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Home equity investment companies were busy last month, securing investments and issuing securitizations.READ MORE: Home equity investment products set to soar, experts sayThe following is a roundup of recent news from some of those firms making moves in the marketplace.Myriad Group invests in The Home Equity PartnersThe Home Equity Partners, a Canadian financial solutions company, announced Nov. 26 an investment from The Myriad Group, a Canadian real estate company. As part of the investment, Myriad Group Vice President of Finance and Operations Kyle Goldenberg will join The Home Equity Partners' advisory board."Canadians are house rich and cash poor, with many unable to keep up with mortgage payments. We are on a mission to solve that," said Shael Weinreb, Founder & CEO of The Home Equity Partners, in a press release. "The Myriad Group has a long-standing legacy in real estate, and its continued commitment to innovation makes it the perfect partner for what we're building. We are thrilled to have Kyle Goldenberg join the advisory board as we continue to expand and serve Canadian homeowners."Cornerstone secures $1 billion in financing from FortressCornerstone Financing landed a $1 billion financing investment from Fortress, it announced Tuesday. The deal accelerates Cornerstone's mission to "help mass-affluent homeowners efficiently convert dormant home equity into liquidity without interest, debt or monthly payments," the company said in a press release."With Fortress's financing commitment, [Cornerstone Home Equity Insurance/Investment Funding Solutions] is positioned to become the next major part of holistic financial planning, allowing advisors to efficiently optimize over $35 trillion of home equity to better serve their clients," said Craig Corn and Dan Anderson, co-founders of Cornerstone, in a joint statement.Point and Blue Owl issue $390 million HEI securitizationPoint, a leading home equity investment platform, and funds managed by Blue Owl issued a $390 million securitization of home equity investment assets, the companies announced earlier this month. The transaction closed on Oct. 28 and was Point's third securitization this year."This transaction reflects growing confidence in home equity investments as a mainstream asset class," said Eddie Lim, co-founder and CEO of Point.

Multiple proposals have been in play for government-sponsored enterprises Fannie Mae and Freddie Mac, including some scenarios that could affect the status of their shares.The question for the industry now is how the various possible directions Fannie Mae and Freddie Mac could take will affect the many mortgage-related businesses that work with them.This series, which starts by examining what appeared to be the most likely big-picture GSE reform change at deadline, will go on to look at how this and other proposed Fannie and Freddie initiatives may impact industry credit, pricing, products and institutions in the home lending ecosystem.Fannie and Freddie's oversight agency and the GSEs did not offer any information beyond what is in the public record in response to inquiries about these topics.Prospects for uplisting the GSEsOne of the latest concepts floated for the GSEs is a plan by legacy investor and billionaire Bill Ackman to get their shares uplisted on the New York Stock Exchange. Fannie and Freddie's shares have been trading in the over-the-counter market since 2010. The idea is one of several that have surfaced as Trump administration officials explore whether the GSEs could be monetized for taxpayers, potentially through a new stock offering.Ackman has pitched his idea as the most likely to be viable in the near-term. Analysts have said it's not out of the question, but could face some hurdles.The biggest may be whether the Treasury, which has been closely tied to the GSEs since a housing crash forced them into conservatorship in 2008, will forgive senior preferred shares as Ackman has proposed, according to a report by Keefe, Bruyette and Woods. KBW is a financial services specialist that has some business ties to the enterprises.Forgiving the shares the Treasury acquired in senior preferred stock purchase agreements has downsides for taxpayers, but would be of less concern to investors who dislike conversion as an alternative concept proposed in discussions around potentially conducting a secondary offering.There may be ways to ease concerns on both sides. Some have long argued that the GSEs' profitability since entering conservatorship means the senior preferreds are already repaid. How the courts might view that claim, though, remains an open question.Ackman also proposed the uplisting as a potential building block for a secondary stock offering, followed by a release from conservatorship, with agreements sustaining the government backstop that supports their business models. "What would that mean and be owned by shareholders? I think that would be potentially a game changing kind of an approach for mortgage lending in a variety of different ways," said Larry Goldstone, president of capital markets and lending at BSI Financial Services. If the GSEs were to actually clear all the hurdles it would take to leave conservatorship with an implicit backstop in place, they would likely still operate with some government controls, he