Uncategorized

I feel like I haven’t written a word about mortgage rates since the government shutdown began.Part of that is because once the government closed shop, we stopped receiving key economic data.And without any new data, mortgage rates were kind of stuck. The good news is they were stuck near three-year lows.But now that the shutdown is over, it’s time to start paying attention again.This Thursday we’ve got what could be a big market mover in the delayed jobs report from September.Watch Out for a Big Mortgage Rate Move on ThursdayMark your calendars for this Thursday morning when the Bureau of Labor Statistics (BLS) releases the much-anticipated and much-delayed September jobs report.It’s typically released on the first Friday of the month, but thanks to the government shutdown, it got pushed back quite a bit.Now we’re going to get the key report on a Thursday, exactly one week before Thanksgiving.Kind of strange, but given the massive delay and lack of other data lately, it’s going to be an important one.This is especially true since labor has been top of mind lately for both the Fed, economists, and the bond market.If the report comes in cold again, as it has been lately, there could be a rush to bonds, which would increase bond prices and lower corresponding bond yields.That would be good news for mortgage rates, which as I’ve said have been stuck for over a month thanks to the shutdown that began on October 1st.Mortgage Rates Came Full Circle During the ShutdownThe 30-year fixed did come down in the middle of the shutdown, but basically came full circle since it began, as seen in this chart from MND.Historically, mortgage rates tend to fall during shutdowns, which they did, but they popped back up after the Fed cut its own rate.That too seems to be a thing, as whenever the Fed cuts, mortgage rates seem to bounce higher.It might boil down to a sell the news thing where everyone knows the Fed is going to cut, bakes it into rates, then once they cut, we see a little reversal.But it was also driven by words from Fed Chair Jerome Powell, who indicated that future cuts, including one in December, weren’t a sure thing.Will Another Fed Cut in December Derail Mortgage Rates Again?The chances of that cut will likely be driven in some part by this jobs report, which seems to be one of the bigger pieces of data that was delayed.We’ve been told the October jobs report may never be released, though we might get the November jobs report in early December before the next Fed meeting on the 10th.As it stands now, the chance of another quarter-point cut in December is just 41%, per CME, down markedly from a month ago when it was 94%.So there are certainly some headwinds and with lots of unknowns regarding data releases, mortgage lenders might be defensive with pricing.However, if we get more ugly jobs reports between now and then, along with cooler-than-expected CPI, or simply neutral inflation data, mortgage rates could rally lower and push below 6%.I’ve long thought a sub-6% 30-year fixed mortgage rate was possible by the fourth quarter of 2025.And while we’re running out of time, we’ve still got another 45 days or so to make it happen!It wouldn’t be a huge surprise given the 30-year is already priced at 6.375%, meaning it doesn’t have much more ground to make up.Rates have already come down about one full percentage point since January, so it’s safe to say 2025 has actually been a good year for mortgage rates.Read on: 2025 Mortgage Rate Predictions 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)

(Bloomberg) — Former Federal Reserve Governor Adriana Kugler, whose abrupt resignation allowed President Donald Trump to install an ally at the central bank, violated Fed ethics rules and was subject to an internal probe when she stepped down in August, documents released Saturday showed.In her final weeks at the Fed, Kugler sought to address a problem with her financial holdings, but Chair Jerome Powell denied her request for a necessary waiver ahead of the central bank's July 29-30 policy meeting, according to a Fed official. She skipped the meeting and announced her resignation days later.The Office of Government Ethics on Saturday released Kugler's latest financial disclosures, which included previously undisclosed trading in multiple individual stocks in 2024 — some of which occurred during the Fed's blackout period — in violation of the agency's ethics rules. Fed ethics officials referred the matter to the agency's inspector general earlier this year, the form showed. They also declined to certify the disclosures, which Kugler filed about a month after her resignation. An IG spokesperson said Saturday that an investigation is ongoing.Kugler's resignation gave Trump an earlier-than-expected opportunity to fill a slot on the Fed's board in the midst of his intense pressure campaign urging policymakers to drastically lower interest rates. The opening ultimately went to Trump adviser Stephen Miran, who took an unpaid leave of absence from his post as chair of the White House Council of Economic Advisers