Uncategorized

Residential mortgage and services provider Rate is rolling out the welcome mat for mortgage industry veteran Jason Stenger, appointing him to chief production officer.  Stenger moves over to Chicago-based Rate from Movement Mortgage, where he most recently held the title of chief operations officer, a role he served in for over three years. Lyra Waggoner has replaced him in that role. During his tenure, Stenger helped scale production at Movement, leading to more than $200 million in volume in the last decade with over half coming in the past five years."He is a strategic addition to our already world-class production team who greatly reinforces what makes Rate different: a relentless focus on empowering our loan officers through technology and support," said Rate CEO Victor Ciardelli in a press release. In his new position, Stenger will lead production strategy and support originators with an eye on scaling growth for the company once known as Guaranteed Rate. Stenger will be responsible for Rate's retail platform, overseeing improvements to existing proprietary technology and the use of artificial intelligence in underwriting. He will also lead development and enhancements of existing products and programs belonging to the company, including its digital application, same-day mortgage closings and the PowerVP platform that assists loan officers. "Jason's experience and mindset will make an immediate impact at Rate. He has a mindset grounded in positivity and a genuine belief and commitment in helping people reach their full potential," Ciardelli added.Before joining Movement over a decade ago, Stenger also served in mortgage leadership at Bank of America Home Loans. Other recent Rate movesThe addition of Stenger comes after Rate announced other new personnel moves, with several loan officers joining this year, including some who returned to the company after previously leaving for other lenders. The company currently operates more than 850 branches in all 50 states and the District of Columbia. Among the new or returning faces at Rate since May were Mike Buffler, tapped to serve high-net-worth clients in sports and entertainment industries from his base near Nashville, Tennessee. Returning to the company this summer to serve Chicago-area and Las Vegas communities, respectively, were Brad Rasof and Jia Mei Wang. Last month, the company also named industry veteran Ryan Proffitt as producing area manager in Jacksonville, Florida. In addition to his role with Rate, Proffitt is also the incoming president of the Mortgage Bankers Association of Northeast Florida. As the company looks to further expand and tap into underserved communities around the country, the lender unveiled a new Spanish-language mobile app in mid September aimed at enhancing services already offered through its language-access program.  Rate originated $24.7 billion in loan volume in 2024, according to Home Mortgage Disclosure Act data.  

Better Home & Finance is rolling out a new wholesale operation where it'll offer home equity line-of-credit and closed-end second liens. The lender is touting a wide credit matrix, fast originations and options including 12 and 24 month bank statement approval options for small business owners. The largely direct-to-consumer shop, with an emerging retail arm, has already originated over $1 billion HELOC and closed-end seconds among its over $110 billion via its origination channels since it was founded a decade ago. "Unlike some platforms that deliver limited pull through, Tinman AI is powered to hand-hold, process, and underwrite more challenging customer files too; allowing for greater customer satisfaction and higher broker earnings," said Patrick Kandianis, Better's Head of Business Development, in a press release Tuesday.The company said its channel is kicking off with 10 seasoned broker partners. Better reported $240 million in HELOC volume in the second quarter, and Wednesday described a HELOC approval rate of 63% and average loan amount of $137,475.CEO Vishal Garg also suggested of the $201 billion in HELOC volume originated nationwide last year, a very small percentage of that volume flowed through such an artificial intelligence-powered channel. The company hinted at the scale it wants to achieve, citing the over $300 billion originated in purchase mortgages by brokers last year. Better has frequently boasted of its Tinman platform, which allows for customers to use its One Day HELOC offering which can deliver funding in five days. The announcement comes shortly after Better's announced partnership with Finance of America, in which the publicly traded competitor will offer HELOCS and HELOANs via the Tinman platform. Better will also offer reverse mortgages as part of that agreement. The industry has long-highlighted Americans' rising home equity levels, with an estimated 86 million homeowners holding $21.5 trillion in tappable equity.  

