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Rocket Cos., preparing for its twin acquisitions of Mr. Cooper and Redfin, sunk back into the red for the first quarter, the second time in the past three quarters it has lost money.But as the company noted, one of its bright spots was in home equity lending, which had another record quarter, as homeowners looked to access their equity without affecting their first-lien mortgage rate."If we consistently have quarter over quarter growth, if you think about the market share opportunity there, regardless, you know, if rates are at 7% or if rates are at 6%, that product is still very attractive," said Brian Brown, chief financial officer, on the earnings call. "So we think there's a really long runway there."The financials behind Rocket’s quarterly lossRocket lost $212 million during the quarter, compared with a strongly profitable fourth quarter of $649 million, and earnings of $291 million for the period ended March 31, 2024.On a GAAP basis, Rocket had total revenue of $1 billion, and an adjusted $1.3 billion for the period, which was at the high end of past guidance.However, expenses in the first quarter were $1.26 billion. Those were up from $1.1 billion one year prior.Using the non-GAAP adjusted income metric, Rocket made $80 million in the first quarter, versus $84 million in the same period in 2024.The year started off strong, Varun Krishna, CEO said on the earnings call, especially as mortgage rates dropped during the quarter.In particular March was a high point at Rocket, as it served 21% more origination clients than it did in the same month in 2023.Momentum shifts at the start of AprilBut in April, which is in the second quarter, the market dynamics, normally positive for the start of the spring home purchase season, shifted. That came after President Trump's tariff announcement, which roiled both mortgage rates and consumer confidence."It actually marked a sharp reversal in earlier momentum, and that's for a few reasons," Krishna said. "Following global tariff announcements, the stock and bond markets reacted with volatility, and the 10-year Treasury yield fluctuated sharply."Purchase applications shrunk by double digit percentages in April, which the mortgage industry had not seen since the financial crisis."While these short-term headwinds are shaping consumer behavior, certainly it also reinforces our conviction for who we are and where we're going," Krishna said. In this environment an integrated home ownership platform becomes an essential pursuit."Production up year-over-year in both channelsTotal origination volume was $21.6 billion, down from $27.8 billion three months ago but up from $20.2 billion in the first quarter last year.The direct-to-consumer channel had sold loan volume of $11.3 billion, up from over $9 billion a year ago, while the partner channel did $9.2 billion, up from $7.8 billion.Second quarter objectives are achievable"For the second quarter, we expect adjusted revenue to be in the range of $1.175 billion to $1.325 billion with the midpoint of this range representing 2% year-over-year growth," said Brown. "This outlook reflects what was a challenging April from both a margin and volume perspective, and our expectation that May and June will perform sequentially better than April."This is achievable despite the uncertain market backdrop, Brown continued.Servicing loses money on fair value adjustmentOn the servicing side, Rocket lost $48.5 million as $400.7 million of servicing fee income was cancelled out by a $449.2 million negative adjustment to the fair value of its rights. A year ago, it made $402.3 million in servicing, including a positive adjustment of $56.5 million.During the call, management was asked if it was considering further acquisitions in order to expand its purchase mortgage business as well as the distributed retail channel. As part of the Redfin deal, Rocket is picking up Bay Equity Home Loans.Rocket right now is focused on the two pending deals, being "knee deep in integration preparation," and that will be its primary focus, Krishna said.Fitch removes Ratings Watch statusThe day before the earnings were released, May 7, Fitch Ratings removed Rocket Mortgage from Ratings Watch Negative status and affirmed its "BBB-" issuer default rating.This change reflects Fitch's consideration of the expected impact of the merger agreement with Mr. Cooper, the first quarter financial results at both companies, along with additional information received from Rocket on its planned capital structure. Rocket enhanced its liquidity with a line of credit from JPMorgan Chase."These factors increase Fitch's confidence that corporate leverage will decline below the downgrade trigger of 1.0x within one year of transaction closing," the Fitch report said. "Still, negative rating action could occur if the company fails to show meaningful progress toward achieving 1.0x corporate leverage near term or if execution risks related to merger integration lead to operational disruptions, which impact market positioning or result in weakened financial metrics."Redfin also loses money in the quarterThe Fitch analysis did not discuss the pending Redfin purchase.Redfin, which Rocket signed a deal to acquire on March 10 