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Federal officials met consensus expectations and left monetary largely unchanged on Wednesday, disappointing some in the industry anticipating tariff-related pessimism could prompt a downward rate move, but their inaction could nevertheless have a short-term upside for lenders."Mortgage rates will drop a bit this week as bonds have cheered the Fed's decision to leave rates alone," said Melissa Cohn, regional vice president at William Raveis Mortgage, noting that the officials decided on inaction despite the fact that new tariffs have increased inflation and unemployment risks.In the medium-term, however, the current state of monetary policy leaves mortgage rates in a place where traditional first-lien lending and single-family housing activity could remain low, putting prolonged pressures on mortgage lenders to diversify into other sectors like second-lien products.What the Fed announcement means for mortgage lendersWithout a downward move in short-term interest rates the Federal Open Market Committee can control directly or a change in its bond purchases, monetary policymakers' actions are unlikely to reboot a slowing housing market, said Aaron Terrazas, an economist at home-equity investment firm Point.  "All of these forces seem to be putting a higher floor on rates," he said. "We're not going to see a sudden surge in homebuying and selling, which means people are having to make the most of where they live."The long-term primary mortgage rates that currently dominate the market aren't historically that high, but they're still above record-low pandemic levels back at the outset of the decade, leaving a lot of borrowers with older loans they don't want to give up."One thing is for certain: interest rates are highly unlikely to dip down to 2021 levels, when rates hovered around 3%," said Selma Hepp, chief economist at Cotality, in an email. "We foresee a 6% mortgage rate, or higher, to be the new normal for the 30-year fixed mortgage for the next two years."Mortgage bonds were trading a couple basis points higher on the day in line with indications rates could inch down this week as a result, according to Better Chief Financial Officer Kevin Ryan."As an American citizen I think everything Powell says makes sense, for somebody who is running a mortgage business I think we're going to open tomorrow with the same macro environment," he said. Ryan noted, however, that his company has seen some uptick in volume even in the current rate scenario."Despite the meaningful volatility in the capital markets it's been a little better these last couple weeks as it relates to volumes we're seeing, including home equity," he said. "In our customer base, I think volatility has convinced some people to consolidate debt."What the Fed may do in the coming monthsThe committee's statement issued at the close of its meeting and Chairman Jerome Powell's subsequent press conference indicated that officials are well aware of some of the negative indicators in the market that could argue for a rate cut, but are reluctant to move because of other signs of economic strength.Their comments indicate a rate cut wasn't out of the question in the foreseeable future given that Powell reconfirmed that inflation, while something new tariffs could add to, has not been an apparent concern in the most recent data."The underlying inflation picture is good. It's what you see, which is inflation now running a bit above 2% and we've had basically decent readings in housing services and non-housing services, which is a big part of it. So that part, I think, is moving along well. But there's just so much that we don't know," Powell said.Powell acknowledged sentiment readings have become markedly negative in some instances but noted that he would want to see more hard evidence of economic weakness before lowering rates in response."If that continues and nothing happens to sort of alleviate those concerns, then you would expect that to begin to show up in economic data. It wouldn't maybe show up overnight, but it would show up over weeks and months. And that may be what happens, but hasn't happened yet," he said.