noted."Ultimately the government is going to be responsible for all the losses on those loans, so I think there would be some constraints on them," Goldstone said.What being back on the NYSE would meanAckman has cited new investment as a key benefit to uplisting Fannie and Freddie as companies tend to have rules that bar or limit investments in stocks that trade over-the-counter. Industry investors could be part of that, but they would likely consider the GSEs' history, the status of government's stake and backing, and whether the enterprises long run of profitability since then is sufficient to provide confidence in shares that have been trading like meme stocks.Fannie and Freddie would have to ensure they meet certain standards to stay on the NYSE, including not allowing the prices of their shares to fall below certain thresholds. Investors broadly also would likely consider the status of the government backstop, which officials have pledged to protect.George said that the GSEs' shares could be considered more comparable to those of private mortgage insurers and have the potential to be competitive in that context. Adjustments to their capital framework amid reform would have to be addressed, he added."I think they're going to have a real hard time doing anything other than for the current construct," said Dan Cooper, executive vice president of capital markets and servicing at Cornerstone Home Lending and Cornerstone Capital Bank. "I know they would like to have at least an element in the private market, but I think there's a lot of headwinds and a lot of complexity to it."Big picture change but an incentive for market stabilityThe idea of changing the larger status of the GSEs may appear daunting, with the potential to reshape industry dynamics in unpredictable ways. In reality, the fact that policymakers have that type of reform in mind means they are more likely to try to avoid upsetting the mortgage companies they work with as well as investors, according to George."Their main focus seems to be to make sure that the market is stable and affordability improves if possible," he said.

The goal for artificial intelligence in mortgage isn't total automation, but misunderstandings surrounding the purpose of the technology can lead some to believe it is, resulting in a certain level of apprehension and mistrust today. If anything, the technology industry's efforts to market AI, particularly its ability to automate, might be too successful, unintentionally creating apprehensions and misconceptions in highly regulated segments like mortgage over what agentic tools are actually doing, industry leaders suggest.The real and imagined risks that all types of agentic AI could pose for businesses, though — whether associated with regulation, data security or misinformation — are at top of mind for mortgage lenders. In a survey of over 100 lending professionals conducted this summer by Arizent, parent company of National Mortgage News, 86% of the industry cited agentic AI use as an enterprise risk factor. Nine percent went as far as rating it a "significant" risk, with 77% deeming it "moderate."Part of the problem may be that AI is making the work look too easy, according to Diane Yu, CEO of point-of-sale software platform Tidalwave. "A lot of technology companies are trying to sell it that way: 'I will automate everything,'" she explained. While the ability of agentic AI to act and complete tasks autonomously is an important selling point, it's a far cry from making approval or denial decisions — a point even its staunchest advocates in the mortgage industry say is not their goal. Regulators themselves also have not given signals that an AI-produced loan decision would be compliant. "A lot of people don't understand that, though," Yu added, referring to the consumer population. because what AI automation can accomplish is "a good story." More than just ChatGPTMany people today equate artificial intelligence output to ChatGPT production, but agentic AI expands that definition, ranging in form from automated voice service technology to tools that operate in the background reading, extracting and analyzing data and documents.The accelerated improvement of artificial intelligence over the past year means that, despite industry hesitance, many mortgage professionals want to explore the potential benefit it will bring, regardless of their institution type. Large banks and credit unions are already actively looking for ways to apply it effectively in mortgage operations, according to John Geertsema, managing partner at business and technology consulting firm Capco. "They're asking, 'Where is it safe to use? Where will regulators be comfortable with us using it? And what can we automate without creating a risk for, say, a repurchase?'" Geertsema said. "A lot of what we were talking about was large language models for the last couple years. The difference now is that with agentic AI, it goes beyond just being conversational and now the agents are actually executing multistep tasks," he added. Ensuring humans are in the loopWhile its aptitude at accomplishing tasks and analysis in a fraction of the time it might take a live employee to do them, agentic AI won't be able to provide optimal results by itself, experts warned, emphasizing long-standing industry sentiment that humans will