Lenders can expect to see a concrete milestone reached in credit scoring changes by early next year, a Mortgage Bankers Association official said at the 2025 MBA Annual conference in Las Vegas on Monday.Sasha Hewlett, associate vice president of secondary and capital markets at the MBA, said regulators are currently weighing credit score change impacts to the GSEs and loan-level price adjustments. Hewlett compared the current credit score transitionary period to the switch from LIBOR to SOFR. The MBA leader called on robust engagement from industry players to help a smooth implementation. "Its a huge undertaking. [SOFR] was really a transition where they looked at every single step, every part of the process," she said. "I think if you have engagement, you avoid unintended consequences."MBA President and CEO Bob Broeksmit also hinted at progress behind the scenes on eliminating the GSEs' tri-merge credit reporting requirement during his opening address at the conference."You now see competition being unleashed, clearly, on the score side," he said, alluding to recent moves by the credit bureaus and FICO — the former offering discounts or free VantageScore access, and the latter selling its scores directly to resellers.  "And with our progress with the GSEs to eliminate the need to get a tri-merge. It's not done … but we're making great headway," Broeksmit added.He characterized the tri-merge requirement by the GSEs as an "oligopoly," pointing to rising costs for value that he said is mostly the same before price hikes in recent years.Lenders at the conference joined calls to scrap the tri-merge requirement.Kevin Bowen, managing director at Chase Home Lending pointed to credit and auto lenders, which typically use a single bureau. He also expressed frustration with the industry's lack of innovation since the GSEs adopted FICO in 1995, and said there's very effective ways today of estimating default probabilities. "We should look to these other products and ask, why are we still stuck where we were three decades ago?" he said. MBA touts effectiveness in work with policymakersBroeksmit's comments about progress on credit reports with the GSEs came as he highlighted several legislative wins from the MBA's lobbying efforts. He said the trade group has played a role in nearly 10% of legislation passed this year. Along with major victories on tax and trigger lead reform, he said the MBA is also shaping discussions around loan officer compensation and credit policy. The trade group CEO described meeting the Consumer Financial Protection Bureau's top brass last week, noting that the CFPB officials had to come down to the front desk to greet them, given the lack of staff there amid the government shutdown. He said that leadership appeared to be aligned with the MBA's calls to action, including putting LO Comp reform on the table. "When the bureau gets its staff back for rule-writing, not only are we on the list, our priorities are totally in sync with the leadership's priorities," said Broeksmit. MBA leadership has also met with the Federal Housing Finance Agency and the Treasury regarding government-sponsored enterprise reform. Broeksmit suggested the industry group is "near the head of the table" and said senior administration officials have recognized the MBA's impact by the tone of their public comments. "They say any reform will be, and I quote, 'informed, careful and calibrated,'" he said. "They also made it clear mortgage credit won't get more expensive and they're pushing costs down."Top economic minds concerned about the economy, ratesAs housing regulators were absent at the conference amid the government shutdown, top economic minds mulled larger points about economic uncertainty that could affect mortgages. Larry Summers, former Treasury Secretary under President Clinton and NEC director under President Obama, suggested the 30-year fixed-rate mortgage would be 40 basis points higher a year from now. He also described Trump's attack on Fed independence as a "premature alibi" situation, setting up the Fed as a scapegoat should the economy falter.Discussing the Fed and the Treasury market, experts suggested mortgage rates wouldn't come down soon. Gary Cohn, a former Goldman Sachs executive and director of the National Economic Council in Trump's first term, said the current "lower dollar" policy would affect T-bills. A devaluing dollar can erase gains on today's 4% 10-year T-bills, and shifting dynamics could catch the larger economy by surprise. "For a lot of you in this room, and I think a lot in the real economy, the 10-year rates are not really moving," he said. "Because the government can control Fed Funds, that rate will go down, but the real rate is controlled by the market [and] is going to stay somewhere else."