for $1.75 billion, reported a deeper year-over-year loss for the first quarter, at $92.5 million, compared with $36.4 million in the fourth quarter and $66.8 million in the same period in 2024.Gross profit, which is primarily revenue minus the costs associated, were $70.6 million, essentially flat from one year ago at $70.8 million. Fourth quarter gross profit was $81,8 million.Redfin's mortgage segment, including Bay Equity Home Loans, lost $2.3 million during the first quarter, versus a $327,000 loss a year ago.It earned $974,000 from the title insurance segment, versus a $447,000 loss in the first quarter of 2024.Bay Equity originated $887 million for the first quarter, down from $1.0 billion in the fourth quarter and $969 million in the first quarter of 2024.Management points to the positive"Redfin profits were at the high end of the guidance we gave investors in our last earnings call," CEO Glenn Kelman said in a press release. "The number of Redfin lead agents increased 32% year on year, and loyalty sales increased 40% year on year, thanks to our new plan to pay agents entirely on commission."However, because of the merger, Redfin did not do a quarterly call, nor is it providing forward guidance.The company said it had its best quarter for mortgage cross-selling, with a 29% attach rate."Many Redfin employees, from agents to engineers, have been over the moon about Rocket's vision of a home-ownership platform," Kelman said. "We can't wait to join Rocket and build the future of homeownership."Previously, Mr. Cooper reported first quarter results, with a net profit of $88 million impacted by an $82 million servicing rights valuation.

The nation's housing regulator is temporarily barred from imposing the Trump administration's agenda on grants for several localities to combat homelessness, a judge ruled Wednesday.U.S. District Judge Barbara Rothstein on Wednesday issued a 14-day temporary restraining order on the Department of Housing and Urban Development, the Department of Transportation, and the Federal Transit Administration. The departments sought to impose grant conditions based on President Trump's executive orders regarding diversity, equity and inclusion; immigration enforcement; gender identity and abortion. Eight cities and counties said in a lawsuit filed last week that $280 million in HUD grants were at stake. The local governments use the funds provided by HUD's Continuum of Care program to serve homeless residents via shelters, rental assistance, child care and other services. The complaint in a Washington federal court also cited $446 million in appropriated FTA grants at risk for the county which encompasses Seattle. HUD Secretary Scott Turner, who has championed combating homelessness, previously said HUD's COC program was used by "the left to push a woke agenda." "COC funds will now be used for their intended purpose — they will not promote DEI, enforce 'gender ideology,' support abortion, subsidize illegal immigration, and discriminate against faith-based groups," wrote Turner in a post to X (formerly Twitter) in March. Local prosecutors from Washington state and Bay Area counties, Boston, Columbus and New York City sued HUD over new grant terms, claiming among other violations breaches of the Fifth and Tenth Amendments. Some of those prosecutors on Thursday lauded Judge Rothstein's decision. "These new grant conditions blatantly violate the Constitution and have nothing to do with the purpose or performance of these grants," said David Chiu, San Francisco city attorney, in a press release. "This is part of Trump's strategy to push his ideology by threatening local programs and budgets."Spokespeople for HUD didn't return a request for comment Thursday.The executive orders tied to the homelessness grant proposals call on feds to end support for DEI efforts; for "taxpayer subsidization of open borders" and sanctuary cities; for "gender ideology extremism"; and for efforts promoting access to lawful abortions. Violators could also be subject to the False Claims Act, which is punishable with civil fines in the tens of thousands of dollars, according to the lawsuit. Local prosecutors argue HUD and other agencies aren't allowed to condition already-awarded, and soon-to-be awarded funds on unlawful and unconstitutional terms. Counties and cities also argue the stipulations are vague, and that it's unclear what would constitute a violation of the EOs.In opposing the TRO, attorneys for HUD, DOT and the FTA rejected the claims and said the case should be litigated rather in the U.S. Court of Federal Claims. Rothstein, who was appointed to the federal bench by former president Jimmy Carter, said plaintiffs showed a likelihood of success on the merits of their claims."The conditions that defendants added … likely exceed defendants' authority, as circumscribed by the Constitution," wrote Rothstein. HUD is realigning under the Trump administration, already shedding over $100 million worth of vendor contracts. The White House is also asking for a $33.6 billion budget cut for the department in the upcoming fiscal year. The nation's housing regulator has received some backlash over its moves, recently for its planned rescission of the Affirmatively Furthering Fair Housing policy.

