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Through the final rule for flood-risk management, released on Monday, the Department of Housing and Urban Development will add new prerequisites for certain mortgages.The rule will hold maps and collateral for some loans the Federal Housing Administration insures to new standards. It affects new-construction residences in certain at-risk flood zones. The lowest floors in these homes now must be at least 2 feet above the base flood elevation.HUD estimated that the change in its floodplain management and property standards will affect around 10% of new homes built each year. That will protect them against future climate risks."This rule will ensure HUD supported properties have the best chance of being undisturbed when flooding occurs," said Marion McFadden, a principal deputy assistant secretary at HUD. "It is the responsibility of the federal government to ensure that taxpayer investments are built to withstand foreseeable risk," she added. Lessons learned from past flooding have proved valuable in demonstrating the value of structural improvements, according to the department.In drawing up its new rule, HUD looked at the effectiveness of past public flood-proofing. Initiatives implemented after Hurricane Katrina, for example, were successful in making local housing more resilient, it found.The minimum requirements for FHA loans are effective May 23 but certain compliance requirements won't kick in until Jan. 1 of next year. Building permits must meet the new standards starting on that date.The Mortgage Bankers Association thanked HUD for giving the industry several months to implement the requirements. However, it also expressed concerns about the upfront costs."Implementing new elevation requirements for some new single-family and multifamily homes, and requiring higher levels of flood insurance will make FHA financing more expensive and less competitive," said Bob Broeksmit, president and CEO of the association.But HUD said that the investment in elevation improvements is a cost saver in the long-term.Overall, the rule could save homeowners roughly $56.4 million to $324.3 million over 40 years, according to the department. Elevated homes in particular avoid $6 in damages for every $1 invested, according to the department's analysis of National Institute of Building Sciences data. Around 80% of states and more than 600 local jurisdictions already have elevation requirements for at-risk homes.The MBA also posed questions about references to the use of climate-informed science tools used in mapping.Maps associated with CISA tools "are not yet available nationwide, creating inconsistencies and confusion in complying with the final rule," Broeksmit said.In response to that concern, the department has noted that it chose to focus on those tools because they account for forward-looking risks. Many alternatives are based on retrospective analyses. Outdated flood maps have been a challenge for the industry"We will continue to work with the Biden administration on policies and solutions that address climate risks and extreme weather impacts, stressing the need for common sense approaches that do not curtail housing construction and negatively impact borrowers," Broeksmit said.

Lender and servicer Mr. Cooper announced Tuesday that it is beefing up its ranks with two senior executives.Ranjit Bhattacharjee, a capital markets veteran, will join the company as an executive vice president and chief investment officer. In his new role, Bhattacharjee will oversee capital markets and correspondent lending.Bhattacharjee comes to Mr. Cooper from Wells Fargo where he served as head of capital markets and correspondent lending from May 2022 to April 2024. He previously served as executive vice president of capital markets at Caliber Home Loans and spent nearly 15 years at Citi Mortgage. The mortgage executive is slated to start his job on May 6, 2024.Additionally, financial analyst Kevin Barker assumed the role of senior vice president of corporate finance Monday. Barker will lead Mr.Cooper's business finance teams and report to Kurt Johnson, the company's chief financial officer.Prior to his career shift, Barker worked for nine years as an analyst for Piper Sandler, his LinkedIn shows. The executive also previously worked at Freddie Mac and at Compass Point Research & Trading."Ranjit's deep knowledge of capital markets and correspondent lending and Kevin's extensive understanding of the mortgage industry will undoubtedly bring new ideas and insights to Mr. Cooper," said Jay Bray, Chairman and CEO of the company. "We are excited to welcome these two new leaders to our team as we continue to grow and scale our business."In January, Mike Weinbach was announced as the next president of the company. He will take over the roll following current leader Chris Marshall's retirement at the end of this year. Weinbach worked at JPMorgan Chase from 2003 through 2020, heading mortgage operations in his final five years there.Mr. Cooper reported better than expected earnings in the fourth quarter, posting a net income of $46 million. The mortgage lender and servicer also revealed the company's total servicing portfolio, which rose to $992 million in the fourth quarter, is likely to finally surpass its longstanding $1 trillion goal in the first quarter.