Key insight: Zions said its losses that led investors to sell off bank stocks en masse were an isolated incident.What's at stake: Banks have been under the microscope in the last week following three instances of losses due to alleged fraud by separate borrowers.Supporting data: Excluding the $50 million charge-off it disclosed, Zions' credit metrics improved in its third quarter.Zions Bancorp. joined the chorus of banks fighting back against investors' fears of souring credit, contending Monday that its own $50 million loss was a one-off.The $89 billion-asset bank is working with a third party to review credit and collateral practices after disclosing a credit hit last week where it found "apparent irregularities and misrepresentations." So far, the company hasn't found any other concerning loans, CEO Harris Simmons said during Zions' third-quarter earnings call."Our credit history over a number of years speaks for itself," Simmons said. "This was a case where we had some unusual things going on that really are not commonplace. We're going to continue reviewing with an external party to make sure that we're learning from the experience and seeing what we can continue to improve upon."Chief Credit Officer Derek Steward added that he was "confident" the loss was an isolated incident.Zions' announcement last week — which marked the third instance in recent months of large losses at banks due to alleged fraud — prompted a rapid sell-off of bank stocks, as Wall Street raised flags on credit quality.Simmons said Monday that the issue "was not something that came across the radar screen as early as we would have wished," but he thinks credit underwriting and collateral review is generally one of Zions' strengths."I think … one of the reasons that it got everybody's attention is it was not the kind of thing you'd expect from us," Simmons said.The company's stock fell some 14% last Thursday, but recovered and stabilized in the following days. Zions said Monday that due to active litigation, its comments on the issues would be limited.Zions' losses were tied to two commercial and industrial loans based in California. The borrowers, who, per their lawyer, "vehemently deny all the allegations of wrongdoing," are connected to entities that are in a separate dispute with Phoenix-based Western Alliance Bancorp. Steward said Zions doesn't have other exposure to the borrowers in question.Both Western Alliance and Zions have sued the borrower entities to recover the debts, which amount to $100 million and $60 million, respectively.Zions, which operates through eight subsidiaries across the western half of the country, said its affiliates each make credit decisions local to their geographies. In California, the Salt Lake City-based company's division is California Bank & Trust."One of the strengths of our model is we try to have local decisioning at the affiliates … where they know the companies best," Steward said.Excluding the costs of the alleged fraud, Zions' credit metrics improved from the prior quarter. Non-performing assets were stable, and criticized loans decreased.Zions reeled in $221 million of net income in its latest quarter, or $1.48 of diluted earnings per share, beating the consensus analyst estimate of $1.44.Last month, a handful of banks logged credit hits ranging from $20 million to $200 million in connection with Tricolor Holdings, a subprime auto lender that has filed for bankruptcy and been accused of fraud by lenders. A few weeks later, the auto parts maker First Brands Group also filed for bankruptcy amid allegations of defrauding financial institutions.As banks have released their quarterly financial results over the last several days, many have doubled down on their conviction in the quality of their loan portfolios. But the recent smattering of losses has also driven finger-pointing at the rapidly growing non-depository financial institution lending, or NDFI, sector — to which each of the three allegedly fraudulent borrowers is connected.Simmons said he doesn't think there's a specific relationship between the three cases, but understands the concern. While some types of NDFI lending are quite safe, he said, others, like the rapidly growing private credit business, are at least "a yellow flag.""The greater risk, I think, is going to be the spillover risk if or when that private credit sector finds itself in a period of stress," Simmons said. "They don't have the structural backstop of liquidity that the banking sector does. So again, given the high rate of growth in the sector, I think it's not unreasonable to think that it could pose some increased risk in credit markets."The NDFI sector is one of the fastest-growing loan categories across the banking industry, and now makes up some 10% of all bank loans.Zions offered a more detailed snapshot of its NDFI business this quarter, which at $2 billion is about 3% of its total loans. The company said the portfolio is generally evenly balanced across the types of lending, such as business credit, mortgage credit and consumer credit.Steward said the Utah company has been in the business for a long time, and doesn't intend to increase its exposure significantly.Even with the latest losses, Zions upped its loan growth guidance for next year from "slightly increasing" to "slightly to moderately increasing.""We're going to continue doing underwrite the way we've done historically," Steward said. "So [the losses] will not change how we look at growth now. Can we learn? Sure. But we're going to continue doing what we've been doing."