A coalition of over 100 federal and state consumer organizations, led by the National Fair Housing Alliance called on the Department of Housing and Urban Development to withdraw its interim final rule revising the Affirmatively Furthering Fair Housing policy.Meanwhile HUD extended the comment period for the proposal from its original May 2 expiration until May 9.The history of AFFH: Obama, Trump, and Biden's shifting policiesAmong the first acts HUD Secretary Scott Turner undertook was to terminate the Obama Administration version of the rule, which the Biden presidency restored that had cancelled an initiative from the first Trump term. Even under Biden, regulators were planning to revise AFFH but never finalized it.HUD acknowledged National Mortgage News' request for comment on its proposal but had not otherwise responded by press time.When Turner terminated the rule in February, attorney Robert Maddox of Bradley Arant Boult Cummings noted that the concept itself was a key part of the Fair Housing Act and a simple stroke of the pen could not undo it.Legal expert warns: new rule weakens fair housing protectionsWith this new rule, "there no longer is an affirmative duty to look at, you know, the traditions of what racial segregation did in housing," Maddox said in a May 7 follow up interview.Referring to his earlier comment, Maddox said this proposal is simply "Thou shalt not discriminate." "Not, thou shalt not discriminate and affirmatively undo the historical path and break with segregation in housing," he added.For compliance purposes, all a property developer has to state is that no discrimination exists and that the property needs to be accessible. The rule in the Obama and Biden Administrations had an affirmative obligation requiring subsequent analysis and evidence, Maddox said.From a development and finance perspective, the interim final rule significantly reduces the amount of analysis as well as any required evidence of the work that was done to prove it affirmatively supports fair housing, which does cut the regulatory burden.The interim rule was proposed in March and the comment period was supposed to expire on May 2. But a technical problem which cropped up on or about April 28 prevented some commenters from submitting, so an extension notice was published in the Federal Register on May 7.HUD defends latest fair housing rule as necessary deregulation"Thirty years of expansive back and forth rulemaking over vague statutory directives is the epitome of regulatory overreach," the latest interim rule justification as published in the Federal Register said. "HUD's 2020 [Preserving Community and Neighborhood Choice] final rule, while taking into account a number of considerations, as detailed in the notice thereof and incorporated herein, fairly targeted and reined in this overreach."Maddox added, with the deregulatory bent of the Trump Administration, its budget cuts along with reductions in force in the federal government, who would be around to enforce the rule anyhow?Some 617 comments were posted in the docket as of May 6, according to regulations.gov.Consumer advocacy groups condemn HUD's 2025 fair housing proposal"Imagine a society in which every child and every person can live in a neighborhood with ample affordable and accessible housing, fresh air, clean water, good public transportation, living wage jobs, quality healthcare, healthy foods, and affordable credit," said Nikitra Bailey, executive vice president of the NFHA, in a press release and in the opening of the letter. "That is what affirmatively furthering fair housing means."However, the Trump administration has backed away from the federal government's duty to affirmatively further fair housing and taken away critical tools that states and localities needed and requested to address the nation's fair and affordable housing crisis and advance the American Dream of having a safe, stable place to call home," she added.The letter advocates for restoring the 2021 interim final rule.The National Community Reinvestment Coalition is a signatory to the NFHA letter, and submitted a comment of its own."The 2025 AFFH IFR improperly defines AFFH as well as fair housing; and portrays addressing protected classes' specific housing needs that discrimination likely caused as providing 'preferences' based on racial or ethnic characteristics,' instead of redress," the NCRC comment argues."Moreover, it merely requires grantees to certify that they will affirmatively further fair housing and does not mention whether HUD will provide municipalities with technical assistance, data, or tools, to help them affirmatively further fair housing."The NCRC also claimed the Turner proposal will exacerbate economic uncertainty, worsen the affordable housing shortage and aid private equity firms in outbidding first-time home buyers for available properties."AFFH's community engagement process — as enshrined in the 2021 interim final rules, but weakened by the 2023 rule and now facing obliteration under the current management of the Executive branch — has the power to bolster and not weaken the American economy and empower local communities to advocate for critical resources to ensure that all Americans have equal access to affordable housing and opportunities," said Nichole Nelson, senior policy advisor at the NCRC."AFFH's community engagement process can also help average Americans challenge the predatory economic conditions that have created the affordable housing crisis," Nelson added."In the past, AFFH has mitigated the eviction of working-class Philadelphians by establishing the right to legal counsel; helped New Orleanians identify schools as a barrier to successful for all residents; and the City of Chicago enact a July 2022 zoning ordinance that prioritized the development of affordable housing near transportation."A similar argument is made in the NFHA letter. "As everyday people in America struggle to make ends meet, HUD has issued the watered-down 2025 AFFH IFR, which will only worsen the fair and affordable housing crisis by weakening mandates and taking key tools away from states and localities despite many of them requesting HUD's guidance," it said.State attorneys general challenge HUD's controversial policy shiftAlso commenting was a group of state attorneys general, led by California, Massachusetts and New York; a total of 18 states and the District of Columbia AGs signed off on the letter."As chief state law enforcement officials, we have a vested interest in ensuring equal access to housing and eradicating the harmful effects of segregation in our communities," the AGs letter said. "The FHA's AFFH mandate is an essential tool in reaching these goals. The IFR eliminates key aspects of prior rules, undermining HUD's ability to carry out its AFFH obligations."