remain vital to its expansion. They raised caution about the perils of handing too much responsibility to agentic AI programs and its potential to harm business, particularly if human oversight is discarded.In an analysis of the performance of end-to-end agentic AI workflows conducted by attorneys at Debevoise & Plimpton, they determined the technology was effective when automating aspects of a complex project but struggled to maintain that level consistently across a project. "Many of these AAW projects fail because, as various tasks are stitched together without any human review in between them, the risk of errors compound, and any time saved in the process is lost by needing human intervention to fix the end product," the attorneys wrote in the law firm's data blog. The benefits agentic AI offers is only as good as the data it has available to analyze, meaning important variables may be left out when it considers all possible outcomes. "The rules that we set up for agentic AI systems usually cannot capture the nuanced social and cultural contexts that experienced employees rely on when deciding that not following a policy is actually the right course of action because the policy was drafted without this particular situation in mind," the blog stated.  In the case of mortgage, any incomplete or outdated source data could result in a customer being deemed ineligible for certain loans simply because incorrect guidelines were applied. While the AI may technically still be operating within the rules, the use of faulty data in such cases brings the same type of outcome a denial would — lost business. The findings add credence to technology experts' emphasis to keep humans in the process, not just to review exceptional findings, but also override AI when necessary. "You want a human in the loop on a lot of these decisions that are occurring," Geertsema said. Achieving the right balance means finding the right formula "to make things more efficient and more accurate, but still keeping that human touch and reasoning in there." Agentic AI's scrutinization of source data and the speed at which it can to spell out its findings after completed tasks are helping to provide lenders some peace of mind, Yu said. Understanding how autonomous determinations were made, including any flaws AI may have uncovered, and seeing suggestions for future action items goes a long way in helping them get to the lightbulb moment.  "Loan officers, processors, underwriters — they don't have to chase down all those data points.They don't have to run calculations. They can see them in the review," Yu said.As a result, "they can make a long decision much faster, and I think that's the key here. They are making the loan decision," she said. 

Key Insight: Acting Consumer Financial Protection Bureau Director Russell Vought says he cannot request money for the bureau because the Federal Reserve System has not turned a profit since 2022.Supporting Data: While some think the issue could be taken up eventually by the Supreme Court, new data suggests the Federal Reserve may return to profitability in the first quarter.What's at Stake: The current legal battle is part of a larger war waged by the Trump administration to gut the CFPB and get federal employees to leave the agency. The Trump administration has shifted the focus of its legal battle over its ability to shut down the Consumer Financial Protection Bureau from a matter of executive power to a dispute over the CFPB's funding — one that may ultimately reach the Supreme Court. Acting CFPB Director Russell Vought alleged earlier this month that he cannot request funding from the Federal Reserve because the system is unprofitable. Vought anticipates the CFPB will run out of funding in early 2026.The new argument over the CFPB's funding marks another major skirmish in the legal battle over whether the president can effectively eliminate an agency by firing federal employees en masse. The CFPB's union sued Vought in February, and the litigation shows no signs of an easy end. A federal judge ordered Vought and the National Treasury Employees Union to submit arguments to U.S. District Court Judge Amy Berman Jackson on whether a preliminary injunction that she issued in March — which bars Vought from firing employees — remains in effect.The union asked the judge for clarification on the injunction, after Vought said the CFPB was running out of money and would knowingly be in violation of the preliminary injunction. Now both the CFPB and the union also must address the district court's authority to enforce the injunction given that the litigation is pending an appeal. In August, a panel of the U.S. Court of Appeals for the D.C. Circuit ruled in favor of the CFPB, finding that Vought could lawfully fire employees through a reduction-in-force. That opinion was appealed by the union, and the D.C. Circuit court is expected to rule any day now on whether they will rehear the case.Alan Kaplinsky, senior counsel at Ballard Spahr and its longtime consumer financial services practice chair, said that, whatever the legal question is, the case is headed to the Supreme Court. "That issue is now on track to eventually make it to the Supreme Court," Kaplinsky said. "And I would expect the Supreme Court to grant review, because it's such an important issue.Adam Levitin, the Carmack