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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.

Jamie DimonBloomberg Jamie Dimon said his retirement from the top post at JPMorganChase is "several years away," but the decision is up to the bank's directors."It's up to God and the board," the 69-year-old chief executive officer said in a taped interview aired Monday on Fox Business. "I love what I do."The question of when Dimon would retire and who might succeed him has hung over JPMorgan for years. Dimon used to joke that retirement was five years away, no matter when asked, but has recently stopped giving that answer. JPMorgan boosted Dimon's pay to $39 million for 2024, a year in which the biggest U.S. bank beat its own record for the highest annual profit in the history of American banking.In the wide-ranging interview, Dimon also repeated his recent commentary that a "crack" in the U.S. bond market is inevitable, though he wouldn't predict exactly when that might happen.In May, Dimon said that the bank has lost international business recently, as certain clients have retreated from working with American banks in the wake of roller-coaster tariff policies.Some international clients have moved from JPMorgan to banks based in Europe and Canada, but not because they're dissatisfied or upset with the American bank, Dimon said during an Investor Day presentation."We've lost business because of that," Dimon said. "It's not that big. It's not that significant. ... I do expect there'll be some of that if this trade war gets worse, but it's not going to change our plans."Even though the Trump administration's more extreme tariff policies have been put on pause, JPMorgan is still planning for possible stress, since the trade war's final resolution remains uncertain. Dimon said that even at their current levels, tariffs are stirring up risks to the economy.Dimon added that he believes the market is underestimating the potential effects of geopolitical risk. The worst-case outcome for a bank is so-called stagflation, when the economy gets hit by a recession and inflation simultaneously, he said.The JPMorgan CEO said he thinks the chances of stagflation, which reared its head in the 1970s, are roughly two times what the market predicts. If there is a recession, Dimon is predicting that credit losses will be worse than most estimates.Still, Dimon said his own bank would be fine.The nation's largest bank maintained its net interest income guidance for the year at $90 billion, and it's hopeful about beating that forecast, Chief Financial Officer Jeremy Barnum said in May.Some of the headwinds JPMorgan outlined a month ago "are now tailwinds," according to Barnum. The bank stopped short of upping its prediction for net interest income due to the continued volatility of the yield curve, he said.Although the bank is optimistic about its 2025 performance, its management team still emphasized risks during their remarks."The evolving tariff environment, combined with the preexisting geopolitical tensions, adds significant uncertainty into the economic outlook," Barnum said. "And the combination of inflation and large fiscal deficits may constrain the available policy responses in ways that further increase the risk."—Catherine Leffert contributed to this article.

While the threat of property damage and associated monetary losses resulting from Atlantic hurricanes is well documented, a new study puts numbers on the extent of the risk to homeowners and their communities.Climate scenarios are on the minds of home buyers, influencing where and what they buy as they consider both costs and standard of living. The choices they make will have long-term effects on communities in storm-prone areas. The risk extends well beyond hard-hit Florida, which has regularly borne the brunt of extreme weather events this century, according to a new risk report from Cotality. "Buyers are factoring environmental risk factors into their decisions in ways we haven't seen before," said Cotality Chief Economist Selma Hepp in the report. "They're pricing in insurance premiums, future storms and the potential for resale challenges. That's reshaping demand in coastal markets, even in areas with minimal storm history," she continued. What are the costs from hurricane damage?Across the Eastern U.S. the real estate data firm found more than 33.1 million properties from Maine to Texas with moderate or greater risk of damage from hurricane-force winds. The estimated reconstruction cost value for affected residences totals $11.7 trillion. Coitality also found 6.4 million homes in the same affected area with at least a moderate risk of damage from storm-surge flooding, with reconstruction costs coming in at $2.2 trillion. While attention often turns to the coast when the conversation turns to hurricanes, 2024's storms showed, the damage from storms can move well into inland markets. Winds and flooding during Hurricane Helene were responsible for extensive monetary losses and over 100 deaths in western North Carolina. Thanks to strict building codes in Florida, due to its location in the eye of many storms, the Sunshine State managed to reduce hurricane damage. Still, repair costs still run into the billions. Florida sits at the top of the list of states with the most homes at risk with 8.2 million and potential reconstruction costs of $2.3 trillion. Trailing by a significant margin is Texas with almost 4.8 million properties holding moderate or greater risk from climate damage that could result in $1.4 trillion worth of repairs.  