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Remax Holdings third quarter operating earnings beat analysts' estimates even as the franchisor's primary industries of real estate and mortgage were working their ways through uncertain times, CEO Erik Carlson said on its earnings call."We remain centered on what we can control, and we believe our third quarter financial results are further proof that our actions are making a difference," Carlson said.Net income attributable to the company was $966,000, down from $3.7 million in the second quarter and a loss of $59.5 million one year prior. Operating earnings per share of 38 cents beat Keefe, Bruyette & Woods and street consensus estimates of 35 cents.For the Motto Mortgage business, September's performance showed that "rates do matter," Carlson said, pointing to the most franchise sales since March 2023 as well as the year-to-date high in loan submissions during the month.Still the mortgage business was operating in the red as measured by adjusted EBITDA, recording a loss of $1.12 million in the third quarter. This compared with a loss of $1.68 million three months prior and a loss of $1.49 million one year ago.On a net business, Motto lost eight franchises on a year-over-year basis in the quarter and was at 234 offices as of Sept. 30. It is the first time since Remax started the Motto business that the number of operating franchise offices has declined, Carlson said."A few existing franchises have terminated due to their financial position, lack of transaction activity or not being connected to the real estate transaction," he explained. But as the economy changes direction, Remax expects the business to resume its upward trend.On the real estate side, the National Association of Realtors' change in commission structure occurred midway through the quarter on Aug. 17."We believe in prioritizing consumer interests over practices that benefit a few at the expense of many," Carlson said. "As the industry moves forward, there will continue to be discussions around industry practices that may result in further change.Headwinds in the mortgage industry are "outsized" compared with those in the real estate business, added Karri Callahan, chief financial officer."While there's still a little bit of mud in our boots from a collections perspective [of franchise fees] on the mortgage side financially, I think operationally, there's some cautious optimism that we're moving in the right direction," Callahan continued.The mortgage unit looks to work with its broker franchise owners much the same way the real estate business does, added Ward Morrison, president and CEO of Motto Mortgage."Even though they are having some issues right now in one of the toughest mortgage markets ever, we continue to provide that support, that education and the tools that they need to be successful...and get them through this unusual market," Morrison said.Going forward, Hurricanes Helene and Milton affected a number of franchisees and that will also have an impact on Remax' revenues in the current quarter, the company said on the call.

Seems pretty clear now that it doesn’t matter what economic data shows up between now and next week.Mortgage rates aren’t going to improve by any significant margin this week or until after the election.Unfortunate for those who need to lock their rate and/or close this week. And the past month for that matter.Lenders are essentially in a holding pattern and continuing to price defensively until at least next Wednesday. Likely longer…Simply put, the outcome of the election matters more than the data right now.Biggest Presidential Election in YearsWe all know next week’s presidential election is a big one. One of the bigger ones in years. Aside from it being very contentious, a lot is at stake regarding the direction of the economy.Thus far, the markets have priced in a Trump victory, at least in a defensive type of way.Without getting political here (I never have any interest in doing that), it doesn’t appear that either candidate winning is helping 10-year bond yields at the moment.The best way to track mortgage rates is via the 10-year bond yield, which works well historically because 30-year fixed mortgages often last about a decade too.Despite being offered for 30 years, most are paid off earlier due to a refinance or a home sale.Lately, the 10-year yield has climbed higher and higher, with most market pundits pointing to increased government spending as the culprit.Long story short, with more government spending expected, any way you slice it, yields have gone up. Investors want to be compensated when they buy government debt (bonds).But one could argue that this was already known several months ago, when yields were closer to 3.50% vs. about 4.35% today. What gives?Bond Yields Are Higher Because the Worst of Everything Is Baked InWithout getting too technical here, bond yields have basically priced in the worst of everything lately. Just look at the chart above from CNBC.Whether it’s the election outcome, possible government spending, economic data, it’s all priced in in the worst way possible.This is why we’ve seen the 10-year yield climb nearly a full percentage point since the Fed cut rates back in mid-September.And despite a very weak jobs report this morning, the 10-year yield climbed up another ~6 basis points.Yes, it was a report affected by hurricanes and labor strikes, but on a normal first Friday of the month you’d likely see yields drop and mortgage rates improve given the immense weakness.That’s not happening this week and it’s no real surprise at this point. As noted, there are bigger things on investors’ minds.The good news is we should get clarity next week once the votes are tallied and we hopefully have a clear winner.Of course, if things drag on, that could be bad for bond yields too. Essentially, anything and everything is bad for bond yields, and thus mortgage rates, right now.