Waterhouse professor of law and finance at Georgetown University Law Center, said it isn't clear which court will hear the funding issue and when. "One possibility is the D.C. Circuit takes this up, but the problem is, this is a new issue that wasn't litigated in the district court," Levitin said. "It's not that it's outside the power of the courts, but a federal court telling a federal agency that it has to draw money from another agency can get very weird."When Vought announced that the CFPB could not request funding from the Federal Reserve, he cited a new interpretive letter issued from the Department of Justice's Office of Legal Counsel, which claimed  the Fed lacks "combined earnings" from which to fund the CFPB.At issue is the statutory text in the Dodd-Frank Act that states the CFPB will be funded from the Federal Reserve's "combined earnings," which is not further defined in the statute. The CFPB under Vought has argued that the Fed's earnings means all the money the Fed earns from bonds and securities, interest and fees minus interest expenses. The union claims just the opposite: that combined earnings means money earned before paying out interest.As if the litigation isn't complicated enough, a new wrinkle has emerged, with some experts now predicting the Fed will return to profitability in the first quarter, after losing money since September 2022. "That certainly throws a wrench into the CFPB's argument," said Chris Willis, a partner at the law firm Troutman Pepper Locke. The theory that the CFPB cannot request funding from the Fed gained traction last year, almost immediately after the Supreme Court sided with the CFPB in May on a separate argument against the CFPB's funding. In that case, Justice Clarence Thomas wrote the 7-2 opinion affirming the constitutionality of the CFPB's funding structure and rejecting an argument that it violates the Constitution's Appropriations Clause. The novel theory that the Fed cannot fund the CFPB when it fails to turn a profit has not been decided by any court, but it gained renewed enthusiasm after Harvard Law School Professor Emeritus Hall Scott threw his weight behind the issue in an op-ed in the Wall Street Journal. "The CFPB added this as an argument at the last minute, but they haven't abandoned any of the other arguments — they are just saying that now they don't have any funding," Willis said.Many legal experts are debating whether "combined earnings" in Dodd-Frank means net or gross. Jeff Sovern, the Michael Millemann Professor of Consumer Protection Law at the University of Maryland Francis King Carey School of Law, noted that Vought's stated goal was to put civil servants "in trauma," and to shut down the bureau. "I find the argument that the Fed can't fund the CFPB because it lacks profits unpersuasive, though a court eager to serve the president's goals might nevertheless seize upon it, just as the administration has," Sovern said. "The CFPB's funding doesn't depend on whether the Fed is profitable in a particular quarter or even a particular year."Sovern and others said Congress would not have set up the CFPB's funding to lapse. Plus, the CFPB has accepted the funding since 2022, and it has done so this year under Vought, who waited nine months before raising the issue."It makes no sense that Congress would want consumers to be protected against abusive debt collectors, inaccurate credit reports, deceptive bank practices and the like, only when the Fed's revenues exceed its costs," Sovern said.Kaplinsky said he found it peculiar that the CFPB announced this week that it would start supervising banks again and would subject examiners to a so-called "humility oath," at the same time the agency is warning that it has no funding. The bureau also is continuing investigations and plans to bring enforcement actions."What's surprising is, why didn't they make this argument long ago? It's not as if they didn't know about it," said Kaplinsky. "And what [Vought] is saying about doing more work seems inconsistent with an earlier statement that they are running out of money and he claims there is nothing they can do about it. Who is going to do all the work? How are they going to pay for it and where is the money coming from?"The agency has filed no enforcement actions since February, when Vought took over, and has instead dismissed more than half of pending litigation from the Biden era.In addition, the CFPB is rushing to complete a number of rules including the 1033 open banking rule and the 1071 small business data collection rule. The bureau also has statutory requirements such as publishing the Annual Percentage Offer Rate that provides stability to the mortgage industry. "It's very counterproductive for them to close the agency when they are doing a bunch of rulemakings that the industry would like to see completed," Willis said. Looking forward, many lawyers think Jackson will hold a hearing next week to sort out the immediate issues posed by the Office of Legal Counsel opinion, and the issue will likely wend its way through the court system from there. But in a broader sense, the Trump administration's goal of breaking the CFPB may be realized even if its goal of eliminating the agency is not."Even if the agency still exists at the end of the Trump administration, it will be a hollowed out shell," said Levitin. 