Why disaster mitigation is importantClimate events play a large part in both driving property values down in some areas but can also push overall housing costs up for many homeowners.Storm threats are leading residents of coastal communities to cities perceived as less risky and more affordable both within their state and elsewhere. A continuous exodus will bring housing values down, reducing the equity gains many homeowners spent years accruing and even lead some to go underwater on their mortgages, Cotaility said.  While values may fall in disaster-prone regions, insurance premiums will surge, as they did in Florida this decade when some providers opted to leave the state.Even in safer locations, homeowners are seeing their properties lose value due to the cost of property and flood insurance or unavailability of them, the report said.    The effect on homeowners' financial health necessitates robust efforts to protect against damages, but recent policy moves are weakening previous standards. Earlier this year, the U.S. government ceased enforcing some regulations on federally funded construction projects aimed at mitigating national flood risk, a move that could jeopardize the integrity of future infrastructure projects, according to the report. "This rollback comes as flooding — especially in coastal states like Florida — grows more frequent and severe due to environmental factors and urban development," said Chay Halbert, principal of public policy and industry relations at Cotality. "Expanding development in flood-prone areas without maintaining or enhancing protection standards increases environmental and financial burdens for future generations," he concluded.Tests to emergency management and property servicing networks in the face of hurricanes could come as soon as this summer with above-normal activity, the National Oceanic and Atmospheric Administration said. Recent Trump administration funding cuts that reduced staffing at NOAA as well as the Federal Emergency Management Agency will challenge storm forecasting and disaster-mitigation efforts as well as post-hurricane relief, many are predicting. 

Home equity lending hasn't been this hot in almost two decades. Second-lien equity withdrawals approached 2008 levels in the recent first quarter, according to Intercontinental Exchange. Homeowners grabbed nearly $25 billion in home equity lines of credit, while overall first quarter equity withdrawals, including cash-out refinances, totaled $45 billion. Introductory rates on second-lien HELOCs fell below 7.5% in March, ICE said in its June Mortgage Monitor. The mortgage technology company is predicting HELOCs could dip into the mid-6% range by next year on par with the 30-year fixed-rate mortgage forecast, if the Federal Reserve moves forward with an anticipated three rate cuts."If the Fed moves forward with anticipated rate cuts, borrowing against home equity could become even more attractive in the second half of the year," said Andy Walden, head of mortgage and housing market research at ICE, in a press release. The monthly HELOC borrowing cost is still around $200 to $250 above long-term averages. But the average monthly payment a homeowner needs to borrow $50,000 has dropped about $100 from early last year to $311 at the end of the first quarter, ICE found. Notably, borrowers are still largely underutilizing their estimated $11.5 trillion in tappable home equity, accessing just 0.41% of that amount. In all, ICE assumes 48 million homeowners nationwide sitting on $17.6 trillion in total home equity. Lenders are still failing to retain customersThe findings also described the significant opportunity lenders are failing to grasp in meager retention rates. Just 23% of borrowers are returning to their servicer for a cash-out refi, and 26% going back for a rate-and-term refi. According to ICE, companies are retaining up to 43% of customers reworking home loans originated between the rising rate era of 2022 to 2024. The majority, or 77% of mortgage customers are still just considering one or two lenders for their home loan transaction, the company reported. While younger borrowers were more likely to shop, less than a quarter of them told ICE they would consider two or more providers. "It suggests retention rates could be much higher if lenders and servicers employed more sophisticated techniques to understand current market dynamics, identify borrowers with a higher propensity to refinance, and marketed the right products in the right place," the report said.Market dynamics continue to coolThe housing market continues to soften amid relative unaffordability. The number of homes for sale is up 30% from last spring, and ICE predicts inventory to return to a pre-pandemic level by mid-2026. The report also found foreclosure metrics including starts, sales and inventory all rising annually for the second consecutive month, and delinquency marks ticking up slightly through the end of April. Last month's 6,500 foreclosure starts were driven by a spike in Department of Veterans Affairs-backed loans, where borrowers currently lack a partial claim option.