Here’s some Q&A with regard to the home loan approval process: “What do underwriters do?”Once you actually apply for a home loan, your mortgage application will be organized by a loan processor and then sent along to a loan underwriter, who will determine if you qualify for a mortgage.The underwriter can be your best friend or your worst enemy, so it’s important to put your best foot forward.The expression, “you’ve only got one chance to make a first impression” comes to mind here.Trust me, you’ll want to get it right the first time to avoid going down the bureaucratic rabbit hole.The Underwriter Will Approve, Suspend, or Decline Your Mortgage ApplicationAfter you formally apply for a home loan your file will be submitted to the underwriting departmentA human underwriter will then review your loan application and decision itTheir job is to approve, suspend, or decline your application based on its contentsIt’s paramount to submit a clean file to boost your chances of loan approvalSimply put, the loan underwriter’s job is to approve, suspend, or decline your mortgage application.If the loan is approved, you’ll receive a list of “conditions” which must be met before you receive your loan documents.  So in essence, it’s really a conditional loan approval.If the loan is suspended, you’ll need to supply additional information or loan documentation to move it to approved conditional status.If the loan is declined, you’ll more than likely need to apply elsewhere with another bank or mortgage lender, or take steps to fix whatever went wrong. The Three C’s of Mortgage UnderwritingCredit – payment behavior over time (your credit report)Capacity – ability to repay the home loan (your income and assets)Collateral – value of the underlying asset (the property)Now you may be wondering how underwriters determine the outcome of your mortgage application?Well, there are the “three C’s of underwriting,” otherwise known as credit reputation, capacity, and collateral.Credit reputation has to do with your credit history, including past foreclosures, bankruptcies, judgments, and basically measures your willingness to pay your debts.[What credit score do I need to get a mortgage?]If you’ve had previous mortgage delinquencies or even non-housing related delinquencies, these will need to be taken into account.Typically these items will be reflected in your three-digit credit score, which can actually eliminate you without any further underwriting necessary if you fall below a certain threshold.Your history supporting significant amounts of debt is also important; if the most you’ve ever financed has been a plasma TV, the underwriter may think twice about approving your six-figure loan application.Capacity deals with a borrower’s actual ability to repay a loan, using things like debt-to-income ratio, salary, cash reserves, loan program and more.This covers whether the loan is interest-only, an adjustable-rate mortgage or a fixed-rate mortgage, cash-out refinance or simply rate and term.The underwriter wants to know that you can repay the mortgage you’re applying for before granting approval.[How much house can I afford?]Finally, collateral deals with the borrower’s down payment, loan-to-value ratio, property type, and property use, as the lender will be stuck with the home if the borrower fails to make timely mortgage payments.Mortgage Underwriters Consider Layered RiskThey don’t look at one aspect of your borrower profile in a vacuumThey consider all factors together to make a sound decisionThose with risk in one area who are able to compensate for it may be approvedWhile those with risk in all areas might be denied due to layered riskNow it’s important to understand that the three C’s are not independent of one another.All three must be considered simultaneously to understand the level of layered risk that could be present in said loan application.For example, if the borrower has a less-than-stellar credit score, limited asset reserves, and a minimal down payment, the risk layering could be deemed excessive, leading to denial.This is the underwriter’s discretion, and can certainly be subjective based on other factors such as occupation, how long the borrower has been in the line of work, why the credit score is less than perfect, and so on.The underwriter must decide, based on all the criteria, if the borrower is an acceptable risk for the mortgage lender, and if the end product can be resold without difficulty to investors.Layered risk is a major reason why the mortgage crisis got so out of hand. Scores of borrowers applied for mortgages with stated income and zero down financing, which is certainly very high risk, and were easily approved.Rising home prices covered up the mess for a while, but it didn’t take long for everything to unravel. This is why sound mortgage underwriting is so critical to a healthy housing market.What Shouldn’t You Do During Underwriting?One last thing. When the underwriter is working to decision your loan file, you as the borrower should do your part as well.This means NOT applying for new lines of credit, such as a credit card or a new auto loan. And not making large purchases.If you