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Signs are emerging that the Trump administration may be less willing to give up control of mortgage giants Fannie Mae and Freddie Mac than investors have bargained for, as policymakers scrounge for ways to close US budget gaps.In recent social media posts, Donald Trump said he's exploring the sale of new shares in the two companies, which play a key role in determining how much Americans pay for home loans — but he also made clear the government will keep a strong oversight role. READ MORE: What Trump's latest GSE comments could mean for mortgagesAnd in recent interviews, Federal Housing Finance Agency director William Pulte said the administration is considering a public offering without actually exiting conservatorship, the quasi-government ownership imposed on the two companies since a 2008 bailout. "Maybe there's a way to take these companies public and use these companies for what they are, which are assets for the American people," Pulte said Monday in an appearance on Fox Business. The comments suggest the administration could choose a different outcome for the two mortgage giants than the one it pursued during the first Trump administration. Back then, the goal was to minimize government involvement. Now the goal may be to generate as much cash as possible for the US, potentially to help fund tax cuts. "Until two weeks ago, we thought Trump would pick up where he left off," said Jim Parrott, nonresident fellow at the Urban Institute and former housing policy adviser to President Barack Obama. Instead, the plan may be to keep substantial control and generate revenue for other policy priorities, he said. "That is a dramatic shift in focus," Parrott said.READ MORE: How President Trump can monetize the GSEsThis might deeply disappoint Wall Street investors such as Pershing Square Capital Management's Bill Ackman who've been counting on a windfall if Fannie and Freddie are set free. Since Trump's election win, shares of Fannie Mae have been up some 700%, hovering near their highest levels in two decades. The bet is that removing the so-called government-sponsored enterprises or GSEs from conservatorship will unleash a torrent of pent-up earnings power. To be sure, administration officials say many alternatives are still on the table for the two firms, which together control $7.8 trillion in assets and last year generated $29 billion in profits.Pulte said last week the government is "studying all different options" for the companies' future, and Treasury Secretary Scott Bessent told Bloomberg last month his agency is studying privatization — but said other policies will come first, such as trade and peace deals. The first Trump administration made strides toward ending conservatorship, for example by stopping a provision that swept all their profits to the government and thus allowing them to build capital. And after leaving office, Trump wrote in 2021 that he would have quickly ordered the release of Fannie and Freddie from conservatorship had it not been for rules that prevented him from doing so at the time. The US Supreme Court struck down those rules in 2021, freeing Trump's hand.But the priorities may be different now, at least judging by early signals from the administration.Mortgage ratesSensitive to rising interest rates, Pulte and Bessent have repeatedly stressed the importance of keeping mortgage costs in check. That's a risk if the conservatorship ends, because US backing helps Fannie and Freddie keep interest rates down on home loans. At the same time, scary-looking budget deficits may be creating a greater incentive to use the GSEs to generate funds for the Treasury, rather than private investors. A spokesperson at the FHFA, which oversees Fannie and Freddie, confirmed the agency is studying how to take the companies public should the president decide to pursue such an offering. This includes potentially taking them public while still in conservatorship, the spokesperson said. "In any scenario, we will ensure the mortgage-backed securities market is safe and sound and that there is no upward pressure on rates," the spokesperson added. 'Little flummoxed'Ironically, retaining substantial control could complicate efforts to sell off the government's stakes for significant amounts of value. To extract cash, the government would need to generate lots of enthusiasm from private investors as part of a public offering — but they'd be interested only if the US surrendered more control. "We're still a little flummoxed by Pulte's comments about taking the GSEs public but not necessarily privatizing," wrote strategists including Nicholas Maciunas at JPMorgan in a Friday note. "If the goal is to sell off the Treasury stake, potentially raising hundreds of billions of dollars to pay down the U.S. debt, we'd think that private investors would want the government's involvement to be somewhat lighter than today." For now, any would-be windfall for the US isn't reflected in accounting by the Congressional Budget Office, the scorekeeper legislators rely upon to estimate how proposed laws would affect the government's budget. The CBO's analysts have indicated they won't adjust the value assigned to the government's GSE stakes until plans for ending conservatorship are concrete. Trump's insistence that he would keep the government's "implicit guarantee" of Fannie and Freddie could also inhibit efforts to change the CBO's stance."The president's plan to keep providing Fannie and Freddie with a financial lifeline may mean they continue to view the two companies as obligations of the government, and thus refrain from writing up their financial value," said Ankur Mehta, a strategist at Citigroup Inc.