Enjoy complimentary access to top ideas and insights — selected by our editors. Market volatility under a second Trump administration was no match for Rocket Companies' appetite for mergers in the first quarter of the year, as the origination giant inked deals to acquire real estate brokerage Redfin and mega servicer Mr. Cooper. Now comes the difficult part of juggling the two deals at the same time.Rocket announced its $1.75 billion all stock planned acquisition of Redfin on March 10 as part of a broader effort to grow its footprint in the purchase markets. If finalized, Rocket executives predict that joining its financing businesses with Redfin's real estate lines will yield more than $60 million in revenue. Predicted benefits also include roughly $140 million in cost savings from removing redundant operations."Together, we will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs and increases value to American homebuyers," Varun Krishna, Rocket Companies chief executive, said in a press release.That deal has come under fire from certain  investors in recent weeks, who claim that Redfin failed to adequately disclose the relationship between potential acquirer Rocket and Goldman Sachs, which is advisor to Redin in the merger.Read more: Rocket, Redfin and the race to dominate mortgageRoughly three weeks after the Redfin acquisition was announced, Rocket made its play to purchase Mr. Cooper in an all-stock deal valued at more than $9 billion.The deal activity has caused competitors like Newrez and Lower to pursue new ventures of their own.Newrez, which reported a net income of $146.7 million in the first quarter due in part to growth in both servicing and originations, is toying with the idea of splitting from its parent company Rithm Capital by year's end.Mortgage lender Lower is in the process of purchasing home search website Movato for an undisclosed amount as part of plans to create "an end-to-end homeownership platform." Below is a timeline outlining the evolution of the deal between Rocket and Mr. Cooper and how the markets are reacting.

Vontive, which is a fintech specializing in business purpose mortgages, has received an investment from Citi, which also acted as lead bookrunner on its first-ever securitization.The amount of the off-cycle investment was disclosed.It is the first new capital in the company since its 2022 Series B fundraise, said Vontive CEO Charles McKinney. The company lends on one-to-four family properties to investors who do fix-and-flip or renovate for single family rentals."We got to know the Citi team through one of our venture investors, Zigg Capital, which led our Series B," McKinney said. Vontive was looking at bank partners in order to grow the company. This relationship will be transformative for Vontive."Citi came to us and said, 'Hey, we like technology. We like to make an equity investment in the company.'" McKinney continued. "That also coincided with Citi wanting to re-enter the market around financing and securitizing short-term mortgage debt."The investment was made through ​Citi's Spread Products Investment in Technologies team.Why Citi invested in Vontive"When it comes to venture investments, we get excited about fintechs who are making growing or novel asset classes more accessible to capital markets," said Lee Smallwood, global head of markets innovation and investments, in an emailed comment. "Vontive has a strong focus on data, innovation, and technology — and they balance that with a strong understanding of business purpose mortgage and the needs of real estate investors," he added.The securitization, VNTV 2025-RTL1, consists of $150 million of residential transition loans that Vontive originated. It was not rated. But Vontive plans to be a programmatic issuer and it is working on another transaction that is likely to be rated, McKinney said."RTL is an attractive growing asset class and we've seen securitizations in meaningful volume since the first deal in 2016," Citi's Smallwood stated. "The first rated RTL issuance wasn't until last year, which was a big unlock for the market."What is Vontive's business modelBy pairing technology and capital, Vontive "enables any brand that works with real estate investors to offer a mortgage product-set to their clients," McKinney said.But Vontive is the lender of record in order to solve any licensing and credit risk issues, he pointed out. It controls the underwriting and the capital commitment to fund loans.What is Vontive's new tech offeringIn a separate announcement made concurrent with the Citi news, Vontive has rolled out an artificial intelligence-powered data suite, which it said would make access to private real estate credit products scalable and efficient."Our latest products are about more than automation — they unlock patterns and opportunities that were previously undetectable," said Shreyas Vijaykumar, chief technology officer, in a press release. "Vontive's technology stack now allows us to process mortgage data with unmatched speed and scale."McKinney said the aging U.S. housing stock is one reason why Vontive's services are needed in the marketplace."We think that modernizing, standardizing, addressing challenges with the business purpose mortgage, the mortgage that real estate investors use to build homes, to purchase and fix up properties, is a critical success factor for the U.S. to address the affordable housing shortage," McKinney said.