[How Do Presidential Elections Affect Mortgage Rates?]Mortgage Rates Could See a Relief RallyNow the good news. Because there’s been absolutely no good news for about a month and a half, a major mortgage rate relief rally could be in store.Similar to any other trend, once it runs out of steam, a reversal could be in store. Think about a stock market selloff. Or a short squeeze.After a few bad days or weeks in the market, you often see stocks rally. The same could be true for bonds, which have been pummeled for over a month now.Eventually they get oversold and there is a buying opportunity.If bonds prices do in fact rally once this election is decided, simply due to finally getting some clarity, bond yields could sink in a hurry.The defensive trade could unwind and mortgage rates may finally get some relief as well.It’s never a guarantee, but given that basically everything has worked against mortgage rates for over a month, they could experience a big win as soon as next week.Of course, economic data will continue to matter. But importantly, it will matter again after basically being kicked aside during election season.Remember, weak economic data is generally good for mortgage rates, so if unemployment continues to rise, and inflation continues to fall, rates should come down over time as well.Read on: Mortgage Lenders Take Their Time Lowering Rates(photo: Paul Sableman) 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 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.Latest posts by Colin Robertson (see all)

Employment numbers both nationwide and in the mortgage industry came in virtually unchanged in the latest government jobs report, and the latter could expect to see additional softening as it further right-sizes.Nonbank mortgage lender and broker employment data showed a minimal uptick in September, rising by less than half a percent from the prior month to 272,900, according to the U.S. Bureau of Labor Statistics. The number increased from a revised 271,800 in August and continued a recent flattening trend after the industry's high season. Totals in the mortgage segment are reported with a one-month lag.  While the mortgage industry contracted significantly over a three-year period, an improved outlook for 2025 and recent increased origination volumes put a halt to the downsizing for the time being. But productivity ultimately will dictate the direction of mortgage company hiring, though, MBA Chief Economist Mike Fratantoni said at the trade group's annual conference this week.   Using a historic norm of 1.8 loans produced per employee per month, the industry still has not yet caught up to that benchmark, according to the trade group's research. "We're still at 1.4," he said. "There are two ways you can close that gap. One is either more loans, the other is fewer employees, and I think it's probably going to be both," he said.Still, while further consolidation is anticipated, some lenders also reported in recent months they planned to hire in expectation of higher business volumes after incurring sharp cuts during a prolonged three-year slowdown, MBA added. At its annual conference in Denver this week, the trade group forecasted $1.8 million in mortgage volume to come in 2025, up from $1.4 million this year. Per-loan production income should also continue rising after a two-year period of losses. Recent technology investments made by businesses will play a role in hiring strategy as well, Fratantoni said, saying there was an ongoing goal to make businesses "more scalable, more flexible, so that you don't have to hire and fire to the same extent."I think some of the technology investments are certainly helping to achieve that."Across the country, the U.S. added 12,000 jobs overall in October, with momentum slowing significantly from the higher-than-expected jump of 223,000 a month earlier, according to the U.S. Bureau of Labor Statistics's monthly report. October's total was also below the consensus estimate of 112,500. While subdued on paper, some financial experts cautioned that the latest data might not be fully representative of the U.S. economy following recent natural disasters. An ongoing labor dispute at Boeing also removed several thousand workers from payrolls. Data collection followed normal procedures, but the bureau said it was "likely" that estimates in some industries were affected by the effects of recent hurricanes. "The establishment survey is not designed to isolate effects from extreme weather events," the report advised.The October number, though, virtually guarantees another rate cut at next week's meeting of the Federal Open Market Committee. A strong September number alongside other indicators of a healthy economy had led to speculation the Federal Reserve might want to pause its rate-cut path.The probability of a 25-basis-point reduction is currently 99.5%, according to the Chicago Mercantile Exchange's FedWatch tool, but the effect on mortgage businesses may be limited."Mortgage rates have largely priced in expected Fed rate cuts but may decline modestly from their recently elevated levels as 10-year Treasury yields have retreated modestly based on today's news," said Mark Fleming, chief economist at First American, in a press release."It is unlikely that rates will fall significantly and sustainably below 6% this year, but a slowing labor market is good news for the Fed as it continues to navigate the economy to a soft landing," Fleming added.The most recent 30-year fixed rate weekly average came in at 6.72%, Freddie Mac reported on Thursday.