New York Court of Appeals judges' responses to recent arguments in a closely-watched Foreclosure Abuse Prevention Act case suggest they could take a narrower view of the law's retroactivity but are less open to broad constitutional challenges to it.Recent questions from the New York judges focused more on case details than the constitutional issues, said Brian McGrath, partner at Hinshaw and Culbertson. McGrath is on the legal team representing mortgage and banking groups in an amicus brief filed in the case."It appeared as though that was a challenging bench for the bank's counsel to deal with out of the gate in trying to help the court understand why expansive application of FAPA was improper under state constitutional provisions," he said.The industry is tracking junior lienholder Article 13 LLC's lawsuit against multiple entities closely because it may impact broader interpretations of FAPA's retroactivity, which some see as justifying dismissals of foreclosures on older loans when the cases involved were started under an earlier statute of limitations."If I'm on the foreclosure defense side of the industry, I think I would like how that argument seemed to play out," McGrath said, referring to attorneys who seek to block default actions. "It seems as though the court was prepared to give the legislature full deference, they did not seem open to re-engage in discussion of the Engel decision, which is what precipitated FAPA," he added.Arguments over the legislature's use of estoppelFor entities that pursue foreclosures to make good on unpaid loans, there might be "some optimism that there could be a ruling that would be narrower" in a "quiet title" action like Article 13 v. Ponce de Leon, in which a dispute over property claims exists, McGrath said.That narrower view could be taken if the judges accept some arguments around the use of the term "estoppel" in the case, which involves a situation that arose when Article 13 went to cancel a loan encumbering a property, according to the amicus brief. "Estoppel is applied to a party that has been charged with having taken a different position or having done something previously that now prevents them from taking a different position, and I think that was the most interesting thing about the argument that I took away," McGrath said.In FAPA, which is aimed at closing what some consumers and others see as loopholes in the statute of limitations, estoppel appears to be positioned to stop a foreclosing entity from arguing that earlier efforts to the same end weren't valid in order to extend the timeline.But the brief from the Mortgage Bankers Association and other groups pointed out that "by creating an estoppel against mortgages, FAPA leaves mortgagees without any recourse, despite suffering injury to their lien as a result of the unauthorized conduct of third parties with no connection to the loan."Chief Judge Rowan Wilson had questions around the legislature's use of estoppel in the law during the case's arguments late last week, McGrath said. Associate Judge Michael Garcia did too, McGrath said.Questions came up around whether estoppel is applicable to a situation where another party that does not have a right to foreclose proceeds with one, according to the online video of the case arguments last week. Central to Article 13's allegation that the statute of limitations had expired is a contention that a servicer Central Mortgage Co. accelerated the debt in 2007. Whether CMC held the note when foreclosure began and had a right to foreclose is in question, according to the amicus brief. The court also heard a Van Dyke v. US Bank case which includes FAPA concerns the same day as the Article 13 v. Ponce de Leon case, but the arguments and questions around it had fewer broad takeaways for the industry, McGrath said.What's next for court review of FAPA's retroactivityThe Supreme Court turned down a petition to consider a FAPA case called US Bank National Association, Trustee v. Cassandra Fox, and the New York judges did not appear receptive to Article 13 v. Ponce de Leon's constitutional arguments, but others could still review them. McGrath anticipates the New York Court of Appeals will be relatively quick to move Article 13 v. Ponce de Leon forward."The Ponce de Leon case is a case that they agreed to hear after the Second Circuit certified it, so they know the Second Circuit is waiting on their ruling to continue that case in federal court. So they tend to move a little quicker," he said.The MBA, American Bankers Association and their state affiliates asserted conflicts with protections for due process and contracts, and also with the "takings" clause in the U.S. Constitution in their amicus brief. Hinshaw & Culbertson also asserted conflicts with equivalents of the due process and "takings" clauses in the New York Constitution on their behalf.