and has called repeatedly for rapid rate cuts.Kugler, who was appointed to the Fed in September 2023 by President Joe Biden, declined to comment.The former Fed governor announced on Aug. 1 that she would step down effective Aug. 8 — nearly six months before her term was set to end — without citing a reason and after she missed the central bank's July meeting. At the time, the Fed said her absence was due to a "personal matter."Ahead of that meeting, Kugler sought permission to conduct transactions to address what the Fed official described as impermissible financial holdings. It wasn't immediately clear which holdings were involved in that request.According to the official, Kugler asked for a waiver to rules requiring top Fed officials to obtain clearance before conducting certain financial transactions and prohibiting them from trading during so-called blackout periods that straddle their policy meetings. Powell denied the request.Prohibited TradesIt wasn't the first time Kugler had run afoul of the Fed's ethics rules. She acknowledged in disclosures last year that she violated prohibitions on trading when her husband executed several stock trades. Kugler said at the time that her spouse made the purchases without her knowledge. The shares were later divested and Kugler was deemed in compliance with applicable laws and regulations, according to the disclosures.The newly released documents showed previously undisclosed trading in 2024 in individual stocks — which is prohibited for Fed officials and their immediate family members — including Materialise NV, Southwest Airlines, Cava Group, Apple Inc. and Caterpillar.Some of the trades were also executed during blackout periods, when transactions are prohibited.That included the purchase of Cava shares on March 13, 2024, days ahead of a March 19-20 meeting and the sale of Southwest shares on April 29, 2024, on the eve of the Fed's April 30-May 1 gathering. The disclosure also lists several fund transactions that fell within blackout periods. A footnote connected to the Jan. 2, 2024, sale of Materialise NV shares read: "Consistent with her September 15, 2024, disclosure, certain trading activity was carried out by Dr. Kugler's spouse, without Dr. Kugler's knowledge and she affirms that her spouse did not intend to violate any rules or policies."Financial DisclosureThe disclosure covered calendar years 2024 and 2025 through her resignation. Top Fed officials are required to submit disclosures annually and after leaving the central bank, and to report periodic financial transactions. A spokesperson for the Fed's Office of Inspector General on Saturday confirmed the office received a referral from the board's ethics section related to Kugler's filing."We have opened an investigation and, consistent with our practice, we are unable to comment further until our investigation is closed," the person said.Powell introduced tougher restrictions on investing and trading for policymakers and senior staff at the central bank in 2022. That followed revelations of unusual trading activity during 2020 by several senior officials.Boston Fed President Eric Rosengren and Dallas Fed chief Robert Kaplan each announced their early retirement after the revelations, with Rosengren citing ill health. The Fed's internal watchdog ultimately cleared the pair of legal wrongdoing, but chastised them for undermining public confidence in the central bank.The new rules, which the Fed said at the time were aimed at supporting the public's confidence in the impartiality and integrity of policymakers, boosted financial disclosure requirements, among other measures.Senator Elizabeth Warren, a Democrat from Massachusetts who has long called for stricter ethics rules at the central bank, released a statement Saturday calling for bipartisan legislation "to make the Fed more transparent and accountable."The latest scandal "makes clear that the Fed still doesn't have the guardrails or culture of accountability the American people expect," Senate Banking Committee Chair Tim Scott said in a statement."The next Fed Chair must restore integrity, strengthen transparency, and end the pattern of insiders playing by their own rules," he added.

West Palm Beach, Florida-based Newday USA, a specialist in lending to U.S. veterans, named Neil Brooks as president of its new mortgage program. As head of Newday Home, Brooks will lead efforts to open homeownership to veterans through the unit, including the launch of a network of national real estate agents. A U.S. Navy veteran, Brooks was a top-producing Realtor for My Home Group in Scottsdale, Arizona, and is a certified military housing specialist.Stepping into the role of president of Newday Home's builder division, Ken Harthausen will be in charge of developing partnerships with construction firms around the country to expand purchase options for borrowers using Department of Veterans Affairs loans. Established in forming and growing lender-builder joint ventures, Harthausen's mortgage experience includes similar roles at Countrywide Home Loans and PHH Mortgage.