do, they could show up on the credit report or be reflected in your credit scores. The last thing you want is a lower credit score to jeopardize your loan application.The same goes for moving assets around from one bank account to another, or switching jobs. It might sound crazy, but just about anything you can think of has happened.Long story short, you want to remain in a holding pattern while your loan goes through underwriting and ideally gets funded.Once the loan is funded and recorded, you can go on about your business, whether it’s buying new furniture or applying for a new credit card.But until that time, you can make life easier for everyone (including yourself) by doing nothing!Mortgage Underwriter FAQDo underwriters work for the bank/lender?Yes, underwriters are employees of banks, lenders, and mortgage bankers. They work on the operational side of things, making loan decisions after the sales team brings the loan in the door. This means they work in the same building as the sales team.How long does underwriting take?It might only take an underwriter a few hours to comb through a loan file and approve, suspend, or deny it. However, mortgage lenders only have so many underwriters available, and surely the number of loans in the pipeline will exceed the number of staff. As such, much of the time might be waiting in the queue until a pair of eyeballs actually look over your loan.So if you’re wondering how quickly can underwriting be done, it may depend on how busy the company is and if there’s any backlog. Once your file does get in front of an underwriter, the average time for underwriting is pretty quick, often 24 hours or less.Why do underwriters take so long?Hmm…I don’t know, because they’re approving a six-figure loan amount, or seven, to a complete stranger. As noted, the actual underwriting might not take that long, but the amount of available underwriters (humans) might be low. So you could just be in the queue. A clean loan file will get approved faster and with fewer conditions so get it right before the underwriter even sees it.Do underwriters verify employment?While employment is generally verified nowadays when you take out a mortgage, it might not be the underwriter verifying it. Instead, the loan processor may obtain the verification of employment (VOE). Many use the “The Work Number,” an independent third-party employment verification company now owned by credit bureau Equifax.How much do loan underwriters make?They can make pretty good money. Salaries may be in the high five figures to low six figures if they’re seasoned and skilled in underwriting all types of loans, including FHA, VA, and so on. If you start as a junior underwriter the salary could be less than $50,000. But once you become a senior loan underwriter, the pay can jump up tremendously. It may also be possible to earn overtime.Do underwriters make commission?They shouldn’t because that would be a conflict of interest. They should approve/deny loans based on the characteristics of the loan file, not because they need to hit a certain number. Compensating them for loan quality might be a different story, but again could lead to discrimination if they cherrypick only the best loans.Do underwriters work weekends?I’ve heard of some that have. I don’t know if they do on a regular basis, but if loan volume picks up in a short period of time it’s possible to come in on a Saturday or Sunday. The mortgage world is all about highs and lows, so sometimes it might be slow and other times it’s impossible to keep up.Are underwriters warm and friendly?They can be if you don’t rub them the wrong way. I look at mortgages kind of like the DMV. Show up with the right paperwork and a good attitude and you’ll get in and out before you know it. Do the opposite at your peril!(photo: Joelk75)

Sales of new homes in the U.S. bounced back in March in a broad advance as prospective buyers toughed out high mortgage rates.New single-family home sales increased 8.8% to a 693,000 annual pace last month, the fastest since September, government data showed Tuesday. Economists surveyed by Bloomberg gave a median estimate of 668,000.The figures indicate that sales have somewhat stabilized in recent months, though the data are volatile. Underlying demand remains strong, but buyers are still constrained by high mortgage rates and prices, which are limiting the extent to which the housing market can gain momentum.READ ALSO: RE/MAX's new president defines the new commissions landscapeInflation has proved stubborn in recent months, calling into question not only when the Federal Reserve will cut interest rates in 2024, but if it will at all. Mortgage rates above 7% continue to plague existing-home sales, which are "stuck," National Association of Realtors Chief Economist Lawrence Yun said last week.While the resale market is struggling with a lack of inventory, builders are stepping in to fill the void. The supply of new homes for purchase rose to 477,000 in the month, the highest since 2008.The report from the Commerce Department on Tuesday also showed the median sales price of a new house decreased 1.9% from a year ago to $430,700 in March.