Seattle-based HomeStreet hasn't given up on a sale to FirstSun Capital, but its readying a Plan B in case a revised merger proposal fails to sway regulators. FirstSun Capital Bancorp's planned $286 million all-stock acquisition of HomeStreet Inc. hangs by a thread after state and federal regulators balked at approving their merger applications. The setback comes about five months after the Denver-based FirstSun sought to switch from a national to a Texas state charter in hopes of  boosting the deal's chances.Neal Arnold, the $8.1 billion-asset FirstSun's president and CEO, said the companies were working to revive the transaction via what they termed "an alternative regulatory structure," in a press release this week.  "We are disappointed in the process to date, but we remain hopeful that we will be able to continue productive discussions with regulators in order to obtain regulatory approval," Arnold said in the press release. "We intend to continue to work with HomeStreet and our regulators on possible solutions that will also make sense for our shareholders."Texas Banking Commissioner Charles Cooper declined to comment. A Federal Reserve spokesperson had not responded to a request for comment at deadline. Mark Mason, the Seattle-based HomeStreet's chairman, president and CEO, said in the release that regulators told the bank "that there were no regulatory concerns specifically related to HomeStreet that would have prevented approval of the merger." Seattle-based HomeStreet CEO Mark MasonBrad-Kevelin If FirstSun and HomeStreet prove unable to devise a scheme that passes regulatory muster, Mason said the $9.2 billion-asset HomeStreet has a Plan B ready. It expects to sell $800 million of multifamily loans, then use the proceeds to pay off higher-cost wholesale funding. Since HomeStreet had arranged for a similar, smaller transaction as part of its sale to FirstSun, it's familiar with market conditions and believes it could arrange a new deal quickly, Mason said this week on a conference call with analysts. "If we are unable to obtain regulatory approval and the merger agreement is terminated, we will immediately consider all our strategic alternatives, including operating HomeStreet on a stand-alone basis for the foreseeable future," Mason said on the conference call. Mason said further that the plan, including the loan sale, aims to return HomeStreet to profitability "in the near term, possibly as soon as the first quarter of next year." HomeStreet plans to include longer-duration multifamily loans in the pool it offers for sale. While those are valued less than shorter-term credits with higher yields, selling them would have a bigger impact on HomeStreet's bottom line."We do not believe we will need additional capital to complete this loan sale," Mason said. In a research note Friday, Janney Montgomery Scott analyst Timothy Coffey estimated HomeStreet could sell a portfolio of multifamily loans at about 92% of par value. That would require the bank to declare a pretax loss, but Coffey agreed it could be done without a capital infusion. "We estimate tangible common equity could remain well above 5.50% after the sale," Coffey wrote. Mason declined to provide additional comments to American Banker. Coffey suggested the smaller-size loan sale plan included in the proposed merger — $300 million according to Mason — may have been deemed inadequate by regulators. "We believe a much bigger amount of loans needs to be sold to reduce HomeStreet's CRE concentration ratio to appease regulators," Coffey wrote. Wedbush analyst David Chiaverini wrote in a research note earlier this week that the Federal Reserve's recent decision to cut interest rates was an "incremental positive" for HomeStreet. Chiaverini, however, added the long duration of many of its loans means it might take two years for HomeStreet to produce profitability metrics in line with its peers — should it choose to remain independent. "Our new base case is that the deal is called off, and that HomeStreet will remain a standalone entity. However, we believe HomeStreet may seek a different suitor in coming months at a similar valuation," Chiaverini wrote. "If you assume a termination of the merger agreement, we will be free to consider all strategic options," Mason said on the conference call. HomeStreet posted a third-quarter loss totaling $7.3 million Tuesday, pushing its cumulative loss through the first nine months of 2024 to $21 million. The earnings report did contain bright spots, including stable levels of core deposits, which increased during the three months ending Sept. 30, combined with continued strong asset quality. Though nonaccrual loans increased slightly from the third-quarter 2023 result, they remained low in absolute terms at 0.55% of total loans. "Our loan portfolio remains well diversified with our highest concentration in western states, multifamily loans, historically one of the lowest risk loan types," Mason said on the conference call. HomeStreet began experiencing difficulty in 2022, as the Federal Reserve began increasing interest rates. Rising rates sparked a corresponding increase in the cost of funds, but returns generated by the company's loan portfolio, heavily invested in longer-term multifamily loans, couldn't  keep pace. Net income, which totaled $115.4 million in 2021, shrank to $66.5 million in 2022. HomeStreet reported an annual loss totaling $27.5 million for 2023.FirstSun reported third-quarter net income totaling $22.4 million Tuesday, down 11% from the same period in 2023.Like HomeStreet, FirstSun is laying plans for a future with no deal. The company remains "focused on our organic business prospects following another quarter of strong financial results, including our strong earnings, liquidity, credit and capital profile," Arnold said.

