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(Bloomberg) -- Bond traders are piling into bearish bets, fueling a selloff in benchmark Treasury securities, as fresh evidence of robust US growth triggers a recalibration of expectations for Federal Reserve interest-rate policy.JPMorgan Chase & Co.'s latest client survey showed that outright short positions in US Treasuries rose to the most since the start of the year in the week leading up to April 1. That bearish sentiment spilled over into this week, helping to drive US 10-year yields to as high as 4.4% on Tuesday, a level not seen since November. Reports released in recent days showed strength in manufacturing and jobs, underpinning a narrative of US resilience that has been gaining momentum all year. The latest data, combined with signs of sticky inflation and gains in commodities such as oil, has caused investors to further scale back predictions for the timing and extent of central bank monetary easing and gird for a period of higher-for-longer rates. The Treasury market backdrop "is being shaped by rising growth expectations," said Ed Al-Hussainy, a rates strategist at Columbia Threadneedle Investment.It's a similar story in the Treasury futures market. As bonds slid on Monday, traders amassed new positions across most of the futures strip, indicating a proliferation of short bets, according to data from CME Group Inc. Meanwhile, in the options market, the cost of hedging to protect against a selloff in longer-term Treasuries has climbed to the highest since the end of February, data show. When it comes to Fed rate expectations, investors are now pricing in about 65 basis points of rate reductions in 2024, compared to the 75 basis points signaled by the median estimate of projections released after the Fed's March meeting. That's a switch from recent months, when traders' forecasts were more dovish than the central bank's.With the market leaning so bearish, some traders are starting to take the other side of the bet. Tuesday's activity in both Treasury options and those linked to the Secured Overnight Financing rate — which closely tracks the central bank's key policy rate — included some large bullish wagers. The trades look to target a rally in the so-called belly of the curve — around the five-year maturity area — as well as half a percentage point of Fed rate cuts by the central bank's September policy meeting.Here's a rundown of the latest positioning indicators across the rates market:Treasury Clients ShortJPMorgan client short positions rose 7 percentage points in the week leading up to April 1 to the most since Jan. 1 on an outright basis. With long positions dropping 3 percentage points on the week, the net positioning shifted to the least long since Feb. 20.Hedging Bond Selloff Gets More ExpensiveThe premium paid to hedge a selloff in Treasuries is on the rise. The cost to protect against yields rising on the long end of the curve reached the most expensive since the end of February during Tuesday's session, as reflected by the so-called put/call skew on long-bond futures. In the Treasury options market, short volatility plays remained popular last week in both five- and 10-year tenors. Tuesday's action has seen a couple of large bullish trades in the five-year tenor.  De-Leveraging ResumesThe latest CFTC data covering the week leading up to March 26 shows deleveraging continuing among asset managers and hedge funds. Leveraged net short positions in Treasury futures declined for an eighth straight week to the least amount since July. Beyond the macro rate narrative, the deleveraging may also reflect the continued unwinding of basis trade amid a less attractive backdrop for the strategy. Net long positions by asset managers also unwound for a third week in a row. SOFR Options Most ActiveOver the past week, the most active option has been in the 95.00 strike in tenors out to Dec24. Tuesday's flows have included a buyer of the Sep24 95.00/95.25/95.50 call fly, targeting roughly 50 basis points of rate cuts being priced into the September policy meeting. The popular theme last week was targeting the Fed to skip a June rate cut via expressions such as the Dec24 95.625/95.50/95.25/95.00 "broken put condor."Fed to Skip June Cut? It's the Popular Play in Options Right NowSOFR Options Heat-MapThe most populated SOFR strike out to the Dec24 tenor remains the 95.50 targeting a 4.5% yield, where a heavy amount of risk can be seen in the Jun24 calls, Sep24 calls and Dec24 puts. Other populated strikes include the 95.00, 95.25 and 94.875 levels, where both Jun24 calls and puts are highly populated. --With assistance from Michael Mackenzie.More stories like this are available on bloomberg.com

In February, home prices rose at nearly double the month-to-month pace that was the norm prior to the COVID-19 disruption. At the same time, annual growth slowed, and that trend is likely to continue for the rest of this year, CoreLogic said.The CoreLogic Home Price Index, a separate measurement than the one the company puts out in conjunction with Standard & Poor's and Case-Shiller, rose 0.7% in February from January and by 5.5% when compared with the same month last year.The annual growth rate is down from 5.8% in January, and shows that the market is finally over the impact of when price growth hit bottom in January 2023, said Selma Hepp, CoreLogic's chief economist.In January 2023, annual price growth was 8.6%, but it was the first time it was below double digits in 21 months. When compared with December 2022, prices dropped 0.2%."Nevertheless, with a 0.7% increase from January to February 2024, which is almost double the monthly increase recorded before the pandemic, spring home price gains are already off to a strong start despite continued mortgage rate volatility," Hepp commented in a press release. "That said, more inventory finally coming to market will likely translate to more options for buyers and fewer bidding wars, which typically keeps outsized price growth in check."Going forward, CoreLogic's forecast calls for prices to rise 0.4% in March from the prior month and 3.1% over the previous year.Total inventory is up 12.6% year-over-year, but net new listings fell by 4.4% in March, according to HouseCanary.During the month, 234,838 net new listings were placed on the market, while 275,260 properties went under contract. That last data point represented an increase of 3.2% compared to March 2023.The median price of all single-family listings was $441,608, up 2.5% over February and 3.2% versus March 2023. The median closed