Loan officers: when speaking to potential borrowers who are waiting for home prices to drop, tell them data from the first quarter of 2025 shows that, in most regions nationwide, they shouldn't wait. Prices for single-family homes rose in 83% of measured metro areas, an analysis by the National Association of Realtors found. Though this is a drop from 89% the quarter prior, it highlights that buying a house continues to remain out of reach for some.The national median single-family existing-home price grew 3.4% from a year ago to $402,300, NAR's data shows. In tandem, monthly mortgage payments on properties with a 20% down payment increased by 4.1% to $2,120."Most metro markets continue to set new record highs for home prices," said Lawrence Yun, NAR's chief economist, in a statement. "In the first quarter, the Northeast performed best in both sales and price gains by percentage. Despite the stronger job additions, the South lagged with declining sales and virtually no price appreciation," he added.In the Northeast, several metro areas saw home prices rise by at least 10% year-over-year. Syracuse, New York, led the way with a 17.9% increase, followed by the Ohio-Pennsylvania metro area (13.6%), Nassau County–Suffolk County, New York (12.0%), Toledo, Ohio (11.1%), Cleveland–Elyria, Ohio (11.1%), and Rochester, New York (11.1%).Montgomery, Alabama, also posted a notable gain, with home prices climbing 16.1% compared to the same time last year.The most expensive housing markets in the country are still in California. San Jose–Sunnyvale–Santa Clara saw prices rise 9.8%, followed by Anaheim–Santa Ana–Irvine (6.2%), San Diego–Carlsbad (5.7%), and Los Angeles–Long Beach–Glendale (4.8%).NAR's Yun pointed out the very expensive home prices partly reflect "multiple years of home underproduction in those metro markets." Something that the Trump administration has vowed to address by easing regulations."Another factor is the low homeownership rates in these areas, implying more unequal wealth distribution. Affordable markets tend to have more adequate supply and higher homeownership rates," Yun added.The economist also pointed out that areas that were hit with price declines in the previous year, including Boise, Las Vegas, San Francisco and Seattle, are rebounding."Similarly, some markets currently experiencing price declines – but with solid job growth – could see prices recover in the near future, such as Austin, San Antonio, Huntsville, Myrtle Beach, Raleigh and many Florida markets," he said.Despite an upward trend, some predict a home price downturnThese results run counter to predictions made by some that home prices will soon start to wind down.In a recent interview, Christopher Whalen, chairman of Whalen Global Advisors LLC, predicted that home prices will fall by 20% in the near term.He noted this is a result of the Federal Reserve enabling a huge accumulation of debt, "now we're getting rid of it, but I will make one prediction, I think you're going to have a macro housing price reset in three to four years.""I think we're going to go back down to the 2020-level of home prices on average," Whalen predicted.

Ellington Financial's bottom line improved in the first quarter even though one of its units recorded a loss due to expenses associated with hedging risk in a tough market.The company earned $31.6 million under standard accounting principles during the period, up from $22.4 million in the previous quarter. A year earlier, it had recorded $26.9 million in quarterly net income. Its Longbridge unit took a $1 million net loss for the first quarter of 2025.While some of the disruption associated with uncertainties around tariffs impacted the company in the first three months of this year, Ellington indicated the peak concern in the markets it does business in occurred afterwards and will be part of second quarter results."Securitization debt spreads widened somewhat late in the quarter and then surged in early April amid the overall market volatility," President CEO Laurence Penn said. "We refrained from pricing any more securitizations in April until very late in the month."The company bolstered its profit during the first three months of the year with one asset sale and staged another as the market disruption escalated in April."In the first quarter, we sold a wide variety of credit sensitive securities before yield spreads widened to lock in gains, free up capital and enhance liquidity. Then, in early April, we sold most of our HELOC position, crystallizing profits on those investments while freeing up capital to reinvest in the more attractive opportunities we are seeing," said Penn.Ellington Financial also has been continuing to invest in joint ventures with originators, and making progress when it comes to addressing commercial mortgage distress, he added."We expect that by the end of the second quarter we will have only one significant remaining workout," according to Chief Financial Officer JR Herlihy.Net positive performance in the company's credit portfolio stemmed "sequentially higher" net interest income, net gains from mortgage servicing rights-related investments, commercial mortgages, closed-end second liens, and certain non-qualified mortgage investments in addition to gains on originator equity investments, Herlihy said. Realized and unrealized losses on consumer loans partially offset gains from the aforementioned investments, he said. While Longbridge generated a net loss overall due to interest rate hedges, it also had net gain on mortgage servicing rights from government-backed reverse mortgage securitizations and higher origination margins for proprietary loan products. (Reverse mortgages are a home equity product designed for the needs of borrowers who are at or near retirement age.)The non-QM origination business also paid off for the company, said Mark Tecotsky, co-chief investment officer."Our non QM origination partners in which we had ownership stakes, their strong profitability in 2024 has continued into 2025 we continue to expand our footprint in non QM," he said. While the company pulled out of non QM securitization during the peak period of volatility in April, it returned to the market last week."With the growing securitization market in non QM jumbo and second liens, we are finding a rich opportunity set in the market, and have been deploying capital accordingly," Tecotsky said."We have been an active buyer and securitizer of second lien loans," he added. "We had strong contributions from those investments in the first quarter, and have also been co-sponsoring third party securitization of closed-end seconds that create retained tranches for us to hold."