The typical down payment made by home purchasers during the third quarter increased by $500 over the previous fiscal period, with the average share remaining near 14.4% of the price, Realtor.com said.Compared to last year's third quarter, the dollar amount of $30,400 was down by $100.While it is normal for the down payment share to increase as the calendar year progresses, the level of change was below that of 2024. House price movements were a likely contributing factor, with values pulling back slightly.Between the first and third quarters this year, down payments rose by 0.5 percentage points and $1,500. This compared with a 0.8 percentage point increase and $4,000 for the same period in 2024.Down payment levels have remained steady, albeit elevated as prices rise, which is a reflection of the broader environment for housing in the U.S., said Danielle Hale, chief economist at Realtor.com."High prices and borrowing costs continue to test affordability, keeping many potential buyers on the sidelines and slowing overall sales activity," Hale said in a press release. "Even with mortgage rates easing into the low 6% range in recent months, the combination of high prices and limited inventory has left little relief for cost-sensitive home shoppers, while increasingly concentrating homebuying among higher-income households."Down payments have been in the area of the high-$20,000s to low-$30,000s since 2022, following a steep pandemic era increase. When compared with the third quarter of 2019, they are more than double the typical $13,900 back then.During the six-year period, the median home sales price increased by nearly 45%.Investment property purchasers in the third quarter averaged putting 26.7% down; in dollars, this was $84,200. The dollar amount for second homes was notably more expensive, even though the average percentage put as a down payment was just slightly higher at 26.9%. In cash terms, the average second-home down payment was $110.100.In the first seven months of 2025, sales of homes priced over $750,000 increased nearly 6% versus the same time in 2024; lower priced sales fell by 3%, Realtor.com said.Regional differences in down paymentsRegional differences exist in the down payment homebuyers make. The average for sales in the Northeast was 18.2%, with the West at 16.3%, Midwest at 14.5% and South, 12.5%.The down payment share nationwide is below the 20% typically required by the conforming loan secondary market for homebuyers that do not have to obtain private mortgage insurance. In 2024, over 800,000 home purchasers used private MI, U.S. Mortgage Insurers said.Meanwhile, a cooling housing market has allowed first-time home buyers who can only put down between $10,000 and $15,000 to be better able to compete for homes, a Redfin study reported last week. By dollars, the Northeast's median of $62,900 was 5.6% higher than for 2024, while the Midwest rose 5.8% to $28,000, according to Realtor.com.Down payments in the West, however, fell by 5.6% to $51,900, while in the South, the region reported a year-over-year decline of 4.4% to $22,800.The latest Mortgage Bankers Association forecast expects the average for the 30-year fixed rate mortgage to fall to 6.4% from 6.6% in the third quarter, and remain at that level throughout the next year.In its first detailed 2027 forecast, rates will fall in the first and second quarters of the year to 6.3% and 6.2% respectively before bouncing back up to 6.3%; in a full-year 2028 outlook, it calls for the 30-year FRM to hit 6.5%."As mortgage rates edge lower, we expect more variety in who can buy, and that could bring back smaller down payments," said Hannah Jones, senior economic research analyst at Realtor.com. "However, unless inventory grows meaningfully, renewed competition could put upward pressure on prices and down payments once again."