Nearly 8% of homes sold nationwide last year were subject to a federal capital gains tax, approximately double the level prior to the pandemic, because of rising home prices, a CoreLogic report noted.These taxes, based on the profits earned after a home sale, could be just one more reason why some current owners are reluctant to list their property."I do think for some potential sellers having to pay capital gains taxes is a disincentive to sell, particularly in markets where equity gains are significant and home wealth is their main source of wealth," Selma Hepp, CoreLogic's chief economist, said in an emailed comment.The Taxpayer Relief Act of 1997 created an exemption for married sellers who jointly file a federal tax return of $500,000 on the sale of their primary residence. If a person files as single, the exemption is just $250,000.Between 2000 and 2003, after the Act became law, annually just 38,100 home sales, or 1.3% of the total, were above the exemption amount, CoreLogic estimated using gross housing capital gains.The actual numbers might be lower, because homeowners can deduct eligible costs, along with expenses from taxable gains when they are buying, selling and improving properties, an online posting from Yanling Mayer an economist at CoreLogic said. On the other hand, 12 states have non-disclosure rules that also affected the analysis.But in 2017, 119,200 or 3.1% of the total sales did not qualify for the exemption. The next two years, 3.3% of sales had gains over the exemption amount.The first year of the pandemic, 2020, that share grew to 4%, before spiking up to 6.5% in 2021 and 8.1% for 2022.Last year, 229,000 sales or 7.9% of transactions ended up with gains so high the seller could not claim the exemption when they filed their taxes during the period that just ended on April 15."At the state level, long-term homeowners in high-cost areas are expected to carry the lion's share of homes that owe significant capital gains payments," Mayer said. "That is because in dollar terms, high prices equal higher amounts of capital gains if given the same rate of home price growth, not to mention that many high-priced areas are frequently among the fastest-appreciating markets."This starts with California, where the high priced markets meant that between 2017 and 2023, 37% of all home sales in the state had capital gains above the exemption. During that period, the Golden State was just 10% of residential property sales nationwide.For California homeowners, "it means owing capital gains taxes upon selling homes has become more common than it was when The Taxpayer Relief Act became effective," Mayer said. "Nearly 30 years later, even modest homes for average-income families in many high-cost markets routinely sell for more than $1 million."For the fourth quarter of last year alone, California was responsible for 28.8% of the sales with gains above the exemption limit, followed by Hawaii at 23.8% and the District of Columbia at 22.1%; eight additional states were also over that national average in transaction volume."With high mortgage rates and housing costs challenging housing affordability for millions of households, owing capital gains taxes can be an unexpected (and unwelcome) surprise for long-term owners who are in the process of selling their home while trying to purchase another," Mayer said.

Ginnie Mae filed an answer to Texas Capital Bank's partially dismissed complaint in federal district court last week, arguing against TCB's allegations that it violated the Administrative Procedure Act.Ginnie pushed back against assertions that its seizure of collateral allegedly promised to the bank in return for providing tens of millions of dollars in financing was "in excess of statutory authority" in a filing in Texas' Northern District.The government agency argued that the act "does not authorize the award of monetary damages" and said that an APA claim should be barred because of the bank's "failure to exhaust its administrative remedies."Ginnie reiterated requests for a dismissal of the case filed in Texas' Northern District, noting that it "acknowledges that the plaintiff requests the relief" but "denies that it is entitled to it."The agency also doubled down on repudiating claims it made certain promises to TCB in its latest response to the bank's complaint from last October.In that complaint, the bank alleged "senior Ginnie Mae representatives, including [retiring] President [Alanna] McCargo explicitly assured TCB that it would be repaid" and that the rights to certain reverse mortgage assets were part of that agreement.TCB provided the financing in conjunction with Reverse Mortgage Funding's bankruptcy and Ginnie seized RMF's servicing rights in late 2022.Specifically at issue in the case are rights associated with "tails," or the cash-flows from draws older adults make on home-equity withdrawal loans after the initial disbursement gets securitized. Texas Capital said it would not have agreed to provide financing without these rights.While Ginnie has a history of working with the industry to a degree on policy, it's under a lot of pressure to protect the limited funding it uses to protect a multi-trillion-dollar global securitization market from risk when one of the mortgage companies it works with fails, particularly now.Currently, the Department of Housing and Urban Development's Inspector General is investigating Ginnie's handling of RMF's bankruptcy, and has noted that "extinguishing issuers and seizing their portfolios places significant stress on Ginnie Mae's operations."Ginnie is part of HUD, and reverse mortgages are a small but influential subset of the securitizations Ginnie guarantees and other agencies back at the loan level. The version of these loans found in Ginnie Mae securitizations are known as Home Equity Conversion Mortgages. Another arm of HUD, the Federal Housing Administration, insures HECMs as loans.A limited number of players are involved in the reverse mortgage market, which can complicate Ginnie's work when a failure occurs, particularly when rates are volatile. The agency typically relies on outside mortgage companies to ensure securitized loan cash-flows get to investors.There has been some broader tension between Ginnie and the industry over collateral rights in financial arrangements.Industry advocates have repeatedly asked that Ginnie adjust contractual rights in these arrangements more in their favor, even after some of its leaders like former President Ted Tozer have made attempts to make the agreements more equivocal.TCB and Ginnie do not appear to have utilized a typical agreement but rather had negotiated the terms of the emergency financing.A decisive ruling in the Texas Capital Bank lawsuit may not unfold after the federal election this fall, with the timeline for factual discovery set to continue into next year.