A pool of first-lien, non-prime mortgages will provide collateral for $298.9 million in residential mortgage-backed securities (RMBS) that Blue River Mortgage is bringing to market.Known as GCAT 2025-NQM7 Trust, the transaction is expected to close on December 3, and has a meaningful concentration of non-qualified mortgages, including 23.6% considered non-QM; 37.7% that are safe harbor; and 2.5% of rebuttable presumption, according to analysts at Kroll Bond Rating Agency.The notes have a final maturity of November 2070, KBRA said, and the deal will repay investors on a combined pro rata and sequential basis. Wells Fargo Securities, Goldman Sachs, ATLAS SP and Barclays Capital are among the initial note purchasers.GCAT will also experience what's known as subordination erosion. If cumulative loss or a delinquency trigger event is in effect, then the deal will distribute principal among the class A notes before any principal allocation the class M1 or class B certificates. So, the dollar amount of subordination credit support will fall for classes A1A, A1B and A2 during the life of the securitization, unless a trigger event occurs.The deal will sell notes through about 11 tranches of classes A, M and B notes, KBRA said. GCAT 2025-NQM7 Trust will issue primarily fixed-rate notes, but the B1 notes could issue either fixed-rate notes or debt priced against a net weighted average coupon (WAC).The A1A notes, rated AAA from KBRA, benefit from credit enhancement level representing 30.55% of the note balance, according to the rating agency. Tranches A1B and A1 also rated AAA, have credit enhancement representing 20.55% of the pool balance.GCAT's pool of assets, which has a cutoff date of November 1, is composed of 550 loans that have an average balance of $543,591, KBRA said. Of the loan pool, the aggregate top five balances represent 4.6% of the total pool, the rating agency said.Borrowers—44.8% of which are self-employed—have a weighted average (WA) debt-to-income ratio of 35.9%, and non-zero WA annual income of $529,022.Aside from the AAA-rated A1 notes, KBRA assigned AA- to the A2 notes; A- to the A3 notes; BBB- to the M1 notes; BB to the B1 notes; and B+ to the B2 notes, KBRA said.

Mortgage rates inched down this week, and they are likely to remain stable throughout the rest of the year.After three consecutive weeks of upticks, the 30-year fixed mortgage rate dropped 0.3 basis points to 6.23% from last week when it averaged 6.26%. The 30-year rate averaged 6.81% this week a year ago.The 15-year fixed mortgage rate also fell 0.3 basis points to 5.51% from 5.54% last week. It averaged 6.10% this week a year ago."Heading into the Thanksgiving holiday, mortgage rates decreased," said Sam Khater,Freddie Mac's chief economist, in a press release Wednesday. "With pending home sales at the highest level since last November, homebuyer activity continues to show resilience as we near the end of the year."The Federal Reserve cut the federal funds rate by 25 basis at the end of October, yet the three full weeks that followed all saw mortgage rates rise, causing pending home sales and overall activity to stall shortly after. Much of this can be attributed to Chair Jerome Powell's comments at the Federal Open Market Committee Meeting, in which he tampered expectations for a December cut.Pending home sales decreased 0.3% during the four weeks ending Nov. 9, the first drop in four months, according to a report from Redfin."House hunters are sensitive to rates and prices; many are waiting for one or both to drop before buying," said W.J. Eulberg, a Redfin Premier agent in Milwaukee, in a press release earlier this month.But overall activity in the housing market saw a slight bump recently, as mortgage applications increased 0.2% last week from the week prior, despite a 6% dip in refinancing activity, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey."Despite these slightly higher rates, purchase applications increased over the week and remained at a stronger pace than a year ago, with increases across conventional and government purchase applications," MBA Vice President and Deputy Chief Economist Joel Kan said in a press release Wednesday.With uncertainty surrounding a rate cut next month and delayed data following the government shutdown, mortgage rates are expected to remain relatively stable until next year.

