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California Insurance Commissioner Ricardo Lara said he plans to approve a 22% emergency rate increase for State Farm policyholders, pending a public hearing next month, in a move aimed at stabilizing the state's insurance market after the Los Angeles area's devastating wildfires.The provisionally approved rate hike would provide financial relief to State Farm's California subsidiary, which has said it needs to shore up confidence with solvency regulators and ratings agencies. In the aftermath of January's Palisades and Eaton blazes, the insurer has already paid out more than $2 billion in claims.  Lara said the rate increase is necessary to address the state's years-long insurance crisis, exacerbated by worsening wildfires that have led major insurers to withdraw or limit coverage in California. The commissioner said he intends to approve the company's request for a 22% increase on homeowners' policies and a 15% hike for renters and condominium coverage if the insurer can justify the need during an April 8 public hearing before an administrative law judge. If approved, the new rates would take effect June 1."The role of insurance commissioner involves balancing a stable and sustainable insurance market that serves consumers with effective oversight," Lara said in a statement. "To ensure long-term choices for Californians, I had to make an unprecedented decision in the short term." The California Department of Insurance also recommended that State Farm's California subsidiary seek a $500 million cash infusion from its parent company to "restore financial stability," while calling on the company to halt non-renewals of policies, according to the statement.State Farm's request has been met with skepticism from Consumer Watchdog, an advocacy group that's contesting the insurer's rate hike request. The group has said the parent company has ample reserves and a strong credit rating to shore up the California unit, State Farm General Insurance Co.An analysis by the University of California at Los Angeles estimates the Palisades and Eaton fires, which killed at least 29 people and destroyed more than 16,000 structures, caused $45 billion in insured losses. State Farm, which has the largest share of the property and casualty insurance market in California, is expected to account for $7.6 billion of those claims.

It seems pretty clear that the housing market has cooled, and is now more of a buyer’s market than a seller’s market.While this does and will always vary by metro, it’s becoming increasingly common to see higher days on market (DOM), price cuts, and rising inventory.This all has to do with record low affordability, which has made it difficult for a prospective home buyer to make a deal pencil.The stubbornly high mortgage rates aren’t helping matters either, calling into question if it’s a good time to buy a home. Or if it’s better to just keep renting.But if you do go through with a home purchase today, expect to keep the property for many years to come.Home Price Gains Have Cooled and Could Even Go Negative This YearWhile economists at CoreLogic still forecast home prices to rise 3.6% from January 2025 to January 2026, it seems as if the gains are rapidly slowing.And in some markets, particularly Florida and Texas, home prices have already turned negative and have begun falling year-over-year.For example, home prices were off 3.9% YoY in Fort Myers, FL, 1% in Fort Worth, TX, and 1.1% in San Francisco.I expect more markets to turn negative as 2025 progresses, especially with more properties coming to market and sitting on the market as DOM goes up.It’s a simple matter of supply and demand, with fewer eligible (or interested) buyers, and more properties to choose from.There are many culprits, but it’s mostly an affordability problem, with the national payment to income ratio still around GFC bubble highs, per ICE.This explains why home purchase applications are still pretty flat despite some recent mortgage rate improvement.Sprinkle in rising homeowners insurance and property taxes, and everyday costs of living and it’s becoming a lot more difficult to buy a home today.While it might be good news for a prospective buyer who has a solid job and assets in the bank, for the typical American it probably means renting is the only game in town.If this persists, I expect more downward pressure on home prices, though mortgage rates can fall in tandem as well.Still, I wouldn’t expect any spectacular gains after a home purchase today in most scenarios.Appreciation is expected to be pretty flat in most markets at best for the foreseeable future.This mean the only way to make a dent is via regular principal payments (one of four key components to PITI).Your Mortgage Is Being Paid Down More Slowly When Rates Are Higher$400,000 loan amount2.75% mortgage rate6.75% mortgage rateMonthly payment$1,632.96$2,594.39Interest paid in 3 years$31,938.47$79,698.01Principal in 3 years$26,848.09$13,700.03Remaining balance$373,151.91$386,299.97The problem is mortgage rates today are closer to 6.75%. On a $400,000 loan amount, that means just $345 of the first payment goes toward principal.The remaining $2,250 goes toward interest. Yes, you read that right!As a result, your mortgage is being paid down a lot more slowly today if you take out a home loan at prevailing rates.Contrast this to the folks who took out 2-3% mortgage rates, who have smaller loan amounts and much faster principal repayment.On the same $400,000 loan amount at 2.75%, $716 goes toward principal and just $917 goes toward interest.The effect is these homeowners