Better Home & Finance is bringing to the market a home equity loan, it announced Tuesday.This addition increases its suit of digital home equity products, which already includes a cash-out refinance loan and a one-day HELOC. There are plans for additional home equity-related offerings in the future, hinted Kevin Ryan, president and CFO at Better.According to Ryan, the HELOAN product, which can be originated in a week or less, lends itself to being a beneficial option for borrowers who are looking for a lower interest rate. Compared to a HELOC, HELOAN's can be 1% to 2% lower, he said."A HELOC functions like a credit card, meaning that you can borrow the money, pay it down and borrower again, it's a line of credit," Ryan said. "For a HELOAN it's just a one time draw, it doesn't have the same flexibility, but you borrow at a slightly lower rate."The home equity loan will enable homebuyers to access "up to 90% of their home equity as cash at a fixed annual percentage rate in a total of 30 states to date, with the remaining states being on-boarded to the program," Better said in its press release.Better's push into the home equity product space comes at a time when homeowners have a historically high amount of equity in their homes."A lot of people have a need for cash," said Ryan. "[A home equity loan can be] an alternative to credit card debt and to personal loans. It's borrowing at a lower rate than you would opting for the other products I mentioned. We think the timing for the consumer is very good." The timing is also good for bringing onboard more loan originators, Better's Ryan said, though he would not disclose how many LOs they'd be hiring."We see an opportunity for growth. We obviously spent a lot of time cutting people, cutting costs," he said. "We've hit a low point in the cycle and we'll have some marginal improvement in the industry over the course of 2024 and then into 2025, so we're hiring now in advance of that.""We feel like we've gotten the consumer offering, the flow for the consumer to a much better place that we can gradually take market share here," Ryan added. "It's really just taking market share." The company posted a $59 million net loss in the fourth quarter, its second earnings report since going public last summer. That was an 83% improvement from the $340 million net loss over the third quarter of 2023, which leadership credited to its merger to go public. During its earnings call in March, Better executives were bullish on future performance after shifting loan officer pay last year to commission-based compensation plans.Other companies such as Figure have also jumped on board the HELOC loan craze. Late last year Figure launched a HELOC wholesale loan production platform and entered into partnerships with four independent mortgage bankers to provide a private-label HELOC product as first-lien business declines.

Ted Tozer is warning lenders and servicers to pay heed to the effects of climate change, which could devalue servicing and prompt repurchases. The former Ginnie Mae leader and housing strategist, outspoken on mortgage issues since he left his post in 2017, voiced many concerns about the threats that warming temperatures and more severe weather pose to lenders, servicers, property insurers and borrowers at the Americatalyst conference in Washington, D.C. last week. Tozer, in an interview with National Mortgage News, defined the climate challenge for mortgage firms, which includes more guarantee fees, repurchases and devalued servicing. While acknowledging the term "climate change" is a sensitive topic among some, Tozer emphasized the industry should not focus on the causes of worsening weather but rather the impacts that changes like rising waters could have on America's housing finance system. This interview has been edited for length and clarity.