The next 12-to-24 months will be a good time for the home equity lending market because of the conditions affecting the first lien business, experts say.With elevated mortgage rates, the amount of equity homeowners hold right now and the relative shortage of inventory "it's a really lucrative environment for home equity, and has been for the last two years," said Allen Price, senior vice president, sales client and transaction management at BSI Financial Services. "We've got this jolt of lightning from a demand perspective, and the HELOC utilization has seen huge increases since Q4 of last year."Price sees this continuing for the next two years, although he was reluctant to forecast a longer run. He was speaking as a panelist on second-lien lending at the Mortgage Bankers Association's Secondary & Capital Markets Conference.In the long-term, "I don't think we're going to see anything that's really far deviating from what we're experiencing right now, other than maybe some improved rates," Price said.What could disrupt the second-lien forecastThe two potential flies in the ointment are homeowners who are sitting on a record amount of debt and household savings rates that are at their lowest in two decades."Some of you home equity lenders look at that and [say] 'they might be taking out of home equity for the wrong reason,'" Price said.But "given the current state of things, things are performing really well, and I think that puts a really nice, clear path for home equity to continue to grow in the next two years," he added.The panelists were not concerned about underwriting standards slipping. For both first and second mortgages, those remain pretty tight, said Ken Flaherty, senior manager, retail lending at Curinos.Product innovation in home equity lending"Even some of the specialty products, like shared equity, the underwriting is thoughtful, so I think we'll be good there," Flaherty said. "But I do think…more broadly speaking, there's just a market demand for more innovation around consumer products as it relates to mortgages."The shared equity product is a sign of this, he said. "It'll be interesting to see, from a performance perspective, over time for some of these products, what that looks like."Why today is different than 20 years agoJulian Grey, who leads mortgage data and analytics at Intercontinental Exchange's fixed income unit, emphasized that the housing market today is fundamentally different from 20 years ago, when home equity lending was later blamed as a factor in the financial crisis, largely due to the current shortage of housing inventory.The market has "that solid collateral, which we simply didn't have in 2005, 2006," Grey continued. It could change in the future, "but for now, regardless of product type, the situation is completely different."Lenders are also writing home equity products with combined loan-to-value ratios typically around 80%, with just a small handful willing to go up to 90%, Flaherty said. They are not the high CLTV products seen during the late-1990s through the mid-2000s.What new entrants should considerJohn Toohig, managing director at Raymond James & Associates, who moderated the panel, noted they are getting more and more calls about second-lien programs as lenders "are just dusting off" a product that has been "fairly dormant over the last 15 years."For potential new entrants into the second-lien business, they need to "understand this market right now is a very different market from five years ago," Flaherty said. "The banks, depositories, own this market." Going back seven years ago they had virtually 100% share; they own about 75% of it now and that is because of the growth of the non-traditional products."Now, this is a very diverse market, this is a very hungry market now with investor appetite," Flaherty said. "So what you're entering into isn't just, let's stand up a product and the business will come; you've got 50 competitors that offer the same thing you do."New entrants have to figure out how to be a differentiator in the home equity business, he continued. But some participants are big spenders on marketing, looking to get to the top of the consumer's inbox and winning those borrowers."You might be surprised on just how much some of these lenders are spending to get top of mailbox, and that's usually an eye opening moment when we have some of these conversations with clients of, how are you going to differentiate and how much are you willing to spend on marketing, because you're entering a very fragmented market," Flaherty said.Why lenders need to consider second-lien productsAn audience member during the session, Tom Davis, chief sales officer at Deephaven Mortgage, responded to a question regarding whether traditional retail loan officers are missing the boat with their reluctance to do home equity."If that originator doesn't call that borrower, the servicer is going to take that loan and that borrower and they're going to do the refi cash out," Davis said. "It's a great opportunity to pick up the phone and talk to the borrower [to] just get a pulse check before the servicer takes those deals."Plaza Home Mortgage's wide ranging product menu already includes closed-end seconds, reverse mortgages and renovation loans, "pretty much everything other than HELOCs these days," said Mike Fontaine, chief operating officer and chief financial officer, during an interview at Secondary.The company, which operates only in the correspondent and wholesale channel, has a program called FHA 100, which offers a simultaneous second.The selling point is that the consumer wants to keep their low interest rate first, and they don't need the same level of proceeds they would get from a cash-out refinance."If you look at the blended rate or the blended payment it makes more sense than doing a full refinance or a cash-out refinance, although we see a lot of cash-out refinances as well," Fontaine said.It is considering adding HELOCs and if so, it will be a product Plaza will sell to an aggregator.To some of the points Davis raised during the panel session, it should be easy for Plaza's account executives to get up to speed."It shouldn't be a hard learning curve for them, [it's a] pretty simple program really," Fontaine noted. "There's some programs out there right now that are fairly straightforward."The view on second-lien from the tech sideDocMagic provides not just document services, but also eClosing and eVault, among other mortgage technology offerings. It has started offering its services for HELOCS, company executives said during an interview at Secondary."That's the next logical step that we had to go to, and so we just closed the circuit with that," said Pat Theodora, CEO.Additionally, "MERS now supports from registration perspective," said Brian Pannell, chief eServices executive, pointing out that competitor DART already offered this capability. (DART has ties with HELOC fintech Figure Technologies.)Even though Fannie Mae and Freddie Mac don't buy them, aggregators and investors have been purchasing these products on the secondary market, which is "more of a reason to be one of the first to actually have a HELOC register with MERS," Pannell said."These types of things are pushed now with MERS, because they're seeing that in the channels, there seems to be more HELOCs coming up now versus purchase loans."