are gaining equity much faster, and creating a wider buffer between what they owe and what their home is worth.To go back to our 6.75% mortgage rate borrower, they’d still owe $386,000 after three years of ownership.A Low-Down Payment Makes It Harder to Sell Your HomeNow let’s pretend the 6.75% mortgage rate owner put just 3% down on their home purchase.This is the minimum for Fannie Mae and Freddie Mac, the most common type of mortgage (conforming loan) out there.The purchase price would be roughly $412,000 in this scenario, meaning just $12,000 down payment.It’s great that the down payment is low I suppose, but it also means you have very little equity.And as shown, you’ll pay very little down over the first 36 months of homeownership.In three years, the balance would drop to just over $386,000, which is a cushion of roughly $26,000.During normal times, we could expect home prices to rise around 4.5% annually, putting the home’s value at say $470,000.This would give our hypothetical homeowner about $84,000 in home equity, between appreciation and principal pay down.That works out to roughly $58,000 in appreciation, $14,000 in principal, and $12,000 down.Now let’s assume you want to sell because you don’t like the house for whatever reason, or need a different one, or simply can’t afford it anymore.There Are Lots of Transactional Costs Involved with Selling a Home$412,000 home purchase1% gain annually4.5% gain annuallyValue after 3 years$424,500$470,000Balance after 3 years$386,000$386,000Home selling costs$42,500$47,000Sales proceeds-$4,000$37,000Selling a home isn’t free. It comes with a lot of transactional costs, whether it’s transfer taxes, escrow fees, title insurance, real estate agent commissions, moving expenses, and so on.While these fees vary by locale, one might expect to part with 10% of the sales price in total closing costs.So let’s pretend the home is able to sell for $470,000 after three years. Costs to sell are roughly $47,000.This means the effective sales price is a lower $423,000. You walk away with $37,000 in your pocket, the difference between that and the $386,000 loan balance.Remember you parted with $12,000 to buy the place too, so your “profit” is $25,000. Even less when you consider you just paid back your loan.Now imagine the home doesn’t appreciate in value by that 4.5% per year, and instead appreciates at say 1% per year.It’s only worth $424,500 after three years and you want to sell it. The same 10% in selling costs apply, lowering the proceeds to $382,050.But you owe $386,000 on the mortgage. Even though you didn’t have an underwater mortgage, where the balance exceeds the home value, once selling costs are factored in, it’s negative.You would have to bring money to the table in order to sell the property.For this reason, you need to think about a longer time horizon when buying a property today.This isn’t to say home prices won’t go up over the next three years, but you can see how easily a scenario like this could unfold.In recent years, home prices were going up by double-digits each year, with cumulative gains of 50% in just three or four years in some cases.At the same time, these homeowners were paying down their mortgage balances much faster thanks to a 2-3% mortgage rate.This made it much, much easier and faster to quickly turn around and sell if they wanted to. Or had to.Now you’re likely going to have to keep a property for many years if you want to sell for a profit. So make the decision wisely. 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)

Bloomberg News A Maryland judge Thursday put a temporary halt to firings of probationary employees at the Consumer Financial Protection Bureau, Federal Deposit Insurance Corp., Department of Treasury, Small Business Administration and several other federal agencies. Judge James K. Bredar of the U.S. District Court for the District of Maryland ruled that the layoffs violated legal requirements to provide states with advance notice, the absence of which hindered their ability to respond to the increased demand for unemployment and social services. The Judge said he was not convinced by the government's claims that it dismissed the probationary employees for performance or "individualized" reasons. "There were no individualized assessments of employees. They were all just fired. Collectively … these big government layoffs were actually 'Reductions in Force,'" which require notice, the Judge wrote in the ruling. "Because the federal government's recent discharge of thousands of probationary employees was not executed in compliance with rules intended to ensure that states are ready to bear the load cast upon them when mass layoffs occur, and because the plaintiff states are not yet in fact so prepared, and because of the violations, the recent directives of various federal agencies terminating probationary employees must be stayed."The motion's temporary restraining order reverses the layoffs — requiring affected employees to be reinstated — for fourteen days while the court considers further action. The Court found that the states are likely to succeed in their case, are suffering irreparable harm and that issuing a temporary restraining order serves the public interest by preventing further harm to both the states and the affected workers. These agencies are now prohibited from conducting further staff reductions until the Court reviews the case in greater detail.The case centers around a legal challenge — State of Maryland, et al. v. United States Department of Agriculture, et al. — filed by 19 states and the District of Columbia in March against the Trump Administration