A day after the Fed held its key policy rate steady, 10-year bond yields are up double-digits.And that will result in higher mortgage rates for consumers, all else equal, though the driver appears to be an unrelated trade deal with the United Kingdom.The bellwether bond was up more than 10 basis points to nearly 4.38 on the day after appearing to spike out of nowhere.The only real reason would be the U.K.-U.S. trade deal, which coincided with a stock market rally.In short, investors left bonds behind and piled into stocks, which resulted in higher bond yields (and mortgage rates).Is This a Sign of Things to Come?The newly-announced trade deal with the U.K. was somewhat scant on details, though the 10% tariff on imported goods will remain in place.And vehicles from the U.K. will see tariffs reduced from 27.5% to 10%, while tariffs on steel and aluminum are eliminated.Of course, a trade deal with one of our closest allies isn’t necessarily the big news we’ve been waiting for.Ultimately, it’s China and has always been China. This is kind of a sideshow and not necessarily illustrative of what will transpire there.Investors seemed to cheer it anyway, a day after the Fed said due to the global trade war, “risks of higher unemployment and higher inflation have risen.”This would mark some normalcy for markets, with good economic news typically resulting in stock market rallies and a flight away from the safety of bonds.In other words, a risk-on event where investors feel more comfortable piling back into stocks and other higher-yielding investments.That means bonds lose their luster and their price is driven down, which correspondingly results in higher bond yields.When long-term bond yields go up, mortgage rates go up.Will Home Buyers Be Hurt by Trade Deals?It’s still too early to know if this is meaningful, or just a trade for the day that will reverse in short order.And as noted, this deal with the U.K. is a not a deal with China, so if and when talks get underway there, it could look a lot different.But if more trade deals come along, investors might look at this as getting back to basics. To consider economic data instead of worrying about tariffs.If that’s the case, and the economic data continues to come in positive, that could keep pressure on 30-year fixed mortgage rates.Remember, strong economic growth is generally bad for mortgage rates, while weakness can lead to lower rates.Initial jobless claims got released this morning as well and came in below forecast, “with no signs of recession or layoffs.”Taken together, this is the type of stuff that would keep the Fed from cutting rates anytime soon.That too would keep upward pressure on mortgage rates. And if you look at probabilities for the fed funds rate from CME, cuts keep getting pushed further out.Recently, four fed rate cuts were expected in 2025 alone, now it’s three, and soon it could be two.This is all based on the strength of the economy, which arguably is stronger with a more subdued or weakened trade war.Watch Out for Higher Mortgage Rates Either WayThe takeaway for now, given how fluid this is, is to expect higher mortgage rates in just about any scenario.It seems trade deals are being cheered by investors, while uncertainty regarding trade deals isn’t necessarily benefiting bonds.Typically, there’s a flight to safety in bonds when investors are nervous, but lately we’ve seen stocks and bonds fall together.Really, the only scenario where mortgage rates appear to benefit is from actual soft economic data.There’s still a lot of pent up consumer sentiment that alludes to economic weakness, but until we actually see it in the hard data, mortgage rates might have a tough time moving lower.In other words, expect most narratives to lead to higher mortgage rates, or at least not lower ones for the foreseeable future.That doesn’t mean they don’t eventually come down later this year, but right now the relief seems to be getting pushed further and further out, possibly into 2026.I had expected lower rates beginning in the third quarter, which is still possible, but it might come in the fourth quarter or later if the economy holds up better than anticipated.Read on: 10 Simple Ways You Can Save Money on Your Next Mortgage 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)