The mortgage servicing rights market changed dramatically when the government-sponsored enterprises went into conservatorship and Basel bank capital rules tightened, so stakeholders are watching the review of both carefully.Those two historic changes created the "perfect storm" for MSRs that led to a concentration of large nondepository players, an advocate for mid-sized banks said at an industry meeting on Friday, noting that certain outcomes of current policy reviews could change that.Federal Reserve Vice Chair Michelle Bowman's acknowledgment of challenges in Basel III capital rules and interest in changing them is promising, Ron Haynie, senior vice president at the Independent Community Banks of America told attendees at the IMN MSR Conference."I think that would be good because that would mean you have community banks holding MSRs. You might have them actually buying MSRs," he said while speaking on a panel on conservatorship's influence on the market and related policy topics.Haynie acknowledged this could create more competition for buyers but a moderate rebalancing of the participation between banks and non-depositories could be good for the overall market."I do think if the business were spread out a little bit, it would be a good thing," he said.Potential impacts from changes at the GSEsMSRs are generally defined by a series of contracts that the enterprises can easily change "unilaterally" through shifts in their guidelines, regardless of their conservatorship status, noted Eric Edwardson, a partner at law firm Mayer Brown."That can be for good or for ill. I think the recent trend is for good," he said, noting that changes such as the decision to cap Fannie Mae servicing advances at four months in alignment with Freddie Mac's during the pandemic exemplifies this.The panel generally agreed that the near-term plan for the GSEs currently under consideration is most likely to involve keeping them in conservatorship with potentially a secondary offering of some of their shares. However, leaving conservatorship could still be an end goal.Haynie said he's watching what the current review could mean for Fannie and Freddie's unified mortgage-backed security and the common securitization platform.The UMBS was designed to align the enterprises' bonds despite the fact that they traditionally had different profiles. A shift in their status that could make them more like private companies may potentially put pressure on them to reverse what are currently harmonized prepay speeds."It'd be like saying, Wells Fargo, your book of business has to look like JPM's," Haynie said, noting that the idea for the UMBS was something he historically opposed and was originally intended for a scenario which did not materialize.Panelists noted that FHFA Director Bill Pulte has said little about his plans for the UMBS and its supporting platform since reviving an idea to market the system more broadly and giving it a new name.Edwards noted that Pulte's interest in having Fannie and Freddie do more with assumable or portable mortgages could shift market dynamics and unsettle some MBS holders."The folks who are buying the MBS securities would say, 'Hold on a second. You're changing some of the prepay speeds," he said.

Mortgage delinquencies increased by 6 basis points from the second quarter, as the performance of Federal Housing Administration-insurance loans declined, the Mortgage Bankers Association National Delinquency Survey found.Recently, ICE Mortgage Technology executive Andy Walden said FHA loan performance trends were a yellow flag for the mortgage industry.Delinquent mortgages made up 3.99% of all outstanding loans when seasonally adjusted in the third quarter, up from 3.93% in the second quarter and 3.92% one year prior.This is the second highest delinquency rate since an all-time low was recorded in the second quarter of 2023. The 3.37% posted for that period was 62 basis points below the most recent data.While the foreclosure start rate was still rather low at 0.20%, it was 3 basis points higher than the previous quarter. The share of loans in the foreclosure process was 50 basis points, up 2 basis points from the second quarter and 5 basis points over the