Newrez wants to dismiss a trio of "zombie" second mortgage lawsuits, suggesting its servicing arm didn't violate, nor is subject to, the lending laws consumers cite.Borrowers accuse Newrez's Shellpoint of inflating the balances of their long-dormant second mortgages, and for long periods failing to send them monthly statement notices. The prospective class action complaints in Georgia, Massachusetts and North Carolina allege various violations of state and federal consumer and lending laws. Newrez fired back last month, filing motions to dismiss the Massachusetts and North Carolina suits and asking for summary judgment in the older Georgia case. Federal judges have not yet responded to those latest filings. While the motions have various nuances, the mortgage player commonly argues Shellpoint isn't subject to Truth in Lending Act claims.In Massachusetts, Eva Hodges is suing Shellpoint and Bank of New York, as an assignee and holder, over a $100,000 home equity line of credit loan she obtained in 2005 with Countrywide Home Loans. Hodges filed for bankruptcy in 2008, received a discharge of her HELOC that year, and stopped receiving monthly mortgage statements, according to her lawsuit. Early last year, Shellpoint allegedly asked her to pay $152,820 to cure the arrearage on her HELOC, or face foreclosure; the total amount due had grown to $200,000. Hodges sued the servicer and bank in January for violating TILA, but removed that claim in place of other state statute violations in an amended April complaint. Counsel for both institutions responded to Hodges two weeks ago, and accused her of improperly trying to backdoor a TILA claim into a Fair Debt Collection Practices Act claim. "TILA only applies to creditors, and it is well-settled that mortgage servicers that do not also own the loan are not 'creditors', and therefore, cannot be liable under TILA," wrote attorneys for Shellpoint and BNY. The servicer cited precedent from other federal court rulings, including a case involving Newrez in 2020. Spokespeople for both Newrez and Bank of New York declined to comment, while attorneys for Hodges didn't respond to requests for comment Monday. Counsel for Newrez in the Georgia and North Carolina cases raise similar TILA arguments, alongside defenses against other statutes like the Real Estate Settlement Procedures Act. Those cases involve "80/20" loans originated prior to the Great Financial Crisis, where their second loans covered their homes' remaining 20% of value.Each lawsuit refers to Shellpoint by its former Specialized Loan Servicing name. Newrez parent Rithm Capital acquired SLS as part of its $720 million Computershare Mortgages purchase in 2023. SLS is also accused of up-charging borrowers in a "pay-to-pay" suit which remains pending in a Texas federal court.  The spate of zombie second claims against Shellpoint cite Consumer Financial Protection Bureau guidance from 2023, which discusses companies coming to collect on Great Financial Crisis-era second mortgages as home values have risen. The regulator said those servicers could be violating the FDCPA.The CFPB under acting Director Russell Vought last month rescinded widespread bureau guidance, although the "zombie" mortgages bulletin was not mentioned in that federal register update. Vought nonetheless has moved to defang the agency and pulled back widespread enforcement of mortgage businesses.

Graeme Sloan/Bloomberg The Department of Justice, which recently terminated one Biden-era fair lending consent order, is now pushing to free another bank from its obligations under a three-year-old redlining settlement.The DOJ filed an unopposed motion last week asking a federal judge to dismiss the department's consent order with New Jersey-based Lakeland Bank more than two years before it's slated to end.Lakeland — which was acquired last year by Provident Financial Services — was hit by the Justice Department in 2022 with one of the costliest redlining settlements in the agency's history. The DOJ alleged that the bank failed to provide mortgage lending services to Black and Hispanic neighborhoods in the Newark, New Jersey, area between 2015 and 2021.The bank agreed at the time to invest $12 million in a loan subsidy for residents of previously excluded neighborhoods over a five-year period. Lakeland also said it would spend more than $1 million on outreach, consumer education and community partnerships. The consent order is currently scheduled to be in effect until at least September 2027.The DOJ argued in its motion last week that Lakeland "has demonstrated a commitment to remediation and has reached substantial compliance with the monetary and injunctive terms" of the order. Lakeland, which is now part of Provident, has also committed to continuing the disbursement of the loan subsidy fund, according to the government's filing. Keith Buscio, director of public relations for Provident, affirmed that commitment Monday in an email to American Banker."Provident acknowledges the benefit of the mortgage loan subsidy to underserved communities and, in the event the DOJ's motion is granted, will commit to spending the remaining amount under the subsidy," Buscio wrote.Provident, which announced its plan to buy Lakeland in 2022, one day before the consent order was made public, closed the acquisition in May 2024. The deal was originally expected to close in the second quarter of 2023, but was later extended to allow more time for regulatory approvals.Ultimately, in reviewing the merger application, the Federal Reserve determined that the consent order was binding and that Lakeland had made progress toward satisfying its obligations. It also determined that Provident had appropriate control in place to make sure that Lakeland's commitments were met.On Monday, in response to the possibility of Lakeland exiting the consent order early, several fair housing advocacy groups sought to intervene, arguing that the DOJ hasn't presented adequate evidence to dismiss the case.The New Jersey Citizen Action Education Fund, the Housing Equality Center of Pennsylvania and the National Fair Housing Alliance wrote in their brief that terminating the agreement requires "'exceptional circumstances,' none of which have been presented to this court.""This Court should therefore hold the parties to the terms of the Consent Order to which they voluntarily agreed, require Lakeland to fully remedy the harm its practices allegedly caused, and allow the Newark community to continue to reap the benefit of Lakeland's obligations under the Consent Order for the remainder of its agreed upon duration," the groups wrote.In a statement to American Banker, New Jersey Citizen Action said it "condemned" the Trump administration's motion to terminate the consent order with Lakeland. "This funding and these programs are critical to remediate the impact of redlining," Leila Amirhamzeh, New Jersey Citizen Action director of community reinvestment, said in the statement. She added that "the Trump administration's efforts to terminate the order sends a clear message to financial institutions that it will not hold banks accountable for discriminatory redlining practices."Days before the DOJ filed the proposal to terminate the Lakeland consent order, two of the department's New Jersey-based attorneys — Michael Campion and Susan Millensky — requested to withdraw from the case. A spokesperson for the U.S Attorney's Office in New Jersey could not immediately be reached for comment.Last month, the DOJ and the Consumer Financial Protection Bureau requested the dismissal of a 2021 consent order against Trustmark National Bank. That case also involved lending discrimination charges, and Jackson, Mississippi-based Trustmark agreed to pay a $5 million civil money penalty.The DOJ's request in the Trustmark case was approved by a federal judge last month.During the Biden administration, the DOJ brought 15 redlining settlements against banks in three years as part of an initiative combating the unfair lending practices.The Trump administration has taken a sharply different position on lending discrimination. On April 23, President Trump signed an executive order revoking the use of what's known as "disparate-impact liability," arguing that the legal theory results in unlawful discrimination.The order calls for the administration to "assess all pending investigations, lawsuits and consent judgement that rely on a theory of disparate-impact liability and take appropriate action," and it requires agencies to "deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability."