listings price of $413,998 is a month-to-month gain of 2.5% and an annual increase of 6.8%."The interest rate shock is the biggest factor responsible for sustaining inventory scarcity," said Jeremy Sicklick, HouseCanary CEO in a press release. "The continued expectation that the Federal Reserve will introduce interest rate cuts in the months ahead offers potential homeowners a sense of hope, however for now, buyers are facing a seller's market."That lack of inventory led to another record: the typical home is worth over $1 million in a stunning  550 U.S. cities. That's up by 59 compared to this time last year, Zillow found."Affordability is still a big challenge for buyers, but that hasn't stopped prices from growing," said Anushna Prakash, an economic research data scientist at Zillow, in a press release. "Buyers this spring are going to see more options to choose from, but they'll also see a lot of other buyers wandering through the same open houses."As a result of the increased competition, especially if mortgage rates decline as expected, prices are likely to continue to rise and the surge in $1 million cities will continue, Prakash said.Prices grew at a faster pace in these locations than the nation as a whole, Zillow found.However, in its monthly consumer loan performance update, Moody's noted that home purchase activity in 2024 "will likely remain quite constrained given high prices and weak home affordability, and with existing homeowners reluctant to sell and give up their low fixed-rate mortgages.But if the U.S. economy cools as expected, many homeowners may take advantage of the growth in appreciation to take cash out of their property, either through a second-lien mortgage or a home equity line of credit, the report said.

In a report last week on AI and cybersecurity, the U.S. Department of the Treasury said that, while banks tend to share plenty of information with each other for the purposes of cybersecurity and anti-money laundering, they have practiced "insufficient data sharing" in the area of fraud prevention.The dearth of banks sharing their fraud data undercuts smaller banks' efforts to train anti-fraud AI models— models that many banks hope will replace rule-based engines, deny lists and device fingerprinting in the fight to detect and prevent transaction-related crimes such as money laundering and fraud.Treasury acknowledged a general gap in the data available to financial institutions for training AI models of all kinds, but the report said the gap is "significant in the area of fraud prevention," which the report contrasted with robust cybersecurity data sharing efforts led by organizations including the Financial Services Information Sharing and Analysis Center."The accuracy of machine learning-based systems in identifying and modeling fraudulent behavioral patterns correlates directly with the scale, scope (variety of datasets) and quality of data available to firms," the report reads.The report said "most financial institutions" interviewed for the report, which was based on 42 interviews, expressed the need for better collaboration in the domain of fraud prevention, particularly as fraudsters themselves have been using AI and machine learning technologies."Sharing of fraud data would support the development of sophisticated fraud detection tools and better identification of emerging trends or risks," the report said.However, while such information sharing could improve fraud detection, it "also raises privacy concerns," the report said, as it would involve collecting and storing sensitive financial information including transaction histories and personal behaviors. Data anonymization and algorithmic transparency — i.e., helping customers understand how their data is used — could mitigate these issues, the report said.Treasury said in the report that the Financial Crimes Enforcement Network, which is a bureau of Treasury, might be well positioned to support fraud information-sharing efforts between banks, to ensure that smaller financial institutions "are benefitting from the advancements in AI technology development for countering fraud," the report said. Core providers could also play this role, according to the report.While many vendors offer smaller banks access to AI-based transaction monitoring systems, Treasury's report said internal development at banks "offers advantages in oversight and control of the development, testing, transparency, and governance of models and access to sufficient data monitoring for model risk management evaluation purposes."For the moment, the report cited efforts by two institutions that are already working to close the fraud information-sharing gap: The Bank Policy Institute and the American Bankers Association.The Bank Policy Institute, a public policy research and advocacy organization, told Congress in February that, as part of the effort to promote and enable data and intelligence sharing between institutions, the institute has established BITS, an "executive-level forum" for bankers to collaborate on policy advocacy, promote critical infrastructure resilience, strengthen cybersecurity and reduce fraud.The American Bankers Association, a trade organization and bank industry lobbying group, is set to launch an information-sharing exchange in the first half of this year, which the association says will help member banks fight fraud.As an example of how the exchange will work, in fraud cases known as business-email compromise, the platform will enable banks to alert their peers with key information about the account of the alleged fraudster, said Paul Benda, executive vice president of risk, cybersecurity and fraud at the American Bankers Association."The idea here is to allow banks to share this information amongst other banks in a near-real-time manner so they can integrate this data into their payment flows, into their risk-scoring systems, to stop that money from going out," Benda said.The association said its long-term goal is to make the exchange available to all financial institutions that are covered by Section 314(b) of the Patriot Act, which gives financial institutions the right to share information that could be used to identify transactions that might involve money laundering or terrorist funding.As for the consequences of failing to promote adequate fraud information sharing, several institutions Treasury interviewed said "there may be a risk of future consolidation towards larger institutions" if "smaller financial institutions are not supported in closing this critical gap," according to the report.