third quarter of 2024."Since this time last year, the FHA seriously delinquent rate — which includes 90-plus day delinquencies and loans in foreclosure — increased by almost 50 basis points," Marina Walsh, the MBA's vice president of industry analysis, said in a press release. "In contrast, the conventional and Veterans Affairs seriously delinquent rates remained relatively flat."The period's results were not affected by the government shutdown or the end of pandemic related FHA loss mitigation programs, although those are likely to affect delinquency activity going forward, Walsh said.FHA borrowers are more affected by a softer labor market, other personal debt obligations, along with increases in taxes, homeowners insurance premiums and other fees, she said."Additionally, home price declines in some parts of the country may lessen the ability to sell or refinance," Walsh warned. It is the growth in values which provides a level of protection for distressed borrowers in recent years.While the seasonally adjusted serious delinquent borrower rate (90 or more days) of 111 basis points was unchanged from the second quarter, the shorter term buckets were higher.For borrowers who are between 30 and 59 days late on their scheduled payment, the rate increased 2 basis points to 2.12%, while between 60 and 89 days rose 4 basis points to 76 basis points.FHA mortgage rates were 21 basis points higher to 10.78% versus the second quarter, while year-over-year they are 32 basis points more.Conventional loans overall late payments rose 2 basis points to 2.62% from three months prior but reported a 1 basis point drop versus the third quarter of 2024.While the overall VA rate rose 18 basis points to 4.5% between the second and third quarters, it dropped 8 basis points from one year ago.The seriously delinquent rate decreased 2 basis points for conventional loans, increased 30 basis points for FHA loans, and decreased by 1 basis point for VA loans quarter-to-quarter.Versus the third quarter 2024, this fell by 4 basis points for conventional loans, but rose 47 basis points for FHA loans and 4 basis points for VA loans.In recent reports from bond rating agencies KBRA and Fitch, both are expecting delinquency rates to increase next year.

Bayview Asset Management and three affiliates have agreed to a settlement with plaintiffs over a data breach lawsuit for a hack that affected 5.8 million people in 2021.The sides agreed to basic terms of a class action settlement, subject to court approval and the final dismissing of the case, according to a court document filed Thursday. They plan to file a written, formal agreement within 45 days.The parties also asked for all current deadlines related to pending motions to be paused.The settlement agreement signals the beginning of the end for the three-and-a-half-year legal battle. Customers affected by the breach began filing lawsuits against the company and its servicing subsidiaries, Community Loan Servicing, Lakeview Loan Servicing and Pingora Loan Servicing, in March 2022 after Lakeview said in public notices the breach impacted 2.5 million borrowers between Oct. 27, 2021 and Dec. 7, 2021."This (personal identifiable information) was compromised due to defendant's negligent, careless and intentional acts and omissions and the failure to protect the PII of plaintiff and class members," wrote Daniel Rosenthal, an attorney with DBR Law, P.A., at the time in a complaint on behalf of an affected California customer.Dozens of plaintiffs wanted to enforce multiple cybersecurity measures at the firm and collect damages, but a judge gutted all but one of their claims in December 2023.California, Maryland, North Carolina and Washington state entities then led a group of more than 50 regulators in an action imposing a $20 million penalty on Bayview's affiliates in January, citing flaws in the way the companies handled the breach. The servicing entities also agreed to ensure their cybersecurity efforts comply with federal and New York State Department of Financial Services standards. Bayview has since acquired Guild Mortgage for $1.3 billion and plans to privatize the lender once the deal is finalized, which is expected by the end of the year.