Two, the real estate investment trust that owns Roundpoint Mortgage Servicing, is anticipating legal expenses that some analysts say could lead to asset sales.The REIT expects a $198.9 million charge for May that includes a $139.8 million fee as a contingency liability and $60 million in related expenses due to the lawsuit with its former external manager, according to a Securities and Exchange Commission filing.A recent debt raise will help the company manage the cost of summary judgment on certain claims, and Two also may sell off some of its mortgage-backed securities or servicing rights due to the expense's impact, according to a BTIG report."We expect it will initially look to trim its $8.6 billion of agency MBS, versus selling its $3 billion market value of MSRs, which are comparatively less liquid," Eric Hagen and Jake Katsikis, analysts at BTIG, said in a research note.A breakdown of the legal costs and Two investors' responseThe company's stock had fallen slightly below its previous trading range between $10.67 and $11.23 to $10.60 at deadline in line with BTIG's expectation there would be a "potential downside" for the shares and possibly a dividend cut due to the expense.The $139.8 million contingency liability amount reflects around three years of management fees while the additional $60 million reflects in prejudgment interest that the company formerly known as Two Harbors Investment Corp. anticipates paying Pine River, according to the BTIG report.The combined amount was likely larger than many investors anticipated, according to a separate Keefe, Bruyette & Woods equity research note."We believe the market expectation was that charge would be capped at the $140 million termination, but the charge came in above that," Bose George, Frankie Labetti and Alex Bond, analysts at KBW, said in their report.Some claims in the Pine River lawsuit remain outstandingTwo is not immediately recognizing some other outstanding claims related to the legal dispute "as management does not believe that a loss or expense related to such claims is probable or reasonably estimable," according to its SEC filing.Current estimated costs in the lawsuit stem from summary judgment in a federal district court on claims that "the company did not have a basis on which to terminate the management agreement for cause." The court overruled objections Two raised to the decision.The complaint Pine River filed against Two in the Southern District of Manhattan also "seeks, among other things, an order enjoining the company from making any use of or disclosing PRCM Advisers' trade secrets, proprietary, or confidential information."In the lawsuit, Pine River asked the court to force Two to pay for its court costs, damages "in an amount to be determined at a hearing and/or trial," and disgorgement of what the plaintiff alleges were "wrongfully obtained profits."

The Trump administration is defending new building standards that over a dozen states and a leading industry trade group say will  markedly raise housing costs.A federal judge this week scheduled a hearing which could determine the fate of the lawsuit over the adoption of energy efficiency standards a decade in the making. The Department of Housing and Urban Development and the U.S. Department of Agriculture are asking the court for summary judgment, or to toss the lawsuit which was filed in the final days of the Biden administration.The National Association of Home Builders and 15 state attorneys general argue the new rules would suppress production of lower-priced homes eligible for Federal Housing Administration and USDA-insured mortgages. The NAHB also suggests the new building codes could add up to $31,000 to the cost of building a new home.Feds' opposition to the complaint comes despite HUD in March postponing some of the construction compliance dates in question by six months, part of the Trump administration's review of numerous existing policies. Housing regulators have so far largely followed through on President Trump's deregulatory push, but HUD has clung onto some old fights, such as a dispute over appraisal guidance with Rocket Cos.  Neither attorneys nor representatives for the parties responded to requests for comment Friday.The new building rules lean on standards from the 2021 International Energy Conservation Code and the 2019 American Society of Heating, Refrigerating and Air-Conditioning Engineers code. HUD and USDA said average single-family borrowers could see net savings of $15,000 over the life of a 30-year loan under the new code.In a 39-page motion for summary judgment this week, the government described its lengthy analysis and the multiple opportunities it afforded for public comment, to which NAHB had responded. A Department of Justice attorney accused plaintiffs of taking feds' remarks out of context, such as a finding that the rules would eventually reduce the pool of homes for FHA buyers by 0.2%. HUD and USDA said they offered that figure as a worst-case scenario which didn't account for positive impacts of energy efficiency. "Plaintiffs' quotations cherry-pick unfavorable sounding language, ignore that those quotes were just a part of the analysis, and ignores the bigger picture and clear conclusions to the contrary," wrote counsel for HUD and the USDA.The government also disputes plaintiffs' Administrative Procedure Act claim, and rejects their challenge that feds are barred from further rulemaking under a 1990 federal housing act. The regulators say they're permitted to make subsequent code updates despite an earlier "Final Determination" regarding building rules in 2015.The sides are set to debate the motions for dismissal and summary judgment July 9 in a Tyler, Texas federal courthouse. HUD Secretary Scott Turner has pushed the agency to cut red tape across the department, including rescinding the Affirmatively Furthering Fair Housing Rule and slashing vendor contracts worth over $100 million. The regulator is also seeking a $33 billion reduction in funding in the upcoming federal budget debate.The moves have been criticized by numerous stakeholders, including local elected officials who this week encouraged lawmakers not to divert the burden of affordable housing funding onto states and municipalities.