If you’re having trouble obtaining a home loan, perhaps after speaking to multiple banks, lenders and even a mortgage broker, consider reaching out to a “portfolio lender.”Simply put, portfolio lenders keep the loans they originate (instead of selling them off to investors), which gives them added flexibility when it comes to underwriting guidelines.As such, they might be able to offer unique solutions others cannot, or they could have a special loan program not found elsewhere.For example, a portfolio lender may be willing to originate a no-down payment mortgage while others are only able to provide a loan up to 97% loan-to-value (LTV).Or they could be more forgiving when it comes to marginal credit, a high DTI ratio, limited documentation, or any other number of issues that could block you from obtaining a mortgage via traditional channels.What Is a Portfolio Loan?A home loan kept on the bank’s books as opposed to being sold off to investorsMay come with special terms or features that other banks/lenders don’t offerSuch as no down payment requirement, an interest-only feature, or a unique loan termCan also be useful for borrowers with hard-to-close loans who may have been denied elsewhereIn short, a “portfolio loan” is one that is kept in the bank or mortgage lender’s portfolio, meaning it isn’t sold off on the secondary market shortly after origination.This allows these lenders to take on greater amounts of risk, or finance loans that are outside the traditional “credit box” because they don’t need to adhere to specific underwriting criteria.Nowadays, most home loans are backed by Fannie Mae or Freddie Mac, collectively known as the government-sponsored enterprises (GSEs). Or they’re government loans backed by the FHA, USDA, or VA.All of these agencies have very specific underwriting standards that must be met, whether it’s a minimum FICO score of 620 for a conforming loan. Or a minimum down payment of 3.5% for an FHA loan. If these conditions aren’t met, the loans can’t be packaged as agency mortgage-backed securities (MBS) and delivered and sold.Since small and mid-sized lenders often don’t have the capacity to keep the loans they fund, they must ensure the mortgages they underwrite meet these criteria.As a result, you have a lot of lenders making plain, vanilla loans that you could get just about anywhere. The only real difference might be pricing and service.On the other hand, portfolio lenders who aren’t beholden to anyone have the ability to make up their own rules and offer unique loan programs as they see fit.After all, they’re keeping the loans and taking the risk, so they don’t need to answer to a third party agency or investor.This means they can offer home loans to borrowers with 500 FICO scores, loans without traditional documentation, or utilize underwriting based on rents (DSCR loans).Ultimately, they can create their own lending menu based on their very own risk appetite.Portfolio Loans Can Solve Your Financing ProblemLarge loan amountHigh DTI ratioLow credit scoreRecent credit event such as short sale or foreclosureLate mortgage paymentOwner of multiple investment propertiesAsset-based qualificationLimited or uneven employment historyQualifying via subject property’s rental incomeUnique loan program not offered elsewhere such as an ARM, interest-only, zero down, etc.There are a variety of reasons why you might want/need a portfolio loan.But it’s generally going to be when your loan doesn’t fit the guidelines of the GSEs (Fannie/Freddie) or Ginnie Mae, which supports the FHA and VA loan programs.As noted, these types of mortgage lenders can offer things the competition can’t because they’re willing to keep the loans on their books, instead of relying on an investor to buy the loans shortly after origination.This allows them to offer mortgages that fall outside the guidelines of Fannie Mae, Freddie Mac, the FHA, the VA, and the USDA.That’s why you might hear that a friend or family member was able to get their mortgage refinanced with Bank X despite having a low credit score or a high LTV.Or that a borrower was able to get a $5 million jumbo loan, an interest-only mortgage, or something else that might be considered out-of-reach. Perhaps even an ultra-low mortgage rate!A portfolio loan could also be helpful if you’ve experienced a recent credit event, such as a late mortgage payment, a short sale, or a foreclosure.Or if you have limited documentation, think a stated income loan or a DSCR loan if you’re an investor.Really, anything that falls outside the box might be considered by one of these lenders.Who Offers Portfolio Loans?Some of the largest portfolio lenders include Chase, U.S. Bank, and Wells Fargo, but there are smaller players out there as well.Before they failed, First Republic