While gain on sale margins for mortgage lenders were at least stable, if not improved, in the third quarter compared to prior periods, that did not necessarily translate to improved profitability, separate reports from Morningstar DBRS and Boston Consulting Group revealed.The Morningstar report looked only at independent mortgage bankers, and the group it pulled gain on sale data included Onity, Rocket, Loandepot, United Wholesale Mortgage, Rithm and both publicly traded Pennymac companies.BCG includes depositories which provided GOS information, including Citizens Financial, Fifth Third and PNC; its non-bank group includes the soon-to-be acquired Guild, but not Onity or Pennymac Financial Services, although those companies do appear in other portions of the study.What drove IMBs third quarter results"Companies optimized their performance by controlling pricing in the wholesale channel, capitalizing on the servicing portfolio through enhanced recapture capabilities, and optimizing channel mix by shifting volume to more profitable channels such as the direct-to-consumer channel," Morningstar DBRS analysts Shaima Ahmadi and David Laterza wrote.Both reports noted the tailwinds from the surge in refinancings for volume in September, which continued into October.Going forward, BCG is expecting high refinance demand as sensitivity to rate changes coupled with a growing portion of outstanding loans with mortgage rates which are over 6% are pushing lenders to focus on recapture opportunities.Rocket's GOS was flat compared to the second quarter and only 2 basis points higher than one year ago. Its earnings benefitted from the integration of Redfin during the quarter, as the latter's real estate leads flowed into Rocket's platform, Morningstar DBRS said.Rithm reported lower GOS versus both comparable quarters, which the Morningstar analysts noted came from "higher Ginnie Mae streamlined refinance volumes, which are cheaper to produce, but have thinner margins."The only depository in the BCG grouping with lower GOS on a quarter-to-quarter basis was Citizens, down 24 basis points. Among the companies it tracks, median GOS margins increased by 9 basis points versus the second quarter but declined on an annual basis by 14 basis points.Non-bank mortgage companies tracked by Morningstar DBRS reported combined net income of $367 million for the third quarter, down from $807 million three months prior but up from $191 million of net losses for the third quarter of 2024.Why improved margins did not correlate with better results"Stabilization of mortgage servicing rights, fair values with effective hedging and higher servicing fee income were common drivers of improving profitability for certain participants," the analysts said. "However, higher gain on sale margin as reported by some of the peers did not have a corresponding effect on overall firm profitability as those gains were offset by an increase in operating costs, and the nonrecurrence of derivative gains, and one-time benefits reported in the same quarter a year ago."When it came to operating expenses across the peer group, these rose by an average of 30% over the third quarter of 2024, with higher variable costs related to higher production volumes being a common driver. For Rocket in particular, expenses were also driven by transaction-related costs from the Redfin and Mr. Cooper deals.In its client conversations, BCG found they are working towards creating lasting low-cost structures and remarkable growth, primarily via margin expansion and increased market share, the report from Micah Jindal said."Many are prioritizing investments in artificial intelligence, end-to-end digital customer journeys and home ecosystems to achieve these goals," BCG said. "These observations highlight a common urgency: continually adapting to fuel sustainable growth and lead in a persistently changing mortgage sector industry."What lenders are doing to grow their businessAs part of efforts to grow market share, lenders are adding to their product menu "to meet changing customer needs," such as adding or expanding their home equity line of credit and non-qualified mortgage offerings, BCG pointed out.Among the forward looking guidance the BCG clients provided was a "strong belief across peers that continued AI investment will reduce cost to originate and service while enabling personalization at scale to help grow revenues."Peers are continuing to shape their mortgage platforms as some look to diversify their business lines (Rithm), invest in servicing capabilities (Rocket, UWM), pursue asset lite strategies (Pennymac, Onity) and focus on customer relationships (banks)," BCG said.Besides the six IMBs and three banks previously mentioned, the other depositories in the BCG report are Wells Fargo, J.P. Morgan Chase, U.S. Bank, Bank of America, Truist, Huntington Bank and Citi.