PHH Mortgage officially rolled out a new lending product suite this week as it looks to tap into growing mortgage industry demand for non-agency offerings.The proprietary non-qualified mortgage products, collectively known as FlexIQ, will be available through PHH's correspondent lending channel for both delegated and non-delegated loans. The lender is a subsidiary of West Palm Beach, Florida-based Onity Group. "FlexIQ is our new proprietary product with a service-first approach that includes a single standard for underwriting across multiple product types, a dedicated support desk and necessary training, as well as other helpful resources," said Andy Peach, Onity group executive vice president and chief lending officer, in a press release. Through FlexIQ, originators will be able to offer three different types of non-QM loans for their customers, Onity Group said. PHH's full-documentation product serves jumbo loan borrowers with lending amounts above Fannie Mae and Freddie Mac conforming standards.  An alternative-documentation option is available for consumers with non-traditional salaried incomes, such as business owners or independent contractors who require different methods for underwriting and wage verification of their loans.The third, a debt-service coverage ratio option for real estate investors, allows for underwriting based on expected income from long- or short-term rental of their purchase units. The new suite replaces PHH's previous gold, silver and bronze tiers of its non-QM programs, the company said. "We anticipate that FlexIQ will serve as a cornerstone in expanding our non-agency product offerings to help our clients grow their business," Peach continued.The addition of the non-QM suite arrives as Onity, which has long been a leading player in the loan servicing segment, employs new strategies for lending in 2025 through its PHH Mortgage business. Along with its latest news, PHH returned to the senior lending market earlier this year with a new proprietary home equity-related loan offered via its Liberty Reverse Mortgage arm. The latest non-QM trendsFlexIQ also comes as the mortgage industry sees a renewed focus on the non-QM segment of the market this year. Its development came about as Onity executives recognized the rising demand for such products, according to the company's chief growth officer Rich Bradfield. As other lenders touted their success in the non-QM market in 2024, related securitizations outpaced last year's level of activity through the first six months of 2025. At the same time, some loan officers said they are eyeing the non-QM market as a potential new source of business to guide them through current industry headwinds. Other companies making non-QM moves include Figure Technology, which announced last week it would introduce its own DSCR lending platform to take advantage of anticipated growth in investor demand. 

Key insight: The trade association letter urges the White House to reverse cuts to the congressionally mandated program.Supporting data: The Office of Management and Budget has let go CDFI Fund staff as part of a reduction in force across the government, and the administration has singled out the program for cuts to the extent possible under the law.Forward look: The letter raises bipartisan pressure on the administration as the ongoing government shutdown enters its fourth week.A coalition of banking industry groups Monday is urging top Trump administration officials to restore staff and funding for a Treasury lending program for underserved communities. In a letter to Treasury Secretary Scott Bessent and Office of Management and Budget Director Russell Vought, six trade groups — including the American Bankers Association, Independent Community Bankers of America and the Mortgage Bankers Association — applauded efforts to streamline the program under Trump's second term, but expressed concern after the administration announced it would gut agency staff as part of an overall shrinking of the federal workforce."Ensuring the Fund has the necessary resources in place will allow it to sustain momentum and fully deliver on the Administration's priorities of revitalizing communities, supporting small businesses and homeownership, and promoting economic growth nationwide," the groups wrote in a letter. "The Administration's actions to make the Fund more effective should not be undercut by the loss of the experienced professionals who are key to implementing them."Established by the Riegle Community Development Regulatory Improvement Act of 1994, the CDFI Fund is a Treasury Department program that has enjoyed bipartisan support in Congress, who has repeatedly called for preserving federal support for the program. At his January confirmation hearing, Treasury Secretary Scott Bessent expressed strong support for CDFIs. The fund certifies financial institutions that focus on financial inclusion as CDFIs, among them banks, credit unions, nonprofit loan funds, microloan funds and venture capital funds. CDFIs rely on a mix of public and private funding to provide capital to underserved areas, offering financial services to individuals and businesses that traditional banks often overlook due to higher risk. The CDFI Fund was already under scrutiny by President Trump's camp in his first term, when the administration proposed cuts, citing concerns about the federal government's role in subsidizing financial activities that could be handled by the private sector. Trump issued an executive order in March scaling back the program to its minimum under federal law. In August, internal documents obtained by American Banker showed OMB had frozen nearly all discretionary CDFI funds. Military credit unions have since urged Congress to restore funding, warning that cuts would hurt veterans and undo decades of financial inclusion progress.The administration also moved to abolish the fund, including laying off its staff as part of its accelerating reductions in force during the ongoing government shutdown over extending health care subsidies backed by Democrats. While the Treasury has argued the fund's programs are legally mandated, OMB has blocked disbursement of appropriated funds and OMB Director Russell Vought has floated the idea of a "pocket rescission" to cancel them. CDFI Fund champion Senator Mark Warner, D-Va., has said he believes OMB, not Treasury, ordered the layoffs at the CDFI Fund, calling it an illegal move. In Monday's letter, the banking groups argued that the FY 2025 funds remain available and that keeping the fund running could be a boon to the administration's stated goals of promoting economic growth."Its programs are invaluable in helping banks and other lenders meet community credit needs, create jobs, and build local wealth," the groups argued. "Banks, credit unions, and nonbank CDFIs alike rely on Treasury-issued CDFI certification as the recognized standard for determining whether an entity effectively serves low-income communities … [and] sustaining the Fund's full operational capability will also protect the stability of key segments of the federally insured financial system."