Former Federal Reserve Vice Chair and noted macroeconomist Stanley Fischer, who passed away Saturday at 81.Bloomberg News (Bloomberg) — Stanley Fischer, a professor and practitioner of macroeconomics who helped guide central banks in two countries, Israel and the US, and mentored a younger generation of economic decision-makers, has died. He was 81. He died on Saturday, the Bank of Israel said in a statement, expressing condolences.Fischer, known as Stan, served as vice chairman of the US Federal Reserve from 2014 to 2017 following eight years as governor of the Bank of Israel, adding to a resume that included time at the Massachusetts Institute of Technology, spells at the International Monetary Fund and World Bank, and a stint as vice chairman of New York-based Citigroup Inc. The roster of MIT students he taught and advised included Ben S. Bernanke, who would go on to become Fed chair and called Fischer his mentor; Mario Draghi, a future European Central Bank president and prime minister of Italy; Lawrence Summers, who would serve as US Treasury secretary under Bill Clinton; Greg Mankiw, who would lead President George W. Bush's Council of Economic Advisers; Kazuo Ueda, named Bank of Japan governor in 2023; and IMF chief economists, including Olivier Blanchard, Ken Rogoff and Maurice Obstfeld.Countless other college undergraduates were introduced to the dismal science by Macroeconomics, the textbook Fischer wrote in 1978 with his MIT colleague, Rudi Dornbusch. The 13th edition of the book was published in 2018. "It is hard to think of any other macroeconomist alive who has had as much direct and indirect influence, through his own research, his students, and his policy decisions, on macroeconomic policy around the world," Blanchard wrote of Fischer in 2023. Fischer and Blanchard co-authored Lectures on Macroeconomics, published in 1989.Dispatched on several occasions to extinguish economic emergencies around the world, Fischer drew academic lessons from his first-hand experience with countries in crisis. The pattern began in 1983, when George Shultz, then the US secretary of state, invited Fischer to serve on a joint US-Israeli team of experts helping Israel reverse a prolonged period of weak growth, triple-digit inflation and falling foreign exchange reserves. Their work resulted, in 1985, in an economic stabilization program combining a large reduction in government subsidies with the fixing of the exchange rate, a tightening of monetary policy, and wage and price controls — followed, crucially, by the US supplying a $1.5 billion two-year aid package.That was a prelude to Fischer's tenure as the No. 2 official at the IMF, the lender of last resort to countries in economic peril. Starting in 1994, Fischer traveled the globe to help resolve interrelated financial crises in Mexico, Russia, Brazil, Thailand, Indonesia and South Korea. His role meant he often overshadowed his boss, IMF Managing Director Michel Camdessus. But years later, Fischer credited Camdessus with keeping a sense of calm following the collapse of the Mexican peso in 1994, the first IMF crisis Fischer faced.Emergency Loans"I thought Western civilization as we knew it was coming to an end," but Camdessus "had seen this particular play before," Fischer recalled. The IMF provided about $250 billion in emergency loans during Fischer's seven years as first deputy managing director, ending in 2001.To accept Israel's 2005 offer to head its central bank, Fischer, an American citizen since 1976, added Israeli citizenship. He conducted business in Hebrew, with an accent that indicated his upbringing in southern Africa.Under his leadership, Israel's central bank was the first to cut rates in 2008 at the start of the global economic crisis, and the first to raise rates the following year in response to signs of financial recovery. In 2011, responding to a global downturn, the bank embarked on a series of rate cuts that pushed the benchmark from 3.25% to a record low 0.1% in 2015. Major changes enacted by Fischer during his eight-year tenure included shifting responsibility for the monthly interest-rate decision from the governor alone to a six-member Monetary Committee, including three outside academics. "It is testament to Stan's skillful handling of Israel's economy that it is one of the very few advanced economies whose output increased every year through the crisis period," former Bank of England Governor Mervyn King said in 2013.President Barack Obama appointed Fischer as vice chairman of the Fed Board of Governors under Janet Yellen. Fischer announced his retirement in 2017, a year before his four-year term was to end. He joined BlackRock Inc. as an adviser in 2019.Africa UpbringingFischer was born on Oct. 15, 1943, in Mazabuka, a town in Zambia, the nation then known as Northern Rhodesia. His family was part of a close-knit community of Jews who had emigrated to southern Africa. His Latvian-born father, Philip, ran a general store. His mother, Ann, had been born in Cape Town, the daughter of Lithuanian immigrants, according to a Financial Times profile.At 13, the family moved to Zimbabwe, then called Southern Rhodesia, where Stanley became active in the Habonim, a Zionist youth group, along with Rhoda Keet, his future wife. In the early 1960s, he spent six months on a kibbutz on Israel's Mediterranean coastal plain, where he combined learning Hebrew with picking and planting bananas.He was introduced to economics through a course in his senior year in high school and moved to the UK to study at the London School of Economics, earning a bachelor's degree in 1965 and a master's in 1966. He chose MIT for his doctorate work so that he could study under future Nobel laureate economists Paul Samuelson and Robert Solow. He said he may have been drawn to macroeconomics "because I was interested in big questions.""I had this image of the world as we knew it having nearly collapsed in the 1930s, and that these guys" — the macroeconomists — "had saved it," he said in a 2005 interview with Blanchard.He earned his Ph.D. in economics in 1969, worked as an assistant professor at the University of Chicago, then returned to MIT in 1973 as an associate professor. The first course he taught was monetary economics, alongside Samuelson. He became a full professor in 1977.Bernanke, who earned his Ph.D. from MIT in 1979, traced his interest in monetary policy to a conversation he had with Fischer — "then a rising academic star" — in the late 1970s.  