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The drop in third-quarter interest rates drove single-family loan purchases at Fannie Mae up more than any other fiscal period in the year, but other developments reduced its profitability.The influential government-sponsored enterprise, which accounted for 27% of the market's single-family securities-related activity in the quarter, generated $4 billion in net income for the period.That number was down around $300 million to $500 million from comparable periods even though the period was its strongest quarter for the year for the single-family loan acquisitions that represent a cornerstone for its business. Single-family loan acquisitions climbed to $93.1 billion for the quarter, representing a high for the year, but the gains the GSE got from credit benefits and valuation gains were lower."Our third quarter revenues remain strong at $7.3 billion driven by steady guarantee fee income, but our benefit for credit losses was down $273 million this quarter," Chief Financial Officer Chryssa Halley said in an earnings call, comparing the current figure to the previous quarter.The GSE also recorded smaller fair value gains, which came in at $52 million versus $447 million the previous quarter.Fannie remains in the government conservatorship its been in since the Great Financial Crisis and therefore isn't that high-profile as a stock, although as the election has given its shares a boost at times on speculation that a second Trump administration could resume privatization.Its penny stock was down slightly on the day this morning, opening at $1.44 and trading closer to $1.42 later.While the seasonally strong single-family acquisitions in the past quarter weren't enough to boost Fannie's earnings during the third quarter, it did add to the net worth its been working to build with the aim of meeting certain targets in line with ensuring its financial soundness."Our net income increased our net worth to $90.5 billion at the end of September, making us even more financially stable. Plus just since the start of this year, we've reduced our minimum regulatory capital shortfall by $17 billion," said CEO Priscilla Almodovar.While Fannie Mae's loan acquisitions were strong in the quarter, they have been limited to an extent by market conditions."Although home prices increased by 1% during the quarter and 5.9% year-over-year, with existing home sales expected to be the lowest since 1995," Almodovar said.In line with its mission, Fannie reported providing funding that served homeownership needs of 300,000 renters and 117,000 first-time buyers during the period. For the full year, it projects home price growth of 5.8% and single-family mortgage originations at $1.7 trillion."Our mission is not just about helping people get into homes, but also helping them stay in their homes, especially during tough times," said Almodovar, noting that Fannie has been delivering temporary payment assistance to borrowers affected by recent hurricanes."These events can be tough and Fannie Mae is here to help," she said.The serious single-family mortgage delinquency rate climbed in for the first quarter inched up to 52 basis points from 48 the previous quarter. Ongoing issues in the multifamily market drove its arrears up to 56 basis points from 44 during the same period.Multifamily issues played into the reduction in the overall credit benefit during the period."In multifamily, we recorded a $424 million provision for credit losses of $176 million from the prior quarter. The third quarter provision was largely driven by ARM loans that were written down during the period and modest decreases in forecasted property values," Halley said, referring to the acronym for adjustable-rate mortgages.Fannie's numbers for net income the previous quarter and a year earlier were $4.5 billion and $4.7 billion, respectively.Smaller competitior Freddie Mac, recorded $3.1 billion in earnings in the third quarter, generating gains from the improved rate environment for originations during the period. The two have different balance sheet structures that can account for variations in their results.