Bank offered special portfolio mortgages to high-net-worth clients that couldn’t be found elsewhere.They came with below-market interest rates, interest-only periods, and other special features. Ironically, this is what caused them to go under. Their loans were basically too good to be true.It’s also possible to find a portfolio loan with a local credit union as they tend to keep more of the loans they originate.For example, many of them offer 100% financing, adjustable-rate mortgages, and home equity lines of credit, while a typical nonbank lender may not offer any of those things.Generally, portfolio lenders are depositories because they need a lot of capital to fund and hold the loans after origination.But there are also non-QM lenders out there that offer similar products, which may not actually be held in portfolio because they have their own non-agency investors as well.Portfolio Loan Interest Rates Can Vary TremendouslyPortfolio mortgage rates may be higher than rates found with other lenders if the loan program in question isn’t available elsewhereThis means you may pay for the added flexibility if they’re the only company offering what you needOr they could be below-market special deals for customers with a lot of assetsEither way still take the time to shop around as you would any other type of loanNow let’s talk about portfolio loan mortgage rates, which can vary widely just like any other type of mortgage rate.Ultimately, many mortgages originated today are commodities because they tend to fit the same underwriting guidelines of an outside agency like Fannie, Freddie, or the FHA.As such, the differentiating factor is often interest rate and closing costs, since they’re all basically selling the same thing.The only real difference aside from that might be customer service, or in the case of a company like Rocket Mortgage, a quirky ad campaign and some unique technology.For portfolio lenders who offer a truly unique product, loan pricing is entirely up to them, within what is reasonable. This means rates can exhibit a wide range.If the loan program is higher-risk and only offered by them, expect rates significantly higher than what a typical market rate might be.But if their portfolio home loan program is just slightly more flexible than what the agencies mentioned above allow, mortgage rates may be comparable or just a bit higher.It’s also possible for the rate offered to be even more competitive, or below-market, assuming you have a relationship with the bank in question.It really depends on your particular loan scenario, how risky it is, if others lenders offer similar financing, and so on.At the end of the day, if the loan you need isn’t offered by other banks, you should go into it expecting a higher rate. But if you can get the deal done, it might be a win regardless.Who Actually Owns My Home Loan?Most home loans are sold to another company shortly after originationThis means the bank that funded your loan likely won’t service it (collect monthly payments)Look out for paperwork from a new loan servicing company after your loan fundsThe exception is a portfolio loan, which may be held and serviced by the originating lender for the life of the loanMany mortgages today are originated by one entity, such as a mortgage broker or a direct lender, then quickly resold to investors who earn money from the repayment of the loan over time.Gone are the days of the neighborhood bank offering you a mortgage and expecting you to repay it over 30 years, culminating in you walking down to the branch with your final payment in hand.Well, there might be some, but it’s now the exception rather than the rule.In fact, this is part of the reason why the mortgage crisis took place in the early 2000s. Because originators no longer kept the home loans they made, they were happy to take on more risk.After all, if they weren’t the ones holding the loans, it didn’t matter how they performed, so long as they were underwritten based on acceptable standards. They received their commission for closing the loan, not based on loan performance.Today, you’d be lucky to have your originating bank hold your mortgage for more than a month. And this can be frustrating, especially when determining where to send your first mortgage payment. Or when attempting to do your taxes and receiving multiple form 1098s.This is why you have to be especially careful when you purchase a home with a mortgage or refinance your existing mortgage. The last thing you’ll want to do is miss a monthly payment right off the bat.So keep an eye out for a loan ownership change form in the mail shortly after your mortgage closes.If your loan is sold, it will spell out the new loan servicer’s contact information, as well as when your first payment to them is due.