'Read This'He said Fischer handed him a copy of A Monetary History of the United States, 1867-1960 (1963), by Milton Friedman and Anna J. Schwartz, with the encouragement, "Read this. It may bore you to death. But if it excites you, you might consider monetary economics."Bernanke credited Fischer with popularizing the principle that while the Fed pursues goals set by the president and Congress, it has policy independence — freedom to use its tools as it sees fit to achieve those goals. As chief economist of World Bank from 1988 to 1990, Fischer visited China and India and became, he later said, "gripped by the problem of development."After Fischer left the IMF in 2001, he joined Citigroup Inc. as a vice chairman and drew on his experience to lead the bank's country risk committee.Fischer declared himself a candidate for the top role at the IMF in 2011, following the resignation of Dominique Strauss-Kahn. At 67, however, he was over the IMF's age limit of 65 for managing directors, meaning he would have needed a change in rules. The job went to Christine Lagarde.In 2013, Fischer was thought to be a possible candidate to succeed Bernanke at the helm of the Fed. Obama instead chose Yellen, with Fischer as her deputy."In a just world, Stan would have served at some point as Fed chairman or managing director of the IMF," Summers wrote in 2017. "Fate is fickle and it did not happen. But Stan through his teaching, writing, advising and leading has had as much influence on global money as anyone in the last generation. Hundreds of millions of people have lived better because of his efforts."

New York Mortgage Trust is staging a consent solicitation to support its latest move into what it considers the right mix and amount of less credit-sensitive assets and higher yielding ones.The company is asking for certain bond investors' permission to exceed a maximum 8-to-1 debt-to-equity ratio it's contractually obligated to ensure it meets on the last day of each fiscal quarter, which follows other efforts it has engaged in to raise funds for new investment.NYMT's strategy highlights its growing interest in finding a way to use debt to fund investment that manages potential risks in residential mortgage-backed securities while finding ways to generate strong returns."The company has significantly increased investment activity, targeting assets that are less sensitive to credit deterioration, such as agency RMBS, and investments with shorter duration and higher yields, such as business purpose loans," the company said in its consent solicitation.A decision for holders of certain NYMT bonds due next yearThe company's consent solicitation is asking certain investors to allow higher debt-to-equity ratios that can lead to perceptions that the company as a whole is taking on more risk in terms of the extent of its borrowing to pursue the aforementioned aims.The consent solicitation NYMT sent to holders of $100 million in outstanding 5.75% senior notes due next year, and asked them to agree to a payment of $4 per $1,000 principal amount of debt. The solicitation expires at 5 p.m. in New York on June 12. As of March 31, the company's liquidity position included $173 million in available cash and equivalents with the exclusion of consolidated real estate variable-income entities.It also included the following unencumbered assets: $256.8 million worth of investment securities and $100.2 million in residential loans.How agency RMBS, BPL investments have impacted financialsNYMT's investments, meanwhile, contributed to a 55% year-over-year increase in interest income in the first quarter.Broader market volatility resulting from uncertainty about the impacts of changing tariffs and how they'll be impacted by related court challenges had an upside for the company in the first quarter, according to executives."We took advantage of the higher spreads and interest rate gyrations to meaningfully increase our quarterly purchases concentrated in agency RMBS," President Nicholas Mah said during the company's quarterly earnings call.The company's repositioning toward agency RMBS and business purpose loans in the past two years has had a positive impact on earning available for distribution, Chief Financial Officer Kristine Nario-Eng said during the call.The metric is considered important in the context of REITs that must distribute a significant amount of their income to equity shareholders.EAD per share rose to $0.20 in the first quarter of 2025 compared to $0.16 the previous fiscal period. "This strategic shift also contributed to an increase in quarterly EPS contributions from adjusted net income to $0.40 per share, up from $0.36 per share in the prior quarter and $0.29 per share a year ago," she said.As of early afternoon in New York, NYMT's shares had fluctuated between $6.44 and $6.54 per share with a slight downward trend.Views on whether agency reform could impact bondsWhen asked about what possible change in the government's relationship with agencies in conservatorship could mean for bonds it invests in, CEO Jason Serrano said there are potential implications for rates, liquidity and securities prices, but they are unlikely to surface immediately."In the near term and medium term, we don't see that being an influence in our activities," he said during the company's earnings call.