I got to thinking lately that mortgage rates are probably as good as they’re going to be for the foreseeable future.And by that, I mean until at least August, as there’s just too much up in the air at the moment.We’ve got the ongoing trade war and tariffs, along with an upcoming spending bill to deal with.So even if we make some headway on trade talks, there’s that bill to worry about next.It’s almost like getting past one wave, only to look up and see another coming crashing down on you.You Might Need to Adjust Your Mortgage Rate ExpectationsWhile I’ve argued that we’ve been in a falling mortgage rate environment for a while now, it’s not without its ebbs and flows.Really, since October 2023, the 30-year fixed has been drifting lower. Back then it hit a cycle high of about 8%.And since then, it’s been significantly lower, though still markedly higher than the 3% rates we were all accustomed to seeing in 2022 and earlier.Sure, there have been better and worse periods for mortgage rates over the past 18 months, but the general trend over time has been lower.If you zoom out, as I have in the chart above from Mortgage News Daily, you’ll see that trend lower.You’ll also see that mortgage rates were a lot lower last summer. But that was before President Trump came into office.With both the tariffs and an impending spending bill on the table, mortgage rates might be stuck for a while as their effects remain to be clear.The Fed just echoed this sentiment in its latest FOMC statement, saying “the risks of higher unemployment and higher inflation have risen.”That makes it difficult to make any big decisions until there’s more clarity, not that the Fed controls mortgage rates directly anyway.The Big, Beautiful Bill Is the Other Elephant in the RoomNow assuming we make headway on the trade war situation and get some sort of resolution with China, it might feel like we’re in the clear.That we can maybe get back to those low-6% mortgage rates that don’t look half-bad anymore.But wait, there’s more! Another big objective the new administration is working on is a sweeping government spending bill.A bill dubbed the “big, beautiful bill,” that many expect will greatly increase government debt issuance.Simply put, more bonds, higher yields, all else equal, in order to bring in buyers. And higher yields mean higher interest rates.So that’s yet another headwind facing mortgage rates in their fight to move lower.That bill is expected to be sorted out around early July, but likely won’t come without lots of drama.In the meantime, this will likely make it difficult for mortgage rates to make any big moves lower.So even if the trade situation gets resolved and comes out great, somehow, we’ve still got upward pressure.The good news is it too might be resolved by around the start of the third quarter. So if you’re patient, things could get better in the second half of the year.If You Believe Rates Will Eventually Be Lower, You Can Maybe Refi LaterI hesitate to even suggest a buy now, refinance later approach, given how wrong it was for the past several years.When mortgage rates first went up in 2022, real estate agents and loan officers were saying to marry the house, date the rate.They assumed the uptick in mortgage rates would be temporary. It turned out not to be. Not even close.It’s now been about three years since the 30-year fixed was hovering around 3%. And getting anywhere close to that seems highly unlikely.Heck, even getting back into the 5s feels like a challenge. But given we’ve been stuck in a higher range for nearly three years now, the argument might be a little more realistic.With rates quite elevated today, the chances of them going lower has increased. After all, it’s easier to drop from 7% to 6% than it is to go from 3% to 7% and back to 4%.But again, trying to time the market or predict mortgage rates is often a fool’s errand.Still, I’m optimistic that the second half will be better for mortgage rates. Once we get these two big issues behind us.For the record, these big issues could also cool the economy, lead to higher unemployment, and by nature, lower mortgage rates.Not ideal, but it might be the outcome. Just make sure you can actually qualify for a mortgage refinance if that’s your plan.You’ll still need steady employment, sufficient income, and good credit to get approved.Read on: 2025 mortgage rate predictions 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)