Mortgage rates remained unchanged this week, in the face of macroeconomic headlines which could have portended swings, according to Freddie Mac.The 30-year fixed rate mortgage averaged 6.76% as of May 8. A year ago at this time, it was at 7.09%.Meanwhile, the 15-year FRM declined 3 basis points to 5.89%, down from last week's average of 5.92%. For the same week in 2024, this product was at 6.38%.It was not just the government-sponsored enterprise that noted this. Mortgage rates remained relatively flat as of 11 a.m. eastern time Thursday morning, compared with the prior day and week, Zillow said. 10-year Treasury moves in a different directionThose measurements, however, did not track along with the 10-year Treasury yield, which is one of the benchmarks used to price mortgages. At that time on Thursday it was at 4.32%, up just under 5 basis points from its Wednesday close and from a 4.23% close on May 1.On May 6, the first day of the Federal Open Market Committee meeting, its intraday peak was 4.36% before moving down on Wednesday after the decision not to increase short-term rates was announced.Why mortgage rates ended the period flatMovements, or ultimately the lack thereof, were influenced over the past seven days by the Bureau of Labor Statistics report and the FOMC meeting, said Kara Ng, senior economist at Zillow Home Loans.Its rate tracker had the 30-year fixed at 6.92%, unchanged from Wednesday, and up 1 basis point from the previous week's average of 6.91%."The Bureau of Labor Statistics employment report, released May 2, showed the labor market was more resilient than expected amidst a period of peak policy uncertainty in April," Ng said in a statement Wednesday evening, after the FOMC decision was announced. "With the unemployment rate holding steady, the Fed has the gift of time to see how government policies impact the economy before adjusting rates."As a result of the news, mortgage rates first "rose a little then fell a little," with the net being almost no change, Ng said.But lenders and consumers shouldn't rely on the current status quo."Economic uncertainty contributed to the standstill in both places," said Holden Lewis, home and mortgage expert at NerdWallet in a Wednesday statement, referring to mortgage rates during the period and the FOMC decision. "But uncertainty has another side to it: A bit of unexpected news could move mortgage rates swiftly in either direction."Other rate trackers show some movementHowever, the Lender Price product and pricing engine data posted on the National Mortgage News website recorded a big jump in the 30-year FRM, to 6.865% from 6.76% one week ago.The latest data on the Optimal Blue website is for Wednesday, when the 30-year conforming FRM was at 6.76%. This was down from 6.818% on Tuesday but up from 6.709% on April 30."At this time last year, the 30-year fixed-rate mortgage was 30 basis points higher and purchase applications were declining," Sam Khater, Freddie Mac chief economist, said in a press release. "Today, rates are lower and have remained stable for weeks, sparking continued increases in purchase applications."The impact on application activityThe Mortgage Bankers Association Weekly Application Survey released on Wednesday found the conforming 30-year FRM at 6.84%, down from 6.89% one week prior."Mortgage applications jumped 11% last week, the first gain in four weeks as slightly lower mortgage rates influenced borrower decisions," MBA President and CEO Bob Broeksmit said in a Thursday morning statement. "We expect this ebb and flow of demand to continue as long as mortgage rates remain volatile due to ongoing economic uncertainty."Fed decision's impact on mortgage ratesIn his May 7 comments on the FOMC decision and its impact on residential mortgage companies, Bose George of Keefe, Bruyette & Woods, maintained a higher for longer outlook on interest rates."We think mortgage rates will trend down modestly from their 6.76% level, but expect that rates will remain above 6% through year-end 2025," George said. "We also expect 10-year Treasury yields to trend down modestly and would anticipate some narrowing of spreads between agency mortgage-backed securities and Treasuries.