The combined sum of for-sale listings on the market at the end of April hit a record, with homes both sitting on the market longer and more inventory arriving, according to a Redfin report.The total value of listings came in at $698 billion at month's end, the real estate brokerage said. The amount surged 20.3% from April 2024 to the highest dollar value since Redfin began measuring the data in 2012. The rise comes as supply also grew that month, when inventory expanded 16.7% year over year. Brand new listings during the month increased 8.6%, while cancellations of previous agreements approached record levels as well. "The record-high dollar value of all homes listed for sale is one way to quantify this buyer's market," Chen Zhao, Redfin's head of economics research, said in a press release. "Not only are there more homes for sale than there have been in five years, but the value of those homes is higher than it has ever been," she added.In the current market, there are approximately 500,000 more sellers than buyers looking for homes, a far cry from the competitive environment of a few years ago, Redfin said.A favorable buyers' market gives aspiring homeowners more time to consider choices or wait if needed, agents said. "House hunters are only buying if they absolutely have to, and even serious buyers are backing out of contracts more than they used to. Buyers have a window to get a deal; there's still a surplus of inventory on the market, with sellers facing reality and willing to negotiate prices down," said Matt Purdy, a Redfin agent in Denver.Suppressing sales volume is a still-challenging level of affordability, with required monthly payments rising as a result of increasing mortgage rates and prices. Despite favorable conditions for buyers this year, supply-and-demand conditions have yet to noticeably bring about lower home prices. Inventory is accumulating as properties sit on the market longer. Typical homes sold in April remained on the market for 40 days before going under contract, five days longer than the same month in 2024. Economic instability is also leading buyers to hesitate, Redfin's report said. How many homes have gone stale?Further evidence of a glut in listings appears in stale home inventory, defined by Redfin as listings on the market for 60 days or more failing to go under contract. Approximately 44% of April listings had gone stale, making up $331 billion of total inventory value.The stale share jumped up by 42.1% compared to April 2024 and accounted for the largest portion of the market since 2020, when markets reeled in the early months of the Covid pandemic. Current trends may finally noticeably benefit the buyer toward the end of the year, Zhao said. We expect rising inventory, weakened demand and the prevalence of stale supply to push home prices down 1% by the end of this year, which should improve affordability for buyers because incomes are still going up," she said. 

Federal Reserve Gov. Christopher WallerBloomberg News As the Federal Reserve examines its approach to communications, one official said the central bank should consider changes to its quarterly forecasts.During an on-stage appearance at an event hosted by the Bank of Korea, Fed Gov. Christopher Waller said he would like to see reforms to the summary of economic projections, or SEP, which are produced by the Federal Open Market Committee four times a year. The next SEP is expected to be released when the FOMC meets again later this month.Waller said the Fed could not stop the practice, which began in 2007, noting that it would imply the FOMC was "hiding something" from the public. But, he said, certain modifications could create more clarity, such as removing from the report year-specific forecasts, which can be interpreted by market participants in different ways."A simple thing is, we do this calendar year forecast — '25, '26, '27 — it should be just a rolling six-month, 12-month, 18-month and not pin it down to some calendar date," he said. "Just keep updating as you go forward."Waller also highlighted scenario analysis, a suggestion made by former Fed Chair Ben Bernanke during the central bank's monetary policy conference last month, as another viable option for incorporating a wider range of guidance into forecasts."You could easily ask people: 'Here's a scenario, what does your SEP look like? Here's a different scenario, what does your SEP look like?'" Waller said. "It just gives you two different SEP paths to communicate some uncertainty and differences, how conditions would change and how [you would] change policy. I don't think that's hard … and it could provide some additional information, if you wanted to do it."The comments came during a discussion at the Bank of Korea's International Conference. The moderator for the discussion, Chang Yong Rhee, the Korean central bank's governor and top monetary official, asked Waller whether changes to the SEP — also known as the "dot plot" because of how data points are displayed in the report — might be incorporated into the Fed's ongoing monetary policy framework review. Waller said he would like to see changes to the SEP made independent from the five-year policy review. "I don't like tying the SEP up with the framework myself, I'd prefer to do it in a separate thing," he said. "But, I mean, there's a lot of things that could be done with the SEP that would lead to better communication."Waller also noted that the Fed is considering various other tweaks to its policy framework, including abandoning the so-called flexible average inflation targeting approach — which would have allowed for inflation to run above the Fed's 2% target for a period of time after a sustained period of sub-2% growth — in favor of the more traditional flexible inflation target, which keeps the target more firmly at 2%.Tariff outlookDuring prepared remarks, Waller gave an update on his views about tariffs and their impact on the broader economy.Harkening back to an April speech in which he outlined a large-tariff scenario of 25% and a smaller-tariff scenario of 10%, Waller said recent developments indicate that the final position of new trade policy will likely settle somewhere in between the two. In light of this, Waller said he continues to expect tariff-induced inflation to be "transitory," with prices increasing in response to tariffs and then stabilizing. While he acknowledged that the Fed made a similar call about post-pandemic inflation that proved to be incorrect, Waller said the current situation is missing the three main components that drove inflation to its highest level in nearly 40 years: a labor shortage, persistent supply chain disruption and flood of fiscal stimulus."There is no longer a shortage of labor and, at least so far, no indication that tariffs are causing big disruptions in supply chains, as the recent surge in imports … should attest. While Congress is putting together a tax bill, as it stands now, a large share of that legislation extends tax cuts that have been on the books for eight years and thus would not be stimulative," he said. "Finally, monetary policy is in a very different position … so I do not believe one can use 2021 and 2022 as a basis for predicting what will happen to the persistence of inflation arising from tariffs."Still, Waller said his new baseline assumption — a trade-weighted tariff of around 15% — would lead to an overall price increase of around 1% and an increase in unemployment. But he did not believe those developments would be enough to warrant a tightening of monetary policy, pointing to recent inflation readings which show price growth cooling. "Now, if inflation turns out to be a lot more persistent, then of course that makes the tradeoff a lot harder, which is what I think you hear from a lot of my other colleagues. They think it's going to be more persistent and so we're facing a very difficult trade-off," he said. "But for me as long as I think this happens the way I've thought it would, I don't think the trade-off is that hard."Stablecoins a 'nice way' to add competitionWaller, who heads the Federal Reserve Board of Governors' payments committee, said stablecoin legislation in the U.S. will bring welcome developments to the payments space, albeit one that banks find disagreeable.During the question-and-answer session, Waller said allowing the proliferation of stablecoins would help bring down high transaction costs without the government stepping in to regulate the market more heavily or cap fees."I just view it as a nice way to introduce more competition and drive down costs from the private sector instead of the government or regulator stepping in and making these decisions," he said.Waller acknowledged that banks are not happy with this new source of competition, especially considering new entrants will be subject to less stringent oversight. But, he said, this different regulatory treatment is appropriate, given that pure-play stablecoin issuers will not be extending credit or engaging in other banking activities."As far as I'm concerned, make sure the playing field is level so the banks can issue it if they want. There's going to be more regulation on a bank simply because they do credit extension and everything else," he said. "If you had a very narrow payment provider — all they do is payments, collect fees; they don't extend credit, they don't do anything — why would you not want to have a narrower, less intrusive set of regulations?" 