Left to righ: Bryce Bradley, Rosegate Mortgage; Craig Freel, Rice Park Capital Management Private investment firm Rice Park Capital Management will acquire a retail and consumer-direct lender one year after the two businesses signed an initial partnership agreement. As in several recent mergers, the servicing pipeline potential figured prominently behind the Minneapolis-based financial firm's decision to acquire Rosegate Mortgage. Rice Park specializes in mortgage servicing rights, with the two companies first inking a deal in October 2024 for the investment firm to help provide financing for Rosegate borrowers. "Acquiring Rosegate enables us to offer a fully integrated mortgage investment platform that we believe enhances value for our investors through improved servicing retention and strategic recapture," said Craig Freel, Rice Park president and co-chief investment officer, in a press release.Rice Park's MSR portfolio currently holds approximately $61 billion in unpaid balance, serviced through subsidiary Nexus Nova. The merger will combine operations of Nexus Nova and Charlotte, North Carolina-based Rosegate into a single business entity within the larger Rice Park organizational structure. Other financial terms of the deal were not disclosed."We're thrilled to be integrated with Rice Park and are excited to build out what we believe will be a high-quality servicing retention and recapture model," Rosegate Mortgage President and CEO Bryce Bradley added."Now within the Rice Park family, we are able to introduce ourselves to more customers," Bradley continued, "while continuing to enhance our organization and grow both the consumer-direct and retail lending channels."The addition of Rosegate will lead Rice Park to "selectively perform recapture across its MSR holdings" that will generate optimal returns and mitigate prepayment risk, the investment firm said. While it offers recapture potential for the newly combined company, Rice Park leaders emphasized they would continue to work with existing partners, who should see no changes in existing relationships. "Our platform is designed to offer flexibility — providing capital and MSR solutions that preserve and support our partners' customer relationships," Freel said. The changes mean Rice Park will adopt a dual-channel strategy. For its MSR acquisitions with existing recapture terms, it will continue to support and respect the partnerships. Rice Park will utilize Rosegate to pursue recapture directly on MSRs without an embedded recapture agreement.Rosegate Mortgage will keep existing branding and continue to operate from its Charlotte home base. The recurring M&A theme of 2025The Rice Park-Rosegate deal comes as the latest example of merger-and-acquisition activity driven by recapture pipelines in 2025. It arrives after the blockbuster merger between Rocket and Mr. Cooper led many mortgage lenders and servicing businesses to evaluate existing models and strategies in order to best capitalize on future business. In between the Rocket and current Rice Park deals, the mortgage industry has seen similar subsequent transactions combining established originations and servicing leaders, including the merger agreement between Bayview Asset Management and Guild Mortgage. The recapture potential and servicing book of Reliance First Capital also played a factor in its acquisition by Carrington Mortgage Services in late October.Other recent M&A deals involve Union Home Mortgage and Anniemac Home Mortgage, both of which have acquired two lenders in 2025. News within the past two weeks also featured mergers between Maryland-based firms NFM Lending and Homespire Mortgage, as well as an agreement uniting Atlantic Coast Mortgage and Tidewater Mortgage Services. 

The U.S. residential housing economy growth will have slowed by 1.1% this year, from 2% in 2024, a result of cost pressures derived from higher tariffs on builder supplies like lumber, labor issues and weaker consumer and homebuilder sentiment about the sector, Fitch Ratings said.Over the next two years, it expects restrained growth rates of 1.3% in 2026 and 1.9% in 2027.While supply remains tight, Fitch's U.S. Cross-Sector Housing Monitor found demand indicators to be weakening."New home inventory has declined slightly, while existing home inventory continues to improve, helped by declining mortgage rates that should spur turnover and demand," a Fitch press release said. "Fitch expects 30-year mortgage rates to end 2025 at 6.25% and decline further to 5.8% in 2026, driven by Fed policy rate cuts and a narrower spread."The Mortgage Bankers Association's Weekly Application Survey for the week ended Nov. 7 had the conforming 30-year fixed-rate mortgage averaging 6.34%. The 10-year Treasury yield closed that day at 4.09%, making the spread 225 basis points, higher than the 180 basis point norm. The current level is still better than the 245 basis point spread in April.In an effort to improve affordability, the Trump Administration floated the ideas of a 50-year FRM, as well as a conforming assumable mortgage to a mixed reaction at best based on social media comments from those in the industry.Predictions of home price growthFitch believes home price growth in 2026 will be flat, following an annual