The Federal Reserve Board of Governors.Federal Reserve Prices grew moderately last month according to the Federal Reserve's preferred measure of inflation, giving the central bank flexibility as it awaits Friday's jobs report.The Bureau of Economic Analysis's personal consumption expenditures, or PCE, price index for September rose 2.1% year over year, down from August's 2.3% growth and the lowest since early 2021.Core PCE, on which the Fed bases its 2% annual inflation target, held steady at 2.7% growth year over year. Core PCE excludes volatile commodity-related cost categories such as food and energy. Month to month, overall prices climbed 0.2% in the headline PCE index and 0.3% in the core reading. The core reading's growth was the highest since April.The modest pick up in price growth was expected by financial market participants and policymakers alike, and increases the odds that the Federal Open Market Committee lowers its benchmark interest rate at its meeting next week.Thursday's PCE reading is the final major inflation report of the month, following the Bureau of Labor Statistics' consumer price index, or CPI, and produce price index, or PPI, both of which showed price growth remaining steady in September. During its September meeting, the FOMC dropped the target range on the federal funds rate by half a percentage point — double the usual adjustment interval — noting an increased sensitivity to its policy impacts on the labor market. The group forecast further rate cuts this year and through 2025. Thursday's PCE reading appears to have strengthened market confidence in a further rate reduction next week. Before the report was published, more than 92% of federal funds futures traders were pricing in a 25-basis-point reduction, according to CME Group's Fedwatch tool, compared with 7.5% who expected no change. After the report, the trading volume pricing in a cut ticked up north of 96%.In a speech earlier this month, Fed Gov. Christopher Waller said analysts were projecting that core PCE increased by 0.25% last month. He noted that elevated interest rates have created "pent-up demand" among consumers for high-priced items and, now that borrowing costs are coming down, many are looking to make those purchases. Waller said such an uptick would not be a "welcome development" in the Fed's push to tamp down inflation, but as long as the index remains near the Fed's 2% target, one elevated reading is no cause for concern. "We have made a lot of progress on inflation over the course of the last year and half, but that progress has clearly been uneven—at times it feels like being on a rollercoaster," he said. "Whether or not this month's inflation reading is just noise or if it signals ongoing increases, is yet to be seen. I will be watching the data carefully to see how persistent this recent uptick is."Other Fed officials have viewed recent data less optimistically. Fed Gov. Michelle Bowman — who voted against the FOMC's 50-basis-point reduction in September — said in a Sept. 30 speech that core PCE has been "uncomfortably above" the Fed's goal. She added that she views a resurgence in inflation as a notable risk."While it has not been my baseline outlook, I cannot rule out the risk that progress on inflation could continue to stall," Bowman said.Fed Gov. Adriana Kugler, who "strongly supported" the half-point cut last month and the pivot to focusing on safeguarding the labor market, said in remarks on Oct. 8 that the FOMC should stand ready to react to down risks that threaten either employment or price stability."If downside risks to employment escalate, it may be appropriate to move policy more quickly to a neutral stance," Kugler said. "Alternatively, if incoming data do not provide confidence that inflation is moving sustainably toward 2%, it may be appropriate to slow normalization in the policy rate."The Fed is still awaiting one more critical dataset before next week's FOMC meeting: the Bureau of Labor Statistics' employment situation summary, which will detail overall payroll gains and the jobless claims from September. That report is due out Friday morning.

With artificial intelligence in early phases of adoption in parts of the mortgage industry, those working in it are still trying to understand exactly how it works and may ultimately benefit them.AI figured prominently at the Mortgage Bankers Association's annual conference this week in Denver both on the expo floor and on stage during several panel discussions. With the mortgage industry still navigating the changes it brings, two of the biggest enterprises in the AI landscape, Nvidia Corp. and Amazon, took the stage to show AI's capabilities in home finance.  A point emphasized during a conversation with MBA Chair Laura Escobar was that while artificial intelligence will streamline workflows, it still needs to be thought of as an "assistive technology," according to Olivia Petersen, director, worldwide public sector financial services at Amazon Web Services."This is something that makes a recommendation, but, particularly at these phases where the models are still maturing, where comfort and trust is still being gained — it's important to have that other point of validation to say, 'Given these inputs, does this recommendation make sense?'"Following are some of key areas AI can — and in some instances — already is playing a role to change how the home finance industry operates.  