Former Treasury Secretary Steven MnuchinBloomberg News WASHINGTON — Former Treasury Secretary Steven Mnuchin is quietly trying to raise his ownership position in Flagstar Financial — formerly New York Community Bank — through his Washington, D.C.-based private equity firm and a number of family trusts, according to regulatory filings obtained by American Banker. Mnuchin, through his investment firm Liberty Strategic Capital, in March led a group that provided $1 billion of capital to help the beleaguered bank earlier this year. Flagstar was teetering amid turmoil in the large regional bank sector, exacerbated by its acquisition of Flagstar and parts of the failed Signature Bank that pushed it over the $100 billion-asset mark. After that initial investment deal, Mnuchin's firm owned less than 10% of voting shares in New York Community Bank, below the threshold that requires investors to file a Change in Bank Control notice that can trigger more regulatory scrutiny. But in an August regulatory filing with the Federal Reserve obtained by American Banker through a Freedom of Information Act request, Mnuchin and his firm asked the Fed if Mnuchin could more than double his indirect aggregate ownership stake in New York Community Bank. Specifically, Liberty asked to convert non-voting preferred shares — which it obtained as part of the March investment deal — to common stock at the bank, according to the document, filed Aug. 23.Should the Fed accept the proposal, Mnuchin, through his position at Liberty and at a number of other entities, including family trusts, would "indirectly control" up to 22.9% of voting securities at New York Community Bank, according to the document. Since the filing was made, the bank has undergone a corporate rebranding to Flagstar Financial, effective Oct. 25.  "Liberty has not increased its initial investment in NYCB," said Liberty spokesman Zach McEntee in a statement. "The filings you are referring to concern Liberty's conversion of non-voting preferred shares into common stock upon receipt of necessary approvals, not an increase in Liberty's overall investment." The proposal immediately drew criticism from Sen. Elizabeth Warren, D-Mass., a leading voice on bank policy issues on Capitol Hill. "Steve Mnuchin is using his private equity firm to suck the value out of NYCB and leave its customers — including low-income homeowners — hanging out to dry, just like he did with OneWest Bank," she said in a statement. "The Fed should deny this application."The Fed declined to comment on whether or not the application has been approved. Even should the application be approved, Mnuchin's controlling stake would fall below the 25% threshold that would require the investment firm to file an application to become a bank holding company — a move that could present problems with Liberty's other investments, as well as the imposition of capital requirements. While private equity firms can convert preferred shares to common stock for a number of reasons, this particular case is closely watched because of Mnuchin's history in the banking sector. He led an investment deal at IndyMac in the midst of the financial crisis. At least one of the key players who turned IndyMac (later renamed OneWest) around — former Comptroller of the Currency Joseph Otting — is now at the helm of Flagstar. Mnuchin's potentially increased voting share at Flagstar has raised concerns among some observers that the same issues that came to light at OneWest — including the bank's foreclosure practices — could repeat themselves at this institution. "It's alarming that a man known for aggressive and abusive foreclosure practices in the wake of the Wall Street crisis is now an owner of a bank that's so important to low-income communities' interests," said Jesse Van Tol, president and CEO of the National Community Reinvestment Coalition. "I fear that Steve Mnuchin intends to run the same playbook for NYCB as he did at OneWest, with disastrous results for customers and communities."Flagstar's circumstances, however, are very different from OneWest, said John Popeo, partner at the Gallatin Group, who previously led failed-bank deals at the Federal Deposit Insurance Corp. "With the OneWest/IndyMac deal, I believe Mnuchin grew his stake over time after initially acquiring IndyMac," he said. "He was able to successfully leverage the distressed environment to make significant operational changes and profit from the turnaround." Flagstar, by contrast, isn't in FDIC receivership, which makes getting that return on investment more challenging in the near term. Popeo said Mnuchin could be positioning himself for long-term acquisitions once regulatory pressures ease. "Mnuchin likely sees potential for a turnaround at NYCB, where he can play a more prominent role," he said. The proposal also raises larger questions about Liberty's ultimate influence over Flagstar, said Jeremy Kress, a bank law professor at the University of Michigan's Ross School of Business and former counsel to the assistant attorney general for antitrust at the