With interest rates higher for longer and economic activity slowing, analysts expect further pressure on lending profitability as well as deterioration of credit quality in community banks' first-quarter earnings due later this month.However, following recent Federal Reserve policymakers' signals that rate cuts loom this year, analysts also anticipate bankers' commentary during earnings calls will include upbeat long-term outlooks on interest income and credit stability.The Fed has not raised rates since last summer. But after pushing up its benchmark several times in 2022 and early last year, it holds near the high point of this century, keeping deposit costs elevated for banks and interest expenses high for borrowers. This has curbed loan demand and squeezed the margin between what banks earn on lending and pay out on deposits. U.S. banks' median net interest margin, a key measure of profitability, declined to 3.35% in the fourth quarter, down 2 basis points sequentially after slipping 3 basis points in the third quarter and 5 basis points in the second quarter of last year, according to data from S&P Global Market Intelligence.First-quarter results are expected to show that downward NIM pressure persisted through the early months of this year. High rates also have hampered more consumers and commercial real estate borrowers. Credit card costs spiked alongside rates, making monthly payments higher and more difficult to manage, and CRE office properties, in particular, have struggled because of enduring remote work trends in the aftermath of the pandemic.The annualized fourth-quarter net charge-off rate in the credit card segment rose 94 basis points from a year earlier to 4.15%, the highest level since this metric reached 4.38% in the second quarter of 2019, according to S&P Global. Total delinquent CRE loans stood at $25.26 billion at the close of 2023, up 79% from a year earlier.Wedbush analyst David Chiaverini said high rates "may continue to pressure negative credit migration, especially for banks with outsized exposure to CRE and consumer loans."These headwinds, in turn, are slowing down the economy.Yet, as Iron Bay Capital President Rober Bolton said, the industry overall remained profitable throughout 2023 and is expected to remain so this year. Profits also are poised to increase in the second half of 2024 and into next year should the Fed follow through on the three rate cuts that policymakers said were likely in a report after their March meeting."So it's still hard to predict when exactly the Fed will start to move, and there's still plenty of uncertainty around a slowing economy and what that means for the near term," Bolton said. "But longer term, assuming the Fed does act, margins will benefit, and I think there's good reason to be optimistic about community banks."That view is in sync with the American Bankers Association's Economic Advisory Committee outlook, released last week. The committee, composed of bank economists, expects credit conditions to soften some time this year due to a slowing economy and continued elevated borrowing costs.The committee sees economic growth around 1.7% for 2024 and 1.8% for 2025. The forecast for this year would accelerate an already slumping pace. Gross domestic product advanced at an annual rate of 3.2% in the fourth quarter, down from third-quarter growth of 4.9%, according to the U.S.  Department of Commerce.Employers collectively reported six-figure job gains every month last year — and again in January and February of this year but the rate has eased. Employers added 275,000 jobs in February, down from the 353,000 jobs created in January, according to the Labor Department.Employers added 225,000 jobs per month, on average, in 2023. The ABA economists see that slowing to 139,000 per month in 2024 and declining to just about 117,000 in 2025. The committee sees the unemployment rate reaching 4.1% by the end of 2024, up from 3.9% in February and 3.7% at the end of last year."The cumulative effect of still-high interest rates, softening demand, lower consumer savings and a mild uptick in unemployment will drive some deterioration in credit quality," said Simona Mocuta, ABA committee chair and chief economist at State Street Global Advisors.The ABA forecast anticipates bank consumer delinquency rates will increase slightly from 2.8% in 2024 to 2.9% in 2025. That would be up from an estimated 2.4% last year.But recession risks have diminished, the ABA committee said, and inflation continues to be moderate, opening the door for rate cuts beginning this summer. At a 3.2% annual rate in February, inflation was barely a third of the 2022 peak of 9.1%.The consensus view of the committee is that the Fed will begin cutting the target federal funds rate range in mid-2024, instituting three 25 basis point cuts before the end of this year. The reductions would help lower deposit costs and potentially drive stronger loan demand. With more loan volume, and lower costs to fund loan growth, banks could drive stronger net interest income and, by extension, profitability.Against that backdrop, Piper Sandler analyst Casey Orr Whitman said that, across his firm's coverage universe, loan growth slowed and funding costs rose throughout 2023, and likely did so during the first quarter. This hindered margins and, by extension, earnings per share.For the first quarter, Whitman estimated a sequential NIM decline of 3 basis points and a 7% linked-quarter decrease in core EPS for the industry"The sustained higher interest rate environment and continued economic uncertainty help drive near-term and intermediate-term softness," Whitman said.