Climate risk modelingA growing concern weighing on the minds of many in home lending this year is the effect of homeowners insurance premium hikes and pulled provider coverage on buyer affordability. An issue for years, the issue took on greater urgency following the two recent major hurricanes in the Southeast. A video narrated by Nvidia CEO Jensen Huang demonstrated the capabilities of the company's Earth-2 platform that created a digital twin of the planet. Combining weather simulations and graphics, Earth-2 employs a generative AI model to generate climate patterns and models quickly and at higher resolution than other methods in use. In turn, it allows forecasters to potentially forecast the arrival of natural disasters months ahead of when they occur. Currently being used by Taiwan's weather administration, Nvidia expects that the tools can eventually move into highly localized forecasting down to city blocks, where the effects of infrastructure can be taken into account."if you're a creditor insurer, you're trying to figure out how you're going to price all of your insurance models for all the locations that you have, if you have visibility into where the hurricanes are going to head, you know where you're going to be paying and where you're you're not going to be paying," said David Tepoorten, Nvidia's director, global systems integrator partnerships."What would that mean to the underwriters and what would that mean to insurance carriers? It would be able to help people cover their homes while still not making themselves bankrupt by making their own beds," he said.Fraud detectionAs AI further develops, financial services industries will see regulators also focus on their investments in the technology. "By not adopting this, we are putting ourselves at risk because it is not only the good actors who have access to this technology, there are also bad actors that have access to this technology," Peterson said. Regulators are rapidly ramping up their fraud-detection efforts thanks to AI. In fiscal year 2024, the U.S. Department of the Treasury prevented or recovered more than $4 billion in fraudulent payments, up from almost $653 million over the prior 12 months in part due to new artificial intelligence. Amazon AWS is "expanding that influence as well as we build out those communities in terms of understanding where there's fraud, patterns of financial crime, and actually sharing that also with the intelligence community," Peterson said. "Together, we can bring all of those pieces together in understanding where there are threats to our system and how to mitigate those across the board," she added.Intelligent document processingThe ability to extract information from documents is one of the use cases where AI is employed today in lending and touted as an area where artificial intelligence will benefit the mortgage industry most. Among the many things it can do is decipher handwritten answers or checkboxes on forms or take other documents, such as drivers licenses and passports, normalizing field names even when not labeled. "All these different documents that you have no idea what these things look like, these AIs were able to go in there and grab information out there and make it usable," Tepoorten said."When you start this journey, you're going to take hundreds of these documents. You're not going to have one person go through each one of these documents. You're going to bring them all, and it's all going to be into your system and ready to use after this gets absorbed." Customer experienceEven with growing adoption of technology, mortgage will remain a customer-centric business that requires frequent one-on-one interactions. AI can help alleviate customer frustration by reading signals during an interaction and providing a service agent with useful data to help quickly resolve problems a borrower faces. Don't be surprised to see digital agents shadowing new contact center agents get up to speed on the job, while still assisting those well versed in the job. "You can have an agent on the same telephone call with the human person, determining what the customer is asking about, what their sentiment is, what's the next steps that could be taken," Tepoorten said. "And it will give you a little mini tree on how you can work with that customer."AI will also help read a potential new borrower's financial situation to identify products that work best for them based on past data collected."You really have an assistant to the human, which helps get to the highly personalized view of what that customer may be eligible for, what they may have questions or concerns about or just things that they may not be aware of like programs that you can bring to their attention," Peterson noted. 

The number of U.S. properties considered to be zombie foreclosures is down 20% in the fourth quarter from the prior year, because of the hot housing market, Attom Data Solutions said.Currently, 7,109 properties in the foreclosure process are vacant and abandoned by their owners. That is a gain over the third quarter's total of 7,007, but down from 8,903 in the fourth quarter of 2023.That equates to a ratio of one in every 14,776 homes considered to be zombies in the fourth quarter data, significantly lower than the one in 11,565 recorded for the same period a year ago.It is a sign of the strength of the U.S. housing market, especially coming out of the pandemic when Attom expected the number of zombie properties to increase after the expiration of foreclosure moratoriums, explained Rob Barber, Attom's CEO."Those properties have gone from a plague in many areas of the U.S. following the Great Recession of the late 2000s, when millions of homes fell into foreclosure, to a distant memory in most communities today," Barber said in a press release. "That's unlikely to change much in the near future given that record home prices are keeping home-equity levels at historic highs and foreclosures cases dropping."Even when a home is abandoned, the inventory shortage is making it likely a buyer would come in and swoop it up, Barber said. That is in line with a recent report from LendingTree noting that while vacant properties nominally might be increasing, a fair number are empty as they await being rented.Florida, which is a potential trouble area when it comes to distressed homeowners, had a 65% annual increase in zombie properties, to 1,974 from 1,199. Kansas and Arizona both had a much larger percentage increase, both were starting from lower, double digit bases. Kansas grew to 79 from 35, while Arizona went to 60 from 28.Overall, Attom found 1.36 million residential properties or 1.3% were considered vacant, similar to the third quarter.Meanwhile, 215,601 residential properties were in the process of foreclosure in the fourth quarter, down 3.3% from the third quarter of 2024 and 32.8% lower than one year ago.The ICE Mortgage Technology First Look report for September reported loans in active foreclosure were down by 12.5% on a year-over-year basis.