A new report found that the typical monthly payment to borrow $50,000 via a home equity line of credit (HELOC) has dropped by about $100 since 2024.And that payment could drop a further $50 per month if the Fed cuts rates as expected.Despite some near-term headwinds related to tariffs, trade, and government spending, the Fed is still projected to cut rates three times by January.Unlike long-term mortgage rates, which the Fed doesn’t control, HELOCs are tied to the prime rate, which moves up and down whenever the Fed cuts or hikes.This could lead to more home equity withdrawals as the spread between HELOCs and 30-year fixed rates narrows.When Is the Home Equity Lending Boom Going to Happen?I’ve been saying for a while that homeowners just haven’t been tapping equity this cycle.In the early 2000s, homeowners were maxed out, meaning they borrowed up to 100% of the value of their home, whether it was a cash-out refinance or a second mortgage.But this go around, homeowners (and lenders) have been a lot more conservative, which has kept the housing market in check.Part of it has to do with interest rates, which just aren’t that attractive for someone in need of cash.As you can see from the chart above from ICE, the spread between HELOCs and 30-year mortgage rates widened significantly in 2023 and 2024.This made it unattractive to take out a second mortgage such as a HELOC, especially when the first mortgage was typically locked in at 2-4%.But thanks to some recent fed rate cuts, HELOC rates have eased. And they’re expected to come down even more as the year progresses, with three more quarter-point cuts by January, per CME.Within a year, the prime rate, which is the basis for HELOC pricing, could be a full percentage point lower than it is today.This will likely make it much more attractive to consider a HELOC to pay for expenses such as remodeling, or to pay off other high-cost debt.Especially when you consider the amount of equity homeowners are currently sitting on, and rising costs of living.Home Equity Levels Hit Another Record HighICE noted that home equity levels hit another all-time high in the second quarter, with mortgaged properties holding an aggregate $17.6 trillion in equity.That was up 4% from a year earlier, or another $690 billion, thanks to rising home prices and falling mortgage loan balances.A staggering $11.5T of that home equity is considered “tappable,” meaning it could be borrowed while still maintaining a healthy 20% cushion (80% CLTV).Broken down by borrower, some 48 million mortgage holders have some level of tappable equity, and the average homeowner has a whopping $212,000 available to borrow if wanted.Despite this, your typical borrower remains very “lightly levered,” with the aggregate CLTV (outstanding loan balance vs. home value) just 45%.That means someone with a home valued at $500,000 only has an outstanding balance of $225,000.If we consider that same borrower in 2006, they probably had a home valued at $400,000 and a mortgage for the same amount!And over time, eventually an underwater mortgage as the property value fell below the balance of the mortgage.This is one of the main reasons why despite poor housing affordability today, the housing market remains in OK shape.Roughly a Quarter of Homeowners Are Considering a HELOCOf course, things can change pretty quickly, and if borrowers rush to tap their equity while home prices plateau or even move lower, the housing market could become a lot riskier.However, lenders aren’t doling out 100% financing anymore (unless it’s a home purchase), and most homeowners today have relatively tiny first mortgages at ultra-low fixed mortgage rates.So the risk is still pretty low, even if homeowners turn to equity to address cost of living increases.Per the 2025 ICE Borrower Insights Survey, about a quarter of respondents said “they were considering a home equity loan or home equity line of credit in the next year.”And younger homeowners were reportedly more likely to be considering taking out a second mortgage.While nearly $25 billion in home equity was tapped via HELOCs in the first quarter, a 22% YoY increase and the largest Q1 since 2008, it’s still less than half the “typical” withdrawal rate seen from 2009-2021.In other words, we’ve yet to see a home equity lending boom, despite home equity levels reaching new record highs.This will be a key metric to look at as the housing market begins to slow, and home prices start to experience downward pressure.If you consider the top chart, total market CLTV was also relatively low in 2004-2006 before it jumped to around 75%.The housing market has a very healthy cushion today, thanks to more prudent lending standards and a lack of home equity lending.But if/when prices cool and lenders/borrowers get more aggressive with second mortgages, we could see the national CLTV rise again.This could be driven by cash needs as Americans grapple with high prices on just about every item they buy. 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)

Significant changes are in store for President Donald Trump's signature $3.9 trillion tax-cut bill as the Senate begins closed-door talks this week on legislation that squeaked through the House by a single vote. Senate Republican leaders are aiming to make permanent many of the temporary tax cuts in the House bill, a move that would increase the bill's more than $2.5 trillion deficit impact. But doing so risks alienating fiscal hawks already at war with party moderates over the bill's safety-net cuts. READ MORE: What Trump's latest GSE comments could mean for mortgagesIt amounts to a game of chess further complicated by the top Senate rules-keeper, who will decide whether some key provisions violate the chamber's strict rules. Jettisoning those provisions — which include gun silencer regulations and artificial intelligence policy — could sink the bill in the House. House Republicans' top tax writer, Representative Jason Smith, on Friday said that senators need to leave most of the bill untouched in order to ensure it can pass the House in the end."I would encourage my counterparts, don't be too drastic, be very balanced," he said.The wrangling imperils Republicans' goal of sending the "Big, Beautiful Bill" to Trump's desk by July 4. But the real deadline is sometime in August or September, when the Treasury Department estimates the US will run out of borrowing authority.The House bill would raise the government's legal debt ceiling by $4 trillion, which the Senate wants to increase to $5 trillion in order to push off the next fiscal cliff until after the 2026 congressional elections. That's just one of the major changes the Senate will weigh in the coming weeks. Here are others:Permanent business breaksSenate Finance Chairman Mike Crapo's top priority is making permanent the temporary business tax cuts that the House bill sunsets after 2029. These are the research and development tax deduction, the ability to use depreciation and amortization (EBITDA) as the basis for interest expensing, and 100% bonus depreciation of certain property, including most machinery and factories. Senate Republicans plan to use a budget gimmick that counts the extension of the individual provisions in the 2017 Trump tax bill as having no cost. That gives them room to make the additional business tax cuts and possibly extend some of the new four-year individual cuts in the House bill like those on tips and overtime. Deficit hawks could demand new offsets, however, either in the form of spending cuts or ending tax breaks like one on carried interest used by private equity. SALTThe House expanded the state and local tax deduction limit from $10,000 to $40,000 to get blue-state Republicans behind the bill. But SALT isn't an issue in the Senate, where high-tax states like California, New York and New Jersey are represented by Democrats. READ MORE: Property taxes up 10.4% in past three years"I can't think of any Senate Republicans who think more than $10,000 is needed and I can think of several who think the number should be zero," said Rohit Kumar, a former top Senate staffer now with PWC.That includes deficit hawks like Louisiana's John Kennedy, who has balked at the House's SALT boost. Senators could propose keeping the current $10,000 SALT cap as a low-ball counter, forcing the House to settle from something in the ballpark of a $30,000 cap, Kumar said. The Senate could also change new limits on the abilities of passthrough service businesses to claim SALT deductions.Green energyModerate Republicans in the Senate are pushing back on provisions in the House bill that gut tax credits for solar, wind, battery makers and several other clean energy sectors.Senator Lisa Murkowski of Alaska said she's seeking to soften aggressive phaseouts of tax credits for clean electricity production and nuclear power. She has the backing of at least three other Republicans, giving her enough leverage to make demands in a chamber where opposition from four GOP senators would kill the bill. Their demands will run headlong into ultraconservatives, who already think the House bill doesn't get rid of tax benefits for clean energy fast enough.Medicaid, food stampsSenators Rand Paul of Kentucky, Rick Scott of Florida, Mike Lee of Utah and Ron Johnson of Wisconsin say they're willing to sink the bill if it doesn't cut more spending. "I think we have enough to stop the process until the president gets serious about reductions," Johnson said recently on CNN. They haven't made specific demands yet, but they could start off where the House Freedom Caucus fell short — cutting the federal matching payment for Medicaid for those enrolled under Obamacare and further limiting federal reimbursement for Medicaid provider taxes charged by states. Conservatives' demands are in stark contrast to Republican senators already uncomfortable with the new Medicaid co-pays and state cost-sharing for Medicaid and food stamps in the House bill. Senators Josh Hawley of Missouri, Susan Collins of Maine, and Jim Justice and Shelley Moore Capito of West Virginia join Murkowski in this camp. Boosting their case is Trump, who told the Freedom Caucus to stop "grandstanding" on more Medicaid cuts.   Regulatory mattersThere's an extensive list of regulatory matters in the House bill that could be struck if they are found to break Senate rules for averting a filibuster and passing the legislation by a simple majority.  Provisions likely to be challenged for not being primarily budgetary in nature include a repeal of gun silencer regulations, preemption of state artificial intelligence regulations, staffing regulations for nursing homes and abolishing the Direct File program at the Internal Revenue Service.The House bill's provisions limiting the ability of federal judges to hold administration officials in contempt, ending funding for Planned Parenthood, requiring congressional review of new regulations and easing permitting of fossil fuel projects are also vulnerable.The biggest Senate rules fight will be over using the "current policy" budget gimmick to lower the cost of the bill.  Senate Republican leaders could explore bypassing rules keeper Elizabeth MacDonough if she finds the accounting move breaks the rules. Battles over these provisions could take weeks. "I think it would be very difficult to get it out of the Senate quickly," said Bill Hoagland, a former top Republican Senate budget staffer now with the Bipartisan Policy Center. Spectrum salesA major auction of government radio spectrum that would generate an estimated $88 billion in revenue is another unresolved fight.  Ted Cruz of Texas, the Senate Commerce chair, backs the spectrum sale but Senator Mike Rounds of South Dakota has vowed to protect the Defense Department, which has warned auctioning off its spectrum would degrade its capabilities and cost hundreds of billions for retrofits. The proposal would free up key spectrum for wireless broadband giants like Verizon and Elon Musk's Starlink.Estate taxMajority Leader John Thune and 46 other Republican senators back a total repeal of the estate tax, which would likely cost several hundred billion dollars over a decade, benefiting the heirs of the richest 0.1%. That could make it too pricey for the Senate to include. The House bill permanently increases the estate tax exemption to $15 million for individuals and $30 million for married couples, with future increases tied to inflation.