Federal Housing Finance Agency Director Bill Pulte claims the regulator has made criminal referrals for alleged North Korean and Chinese workers at the government-sponsored enterprises. The director made the claim in a televised interview Tuesday with Bloomberg and didn't share additional details. The FHFA referred five or six different people to the Department of Justice for working at either Fannie Mae or Freddie Mac. "There were non-citizens who were posing as either real Americans or in some cases contractors," said Pulte. "And we also recently uncovered some other things, where some of the Indians were also working inside of the companies as well. So more to come on that."His comment regarding Indians seemingly refers to hundreds of employees Pulte fired at Fannie Mae last month over unspecified misconduct. The Times of India and other media previously reported hundreds of Telugu people from India fired from Fannie Mae on ethical grounds. Additionally, Pulte reiterated a claim that he's made over 50 directives in his short tenure. "The amount of nonsense going on is truly staggering, and these are going to be great American icons once again," said Pulte. Pulte has made only 12 orders related to the mortgage industry public via his social media account. Those include axing efforts like the GSEs' Special Purpose Credit Programs.  A spokesperson for the FHFA in an email Wednesday only declined to comment on ongoing investigations. The agency didn't respond to a question whether the FHFA was complying with an executive order by President Trump requiring all departments and agencies to disclose details about terminated programs, cancelled contracts and discontinued grants to the fullest extent allowed by law. Senate Democrats have also asked for answers from Pulte and said they'll continue to press the agency after its watchdog demurred on their investigative demands. Pulte shared a few other insights in the Bloomberg interview and a separate Milken Institute panel discussion, including suggesting the FHFA will review loan-level pricing adjustments in the next 2-to-4 months. He also confirmed that President Trump's cost-cutting task force was not involved with the GSEs but that he would welcome them, and that the agency has been doing its own cutting of fraud, waste and abuse at Fannie Mae and Freddie Mac. Throughout his frequent social media posts and interview appearances, Pulte hasn't hinted at whether the Trump administration is actively moving to privatize the GSEs. The director said the decision was up to President Trump and that he's discussed the GSEs with Treasury Secretary Scott Bessent, but declined to comment on whether they've had meetings regarding privatization.

US mortgage applications for both home purchases and refinancing increased for the first time in four weeks, helped by a slight decline in financing costs.An index of applications for home purchases jumped 11.1%, the most since January, while a gauge of refinancing increased at a similar rate, according to Mortgage Bankers Association data released Wednesday.The contract rate on a 30-year mortgage fell 5 basis points to 6.84% in the week ended May 2. The rate on five-year adjustable mortgages increased, but remained below where it was mid-April.Mortgage rates track US Treasury yields, which declined for most of last week before rebounding Friday after a government report showed resilience in the labor market. Investors will parse comments later this afternoon from Federal Reserve Chair Jerome Powell and whether he signals that officials are firm in their stance for patience on interest rates.While consumers are concerned that US trade policy will spark another bout of faster inflation and a weakening in the job market over the coming year, recent data suggest an underlying appetite for homes. March new-home sales exceeded estimates and contract signings on previously owned houses climbed by the most in more than a year.The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.