NEXA Mortgage is accusing a former director, who developed loan officer training materials for the brokerage, of stealing proprietary information related to its educational materials and attempting to poach its employees.The mortgage brokerage also accuses Kristine Wake, its former director of training, of holding the domain name for its loan officer training website, WhyNexaAcademy.com, hostage. Wake has allegedly demanded an $18,000 payment in exchange for releasing the domain to NEXA.Wake joined the firm in 2020 and helped develop training materials for NEXA's Mortgage Academy Training Program, which covered topics such as marketing, generating referrals, pricing, and guidance on various phases of the mortgage application and approval process.The mortgage brokerage, which currently sponsors over 3,000 loan officers, claims Wake decided to branch out and launch her own competing business dubbed NEXXT LEVEL Mortgage in 2024. In order to do so, the former director allegedly solicited a dozen of NEXA's employees. Wake at that time was still employed by NEXA, the complaint states.However, the venture did not work out, resulting in the executive transitioning to Platinum One Lending and taking NEXA's confidential, proprietary training material with her."Upon information and belief, WAKE continues to wrongfully use NEXA's confidential information for her own benefit and that of PLATINUM ONE to this day," the complaint said.The suit, filed in an Arizona federal court on May 2, also names two other unidentified NEXA employees as defendants. Though it is not clear what their connection is to Wake and her transition out of the company.NEXA accuses Wake of breaching her contractual obligations. Moreover, Wake purportedly not giving up the domain name to its training content is a breach of the Anti-cybersquatting Consumer Protection Act, the company said. The firm is seeking $75,000 in damages.NEXA Mortgage did not respond to a request for comment Wednesday. Its former director of training could not immediately be reached. The mortgage brokerage has been involved in a number of contentious suits, including one with its co-founder Mat Grella.Grella filed a suit against Mike Kortas, CEO of NEXA,  accusing him of misappropriating funds to purchase luxury aviation in mid- 2024. A countersuit was subsequently filed by Kortas, though it was dismissed later in the year.

Much of Main Street shares Wall Street's concerns about the impact of new duties the United States has been planning to impose on other countries as a negotiating tactic, which President Trump has acknowledged could put temporary strain on consumers.Nearly one quarter or 74% of consumers that home-equity investment platform Point surveyed fear tariffs could raise the costs of foreign goods in ways that could hurt their finances in the next 12 months, and 82% are anticipating a U.S. recession."Even if we aren't necessarily seeing impacts of tariffs on prices today, quite yet, people have internalized this fear that price hikes are coming down the line," said Aaron Terrazas, an economist at Point.Why tariff fears could be an opportunity in home equity lendingPoint suggests this means the perception that duties President Trump is using to renegotiate better U.S. trade may ultimately lead more interest in home equity investment for homeowners with lower savings rates.Most or 68% of homeowners have six months of savings or less, Point found. One quarter of them have less than one month's worth. The percentage of consumers that said tariffs have made them feel "unsure about their personal finances" has risen to 42% from 36% last year."People are worried that a new round of price increases could really jolt their personal finances, and they're not necessarily prepared for that," Terrazas said.Almost half of homeowners over 60 showed particular concern about their personal finances given it's led to volatility on Wall Street that's affected the trading prices of investments many rely heavily on, and uncertainties around Social Security reform."Both of these sources of income could be drying up, so they're really in a bind when it comes to thinking about how to meet rising costs," Terrazas said. "The last time we had price increases, we also had a rising stock market. That's not happening right now." Some trying to downsize are particularly concerned about costs around renovating so they can sell."The home building and home renovation sector is particularly vulnerable to tariff costs," Terrazas said.Why tariffs may prompt use of home equity investment platformsAll of this could add some momentum to home-equity investment vehicles like Point's because that the potential financial strain could make more traditional housing-finance firms more cautious about the debt-based second lien lending. While traditional housing-finance firms have turned increasingly to second-lien lending that allows older borrowers with lower first-mortgage rates to tap equity using debt, they're wary of higher debt-to-income and loan-to-value ratios that indicate increased performance risk.Home equity investment vehicles enable homeowners to sell equity based on house prices instead. Housing values have fluctuated in some areas but generally still have single-digit appreciation rates.HEI vehicles have primarily been used for renovation, small business investing and paying off higher interest debt, all of which could become greater needs if homeowners' finances experience increased strain.While mortgage companies and HEI providers historically have been different businesses, the latter has gained more traction in recent years due to the large runup in home equity from pandemic-era interest rate stimulus and partnerships between the two have grown.Point, for example, has partnered with Redwood Trust on HEI securitizations. Also BSI Financial has been subservicing HEI in addition to mortgages. 