U.S. Department of Justice. Kress questioned whether Otting — who was tapped to lead the firm as part of the 2024 investment deal led by Mnuchin — should be considered a representative of Mnuchin or Liberty. "I think there are legitimate questions about whether Liberty exercises a controlling influence over New York Community Bank and Flagstar," he said. "In order to avoid presumptions of control, the Federal Reserve would have had to conclude that Joseph Otting, the CEO of New York Community, does not represent Liberty or Mnuchin — because if Otting did, under the presumptions of controlling influence, Liberty would have had to become a bank holding company." In the application to the Federal Reserve, Mnuchin and Liberty say that they "have no plans to effect any significant change in the business strategy or corporate structure of NYCB or Flagstar or to liquidate, merge or sell the assets of either entity" as a result of the proposed stock changes.  "That statement could be read as inconsistent with the significant strategy overhaul that NYCB has undertaken since the Liberty investment," Kress said. Flagstar declined to comment.

Major rule changes around real estate broker commissions haven't disrupted the buying and selling process, a Redfin study finds. Compensation for agents has only dipped slightly since the National Association of Realtors implemented rule changes in August, according to Redfin. The findings come as objections to massive settlements by NAR and other real estate players mount ahead of a November court hearing to finalize the nearly $1 billion in agreements.The average buyer agent commission for homes sold in October was 2.34%, according to Redfin. It was just 1 basis point higher in August, and just 17 basis points lower than it was two years ago. The digital brokerage only analyzed commissions sourced from its partner agents, or from transactions involving its Bay Equity Home Loans brand. The company's own agents weren't included because of their more competitive fees, Redfin noted, and data from Multiple Listing Services were excluded.NAR's settlement prohibits offers of compensation from appearing on any MLS, although they can still be negotiated off the services. Under the new rules, agents must also enter into written agreements with buyers including revised compensation disclosures. Housing finance experts shared numerous theories as to what would unfold following the updates, although presumed trends such as a rise in dual licensed agents haven't arisen yet. Redfin reported agents seeing more negotiations over who will pay the buyer's agent, but sellers are still paying them, albeit at smaller amounts. "If you're a seller, reducing the commission isn't something you can save on right now," Andrew Vallejo, a Redfin agent in Austin, Texas, said in the press release. "That's because the buyer may not be able to afford your house if they have to pay their agent out of pocket as well."Consumers still face significant affordability hurdles in today's market, with mortgage rates inching closer to 7% and lofty home prices despite softening in some regions. Limited housing inventory has combined with those factors to keep the "lock-in" effect intact.Buyer-side agents meanwhile are netting slightly higher commission rates for homes $500,000 and under, Redfin reported. Their payouts rose slightly from 2.41% in August to 2.43% in October. As prices rise, the compensation share falls: buy-side brokers on homes $1 million and greater have seen their commissions fall 14 basis points in two months to 2.11%.Settlement opposition growsA Missouri federal judge is scheduled to approve settlements including the $418 million NAR deal in a few weeks, which would also clear real estate brokerages with $2 billion or less in annual transaction volume of liability. The agreement has left some consumers unsatisfied, particularly regarding a perceived lack of enforcement and wiggle room for workarounds. Tanya Monestier, a class member and professor of law at the University of Buffalo, filed a 136-page objection to the settlement this week describing those workarounds. One involves buy-side brokers modifying their representation agreements to increase their compensation from a home seller, once that burden is lifted from a buyer. "In this respect, I don't think this is a "workaround" so much as a flat-out breach of the agreement," wrote Monestier. The professor cites three state Realtor associations which allow for agent "bonuses" similar to the purported workaround compensation. The lengthy filing also targets an alleged lack of enforcement, with class plaintiffs' attorneys and NAR being responsible for ensuring compliance by brokers. "We are largely leaving enforcement of this settlement to a handful of plaintiff's lawyers who will benefit … so long as meaningful problems don't arise with the settlement," wrote Monstetier. Law firm Knie & Shealy also filed an objection on behalf of a proposed class of South Carolina-based home sellers, regarding those smaller brokerages insulated from