Finance of America recorded a net earnings increase for continuing operations during the first quarter when increased loan volume and positive fair value adjustments offset the impact of wider spreads.The company recorded $80 million in net income on that basis, which it made the focus of its quarterly press release. The latest figure compared a $16 million net loss from continuing operations a year earlier, according to Chief Financial Officer Matt Engel. "These results were aided by positive fair value adjustments during the quarter, while spreads widened slightly," he said, referring to a broader trend in the markets linked to tariff-related uncertainties during the period.Since acquiring American Advisors Group, FOA has been a leading originator of reverse mortgages that older borrowers can use to withdraw equity from their houses while living in them, so long as they maintain the property. It continued to build on that in the first quarter, Engel said."We delivered $561 million in funded volume, up 5% from the fourth quarter of 2024 and 32% from the first quarter of 2024," Engel said.The relative performance from a margin perspective was not as strong, he noted."Our wholesale channel exceeded volume expectations, helping us meet our overall guidance. However, since wholesale carries lower margins, the channel mix offset the product level improvement and our overall revenue margin was flat," Engel said.The company's stock price rose in late trading after earnings were released from levels around $19.50 to above $21 per share, then plateaued at that level. At one point last year, Finance of America's share price was in the single digits and there were questions about its listing status.Other challenges the company has had to address recently included near-term debt maturities that have been a broader concern for nonbank mortgage companies.Finance of America no longer has any near-term unsecured debt, but it did previously and found itself forced to exchange some it had coming due to avoid a likely event of default.Fitch initially downgraded the company to RD or restricted default prior to that debt exchange. The rating agency later upgraded the company to a low-end speculative grade rating of CCC to reflect the post-exchange capital structure, Eric Orenstein, senior director at Fitch, in a recent interview.

Loandepot saw a slight improvement in its earnings for the first quarter of 2025, but remained in the red after taking a $20 million loss from 2024 MSR bulk sales, it reported Tuesday. The Irvine, California-based firm had a net loss of $40.7 million in the first quarter, a rebound from a net loss of $67.5 million in the previous period. Despite being in the red, Loandepot's margins saw an uptick to 327 basis points, up from 260 basis points in the fourth quarter of 2024, thanks to a surge in demand for its home equity products.Speaking on the company's earnings call, CEO Hsieh thanked former CEO Frank Martell for his leadership over the past three years. "Frank [Martell] is a man of honor and a servant leader. His care for team Loandepot and the customers we serve is evident," said Hsieh. "As we go forward, the team and I will focus on capitalizing upon the things that already make Loandepot great," Loandepot's founder said. "Our multi-channel sales model, proprietary mello tech stack, wide product array, powerful brand muscle and our servicing business are foundational places in which loanDepot can win." Martell is set to transition to a board advisory role come June, after which Hsieh will assume an interim CEO role.The top-20 ranked residential lender and servicer reported origination volume of $5.2 billion for the January-March period, down from $7.2 billion for the October-December period. But an increase from prior year's volume of $4.6 billion. Loandepot is predicting origination volume to range between $5 billion to $7.5 billion in the second quarter.Financial results come during a transitional period for the company, as founder Anthony Hsieh has returned to oversee day-to-day operations at the company. Hsieh will be focusing on expanding originations and driving growth, the company stated.Expenses at the firm edged downwards to $319.7million in the first quarter compared to $341.6 million in the previous quarter, earnings show. Year-over-year, expenses increased by $12 million or 4% on account of increased marketing expenses and personnel expenses, the company said.David Hayes, Loandepot's chief financial officer, said this quarter's results are a reflection of Martell's guidance, reflecting "the benefits of our investment in growth generating initiatives, despite the adverse impact of lower servicing revenue stemming from our 2024 MSR bulk sales.""Our home equity-linked products supported strong margin and volume increases, growing revenue by 23%," Hayes said in a statement. " On the cost side, aligned with our enduring discipline in expense management, our non-volume expenses decreased 3% year-over-year."