The mortgage warehouse lending space is welcoming a new player while watching another participant disappear. Virginia-based Primis Bank on Wednesday unveiled its new Warehouse Lending Division, helmed by division President Drey Roberts. The team has secured over 40 new clients nationwide for the division's non-commercial real estate loans and commercial deposits, according to a press release. "Having met a dozen or so of their clients in person and seeing how fast we have on-boarded them from application to real funding, I am convinced that we can move the needle on profitability and operating results," said Dennis Zember, Primis Bank CEO, in a press release. The $4 billion asset Primis is also a home loan originator. Its Primis Mortgage Company recorded almost $600 million in volume in 2023, and today reports 117 sponsored loan originators for 15 licensed states, according to public databases. It claimed in February it was the first depository home lender, besides independent mortgage banks, to adopt the FICO 10-T credit score. Roberts comes over from Independent Bank, where he was a senior vice president and national sales manager on that company's mortgage warehouse team. In that post, Roberts oversaw an average of over $1 billion in monthly loan balances and large commercial deposits, Primis said, referring to Independent only as a large regional bank. The publicly-traded Independent Bank recently made a "strategic decision" to shutter its warehouse operations, according to a third quarter earnings report last week. The $19 billion asset Independent, headquartered outside of Dallas, said the move should result in increased capital and liquidity. It's in the midst of a merger with Florida-based SouthState bank. The depository intends to cease funding during this fourth quarter. Independent reported average mortgage warehouse purchase loans of $517.3 million for the recent period, a slight quarterly decrease but a 26% increase from the year ago period. The bank's earnings also rebounded from a small net loss in the second quarter, to an eight-figure profit in the recent period. According to public records, the Texas bank's home lending operations had 421 registered loan originators and reported $637 million in loan volume last year. Independent CEO David Brooks told American Banker in May, the company, a serial acquirer, decided to be acquired by SouthState to beef up its technology, and stay on a growth path amid interest rate volatility and heightened regulatory scrutiny. The mortgage warehouse lending space has seen some fluctuation, as major player Flagstar Financial said it would pull back, and Comerica completely exited the business. Meanwhile, Canada-based Bank of Nova Scotia in August tapped a JPMorgan Chase executive to lead its new warehouse lending here in the U.S. 

Consumers who recently obtained a mortgage and are facing cash constraints want to refinance in the near future. However, recent fluctuations in mortgage rates have put into question when the best time to do so might be.Four out of five recent home buyers say they would consider refinancing within the next year if interest rates decrease, according to a TransUnion survey. This indicates that mortgage lenders should continue to actively market to these potential refinance candidates, said Satyan Merchant, senior vice president of mortgage and auto at TransUnion.Despite a decline in interest rates earlier this year, rates have risen to 7% as of Oct. 28. With the presidential election approaching, some economists suggest this increase may be linked to expectations of a Trump victory and potential economic turbulence.TransUnion's report, based on responses from over 1,000 customers who obtained a mortgage in the past 24 months, found that 80% say their mortgage payment is straining their finances. The survey was conducted between Sept. 18 and Sept. 27."For many of these recent home buyers, their mortgage payment is their largest single payment each month," said Merchant in a press release. "The upside is that it is a payment that can be refinanced if the economic climate allows for it, and as interest rates begin to fall, this group of consumers should begin exploring this option."Most borrowers surveyed (70%) said they would refinance for more favorable loan terms, while 67% cited better interest rates and 61% mentioned cash-out refinancing as motivating factors.Nearly 90% of millennials indicated they would refinance in the next 12 months if rates decrease, with 77% of Gen Z respondents and 79% of Gen X expressing a similar interest in refinancing if the terms are favorable.Mortgage application activity, specifically for refinances, has softened sizably. Refinance applications made up 43.1% of total applications for the week ending Oct. 25, according to the Mortgage Bankers Association, straying further from once accounting for the majority of activity.The conditions could favor some mortgage industry players over others, a research note from  Keefe, Bruyette and Woods said."We continue to believe this backdrop is particularly negative for refi volume-sensitive names within our coverage (primarily Rocket)," wrote analysts, using the lender's stock symbol. "We prefer names which typically benefit more on a relative basis from higher purchase volumes."Pennymac Financial Services and United Wholesale Mortgage are listed as purchase market beneficiaries by the investment banking company.Future outlook for refinance activity remains uncertain, though there are predictions that rates should fall below the 6% threshold sometime next year, which could amp up demand.The MBA is forecasting an industry recovery that starts with $1.8 trillion in mortgage originations for 2024, up slightly from a recently revised $1.4 trillion in 2023. By 2025, projections put the annual number at $2.3 trillion and $2.5 trillion the following year.