regarding its termination of thousands of probationary federal employees in recent weeks.This legal action follows an executive order by the Trump administration, which directed numerous agencies to identify staff positions and any programs within the agency not explicitly required by law aimed at making deep cuts to the federal workforce.The CFPB's labor union celebrated the decision as a victory for workers' rights. "I'm thrilled to see my brilliant colleagues reinstated, thanks to the plaintiffs and Judge Bredar's wisdom in granting this temporary restraining order," said Cat Farman, CFPB Union Chapter President and front end web developer at the agency. "The judge rightly recognizes the DOGE mass firings as illegal RIFs, and that agencies must right these wrongs for employees caught up in Elon Musk's attacks on public services."In an email obtained by American Banker, Nelle Rohlich, the CFPB union's chief steward, noted the court ruling to the CFPB's Chief Operating Officer Adam Martinez requesting an update as to when the agency will reinstate terminated employees. According to the email, as recently as Friday morning, the agency was telling terminated employees they would remain terminated — an apparent contradiction to the court ruling. "We are demanding you immediately comply with the court order," Rohlich wrote. "Please." Affected employees also expressed optimism with the ruling, praising the court's recognition of what they saw as unjust terminations and reaffirming their commitment to continue fighting for public services and workers' protections."Protecting the American public from Wall Street is meaningful but difficult work," said Jasmine McAllister, a CFPB data scientist who was terminated, in a statement provided by the CFPB labor union. "I've worked hard in my career to get to CFPB. I received a termination letter at 9 pm that didn't even have my name on it, but claimed I was being terminated for performance reasons. Everyone else got the same email that night, with no notice to our managers, meaning the performance justification couldn't possibly be true. It's common sense for the court to recognize this."The order also applies to the U.S. Departments of Agriculture, Commerce, Education, Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Labor, Transportation, and Veterans Affairs departments, among several others. The order requires affected employees be reinstated by March 17, 2025 and prevents further staff reductions until the agencies comply with legal notice requirements. The case will continue with a preliminary injunction hearing scheduled for March 26, 2025.— Kate Berry contributed to this report.

New-home construction is off to a sluggish start in 2025, with fewer permits issued nationwide—potentially signaling headwinds for the housing market, according to the National Association of Home Builders.While the national picture shows a slowdown, regional trends vary significantly, with some areas seeing unexpected growth.Single-family permits across the U.S. totaled 73,115 in January, off 3.7% from the same month in 2024 when 75,906 were issued. Permits can serve as a bellwether for new construction starts, with new building activity only moving forward after they are issued.  On a regional basis in January, the South and West, which hold some of the hottest housing markets of the decade, saw permits pull back by 6.6% and 2.2%, respectively. The Midwest, though, experienced a significant 11% bump up, while the Northeast saw permitting inch up 0.6%. Even with the national downturn, over half the country saw an uptick in permits. Washington, D.C., led the way with a staggering 525% increase, though many states posted more modest gains. The top ten states accounted for 65.4% of all permits, led by Texas with 12,179 in January. The Lone Star State's total dropped 4.2% from a year ago. The next two states with the highest permit volumes, Florida and North Carolina, saw even larger annual dropoffs of 13.9% and 11.4%. Both states, though, are also dealing with recovery and rebuilding efforts from the severe impact of 2024's hurricane season. The early-year decline in permitting marks a reversal from 2024 full-year numbers. For all of 2024, issued permits grew by 8% nationwide, with numbers rising across all four regions. While a single month's downturn might not indicate a longer-term trend, the data comes at the same time builders' outlook for the year have likewise gone south, according to NAHB's most recent monthly sentiment index. Builders worry that higher material costs from new tariffs and a tightening labor market could push up construction costs, potentially slowing housing development further. While the Trump administration put a pause on import taxes affecting Canadian lumber shipments, a 25% tariff on all steel and aluminum products from abroad went into effect earlier this week. An immigration crackdown by the Trump administration is also raising concerns about a possible shortage of available construction workers that would be able to maintain the pace of building to meet demand. On the multifamily side, permit volume also came in lower to start 2025, dropping 1.2% to 38,402 from 38,870 a year earlier, NAHB said. Numbers fell the most in the West, with a 23.4% pullback from January 2024, while the Northeast and Midwest saw drops of 14.3% and 1.5%. The South, however, posted permit growth of 12.9%, with Florida leading all states in volume. As builders navigate economic and policy uncertainties, the coming months will reveal whether this early-year slowdown is a blip—or the start of a broader housing market shift.