Key Insight: Even though ethics violations among Fed officials are uncommon, high-profile cases like that of former Fed Gov. Adriana Kugler highlights persistent questions about oversight effectiveness.Expert Quote: "When you're in a position that's as influential as working at the Federal Reserve, you're governed by the law of Caesar's wife — be above suspicion." — Alex Pollock, senior fellow at the Mises Institute.What's at stake: The Federal Reserve unveiled new reporting requirements in 2022 for members of the FOMC. The recent Kugler controversy has raised questions about whether the rules are actually working.The Federal Reserve has been rocked in recent years by a number of high-profile trading scandals, leaving some to question whether the central bank has an endemic ethics problem that it is struggling to contain internally.Stakeholders interviewed differ on whether there are actual oversight lapses or whether attention to such cases is simply heightened when Fed officials are involved. But what is clear is that these incidents can undermine public confidence in the central bank."When you're in a position that's as influential as working at the Federal Reserve, you're governed by the law of Caesar's wife — be above suspicion," said Alex Pollock, a senior fellow at the Mises Institute.The most recent scandal to make headlines was the revelation that former Fed Gov. Adriana Kugler violated the central bank's ethics rules and was subject to an internal probe before her abrupt departure in August. Financial disclosures show previously undisclosed trades in multiple individual stocks in 2024, some of which occurred during the Fed's blackout period, a violation of the agency's ethics rules.Other Fed officials embroiled in financial-related scandals in recent years include Atlanta Fed President Raphael Bostic, Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan. Both Rosengren and Kaplan were cleared of legal wrongdoing by the central bank's internal watchdog, but they were criticized for eroding the public's trust. An investigation into Bostic found no violation of federal insider trading laws, but did reveal that he failed to disclose his holdings in a timely manner.Mayra Rodriquez Valladares, a financial risk consultant, said that despite these instances, ethical malfeasance is rare at the Fed and not systemic."We have to remember these are three or four people out of how many thousands who work for the Fed system," she said. "This is not part of the culture in the Federal Reserve; this is not pervasive behavior that is going on."Valladares added that there are many more examples of members of Congress engaging in similar activity, noting that rules should be written to "prohibit them from committing flagrant insider trading."Following the Rosengren and Kaplan scandals in 2020, the central bank implemented more stringent reporting requirements that limit certain investments."These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve," said Fed Chair Jerome Powell in 2021. But stakeholders have questioned whether these measures have had any meaningful impact. Aaron Klein, a senior fellow at the Brookings Institution, called the Fed's ethics system "rotten to the core," saying the central bank has failed to fix underlying issues despite the new requirements."If the Fed regulates banks the way it regulates senior officials for ethics, then God help us all," Klein said.Klein added that the Fed's new ethics standards require senior officials to disclose their financial information monthly, and questioned how Kugler's missing or incomplete disclosures could have slipped through."So was Kugler not submitting the information, or was the information not checked?" he said. "The Fed has never answered either question."The Federal Reserve requires members of the Federal Open Market Committee to give 45 days' notice before buying or selling any securities. If a purchase occurs, committee members must disclose it within 30 days.The agency's inspector general launched an investigation into Kugler earlier this year that is ongoing.Regardless of whether these issues are pervasive, market watchers agree that instances of financial impropriety harm the Fed's credibility."There's a high standard that some may think is not fairly placed on Fed officials, but overall it's important because these individuals are making decisions that impact monetary policy," said Pollock.Valladares said there should be more oversight and stricter rules for anyone who works at a bank regulatory agency, including the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, to prohibit trading in bank-related stocks or bonds. But whatever rules are in place, it is equally important that those rules are effectively implemented and enforced, she said."The problem is you can have all the rules you want, but the question is how do said rules really get enforced," Valladares said. 

The Federal Housing Administration once helped finance thousands of loans for manufactured housing. An effort to restart that program would help millions of Americans afford their own homes, writes Scott Susin, of the Center for Mortgage Access.Kybele - stock.adobe.com The Federal Housing Administration, or FHA, was once a major player in lending for manufactured homes titled as personal property, helping tens of thousands of families achieve homeownership each year. Today, it insures almost none, leaving borrowers to face nearly 10% interest rates in a market dominated by three lenders.FHA's Title I manufactured housing program peaked at 26,000 loans in 1991. By 2009, volume had fallen to 1,300, with a maximum loan limit of roughly $70,000. That limit remained unchanged for over a decade, until FHA lending in this market ceased altogether.Personal property, or chattel, loans finance nearly 40% of manufactured home purchases, with more than 55,000 borrowers using one last year. Unlike traditional mortgages, chattel loans are secured only by