Figure Lending has unveiled a new piggyback loan at a time when housing affordability has rarely been worse.Call it a sign of the times, and maybe an eerie reminder of the early 2000s housing market.But perhaps with a few added safeguards this time around, such as actual loan underwriting!The new product, which is a home equity line of credit (HELOC), will serve both new home buyers and existing homeowners looking to access more of their equity.It will be available at Figure and via their partner network of lenders, banks, credit unions, loan servicers, and home builders.Figure’s New Piggyback HELOC Allows for Lower Down PaymentsAs noted, Figure’s new Piggyback HELOC aims to serve both new home buyers and existing homeowners.Those still searching for that right property can use the HELOC as a second mortgage that closes concurrently with a first mortgage, hence the name piggyback.For example, they can take out a first mortgage at an 80% loan-to-value ratio (LTV) and the HELOC for another 10% or more. This is known as an 80/10/10 loan.Other variations include 80/20 loans, which indicates zero down payment. These were quite popular during the early 2000s.It’s unclear how high Figure will go on this product, but my understanding is their max CLTV is 95%.In other words, you might be able to take out a first and second mortgage while bringing in just five percent down payment. This would be an 80/15/5.The use of a second mortgage can help home buyers avoid private mortgage insurance (PMI) and possibly secure a lower mortgage rate.Keeping the first loan at 80% eliminates the need for PMI, possibly reduces loan-level price adjustments, and can help a borrower stay below the conforming loan limit.Often times, conforming loan rates are cheaper than jumbo mortgage rates. And qualifying tends to be easier for loans backed by Fannie and Freddie as well.Recent Home Buyers Can Combine It with a Cash-Out RefinanceIf you’re an existing homeowner, Figure argues that you can use a piggyback second to “transition to a lower-cost alternative.”They cite an example where a recent home buyer wants to tap equity via a cash-out refinance, but is subject to the 80% LTV maximum on agency loans backed by Fannie and Freddie.Even if they originally purchased the home with less than 20% down, it might be possible to lower the first mortgage to 80% LTV and drop PMI while tacking on a second mortgage for a higher combined CLTV.For example, someone who bought a home for $450,000 with 10% down might be able to take out a new first mortgage loan at 80% LTV and add a piggyback for an additional 15%.In the process, they get access to more of their home equity, but also put themselves in a position where they owe more and could be closer to being in an underwater position if home prices drift lower.Figure offers HELOCs as large as $400,000, meaning loan amount shouldn’t be a roadblock for most borrowers.Figure’s HELOCs Are a Little DifferentFigure calls itself the #1 non-bank home equity line of credit in the United States.Despite only launching in 2018, Figure Lending has already originated more than $12 billion in home equity lines of credit.Part of that amazing growth can be attributed to their use of technology, including a 100% online application process, with no appraisal/title fees, and e-Notary services in many states.And the process can be done quickly, with funding in as little as five days.But I should point out that their HELOCs require the full draw on the line amount at closing. And they charge an origination fee based on that draw, ranging from 0-4.99%. So costs can be steep.Their HELOCs are also fixed-rate loans, which is odd because most HELOCs are variable and tied to the prime rate, which goes up or down whenever the Fed changes its fed funds rate.For the record, prime is expected to come down over the next year as the Fed eases its monetary policy.Figure’s HELOC is already being offered by some of the largest mortgage lenders out there, including CrossCountry Mortgage, Fairway Independent Mortgage, Rate (formerly Guaranteed Rate), Movement Mortgage, Union Home Mortgage, and many more.The company’s products are now available in 49 states and the District of Columbia.(photo: Low Jianwei) 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)

I wanted to take a moment to talk about the types of sellers that exist in the housing market.There are typically two types of sellers: would-be seller and must-sell sellers.The first group are folks who would sell their property, but only for the right price.And the second group consists of motivated sellers who must sell, even if the price isn’t right.Let’s discuss why this is important and how it impacts the housing market.What Is a Would-Be Home Seller?As the name suggests, a “would-be seller” is a homeowner that is interested in selling their property, but only if the conditions are right.Typically, this means they’ll only part with the property for the right price. And that right price is usually a high price.For example, you might see a home listed for $500,000 in a neighborhood where most other properties are