Mount Street Group hired Dean Wheeler as managing director and head of U.S. operations, as it aims to double its current share of the U.S. commercial real estate (CRE) loan servicing business.Mount Street has a strategic partner in Mission Peak Capital, and the firm hopes to double its assets under management from its current $36.3 billion in AUM, according to a company statement. Wheeler will oversee all loan servicing, asset management and special servicing activity, while expanding the team and implementing fintech strategies around Mount Street's CreditHub solution, its proprietary lending app. Mount Street Group Overseeing large enterprises is not new to Wheeler, who ran a $160 billion-plus, 8,000-loan CRE servicing business, in a hub of 300 people while he was head of servicing and asset management operations at SitusAMC. After that, he founded True North Performance Solutions, the software and consulting advisory business where he was president."Dean will be instrumental in helping us achieve our growth ambitions in the U.S., where the CRE market is currently dominated by a handful of players, but which is ripe for disruption as a result of technological and demographic shifts," according to a statement from Paul Lloyd, co-founder and chief executive officer of Mount Street. "His track record scaling businesses will be critical as we look to enhance and improve our infrastructure and rapidly grow our assets under management." Mount Street Group Mount Street's announcement about Wheeler comes shortly after it said it promoted Serenity Morley to the global chief operating officer, in another newly created role. Morley will coordinate the business' overall growth strategy across all areas of loan servicing and asset management and benefiting its 11 offices worldwide, according to an earlier company statement.Founded in 2013, Mount Street Group says it offers a fully contained range of outsourced credit solutions—using technology drive origination, loan administration, portfolio, restructuring and workout services—that support a range of industries, including structured finance, according to the company's website.

Many outstanding mortgages lack interest rate-related incentives to refinance but there nevertheless were notable increases in prepayments in February that occurred as other servicing risks subsided. "At a high level, delinquencies fell, foreclosures fell and prepayments rose," said Gunnar Blix, director of housing market research at ICE Mortgage Technology, summarizing some takeaways from the latest Mortgage Monitor analysis of monthly data during a client webinar.Delinquencies will likely remain subdued this spring due to tax refunds, but prepayments could continue to tick upward as housing turnover increases during the spring homebuying season and a small but important segment of loans remains exposed to refinancing incentive.Mortgage rates peaked at 7.79% in Freddie Mac's survey last year, and loans originated between that level and the 6.79% average recorded during the week ending March 28 have been potential prospects for refinancing, and they appear to have been responsive.While a less influential driver of the rise in prepayments than housing turnover and curtailment, refinances rose a notable 14% to a 17-month high in February, said Andy Walden, vice president of enterprise research strategy at ICE.Overall, prepayments rose just 6.3% to a high not seen since October."Prepayment activity was very low in October, but I think there are a couple of things that kind of catch your eye when you start looking at prepayments in the transition we've seen over the last couple months. One of them is that refinance activity bumped up," Walden said.Speeds for the 2023 vintage in particular have risen 68% from 5.53% percent in November to 9.33%, Walden said."That will be the one to watch this year, not only from an origination perspective and an opportunity perspective, but certainly we'll see its needle move the most from a prepayment perspective," said Walden.In contrast, older loans bearing significantly lower rates continue to serve as a strong deterrent to prepayments driven by housing turnover.Around 40% of the market took out mortgages in 2020 and 2021 when rates were at record lows, Walden said. Those borrowers' monthly principal and interest would grow by 60% if they bought a house equivalent to their own located across the street, according to the ICE research.The average cost for the current mortgage-market overall to make a similar move is 40%. It's a number likely to give homebuyers pause because the more typical rule of thumb in the housing market is that one should be able to get a move-up home once that kind of premium is paid.In contrast, the average 2020 to 2021 vintage borrower would have to pay 132% more in P&I to afford a move-up home.With the Fed on track to lower short-term interest rates this year with a possible reduction in mortgage costs as well, there is some hope that the lock-in effect could be reduced; but Walden warned that's unlikely to happen in short order.Walden estimated that even if the current mortgage rate were to fall to 5% many