punishment. Just one brokerage in South Carolina was above the $2 billion threshold and had to choose between a settlement amount determined by either a formula or mediation, or to continue to fight the claims. "In other states, it is certain that there were no such brokerages," the attorneys wrote. "This settlement leaves those states with wrongdoers who will not be punished, despite having madesubstantial profits at the expense of residents of those states."The nation's leading real estate brokerages have agreed to settlements of at least $998 million, according to plaintiffs' attorneys. Counsel is seeking one-third of the $679.2 million from the NAR and HomeServices of America settlements alone. Attorneys say their work spanned over 107,000 hours in the past five years across four major class action lawsuits, and that they've advanced over $16 million in out-of-pocket costs. The hearing will be held Nov. 26 in a Kansas City, Missouri federal courtroom.

Intercontinental Exchange's mortgage technology business lost money for the eighth consecutive quarter, and ninth in the past 10 in the period ended Sept. 30. But its purchase of Black Knight is helping the segment's results.The period was the fourth full quarter since ICE's acquisition of Black Knight closed on Sept. 5, 2023. On a pro forma basis that assumes the two companies have been operating jointly since 2021, operating income was $181 million for the third quarter, unchanged from the second quarter and up from $172 million for the same period last year.But using a GAAP calculation, ICE Mortgage Technology had an operating loss of $54 million. That is larger than the $32 million loss in the second quarter but much improved over the $157 million for the third quarter of 2023. Mortgage technology revenue of $509 million was similar to the second quarter's $509 million. For the third quarter last year, it had revenue of $330 million.But if revenue from the Black Knight business was included for the entire period, it would have totaled $517 million.The bulk of that difference came from the servicing business. For the brief period ICE owned what had been the Black Knight servicing platform, it had $69 million of revenue.But on a pro forma basis for the entire third quarter last year, the servicing software business earned $216 million.In the most recent period, servicing revenue was $209 million, topping the origination side's $182 million. For all four full quarters that ICE Mortgage Technology has owned the servicing platform, revenue has topped what it has been making from originations."Recurring revenues totaled $387 million," Warren Gardiner, chief financial officer, said on the earnings call. "While recurring revenues declined year-over-year, as expected, they stabilized relative to the second quarter driven by an improvement in data and analytics and offset by the semiannual removal of retired loans on our servicing platform as well as lower minimums on Encompass."Using that pro forma metric, recurring revenues fell to $387 million from $396 million year-over-year. They were unchanged from the second quarter.Gardiner went on to explain that while the majority of Encompass loan origination system users renewed their contracts at higher minimum usage, several customers did the opposite."Importantly, lower minimums at renewal are also paired with a higher price per closed loan or transaction fee, a dynamic that will provide a more material tailwind to revenues as the origination market normalizes," Gardiner saidOn the flip side, ICE Mortgage Technology's transaction revenues for the third quarter were $122 million, versus $119 million in the prior period and $121 million in the previous year.Gardiner said those increases came from revenue related to closed loans and applications on Encompass as well as an increase in MERS registrations.Going forward, mortgage technology revenue should be between $495 million and $505 million in the fourth quarter. That will be driven by purchase market seasonality and related traction revenue."While mortgage origination volumes appear to have stabilized and seem likely to trend around these levels in the near term, we will continue to invest in developing new products, enhancing our technology and our existing product suite as well as expanding our network, all of which will further position our end-to-end platform to generate growth when market conditions normalize," Gardiner said.Intercontinental Exchange Chairman and CEO Jeffrey Sprecher gave a rundown on how the Black Knight acquisition one year later, including an update on the Encompass product and pricing engine it had to build out following the divestiture of Optimal Blue.The upgrade is providing additional options for its lenders, servicers and funding partners."We've connected our network directly to Fannie, Freddie and Ginnie Mae for seamless pricing inquiries," Sprecher said. "As a result, we went live with 32 new price engine clients this year accompanied by a strong pipeline of 19 others that are currently in the implementation phase."

