continued to capitalize on land-light portfolios, stock buybacks and a housing shortage, driving the stocks to outrun the S&P 500's gains.Hope TradeEven further upside in the coming months is likely, according to Lovallo. October through January is a historically strong period for homebuilder stocks as investors anticipate the industry's key spring selling season in what's known as the "hope trade." "I'm not saying that we're in the clear and it's gung-ho from here," he said. "But it does feel like we're starting to hit an inflection point."Even with a challenging economic backdrop featuring high rates, tariff costs and labor concerns, large homebuilders have continued to show discipline in their portfolios, said Cole Smead, chief executive officer of Smead Capital Management, who holds Lennar, D.R. Horton and NVR Inc. Their capital structures have remained strong as they've slowed their pace of building in response to the weaker macro environment. And with rents climbing as supply remains tight, home buying demand is expected to pick up.That said, this rally is being driven by expectations of interest rate cuts from the Fed, not growth, according to Bloomberg Intelligence analyst Drew Reading. And now that the stocks are trading at higher multiples, they're no longer cheap. Homebuilder shares are trading at 1.8 times book value, compared with a long-term average of 1.4 times. To justify these levels, lower interest rates remain key. "Even a stabilization in interest rates will reduce the cost of the buydowns that these builders are using," Lovallo said. "If we saw rates come down, that would really reduce the cost."