While still healthy by historical norms, home equity growth pulled back over the winter while the share of underwater mortgages showed a widespread pickup across the country.The proportion of seriously underwater properties, defined as when the mortgage balance exceeds a home's value by at least 25%, increased quarter over quarter in 48 states, according to a new report from real estate data provider Attom. The national underwater rate stands at 2.8% after the first quarter, up from 2.5% over the final three months of  2024.Compared with first quarter 2024 data, however,  the number of states with a higher underwater share comes in at just 25. The proportion of seriously underwater homeowners has remained between 2% and 3% nationally since early 2023 and currently sits under half of its early 2020 pre-pandemic level of 6.6%. On the other side of the coin, the proportion of equity-rich homeowners, whose collateralized loan balances are under half of current property value, likewise retreated for the third quarter in a row to 46.2%, declining from 47.7% in late 2024. Forty-seven states reported decreases in the percentage of equity-rich owners over the winter, but 33 reported growth on a year-over-year basis.     If history holds, though, first-quarter data may prove to be a temporary blip rather than a long-term cause for concern, Attom CEO Rob Barber advised. "In each of the two previous years, the first quarter marked the lowest point of the year before the proportion of equity-rich homes shot back up in the second quarter," Barber said. "Home equity rates are near their highest points in recent years," he added.Still, the growth of underwater mortgages comes as home prices have declined in some regions to start 2025, while overall cost appreciation is also slowing. Many buyers say they struggle with the expense of homeownership after their initial purchase. Housing researchers also noted recent signs of rising borrower distress, particularly in later-stage delinquencies of some loan types where payments are late by more than 90 days. Efforts are underway to revise or remove some loss-mitigation measures introduced during the Covid-19 pandemic, many of which helped borrowers stay in homes and kept  home equity levels elevated.  The underwater-mortgage share varied across the country, but trends signal weaker homeowner positions in parts of the Central and Southern U.S. Louisiana led all states with an underwater rate of 10.5%, followed by Kentucky, Mississippi, Arkansas and Iowa at 7.3%, 6.6%, 5.8% and 5.7%, respectively. Eighteen out of the "top" 20 states were in the South and Midwest. Kansas led all states in underwater mortgage growth, with the share jumping to 4.7% from 2.9% quarter to quarter.  At the same time, equity-rich states were concentrated in the Northeast and West. Vermont led the way with 85.8% of its homeowners falling under the equity-rich definition. Neighboring New Hampshire followed at 60.5%. The top five was rounded out by Rhode Island at 59.8%, Montana with 59.4% and Maine at 58.9%. 

Guild Mortgage saw its financials slide into the red, as both its origination and servicing segments took a hit in the first quarter, the firm announced Wednesday.The San Diego-based lender reported a net loss of $23.9 million for the January-March period, down from net income of $97.9 million in the fourth quarter of 2024.Its servicing segment was the main driver of the results, with the firm posting a net loss of $4.6 million, compared to net income of $152.4 million the previous quarter. Valuation adjustments to the company's mortgage servicing rights totaled a loss of $70 million, down from a gain of $84.3 million in the prior three-month period, the firm's earnings show.Guild's origination segment also reported a net loss of $2.9 million, compared to a net income of $0.8 million the prior quarter. Though the firm's gain-on sale margins grew to 376 basis points, up from 317 basis points.Terry Schmidt, CEO of Guild Mortgage, said the results "highlight…consistent momentum and [a] balanced business model.""This strong performance is the result of the successful execution of our strategy to opportunistically increase market share during volatile markets, and a commitment to the purchase-driven retail mortgage business," she said in a statement. "While we expect markets to remain volatile moving forward, we will prudently manage costs and believe there will be additional opportunities for Guild to gain market share," she added.The mortgage lender originated $5.2 billion in loans during the first quarter, down from $6.7 billion the quarter prior. This time last year, Guild's originations totaled $3.9 billion.Total expenses for the firm amounted to $230 million in the first quarter, a slight dip from $244 million the quarter prior, but significantly higher than $193 million reported this time last year.During the company's earnings call, Schmidt dismissed concerns about how Rocket Mortgage's recent acquisitions of Mr. Cooper and Redfin might impact business, emphasizing that Guild is focused on "local fulfillment and sales specific to purchase business.""We still have such a big gap in the purchase business," she added. "Our studies imply that a customer at the local level still has a good need for that, that local presence and expertise."Regarding acquisitions, something Guild has been an active participant in, Schmidt said the firm is "always talking to a lot of suitors.""It's a long process and sometimes we're talking to people for six months to two years," she said. "We're constantly looking and vetting and getting to know people and making sure that we make the right decision along the way. There's still a lot across the country that we can conquer, and so we're going to continue to work on growing the market share."