increase of 1.5% this year and 4% for 2024, with affordability and local supply gluts having the biggest impact. Regional variations will play a role; high inventory in the South will hold prices down but low supply in the Northeast will cause values to rise.Fitch forecasts single-family starts to fall 5.5% this year, compared with 6.8% growth in 2024, while multifamily should rise by 13%; this is up from a 25.1% decline last year.Its outlook for new home sales this year is for a 3% decline."Homebuilders continue to offer aggressive discounts or interest rate buydowns to entice buyers, but low affordability and weak consumer confidence will keep potential buyers on the sidelines," Fitch said in the report.When it comes to tariffs, Canada and Mexico represent 25% and 10% of total construction-related imports respectively, the report noted.KBRA's view of the housing marketThe analysts at Kroll Bond Rating Agency are more conservative than Fitch's when it comes to the rate outlook. It expects rates to remain in the 6% to 6.5% range "as inflation remains sticky and unemployment edges higher."But it agrees home prices will remain flat when looked at nationwide but with wide regional differences.Another theme for the industry to watch next year is for state-level regulatory activity to rise amid "slow federal reform."What will next year's PLS activity end atPrivate-label mortgage-securitization activity should reach $160 billion in 2026, which will be a 15% increase from KBRA's 2025 prediction for $138 billion. The market will benefit from tighter spreads, greater liquidity and increased investor demand.For what it termed "esoteric RMBS issuance," this category of reverse mortgage, residential transition loans and home equity investment products should grow 7% in volume. RTL alone should increase 32%, countering an 8% drop in reverse mortgage securitization activity.In a section of the report titled "regulatory uncertainties," KBRA notes while the government-sponsored enterprise reform narrative out of the Trump Administration continues, no timeline exists for exiting conservatorship and the Federal Housing Finance Agency's latest strategic plan does not reference it, the Nov. 12 report said.Outlook at both KBRA and Fitch for delinquency ratesKBRA expects delinquencies to continue to rise next year, particularly in nonprime securitization, but the overall RMBS market is "well positioned" to handle the increase.The nonprime 90 day or more delinquency rate is elevated but has stabilized this year."With modification rates declining, this likely reflects underlying performance improvement, though risk layering and income volatility remain key concerns for self-employed borrowers or loans underwritten to debt service coverage ratio or bank statement documentation types," the KBRA report said.Fitch pointed out residential mortgage and home equity line of credit delinquency rates are above where they were prior to the pandemic.The rating agency "expects the performance of its rated RMBS portfolio to weaken further as rising inflation and lower real household income challenge borrowers. Stretched affordability and higher debt-to-income ratios will lift the serious delinquency rate to 1.7% in 2026 from 1.4% in 2025."

Figure Technology Solutions posted a strong quarter in its first public earnings report, including $2.4 billion in home equity line of credit lending. The fintech, which went public in September, recorded $89.8 million in net income for the third quarter, exceeding a Standard & Poor's consensus estimate of $35 million. That also surpassed its $27.4 million profit in the year ago period, the only other single quarter for which Figure provided information Thursday. While company executives discussed Figure's broader operations in Friday's earnings call, they described a growing home loan business which counts over 246 partners. Figure, which works with over half of the top 20 independent mortgage banks, also said it onboarded "one of the largest" mortgage servicers in the quarter.The lender says it's the top nonbank HELOC producer, and that claim is so far undisputed, as the nation's biggest originators don't usually specify their volume in this product in earnings. In sharing more detail about its originations, the fintech said its average production cost per loan was $730 at the end of last year.At the end of the quarter, Figure-branded HELOCs had average customer interest rates of 9% and loan balances of $90,000, whereas its partner-branded HELOCs had slightly higher rates and balances of 9.2% and $93,000. The unpaid principal balance of the company's over 302,000 HELOCs was $11.1 billion at the end of the quarter. The lender also warehouse lines totaling $1.85 billion, and customers were able to borrow up to $41.2 million on undrawn HELOC loans as of Sept. 30. Figure's non-HELOC lending and beyondBesides traditional home equity lines, Figure reported $80 million in volume in the quarter from other products including crypto-backed loans, small-to-medium business loans, debt service coverage ratio loans and HELOC for seniors which are interest-only. CEO Michael Tannenbaum additionally described another growing segment of originations, first-lien HELOCs typically used to pay off an existing