Despite strong loan origination in the fourth quarter, mortgage lenders slipped back into the red, losing money on every loan they produced, according to the Mortgage Bankers Association.Independent mortgage bankers and bank mortgage subsidiaries lost $40 on a pretax basis on every loan they originated during the period. This ended two consecutive quarters of profitability, including $701 in the third quarter and $693 in the second quarter.For the fourth quarter of 2023, mortgage lenders lost $2,109 on production, while for the same period in 2022, it was $2,812 on every loan. Higher production costs, particularly application-related expenses carried over from the previous quarter, were a key driver of the shift to losses, according to MBA.However, lenders who generate larger volume benefitted from scale, as their fixed costs were spread over more volume. Thus they were able to generate an average production profit in the fourth quarter, Marina Walsh, the MBA's vice president of industry analysis, said in a press release.IMBs swung from an 18-basis-point profit in Q3 to a 4-basis-point loss in Q4—though this was still an improvement from the 73-basis-point loss in Q4 2022. Total loan production expenses — commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations — increased to $11,230 per loan compared with $10,716 in the third quarter.While expenses rose, revenues declined. Lenders earned $11,190 per loan in the fourth quarter, a drop from $11,417 in Q3. Total production revenue, which includes fee income, net secondary marketing income and warehouse spread, decreased to 339 basis points from 341 basis points during the time frame.Mortgage originators of all types produced $475 billion in the fourth quarter, up from $455 billion in the prior quarter. Refinancing volume rose by $50 billion, while purchase activity fell by $30 billion. But the MBA report found average production volume to be $540 million per IMB in the fourth quarter, down from $542 million for the period ended Sept. 30, 2024.The servicing business, on a net basis, made money for IMBs in the fourth quarter, $142 per loan, up from a third quarter loss of $25.But servicing income—excluding changes in servicing rights value and hedging adjustments—declined from $93 per loan in Q3 to $84 in Q4."With the slowing in prepayments in the fourth quarter, net servicing financial income improved and helped the bottom line," Walsh said. "Across both production and servicing operations, 61% of mortgage companies in MBA's sample were profitable, compared to 71% in the previous quarter."While mortgage lenders faced rising costs and shrinking profits, the servicing business helped offset some of the losses. However, with declining revenues and a tougher mortgage market, the industry remains in a challenging position heading into 2025.