Home buyers increased their engagement with digital lending tools earlier this year, resulting in a higher number of interactions and applications as well as shortened turnarounds between pre-approval and loan submission. In the first quarter, borrowers generated 37.8% more pre-approvals than they did over the previous three months, according to the quarterly report from Lenderlogix. The activity pushed the average number of pre-approval letters per loan officer up to 26.5 from 23 in fourth quarter 2024.Consumers looking to purchase were also more digitally active in the post-application period compared to the end of 2024, Lenderlogix said. The software provider tracked borrowers' behavior through their use of its various platforms. The heightened activity suggests optimism remains among many aspiring homeowners despite ongoing affordability challenges, according to company CEO Patrick O'Brien. "Borrowers are entering the market with intent, and their use of digital pre-approval tools reflects a growing emphasis on speed and preparation in today's competitive environment," he said in a press release. Customers who proceeded to the lending stage obtained eight pre-approval letters on average before submitting an application. New mortgage applications coming through Lenderlogix's point-of-sale platform grew 54% between fourth quarter 2024 and the first three months this year.Meanwhile, the conversion rate from pre-approval to application inched up to 55% from 54%. Elevated borrower engagement appeared even as volatile interest rates applied downward pressure on the purchase market. At the same time, worries of a tariff trade war may have spurred demand among some consumers, who chose to accelerate purchases of big-ticket items like a new home. Interested buyers are demonstrating they are invested in the process, O'Brien continued. The average length of time between pre-approval and loan submission shrank from 91 days in last year's fourth quarter to 79.6 days in 2025's first. "We're seeing signs of increased urgency and lender responsiveness, both of which point to a more active purchase market and continued adaptation to borrower expectations," he noted."Borrowers are clearly staying engaged throughout the early stages of the homebuying journey," Their willingness to engage on lending technology platforms extends beyond application submission into the underwriting process. The latest data also showed "meaningful improvements in post-application engagement."The volume of document uploads on Lenderlogix's platforms post application accelerated 48% quarter to quarter. Among the processes seeing the largest growth rates was income and employment verification, which increased to 15.5% of first-quarter applications from 6.5% three months earlier. Similarly, digital asset verification grew to 36.7% from 33.1% quarter to quarter. Previous surveys have consistently shown lengthy closing times as one of the biggest pain points in the mortgage experience for buyers, with many open to technological processes that would expedite underwriting. Elsewhere in Lenderlogix's quarterly report, the data showed the mean pre-approval loan amount rising 1.3% to $326,714 from $322,532. Average sales prices in the pre-approval stage also increased 1.4% to $381,820 from $376,436.Average down payments in the first quarter edged up to 14.4% of the sales price from 14.3% three months earlier.Conventional mortgages backed by Fannie Mae or Freddie Mac accounted for 74.3% of pre-approved loans. Among government-sponsored applications, Federal Housing Administration-guaranteed activity made up 19.1%, while pre-approval letters for mortgages sponsored by the Department of Veterans Affairs or U.S. Department of Agriculture represented 4.5% and 1% shares, respectively.

The Federal Housing Finance Agency will allow Fannie Mae and Freddie Mac to "talk to each other" to combat fraud, Director Bill Pulte said. In a post to X (formerly Twitter) Monday evening, the FHFA leader said the collaboration between the government-sponsored enterprises would be subject to terms and legal conditions. Pulte said details would follow, and an FHFA spokesperson didn't respond to a request for comment Tuesday. Fannie Mae and Freddie Mac are both under FHFA conservatorship but remain competitors in the mortgage space. The GSEs collaborate in some forms, such as the Uniform Mortgage Data Program, but are largely barred from working together despite their conservatorship."FHFA has made clear, however, that the GSEs are operating as unique and separate businesses and will continue to exercise independent business judgment in the use of loan data," a Fannie Mae post about the UMDP states.The FHFA does include Fannie Mae, Freddie Mac, and the Federal Home Loan Banks in its Suspended Counterparty Program. The list includes around 200 companies and individuals barred from doing business with the GSEs or FHLBanks, but it hasn't been updated since October. Pulte has pledged to step up the FHFA's use of the resource.Ed Pinto, a senior fellow and codirector at the American Enterprise Institute Housing Center, said Pulte's assertion regarding GSE conversation was correct. The former Fannie Mae executive recalled asking the company's general counsel in 1986 about guardrails in speaking with Freddie Mac, long before the competitors were brought under FHFA conservatorship."The answer was, you can talk to them about things that are for the good of the order of the mortgage industry," said Pinto.He cited efforts such as uniform application and uniform appraisal rules, and said Fannie and Freddie couldn't discuss efforts that would restrict competition. Separate policies for Fannie Mae and Freddie Mac could also be disruptive."You don't want gaming to go on," said Pinto, suggesting a tighter set of rules at one GSE would lead counterparties to work with the other. Pulte has made fraud a prominent focus of his agency, announcing several efforts last month via social media posts. Those include a new mortgage fraud tip line, and potential "loan recalls" for both GSEs. The FHFA director has also repeatedly referenced occupancy fraud, and separately suggested in a social media post that the new tip line was receiving input. "If you are committing mortgage fraud, you are a risk to the system and we are going to take the appropriate steps within our statutory capability," he said in a televised Fox Business interview Monday afternoon. In that interview, Pulte said the regulator has made an unspecified number of criminal referrals to the Department of Justice. One of those includes New York Attorney General Letitia James, who has joined other state AGs in suing the Trump administration over its various executive actions. 