Key insight: A failure in an AWS internal subsystem in its northern Virginia region caused widespread errors and latencies across the internet on Monday.What's at stake: The outage disrupted services at banks and fintechs like Navy Federal, Truist and Chime, reminding the sector of its concentration risk.Expert quote: "When AWS sneezes, half the internet catches the flu," said Monica Eaton, whose company helps merchants handle charge-back fraud.Overview bullets generated by AI with editorial reviewProblems on Monday at Amazon Web Services' northern Virginia data center caused outages and delays with web services across the internet, including at a handful of banks and credit unions.The disruption served as a potent reminder of the financial sector's dependence on centralized cloud infrastructure and contained echoes of widespread outages last year caused by a faulty update at cybersecurity vendor CrowdStrike.Amazon Web Services, or AWS, provided frequent updates on its investigation into and recovery from the outage on a status webpage on Monday. The company made no indications about whether a cybersecurity incident caused the issues.AWS engineers began investigating increased error rates and latencies in multiple AWS services in the so-called us-east-1 region starting at 3:11 a.m. on the East Coast on Oct. 20. These services are based in that northern Virginia AWS data center.AWS later in the day determined that an "underlying internal subsystem," responsible for monitoring the health of network load balancers, caused the network connectivity issues, according to the company's status page.The issue affected numerous critical AWS services, including S3 (data storage), CloudFront (web content delivery), RDS (a database service), DynamoDB (another database), Lambda (event-driven code execution) and SNS (a notification service).Some EC2 instances, which are virtual machines, also could not properly boot up.At 2:22 p.m., AWS reported that mitigations progressed, and the company saw decreasing network connectivity issues and increased launches of new EC2 instances.Banks and credit unions report problemsUser reports submitted through Downdetector, a service that collects crowd-sourced reports of service outages, indicated problems at numerous financial companies and related platforms on Monday.Banks, credit unions and fintechs that experienced spikes in user reports of outages on Monday included Navy Federal Credit Union, Truist, Ally, Chime, and Venmo.A Navy Federal spokesperson confirmed that a "nationwide outage impacting organizations from various industries also disrupted multiple Navy Federal member service platforms today." The spokesperson did not specify which services in particular were affected.The spokesperson said the credit union's support teams "immediately" identified the national outage and began actively working to restore service while simultaneously engaging external vendors to determine the cause.Spokespeople for Truist, Ally, Chime and Venmo did not immediately respond to requests for comment.Potential fallout in purchase disputesFor organizations dealing with payment processing, the outage immediately created downstream consequences, according to Monica Eaton, founder and CEO of Chargebacks911, a company that helps merchants against charge-back fraud."When AWS sneezes, half the internet catches the flu," Eaton said.Eaton said she expects "a spike in 'I never got my service' or 'I was charged twice' claims," noting that much of this may be the result not of fraud but of confusion, which she said was "the number one driver of charge-backs.""The smart move is to get ahead of the narrative," she advised. She recommended checking proactively for duplicate charges and sending notifications in advance to affected users.She added that businesses should document the outage window for "clean evidence" and offer quick refunds where appropriate, emphasizing that fixing misunderstandings is cheaper than fighting battles in the dispute process.She warned that the outage "will end long before the disputes do."Preparation against future failuresThe incident "underscores just how dependent our lives and basic daily functions have become on a few major cloud