Nerdwallet acquired Next Door Lending, a mortgage brokerage owned by Jonathan Haddad, the CEO of the Association of Independent Mortgage Experts.The personal finance company paid $1 million in cash for the brokerage, a filing with the Securities and Exchange Commission shows. The deal closed Oct. 1. Under the purchase agreement, certain employees of NDL can also earn up to an aggregate of $3.5 million of performance-based cash earnout awards. NDL is expected to contribute 1% to 2% of revenue growth in the fourth quarter to Nerdwallet's bottom line, the company said in its third quarter earnings. The goal of the acquisition is to provide "mortgage shoppers with more hands-on guidance," said Tim Chen, CEO of Nerdwallet, during the company's third quarter earnings call."I have really enjoyed getting to know Next Door Lending's principles, Doug [Liska] and Jonathon. They are kindred spirits who bootstrap their business and share our focus on operational efficiency as well as a consumer first orientation with the customer reviews to match," said Chen. "While the upfront deal consideration is small, the strategic alignment presents a significant opportunity for us to drive better outcomes for consumers, lenders and NerdWallet.""If my mom called me and told me she needed a mortgage, I [would] tell her to call Doug and Jonathon. During our diligence process, we found that they have great rates and great customer service, so letting NDL shop around for you amongst a bunch of lenders is a really great option whether you're buying or refinancing," Chen added.(Liska is the CEO of NDL and Haddad is the owner and president of the mortgage brokerage.)Four months prior to being sold, Next Door Lending was ordered to pay a fine of $45,000 by a Pennsylvania state regulator for illegally operating in the state without having the license to do so, a filing shows. It is uncertain whether this fine had an impact on the company's desire to sell its business.Meanwhile, earlier this year, Haddad's appointment as CEO of AIME was met with consternation. Some members criticized NDL's owner over the company's use of trigger leads, something the trade group advocates against. Close to 20% of Next Door Lending's business is brought in via trigger leads, according to a post from Haddad in Facebook group Brokers are Better, which is run by AIME leadership.Michigan-based NDL currently sponsors 61 loan officers, the Nationwide Multistate Licensing System shows. It has branches in Arizona, Nevada, Ohio and Texas.

The Federal Housing Administration plans to relax requirements for direct endorsement underwriters.In a draft mortgagee letter, the FHA said it is mulling changes to allow underwriters with part-time positions at FHA-approved mortgage companies to underwrite loans in the FHA Title II forward and Home Equity Conversion Mortgage programs.Previously only full-time underwriters were given the green light to work on FHA-endorsed loans. However, the administration is considering nixing this standing requirement in recognition that some mortgage lenders may not have the financial wherewithal to employ full-time underwriters.But also with the understanding that this requirement may be keeping some smaller lenders from participating in the FHA program."FHA recognizes that the financial landscape for smaller lending institutions and Community Development Financial Institutions [CDFIs] has evolved significantly over the past decade, presenting both opportunities and challenges in sustaining growth and meeting customer needs," wrote Julia Gordon, FHA commissioner, in the draft mortgagee letter published Oct. 24. "To reduce operational barriers, provide greater flexibility, and encourage participation in FHA programs, FHA is updating its policies to permit mortgagees to employ DE underwriters on a part-time basis."Apart from the part-time status change, all other requirements will stay the same, the administration said.Mortgage lenders must ensure that underwriters are employed by one lender and are not contracted out. Also, DE underwriters must have a minimum of three years of experience reviewing credit applications and one-to four-unit property appraisals within the past five years.The industry has until Nov. 25 to give its feedback on the future change.Other changes that will have an impact on FHA-approved lenders include the administration's cyber attack response requirements. A draft mortgagee letter in September outlined that the FHA wants to implement a 36-hour window of time for companies to report a cyber incident to the agency. These requirements are in line with timelines set by the government-sponsored enterprises. Fannie Mae requires lenders to report within 72 hours if a potential hack has taken place, while Freddie Mac requires lenders to report within 48 hours of detection.The administration's move to implement data breach timelines for lenders comes during a time of increased cyber crime. In the past year, numerous megalenders have had their systems hit. In some cases, the attacks have been carried out at third-party vendors.Loandepot, Mr. Cooper, Academy Mortgage and Planet Home Lending are among mortgage shops impacted by such incidents. Title companies have also been hit, including First American and Fidelity National Financial.