The House Committee on Veterans Affairs marked up a bill on Tuesday that would institute a successor to a last-resort relief program for distressed borrowers that ended this month.The VA Home Loan Reform Act would create a new form of the partial claim used during the pandemic. The original partial claim's successor, the VA servicing purchase program, just ended.Mortgage bankers have been supporting recent updates to the legislative proposal while urging legislators to fast-track it given the phaseout of VASP."Without swift legislative action and subsequent VA implementation, thousands of veteran homeowners recovering from temporary financial hardship could face heightened foreclosure risk," Bill Killmer, a senior vice president at the Mortgage Bankers Association, said in a letter.Updates to the bill that the MBA said it supported included a clarification that the new partial claim would not reduce the government guarantee on VA loans, and elimination of interest charges on the second-lien balance.Legislators also recently increased the maximum claim amount to 30% from 25%, and replaced what had been a fixed date at which the program would end to a rolling five-year implementation, according to the association."These changes, many of which echo recommendations in our March testimony, represent real progress toward creating a partial claim solution that protects veteran borrowers, provides servicer clarity and aligns with existing government-backed programs," Killmer said.While the industry had ideally hoped for a permanent partial-claim program, the Department of Veterans Affairs has struggled to add one due to limitations in its authorizations as written, and its budget. The department ended the pandemic partial claim in October 2022 due to budgetary considerations, but then later implemented VASP to replace it after finding the lack of a partial claim exposed tens of thousands of veteran borrowers to foreclosure risk.Federal officials' focus on the VA's budgetary constraints has recently intensified as the Republicans currently in power in Washington have broadly engaged in efficiency initiatives that have included staff cuts at the department.The bill's sponsor, Rep. Derrick Van Orden, R-Wis., has been critical of VASP's costs and questioned whether its loan purchases fit within the VA's authorization. He said the new partial claim is a better alternative. Van Orden chairs the House's VA subcommittee on economic opportunity. The committee's markup discussions suggest that the bill will have backing from the Republican majority, who said they have worked to strike a bipartisan compromise on the issue.The attempt to reach a middle ground appeared closer to achieving it than a previous version of the bill, which had left some Democrats dissatisfied.Rep. Herb Conaway, D-N.J., called for a temporary restoration of VASP to help existing borrowers who need such assistance, which would give legislators more time to work on a bipartisan partial claim solution.Rep. Mark Takano, D-Calif., sought a return to the foreclosure ban the department had previously had in place to bridge the gap between the original partial claim and VASP with a similar interest in giving borrowers who needed the last-resort assistance but missed the cutoff a break.Van Orden indicated VASP's purchase structure was inappropriate given it's not a loan buyer but a partial guarantor of mortgages, and the cost of the program was excessive, so he would not favor a return to it that could jeopardize department funding for other initiatives.He also characterized a moratorium as a return to the kind of department overreach Republican legislators are trying to end. Van Orden expressed disappointment with the two Democrats' caveats after what he said was bipartisan discussion on the bill's current form, while Conaway asked when he couldn't consider providing relief from a foreclosure when that can be less expensive than going through with one."Unless we can trust each other, this is never going to work," Van Orden said.