Bloomberg News A federal court in Maryland Friday rejected the city of Baltimore's attempt to block an alleged effort to defund the Consumer Financial Protection Bureau, ruling that the municipal plaintiffs failed to show the agency had made a final decision undermining its statutory duties.While plaintiffs argued that recent actions or inactions by the CFPB signaled an effort to dismantle the agency's financial capacity, the decision, signed by U.S. District Judge Matthew J. Maddox of the District of Maryland, questioned whether actions by the Trump Administration amounted to a concrete agency action. "Plaintiffs fail to make a clear showing that any such decision was made and constitutes a final agency action subject to judicial review under the APA," a judicial filing noted. "Because Plaintiffs fail to demonstrate a likelihood of success on the merits of their claims, their motion for the extraordinary remedy of preliminary injunctive relief must be denied."In February, the City of Baltimore and Economic Action Maryland filed a lawsuit against the CFPB and its Trump-appointed acting director, Russell Vought, in the U.S. District Court for the District of Maryland. The municipal plaintiffs sought an injunction preventing the agency from depleting or reallocating its funds, alleging Vought and others actions violated the terms of a bedrock administrative law, the Administrative Procedure Act. The plaintiffs point to several key actions, including the CFPB's request for zero dollars from the Federal Reserve for the third quarter of the fiscal year, its chief financial officer's alleged interest in returning agency funds back to the Federal Reserve, its closure of the Bureau headquarters from February 10 through 14, and its directive to employees to stop working. During the first Trump Administration, acting CFPB director Mick Mulvaney also requested no funding from the Federal Reserve in the second quarter of fiscal year 2018, but noted it planned to use reserve funds to continue work at the agency.By contrast, Vought's letter to Fed Chair Jerome Powell in February requesting zero dollars for the third quarter of fiscal year 2025 indicated the agency would run at a reduced capacity and questioned the statutory need for a reserve fund. "The Bureau's current funds are more than sufficient — and are, in fact, excessive — to carry out its authorities in a manner that is consistent with the public interest. In the past, the Bureau has at times opted to maintain a 'reserve fund' for financial contingencies," Vought wrote. "But no such fund is required by statute or necessary to fulfill the Bureau's mandate. The Bureau's new leadership will run a substantially more streamlined and efficient bureau, cut this excessive fund, and do its part to reduce the federal deficit."During fiscal year 2024, former CFPB Director Rohit Chopra requested four transfers from the Fed amounting to $729.4 million, according to the CFPB's 2024 annual report.In February, a federal judge in Washington, D.C., temporarily blocked the CFPB from laying off more employees after over 100 workers had already been fired. The ruling came after the National Treasury Employees Union filed a lawsuit to stop further staff cuts.

TD Bank and Flagstar Bank are both closing dozens of U.S. branches following recent periods of turmoil.Toronto-based TD plans to close 38 branches in 10 states and Washington, D.C., the bank confirmed to American Banker. Meanwhile, Flagstar intends to shutter 24 branches in five states, according to recent bulletins from the Office of the Comptroller of the Currency.The affected TD branches will close by June 5, the bank said. The closures are part of "normal business practices," according to the bank."We regularly evaluate existing TD Bank stores, which may result in some closures, consolidations, or relocations as we look for opportunities to better align our network of stores with customer needs and preferences," TD Bank said in an email. "We are committed to making this transition as smooth as possible for customers."TD plans to close branches in New York, New Jersey, Pennsylvania, South Carolina, Virginia, New Hampshire, Maine, Connecticut, Florida, Massachusetts and Washington, D.C. As for Flagstar, the Michigan-based bank had signalled its plan to close some locations earlier this year. The bank's parent company, Flagstar Financial, revealed in an earnings call in January that it was closing "approximately" 20 private client offices and 60 retail branches.Chief Financial Officer Lee Smith framed the branch closures as part of a broader effort to reduce operating expenses.  "These actions will result in a leaner and much more efficient organization without compromising our commitment to safety and soundness," Smith said during the call.The CFO said the closures would happen in three phases, one of which was already underway The next two phases are scheduled for later this year, he said. Smith expressed confidence that customers wouldn't feel a difference in service."These [branches] are close to other locations, and so we do not feel there'll be any disruption to the customer experience," Smith said.Flagstar, formerly known as New York Community Bancorp, has been revamping its operations under a new leadership team that was installed after a near-death experience last year.According to OCC records, Flagstar is planning to close branches in New York, New Jersey, Michigan, Indiana and Ohio.Flagstar did not immediately respond to American Banker's request for comment.TD, meanwhile, is streamlining its American footprint after facing severe penalties from U.S. regulators. Last October, the Canadian bank pleaded guilty to bungling its enforcement of anti-money-laundering controls. As punishment, TD agreed to pay $3.09 billion in fines and was hit with a $434 billion cap on its U.S. assets.Since then, TD has been feeling the pain of those penalties. In the three months that ended on Jan. 31, profits at the bank's U.S. banking unit were down 79% from a year earlier, hampered by $86 million in anti-money-laundering remediation costs.Leo Salom, the CEO of TD's U.S. subsidiary, said during an earnings call last month that the bank would need to spend this year on strategic repositioning and investments in compliance. As part of the bank's repositioning, TD announced in February that it would sell its 10.1% stake in the U.S. financial giant Charles Schwab."Our focus here is to leverage 2025 as that transition year, to make the investments we need to in the core franchise to be able to address some of our remediation activities," Salom said during the call. "And so we're doing those things to be able to enter into 2026 with a more normalized profile."