Truist Financial is one of several U.S. regional banks with larger capital markets businesses that reported year-over-year increases in fee income for the first quarter.Graeme Sloan/Bloomberg Truist Financial's investment banking and trading fees surged in the first quarter, due to better market conditions and a payoff from enhancements to that business, executives said Monday.Through the end of March, investment banking and trading fees totaled $323 million, up 23.8% year over year, the Charlotte, North Carolina, company said. It was a marked improvement from previous quarters in which investment banking and trading revenues slumped amid an industrywide downturn in capital markets activities.The upturn reflected strength in equity capital and mergers-and-acquisitions specifically, Truist CEO Bill Rogers told analysts during a conference call to discuss results.But that's not all, he said. Internally, the $531 billion-asset company is making progress in growing its investment banking and trading business. It is having success in cross-selling through its commercial bank, and it has added more than 30 investment bankers at the "managing director" level who bring "great expertise and great access," Rogers said.As capital markets activity resumes, Truist is gaining market share in certain capital-markets products and expanding into industries "that are primed for growth," Rogers added."A lot of it, obviously, is from market improvement, but … we've been investing in this business for quite some time," Rogers said. "Our existing team is really sort of rising to the challenge."The boost in investment banking and trading fees helped lift Truist's first-quarter noninterest income to $1.4 billion for the quarter, representing a 1.8% increase year over year. Higher wealth management fees also contributed to the lift, which was partially offset by a slowdown in mortgage banking income and fewer service-related charges on deposits.Truist is one of several U.S. regional banks with larger capital markets businesses that reported year-over-year increases in fee income for the first quarter. U.S. Bancorp in Minneapolis, KeyCorp in Cleveland and Citizens Financial Group in Providence, Rhode Island, all reported high single-digit increases in fee income for the quarter, according to a Fitch Ratings report.The boost in fee income comes as banks are facing the possibility that trends in net interest income will remain weak, with growth hampered by the potential for higher-for-longer interest rates. The Federal Reserve has recently signaled that it may keep interest rates elevated for a longer period than many banks assumed in their 2024 outlooks, which could further compress margins.At Truist, net interest income fell 12.6% year over year due to higher funding costs and lower earning assets, the company said. Outside of banks that have big credit card businesses, such as JPMorgan Chase and Citigroup, net interest income has declined across most banks, Fitch said in its report.As a result of potential ongoing pressure on net interest income, Truist on Monday revised its full-year revenue guidance downward. It is now calling for a year-over-year revenue decline of 4% to 5%. In January, it forecasted a year-over-year revenue decline of 1% to 3%, but that range would have been around 3% to 5% if anticipated earnings from the insurance business had been excluded. Trust has since agreed to sell Truist Insurance Holdings to two private-equity firms and other investors.During the second quarter, Truist is predicting that net interest income will decline by 2% to 3%.Truist is currently assuming that the Fed will cut rates three times in 2024, Chief Financial Officer Mike Maguire said on the call. While the firm still expects net interest income to "trough" in the second quarter and then "modestly improve" in the back half of the year, a scenario with fewer than three rate cuts this year would "add pressure" to the net interest income outlook and lead to full-year revenues "coming in at the lower end of our range," Maguire cautioned.The company noted that its revised revenue guidance does not include earnings from the highly profitable insurance business that it has agreed to sell. The sale, which is expected to generate $10.1 billion of after-tax cash proceeds, is on track to close in the second quarter, Rogers said on the call.The proceeds will be divvied up in a few different buckets — one for balance sheet repositioning that involves selling securities, a second for facilitating loan growth and a third for potential share repurchases.The company did not provide details Monday about how many shares it would like to repurchase, though executives said they hope to "resume meaningful share repurchases later in the year." For the quarter, Truist reported net income of $1.1 billion, or 81 cents per share. That was down from net income of $1.4 billion, or $1.05 per share, in the same quarter last year.The results included a trio of notable items, including a Federal Deposit Insurance Corp. special assessment of $75 million and restructuring charges of $70 million. Last fall, Truist began a $750 million cost-cutting program that included reductions in branches and headcount.Noninterest expenses for the quarter totaled nearly $3 billion, down about 2% from the year-ago period. Excluding the three notable items, noninterest expenses were down about 4% year over year.Expenses have been a focal point at Truist since it was created in late 2019 through the merger of BB&T and SunTrust Bank. On Monday, the company revised its 2024 expense guidance downward, saying that it now expects total expenses to be flat compared with last year. In January, Truist had predicted that its expenses would be flat or rise 1% for the year.Overall, the company reported "good expense control," Wells Fargo analyst Mike Mayo said in a research note. Excluding software and compensation costs, most areas of expenses showed declines on both a quarter-over-quarter and a year-over-year basis, he added.