Mortgage rates continued their climb in the wake of the Federal Open Markets Committee September reduction in the Fed Funds Rate, with another meeting and likely cut on the horizon.The 30-year fixed-rate mortgage averaged 6.72% as of Oct. 31, up 18 basis points from last week's 6.54%, the Freddie Mac Primary Mortgage Market Survey reported. But rates remained lower than one year ago for the same week, at 7.76%.Additionally, the 15-year FRM reached 5.99%, versus 5.71% on Oct. 24. A year ago, it averaged 7.03%.This marked five consecutive increases and pushed mortgage rates to their highest level since August, Freddie Mac Chief Economist Sam Khater said."With several potential inflection points happening over the next week, including the jobs report, the 2024 election, and the Federal Reserve interest rate decision, we can expect mortgage rates to remain volatile," Khater said in a press release. "Although uncertainty will remain, it does appear mortgage rates are cresting, and we do not expect them to reach the highs that we saw earlier this year." Zillow's rate tracker is at 6.43% as of 11 a.m. Thursday morning, down by 1 basis point from the previous day, but 10 basis points higher than the previous week's average.At that same time, the 10-year Treasury yield, one of the benchmarks for pricing 30-year mortgages, was at 4.32%, its highest level since July 9."Despite easing inflation, surprisingly strong economic data caused Treasury yields and the mortgage rates that shadow them to continue to climb," Orphe Divounguy, senior economist for Zillow Home Loans, said in a Wednesday evening statement. "What we saw in the data was strong income growth, which supports consumer spending."The statement came out before another inflation data point, the Personal Consumption Expenditures index was released on Thursday morning.That metric, considered by observers to be the Federal Reserve's favorite, rose 2.1% year-over-year in September, down from 2.3% in August.Speaking about the rising 10-year and 2-year Treasury yields, "The growing consensus for the higher rates is that the overall economy and consumer spending are stronger than generally expected, and the Fed will feel pressure to slow the pace of rate cuts to keep the lid on a possible reigniting inflation," investment banker Louis Navellier commented.In a comment following Wednesday's gross domestic product announcement, Mortgage Bankers Association Chief Economist Mike Fratantoni reiterated his belief that the Fed will reduce short-term rates by another 25 basis points at its November meeting next week.Bob Broeksmit, the MBA's president and CEO in a Thursday morning comment on the Weekly Application Survey, added, "Rates remain volatile due to the upcoming presidential election and pending monetary policy decisions, but MBA is forecasting a slight moderation to 6.3% by the end of the year."But in the immediate aftermath of the September 50 basis point reduction, mortgage rates have been on the rise.That is not likely to change after the November cut, if it were to occur, a blog post on WalletHub said."Despite easing inflation, surprisingly strong economic data caused Treasury yields and the mortgage rates that shadow them to continue to climb," the post authored by WalletHub editor John Kiernan said. "What we saw in the data was strong income growth, which supports consumer spending."First American Deputy Chief Economist Odeta Kushi also opined on rate movements going forward. "The outlook for mortgage rates will depend on incoming labor market and inflation data, along with any signals from the Fed about future rate cuts," Kushi said in a statement after the pending home sales report on Wednesday. "If upcoming data suggests weaker-than-expected labor market conditions or an economic slowdown, we could see some downward pressure on the 10-year Treasury yield and mortgage rates."