As loan origination expenses remain high, mortgage lenders are increasingly evaluating how to balance the cost of adding new producers. Recruitment efforts often involve paying out bonuses and other forms of compensation, yet these investments can backfire if loan officers (LOs) fail to meet production targets or leave the company shortly after joining.These challenges have led to clawback attempts and legal disputes, particularly when an LO departs for a competitor. The issue extends beyond financial strain—tensions are rising between top-producing LOs and their lower-performing colleagues, as well as with management."Lenders operate on a margin, and when they have to support low performers (50% of LOs are low performers), their costs rise," said Pat Sherlock, president of QFS Sales Solutions, which offers support to originations teams. "That makes their loans less competitive, which top producers do not like. Holding on to low performers hurts both lenders and high-performing LOs."Branch managers must own their outcomesBranch managers, who are often responsible for both hiring and profitability, must take accountability for both successes and failures, said Casey Cunningham, CEO of Xinnix, a business development and training firm for the mortgage industry."If you own the performance of your branch, you really own it," Cunningham said. "You want to take credit for the top guys, but you've also got to take credit for the bad guys."She challenges managers to assess their contributions to their team's success: "What are you doing specifically to bring value?"A lack of energy, inspiration, and motivation from leadership can drive LOs to leave—often before the company recoups its hiring costs. Most in the industry are paid some percentage of commissions based on the loan margin; when LOs switch firms, many are paid sign-on bonuses as well.The Mortgage Bankers Association's third-quarter report found that independent mortgage bankers' total loan production expenses, including commissions and compensation, dropped slightly to 323 basis points ($10,716 per loan) from 330 basis points ($10,806 per loan) in the prior quarter. However, this remains significantly above the historical average of $7,573 per loan since 2008.Understanding the True Cost of HiringMany managers fail to grasp the full cost of hiring. The breakeven point varies based on market conditions and an LO's projected production, making forecasting inherently risky."We are coaching leaders to identify their breakeven points and evaluate if those costs are tolerable," Cunningham said. Some firms are reconsidering signing bonuses altogether due to concerns about sustainability. Many executives now realize that signing bonuses often go to the wrong LOs—those who keep jumping companies rather than those worth retaining long-term, she said. Hiring tolerance varies among lenders—some expect to break even in six months, others within a year or more. However, Cunningham notes that most lenders don't even know what that timeline should be. In one extreme case, 90% of a lender's new hires didn't make it to their first anniversary."Do you want more long-term production? Because you can get initial production in recruiting, it's the retention that's going to create the profitability long term," she said.Managing hiring expenses"As far as bringing on a loan officer, the expense categories are almost identical for an experienced loan officer compared to a brand-new loan officer, with the exception of salary," said Mike Dulla, the president of United Home Loans.Most companies are likely paying that inexperienced LO, at least at first, a salary (it is an unsettled legal issue on whether minimum wage requirements apply to mortgage sales staff).There's a high dropout rate for those brand new to the field—only 50% to 60% of new hires may succeed. The costs of bringing on a new LO extend beyond compensation. Beyond salaries, firms must also invest in licensing and training (around $1,000 per LO) equipment and time and resources from experienced team members to onboard new hires.Accountability as the key to retentionDulla, who has led United Home Loans for 23 years, believes that "management and accountability are the two most important factors in hiring loan officers." Regular communication and tracking sales activities ensure both sides are aligned.His company follows an approach similar to The Core Training's "greatness tracker," where LOs must report their sales efforts and participate in performance meetings. "If they bring in solid production without a large signing bonus, we expect to break even in 12 to 18 months—but usually I would say at least two years" for experienced LOs he said.For new LOs, the breakeven timeline is even longer due to licensing and training requirements. Recognizing the difficulty of the mortgage industry, United Home Loans meets monthly with inexperienced hires to provide support and guidance."Those meetings help us manage underperformers and reward high achievers. I don't want to cut someone's salary or let them go without multiple warnings," Dulla explained.United