selling for say $450,000.This is usually the first clue. The price is higher than comparable properties. Another way of looking at this type of seller is that they’re simply not motivated.They threw their property on the MLS to see if there were any takers. There’s a good chance they’re not that serious.It’s almost the equivalent of the looky-loo home buyer who tours open houses just to be nosy, often with little intention of making an offer.The would-be seller is like this and isn’t too fussed if their property sells or not.Often, they go against the listing agent’s wishes by listing the property for “too much money.”And this type of property languishes on the market, often for months if not years in some cases.The Must-Sell Seller Is MotivatedConversely, we have the “must-sell seller,” which is the complete opposite of the would-be seller.This individual needs to sell their home, and fast. They don’t have time to mess around and list high.The property should be listed competitively, and the seller should be willing to entertain things like seller concessions and repair requests.The best way to sum up this type of home seller is the word “motivated.” In fact, you might even see the phrase “motivated seller” in their property listing or on their yard sign!A home buyer should favor this type of seller because they’ll be much more willing to negotiate.And the starting point for their list price should also be more reasonable.For example, if recent comparable sales in the neighborhood were $450,000, chances are they’ll list at a similar price. Or even lower!The best way to sum it up is the property is “priced to sell.”Today’s Housing Market Is Dominated by Would-Be SellersNow taking into consideration those two definitions of home sellers, I’d argue that in most markets nationwide, we have a lot of would-be sellers.Why? Well, if you look at what sellers are trying to sell for versus what buyers are willing to pay, there’s often a big gap.You’re hearing a lot of prospective buyers say “that’s too much” or “I’m not willing to pay that.”But the thing is, many of the folks who have listed their properties “too high” don’t really care. They’re not motivated sellers.They’re simply throwing their properties on the market to test the waters. In their mind, if someone offers them full list or close to, they’ll go with it.If not, well, who cares. Just let it sit and bide your time. There’s no rush.What this means for the housing market is that despite poor affordability, home prices continue to go up.The CoreLogic S&P Case-Shiller Index showed that prices increased 4.25% year-over-year in August, though the rate of appreciation has slowed for a fifth consecutive month.And home prices gains are expected to cool further, with just a 2.3% annual gain expected by next August. However, prices keep rising…Low Supply and Cheap Mortgages Allows Sellers to Be PatientA continued low supply of existing homes has kept home prices on the up and up.But the rate of appreciation has slowed and you can blame both high mortgage rates and high home prices for that. However, and most importantly, home prices aren’t falling, at least nationally.This lack of affordability could eventually lead to actual price declines, especially in overcooked markets, but it will depend on the type of seller that dominates the market.For comparison sake, in the early 2000s mortgage crisis, the market was saturated with must-sell sellers.Many couldn’t (or didn’t want to) make their next mortgage payment, often because it was an adjustable-rate mortgage or they qualified via stated income and could never really afford it to begin with.Today, you have a home seller with a very low, fixed-rate mortgage who might want to sell, but isn’t at all desperate.Until that changes, I wouldn’t expect home buying conditions to change much. 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)

Ginnie Mae is considering offering incentives to some issuers that would ease nonbank risk-based capital requirements set to become effective at the end of the year.While the guarantor of securitized government loans continues to see pushback to the contentious rule originally announced two years ago, it foresees few problems with the upcoming implementation, one of its leaders said at the Mortgage Bankers Association conference in Denver on Monday."Going into the 12/31 deadline, we're going to have a high level of compliance," Ginnie Mae's Chief Risk Officer Gregory Keith said during a government lending panel. "We think that at this point, we should not see anybody that's going to be challenged by the rule by the end of the year."The new rule requires nonbank issuers to maintain a minimum capital ratio of 6% with risk weight of 250% for mortgage servicing rights, among other things. Leading mortgage trade groups had argued the levels were too high for nonbank issuers that lack deposits and assets available to depository institutions and might have the effect of discouraging government lending activity. Originally intended to go into effect at the end of last year, Ginnie Mae extended the timeline after stakeholders raised concerns about their ability to comply. While nonbanks appear ready for the upcoming change, Keith said Ginnie Mae was looking at ways to encourage sound financial practices among issuers that would place them in a more solid position to access financing.    