providers," according to Cliff Steinhauer, director of information security and engagement at the National Cybersecurity Alliance, a nonprofit that promotes cybersecurity awareness and education.In particular, the outage highlights the concentration risks associated with cloud computing — a risk financial services companies have been warning about for years.Steinhauer said that even the largest systems are not immune to outages, which are often a sign of "how fragile interconnected systems can be when so much of the internet's infrastructure is centralized.""Businesses can use this outage as a valuable tabletop exercise to identify gaps in their business continuity plans and evaluate what backup solutions they have in place," Steinhauer said.He further recommended that reviewing redundancy and disaster recovery strategies "ensures that critical operations aren't tied to a single cloud region or provider."

Nexa Lending welcomed mortgage industry veteran Tammy Richards as chief strategy officer, one of a series of recent moves introduced by the company as it also undergoes a rebranding initiative.   As chief strategy officer, Richards will help lead market development and expansion for the Mesa, Arizona-based lender, which recently changed its name from Nexa Mortgage. "This company has a fantastic reputation for innovation and customer service. I look forward to building on that strong foundation and helping to steer our strategic direction for a future of continued success and groundbreaking achievements," Richards said in a press release. Richards comes to Nexa after most recently heading retail growth at Kind Lending, where she joined the company in mid 2024 as chief operating officer. An industry veteran, Richards' prior professional background also includes several leadership roles over three decades at leading mortgage lenders, such as Caliber Home Loans, Bank of America and Loandepot. Before joining Kind Lending last year, Richards served as CEO of the mortgage technology firm she founded called Lendarch. The former chief operating officer at Loandepot, Richards sued her former employer and two of its leaders, including founder and CEO Anthony Hsieh in a widely publicized 2021 lawsuit. In her suit, Richards made claims of gender discrimination and wrongful termination resulting from her refusal to take part in what she deemed was a scheme to loosen underwriting standards. Her suit was ultimately thrown out in California Superior Court earlier this year.A countersuit by Loandepot against Richards is still pending.In her new C-suite role at Nexa, Richards will be responsible for national expansion efforts through both recruitment and mergers and acquisitions. She also will lead development of its non-delegated lending channel, working closely with Kortas and other members of the leadership team. "We are thrilled to have Tammy join our executive team," said Nexa Lending CEO Mike Kortas. "Her proven track record of developing and implementing transformative strategies is exactly what we need as we enter our next phase of growth."From mortgage broker to correspondent lendingRichards' arrival comes following several moves made by Nexa over the past month, marked by the addition of many loan officers, all coinciding with the company's new name. Behind the moves is a refocus on the company from its mortgage-broker roots to what it calls "a correspondent-driven wholesale lender." The company recently shed much of its "brokers are better" mantra used previously in marketing outreach."The message is simple: it's no longer about division, it's about growth, unity, and the power of wholesale," the lender wrote in a recent social media post.  Coming alongside recent rebranding was the September hiring of Richards' former Kind Lending colleague Geri Farr as chief growth officer. Previously, Farr served as senior vice president, West retail sales at Kind, after working for several years as a divisional leader at Bay Equity Home Loans. Farr's new responsibilities will include loan officer recruitment efforts, with an eye on attracting  retail producers. Nexa was founded in 2017 and sponsored 3,374 mortgage loan officers in 2024, according to the Nationwide Multistate Licensing System.