loan, akin to cash-out or rate-and-term refinances. Some of the fintech's partners are adopting the first-line product but not offering customers the more-traditional use for a HELOC. "Where we really see growth there, just to be even more specific, is among especially small balance first-lien," he said, "because the cost to originate for Figure is $1,000 whereas industry average is $12 (thousand)."Executives in Friday's call also spoke about the company's other ventures, including Figure Connect, a blockchain-based marketplace for private credit, its MERS competitor DART, and the public Provenance Blockchain.Earlier this year Figure also launched a stablecoin, $YLDS. It's also rolling out Democratized Prime, a DeFi marketplace which allows participants to lend their assets or excess cash at a market-clearing rate. Democratized Prime includes HELOC, crypto loans and an Exchange Margin asset. Borrower fees are 50 basis points of the outstanding balance, according to the company. The platform hasn't generated material revenue yet, but announced Synergy One as its first institutional client. "Our frictionless, short-term liquidity funding marketplace is delivering financing rates below those achievable in wholesale capital markets," said Tannenbaum. "This not only validates DeFi's potential efficiency but also gives us a roadmap to extend this to other asset classes."In yet another rollout, Figure this week said it will issue tokenized stock which will trade on its own platform and be convertible to shares of Class A common stock on a 1-for-1 basis. While the company will disclose more information next week, Mike Cagney, Figure's co-founder and executive chairman, called the offering a "transformational" opportunity to build a new capital market ecosystem. Figure posted net revenue of $156.3 million in the third quarter, up from $101 million in the year ago period. As of the end of the quarter, the lender had $1 billion in cash and cash equivalents.The company's stock, which opened at $36 per share in its Wall Street debut two months ago, was up around 20% Friday midday, trading at $41.55 per share.

Mortgage application fraud risk increased on an annual basis during the third quarter as one in every 118 applications had indicators of potential misstatements, according to Cotality.When compared with the third quarter of 2024, fraud risk increased by 8.2% but this dropped by 2.7% from the previous quarter, the National Mortgage Application Fraud Risk Index reported. This quarter-to-quarter decline came as application volume increased by 8%. Purchases made up two-thirds of the third quarter's total volume. Government-guaranteed products had a 25% share.Why application fraud risk increasedThe index measures six areas but only one category, undisclosed real estate fraud, was higher versus the previous year.This category, up 9.1% from a year ago, includes undisclosed debt, possible occupancy misrepresentation, and/or derogatory credit events like foreclosure, notice of default, a short sale and other similar happenings being hidden from the lender.Another report, this one from Transunion, found that credit washing and synthetic identity creation is a growing problem across all asset types.Occupancy misrepresentation has been in the headlines because of actions taken by the federal government in recent months.The growth in non-owner occupied properties is a contributing factor to the large rise in this fraud category, Cotality said."As the percentage of investors grows, more borrowers have multiple properties and mortgages," said Matt Seguin, senior principal, Cotality Fraud Solutions, in a press release. Some of these are people who originally occupied the property, looked to sell but were unable to get their price so they kept it and became a landlord, the report noted."Oftentimes, those mortgages are being refinanced simultaneously, and they may be with different lenders," and he surmised this is why a continuing uptick in this category is taking place.For the third quarter, Cotality estimated one in 45 investment property applications and one in 26 multi-family applications have indications of fraud risk.What underwriters need to be on the lookout forCotality is noticing increased alerts on occupancy risk. Those include the owner claiming they are occupying the property when a rental listing was found on the property or a primary residence that has a different tax mailing address.Other areas of increasing risk trends include income and identity, Cotality said.The buyer has a high income compared to the value of the property being purchased, which could be an indicator of inflated assets or misrepresentation of occupancy.Meanwhile, indicative of the growth of synthetic identity fraud is more alerts regarding the use of a deceased borrower's Social Security number or other names associated with a number provided.Declining property value related alerts grew 42% from the second quarter and 400% year-over-year."For lenders, this is a critical signal," Cotality warned in the report, saying in underwriting, they must take extra care to review appraisals and supporting documentation. "Exercise caution in areas experiencing negative home price growth to ensure sound lending decisions and mitigate risk."