Among the incentives being considered is a reduction in the level of capital required for issuers that have "demonstrated a history of successful hedging where the efficacy is really high," he said."That would be important to make the program attractive, but it's also a way to continue to use a carrot to create incentives for the issuer base to seek out ways to reduce their exposure to interest rate risk."During the panel discussion, housing leaders also highlighted recent efforts to increase housing supply, including changes to the Federal Housing Administration's 203(k) program meant to encourage housing rehabilitation. Updates to the loan program's regulations were also expanded in such a way to help finance construction of accessory-dwelling units. "The housing stock that we have — existing housing stock, half of it is 50 years-old or more, and that means that if we don't find ways to reinvest that stock, we're going to lose that," said FHA Commissioner Julia Gordon. "So forget about how you incentivize new construction. We need to not lose the homes that we already have."FHA has also introduced several initiatives aimed at boosting affordable prefabricated home construction, including grant programs and redesigned FHA lending products. Improved construction techniques have led to the creation of homes "that are, frankly, quite indistinguishable from site-built homes, but come at a lower price point because they are built in a factory," Gordon said.Easing restrictions that have hampered home construction for decades is a necessary, and perhaps overdue, step for the U.S. to achieve successful affordability outcomes, according to Jim Glennon, vice president of hedging and trading client services at Optimal Blue."Some people will say that regulation has made it a lot more expensive to build or to develop new projects and homes," he said in an interview with National Mortgage News. "I think that can be proven as well, looking at regulations over the past 30 years or so. Can they reverse that? I don't know, but that would be another place where there could be a focus."

Loansnap has officially lost its license to originate in California, a state where it is headquartered, amid ongoing financial strain.The pulling of its license comes two weeks after Connecticut also axed the mortgage fintech's ability to originate loans following an investigation which concluded that the company failed to "to demonstrate that it's [financially responsible]." Arizona is the only state left in which Loansnap has a branch, the Nationwide Multistate Licensing System shows.A filing from California's regulator states that Loansnap's license was pulled because its surety bond expired Aug. 4 and was never renewed.The fintech's nonrenewal is in violation of California's financial code and grounds for the revocation of a license issued, California's Department of Financial Protection and Innovation wrote in its notice Oct. 18.Loansnap did not immediately respond to a request for comment Wednesday.Earlier this year, the fintech lender was evicted from its Costa Mesa, California office, the building's landlord confirmed in June. MGR Real Estate is suing the company for $537,304 for past due rent.It also faces additional litigation from vendors and partners for nonpayment. Loansnap is being sued by stakeholders including Wells Fargo Bank, Optimal Blue and Mortgage Capital Trading. Litigation by Wells Fargo accuses the fintech lender of selling it a loan that did not meet contractual requirements. It is asking for over $400,000 in damages. Optimal Blue is seeking a little over $200,000 for unpaid services.All of these suits cast doubt on Loansnap operating "honestly, fairly and efficiently," Jorge Perez, banking commissioner in Connecticut, wrote in a consent order Oct. 2, which revoked the fintech's license. Events leading to the company's loss of its license occurred earlier this year when it applied for a renewal and instead received a cease and desist order related to allegations that some of its staff performed unlawful mortgage activity. That order threatened potential revocation of its license to do business in Connecticut. In a filing dated Jan. 4, the state claimed Loansnap used unlicensed mortgage originators between August and December 2022, when they accepted applications, solicited potential borrowers and offered or negotiated residential loan terms in violation of both the federal Secure and Fair Enforcement for Mortgage Licensing Act and state laws. The lender "denied in large part" the allegations asserted, Connecticut filings at the time show. The filings did not provide details of the company's response to the state.Loansnap currently sponsors two loan officers, according to the NMLS. Data from S&P shows the company previously secured $57.7 million through four funding rounds from 14 investors.