Loan performance hinges on more than credit scores and interest rates. Environmental infrastructure—especially pond liners—can quietly jeopardize property value, borrower stability, and servicing costs. Lenders who overlook these risks expose their portfolios to long-term damage they cannot track through standard underwriting alone.The importance of pond linersPond liners are necessary as a foundational element in stormwater management, erosion control, and structural protection across both residential and commercial properties. When properly installed, liners contain runoff by preventing soil displacement and shielding nearby assets from long-term deterioration.Liner failure introduces liabilities that compound quickly. Why lenders should care about liner failures becomes clear the moment infrastructure lapses threaten both property integrity and borrower equity.Hidden environmental risks that undermine property valueBelow-grade infrastructure like liners rarely shows visible damage until late-stage failure. Saturated soil, uneven settling, and unexplained pooling often precede foundational stress, but few inspections catch those cues in time. By the time water intrudes into basements or destabilizes fencing, repair costs have outpaced mitigation budgets.Low-cost liners used during rushed construction often decay faster than anticipated. When contractors cut corners, they frequently select materials that fail under pressure cycles or react poorly to local soil conditions. As a result, lenders who lack visibility into site-level choices risk backing compromised assets without adjusting terms or protective coverage.When liner damage leads to borrower defaultRepairing water damage, landscaping erosion, and soil displacement quickly escalates out-of-pocket costs for homeowners. Sudden bills tied to failed liners can push even creditworthy borrowers toward nonpayment, particularly in competitive housing markets. Rising HOA assessments or denied insurance claims often trigger spiraling disputes over responsibility.Properties impacted by poor drainage or liner breakdown typically suffer valuation drops and slower resales. Once environmental flags surface on a property record, future lending or refinancing options grow limited. Why lenders should care about liner failures becomes undeniable when defaults emerge from infrastructure negligence rather than borrower behavior.Servicing fallout and regulatory consequencesFlooded homes with missing or broken liners frequently draw local agency attention. When owners defer repairs or abandon sites, servicers must absorb cleanup, coordinate inspections, and sometimes litigate liability. That burden drains resources meant for loss mitigation and damages servicing benchmarks lenders depend on.The best protection for flood risk is a knowledgeable borrower, especially one briefed on drainage infrastructure before the loan closes. Some jurisdictions have begun linking permitting and EPA standards to water containment compliance. Regulatory fallout tied to erosion or unpermitted liner use puts financial institutions in difficult legal positions. How lenders can strengthen risk review processesStronger due diligence starts with asking site-specific questions about liner type, condition, and inspection history. Surveyors and engineers can validate design integrity long before environmental risks mature into losses. Meanwhile, visuals from GIS platforms or public basin overlays also map which properties carry retention or erosion exposure.Risk teams should tailor their review protocols by region. Flood-prone zones, clay-heavy soils, and recent landfills all raise flags worth exploring in underwriting and post-close monitoring. Investments in environmental visibility reduce surprises and help lenders lead with knowledge, not reaction.Poor liner performance may never appear on a credit report, but it surfaces in loan performance. Lenders who account for that risk early stay ahead of preventable defaults, asset deterioration, and legal fallout.