Home Loans paused hiring inexperienced loan officers for a 24-month period because of the industry's malaise. But being able to bring these younger people on board again is not just good for his company, it's also good for the future of the industry, he said.The need for transparency in hiring costsBrian Boyles, national sales manager for Middleton Advisor Group, emphasizes the importance of transparency in hiring and retention."Every lender calculates expenses differently, affecting their revenue targets per LO," he said. Understanding these financial dynamics is crucial for both lenders and loan officers.Lenders face four key acquisition costs when recruiting: employee carrying costs (benefits, taxes, etc.) sales and marketing expenses, operational fulfillment (loan manufacturing costs) and commissionsTraditionally, signing bonuses under six figures require a 12-month commitment, while larger bonuses extend to 24-36 months. Boyles suggests an alternative: Instead of tying bonuses strictly to time, they could be structured around production milestones, allowing LOs to 'earn out' their bonus faster.Restructuring compensation for long-term successPerformance-based bonuses—where LOs receive payouts for hitting production milestones—could alleviate financial strain on lenders while making LOs feel less restricted.  The parties are then aligned from "a partnership perspective," Boyles said.The mortgage industry's 30%-35% attrition rate remains a significant challenge. To combat this, Boyles advocates for a shift in mindset: Loan officers should evaluate companies for more than just financial incentives. Likewise, lenders must recognize the value LOs bring beyond immediate production.A more collaborative approach to hiring and retention could reduce legal disputes and unnecessary expenses. Lenders and LOs alike can benefit by restructuring existing agreements in ways that create mutual success, rather than continuing a cycle of costly turnover and litigation.

After nearly two years of steady growth, new-home loan applications fell for the second straight month, though seasonal demand remained strong, the Mortgage Bankers Association reported. New-home mortgage applications fell 6.9% year over year in February, a steeper decline than January's 6% drop, according to the Mortgage Bankers Association. The decrease ended a 22-month streak of annual growth, signaling potential headwinds for the market. However, applications edged up 0.3% from the previous month, suggesting seasonal demand remains intact."New-home purchase activity strengthened in February, in line with seasonal patterns, as higher housing inventory and declining rates supported growth," said Joel Kan, MBA vice president and deputy chief economist, in a press release.  The seasonally adjusted pace of new-home sales picked up for the second consecutive month As a result, sales reached approximately 634,000 units, rising 2.9% from 616,000 in January. "MBA's estimate of seasonally adjusted new home sales increased for the second consecutive month to its highest pace in three months," Kan added. In comparison to the same time last year, purchases ran at a rate of 689,000 units. Total sales, nonadjusted, came out to 57,000 last month, according to the trade group's estimates. The number rose 1.8% from 56,000 in January.The recent declines could signal a slowdown in new-home sales for 2025. Over a multiyear stretch marked by a dearth of existing-sales inventory and homeowners' reluctance to sell, new constructions proved to be a bright spot, leading to regular year-over-year increases in mortgage applications for new constructions beginning in February 2023. Recent political developments have dampened some enthusiasm among prospective buyers, who continue to be dogged by elevated prices. Sentiment among homebuilders also nosedived last month in the face of tariffs, with the industry now facing a 25% import surcharge on steel and aluminum shipments. At the same time, new market listings for existing homes increased over the winter, creating more options for buyers, according to recent reports from real estate brokerage Redfin. Much of the recent interest in newly built homes has come from buyers taking out mortgages backed by the Federal Housing Administration, commonly used to purchase starter properties. In February, the slice of activity made up by FHA applications came in at 32.1%, MBA determined."The FHA share of applications reached its highest share in the survey," Kan said. Conventional loans comprised a majority of all applications with 56.7%. Meanwhile, applications sponsored by the Department of Veterans Affairs made up 10.6%. The remaining 0.6% came from U.S. Department of Agriculture programs.In February, the average loan size on new-home mortgages decreased by 1.5% month to month to $397,516 from $403,416. The decline showed "that first-time homebuyers remain active in the new-home purchase market," Kan said. The dip in loan size suggests first-time buyers are still active, but with affordability concerns rising, it remains to be seen whether demand will hold.