the home, not by the land beneath it. They typically carry higher rates and offer fewer consumer protections, particularly in the event of default. Repossession can occur much faster than a foreclosure.Yet for buyers who lack ownership of the land, either leasing it or living on family property, these loans are the only viable path to homeownership. Even among landowners, they are not uncommon.Manufactured homes remain a crucial source of affordable housing for approximately 7 million households, or about 5% of all U.S. households. This exceeds the total number served by all HUD-subsidized housing programs.This federal ret $100M affordable housing fund is 'just the beginning' Financial literacy advocate John Hope Bryant has joined with a Los Angeles-based developer in an effort to raise up to $300 million from banks to preserve and construct low-income housing around the country. reat from manufactured housing chattel loans has created a serious market gap, leaving homebuyers with few options for obtaining these loans. Only three lenders control 76% of the market: Triad, Vanderbilt and 21st Mortgage. The latter two are both owned by Berkshire Hathaway and largely avoid competing with each other.With so little competition, borrowers pay a premium. Average chattel loan rates were 9.7% in 2024, compared with 7.0% for manufactured-home mortgages and 6.5% for traditional site-built homes.Renewed federal participation could help lower costs and expand credit availability by introducing competition, standardized products and additional consumer protections.The Biden administration committed to reviving FHA's chattel loan program and took a number of steps to modernize it. Notably, it reduced the onerous capital requirements imposed on lenders by 75%, collected the scattered program rules that had accreted over the years into a single handbook, and allowed the use of the mortgage industry's standard loan application form. In 2024, they even raised the loan limit.HUD officials under the Trump administration have likewise said they are "committed to exploring" ways to revive the moribund market. Yet despite the efforts of both administrations, progress has been minimal. In the past five years, FHA has been able to guarantee only a single, solitary loan.Of course, there are hurdles to reviving a long-dormant program. Underwriters, loan officers and securitizers must reacquaint themselves with FHA requirements. Lenders have to gain FHA approval to participate in the program and will do so only if they expect sufficient volume.Still, most of the groundwork has been laid. What's missing now is resolve. Restoring FHA's presence in this market would be a pragmatic, market-based step toward expanding affordable homeownership. It requires not a new policy framework, but only the determination by federal officials to act decisively and cut through bureaucratic inertia.

House Democrats sent a letter Tuesday to the U.S. Department of Housing and Urban Development Secretary Scott Turner, asking him to rescind a recent decision that would slash funding for affordable housing programs.HUD's Notice for Funding Opportunity for the Fiscal Year 2025 Continuum of Care Program, issued on Nov. 13, would cut support for permanent supportive housing programs from 86% of Continuum of Care funds to just 30% of its annual budget of roughly $3.5 billion, worsening homelessness, the letter said. The Continuum of Care program is the largest source of federal funding for homelessness assistance."We write in response to the Department of Housing and Urban Development's (HUD) reckless and disturbing policy change and funding announcement that could push over 170,000 formerly homeless individuals back on the streets and exacerbate our nation's homelessness crisis," wrote the lawmakers, led by Rep. Maxine Waters, D-California.More than 770,000 people experience homelessness, and the current notice would worsen the situation, affecting people with disabilities, veterans and domestic violence survivors, the letter said.The notice would also compress the application timeline to 60 days, and coupled with HUD's delayed release of the notice due to the government shutdown, create a nearly half-year gap in services with the fiscal year 2024 funds set to expire Dec. 31."This reckless timing will put critical homeless services at risk, leave rents unpaid, and put the most vulnerable people back on the streets," lawmakers wrote.Under the notice, programs and organizations that align with President Donald Trump's executive order to end crime and disorder will be prioritized. The executive order calls for different policies and practices to address homelessness, including mandated services, work requirements and camping bans. The notice also said HUD has the right to "evaluate the eligibility of a project application" if the project utilizes or has utilized in the past harm reduction practices like safe injection sites, promoted racial preferences or "[conducted] activities that rely on or otherwise use a definition of sex other than as binary in humans," according to the National Low Income Housing Coalition.Many conservatives have voiced their support of the changes, echoing Trump's call for more accountability."[The program change] restores accountability to homelessness programs and promotes self-sufficiency among vulnerable Americans," HUD said in an earlier press release. "It redirects the majority of funding to transitional housing and supportive services, ending the status quo that perpetuated homelessness through a self-sustaining slush fund."Yet, more than 20 Republican lawmakers sent a letter to HUD last month asking for the renewal of the existing grants to avoid disruption caused by significant policy changes this late in the funding award process.The Democratic lawmakers ended their letter by urging HUD to immediately reverse the notice, renew current grants and ensure evidence-based solutions receive necessary funding.