The U.S. Senate confirmed businessman Bill Pulte as new director of the Federal Housing Finance Agency Thursday afternoon. The nomination of the philanthropist and head of investment firm Pulte Capital Partners passed through the chamber by a vote of 56 to 43. Three Democrats, Sens. Angela Alsobrooks, D-Md., Ruben Gallego, D-Ariz., and Elissa Slotkin, D-Mich. joined all 53 of their Republican colleagues in confirming Pulte. Alsobrooks and Gallego are also members of the Senate Committee on Banking, Housing and Urban Affairs, which sent Pulte's nomination to the floor for a vote last week. As the new FHFA head, the grandson of the founder of home-construction company PulteGroup will lead oversight of government-sponsored enterprises, Fannie Mae and Freddie Mac, as well as the Federal Home Loan Bank system. The FHFA ensures the government-sponsored enterprises meet government mandates to provide liquidity in the housing market. Pulte steps into the position without prior government experience but has played a part in housing and community reinvestment within Detroit in his other roles. The home finance industry previously welcomed the nomination and were quick to congratulate Pulte after his confirmation. "Our members stand ready to work with Director Pulte … to increase affordable and sustainable homeownership and rental housing opportunities for all Americans while ensuring a robust secondary mortgage market for single-family and multifamily lenders of all sizes and business models" said Bob Broeksmit, CEO and President of the Mortgage Bankers Association in a statement. Voicing its approval, U.S. Mortgage Insurers President Seth Appleton said the organization "strongly agrees with Director Pulte's statement in his nomination hearing that taking risk away from the taxpayers and giving it to the private market is a win and USMI and its members look forward to working with Director Pulte and his team at FHFA."The commercial and multifamily real estate sector also saw good reason to welcome Pulte. "It's a good sign that somebody from this sector of the world is heading up FHFA," said Lisa Pendergast, president and CEO of the CRE Finance Council in an interview, noting his background in financing housing development. "What we would love to see for multifamily is greater focus on developing and having these agencies serve sort of the underserved." she said.The National Association of Home Builders also said it planned to work with Pulte on efforts to create supply. "We stand ready to work with Director Pulte to help address the nation's housing affordability crisis by promoting policies that ensure stable and liquid mortgage markets for single-family and multifamily housing," NAHB Chairman Buddy Hughes said in a statement.The new director's term will last for five years, with Pulte taking over as director from Sandra Thompson, who served under the Biden administration before announcing her retirement prior to President Donald Trump's inauguration in January. During his confirmation hearing, Pulte indicated he supported easing government regulations, while agreeing to uphold the mandate of the Federal Home Loan Bank system that requires member institutions to allot 10% of profits toward affordable housing. On the topic of releasing the government-sponsored enterprises from conservatorship, Pulte said any such move would need to proceed carefully in order to avoid creating conditions that would lead to a housing crisis. The new director did not express outright support or opposition to privatizing the GSEs during his hearing, but in a post on social media platform X immediately following his vote, Pulte wrote, "President Trump won a historic mandate to fix Washington, and that is exactly what we will do with Fannie and Freddie after these last 4 years' housing crisis."Later, he posted without further elaborating, "There are over 15,000 employees between Fannie Mae and Freddie Mac."More pressing on the Trump agenda, though, is likely tax reform. "The whole GSE reform will be a later conversation just because everybody's focused so much on tax," said CREFC managing director David McCarthy, who is also the group's chief lobbyist and head of legislative affairs."How he crafts his role, we'll see that soon," McCarthy said.