borrowers would remain locked in given that many got loans in 2020-2021."It's going to take some time to loosen up the market, but certainly falling interest rates will start to shift the dynamic," he said.A recent deceleration in the Personal Consumption Expenditures index that policymakers watch closely as an inflation indicator may have increased the chances of a short-term rate decline in the first half of this year.At the time of this writing, Fed Fund Futures were showing a 60% probability of a 25 basis-point short-term rate cut in June, but such indicators have generally been overly optimistic, said Jack Macdowell, co-founder, managing member and chief investment officer at Palisades Group.The degree to which mortgage rates fall could be limited, said Macdowell, whose company is an alternative asset manager specializing in residential credit. Company models suggest a 90 basis-point reduction at most in broader market benchmarks that skew higher than Freddie's."Based on current data, it is hard to envision more than one to two cuts in 2024 and hard to see mortgage rates drop below 6.25%, as measured by either Bankrate.com (7.25%) or the Mortgage Bankers Association 30-year effective rate (7.10%)," he said.A drop of a percentage point from Bankrate's number "would likely release pent-up demand into an undersupplied housing market, resulting in unwanted housing inflation," he said."Mortgage rates would likely need to fall to the low-to-mid 5% range before borrowers become comfortable leaving behind their low-rate mortgages, thereby initiating the release of pent-up deferred sales and leading to much-needed supply-demand parity," Macdowell said.

Consumers submitted nearly 28,000 complaints about mortgage firms to the Consumer Financial Protection Bureau last year, largely regarding trouble with the payment process. Just over half of the submissions, or 11,400 complaints, related to trouble during the payment process. The report highlighted concerns around loss mitigation, in which borrowers said servicers delayed reviewing and implementing loan modifications and deferrals. Many of the issues occurred after servicing transfers, according to the CFPB."Consumers also reported receiving confusing or conflicting communications about modification and deferral options, and about payment amounts and timing," the report said. Common borrower complaints included rude servicer representatives, or being unable to reach someone at all. Servicers in response said they often needed further documentation to review loss mitigation applications, and apologized to customers for delays and inaccurate information. Other customer gripes ranged from late fees, negative credit reporting and foreclosure threats. Some of those grievances stemmed from foreclosure starts on loans which became delinquent in March 2020, just before the passage of federal pandemic aid. According to the CFPB, companies usually responded that those customers' payments were not made on time, or they couldn't provide those borrowers with affordable payment plans.Other problems arose from the Homeowners Assistance Fund. Consumers told the CFPB that mortgage firms didn't provide requested information to state HAF programs on time, or apply HAF payments on schedule. The overwhelming majority of grievances were closed with explanations, the regulator said in its 2023 Consumer Response Annual Report. Of the approximately 27,900 complaints it received, the CFPB sent 84% of those to firms; referred 10% to other regulators; and found 6% to be non-actionable. Mortgage players closed 92% of complaints via explanation and 2% with monetary relief. By comparison, in 2022 3% of complaints led to cash compensation and in 2021 and 2020 4% of issues were resolved in the same manner. The new CFPB report found that in 2023, 3% of issues raised were handled with non-monetary relief, defined by the CFPB as actions such as correcting inaccurate information and stopping unwanted calls from debt collectors. The report did not specify how much money mortgage companies paid to consumers for claims.The majority of issues involved conventional mortgages, followed by Federal Housing Administration loans and Department of Veterans Affairs-backed mortgages. The monthly average of complaints regarding home equity line of credit loans and VA mortgages were up 21% and 11%, respectively, compared to the prior two years. Issues related to purchase and refinance applications and closings were down 1% compared to the same monthly average for the prior two years. "This decrease is likely due at least in part to inflation and the rising costs of homeownership, which have had a significant impact on housing sales," the report said. The number of complaints was relatively flat year-over-year, according to the CFPB's 2022 report. As of March 1, the regulator said less than 0.1% of grievances were outstanding. The mortgage watchdog has recently scrutinized fees related to servicing, part of its push against "junk" fees in consumer lending.

Prosperity Bancshares in Houston has closed on its deal to buy Lone Star State Bancshares roughly a year later than initially planned. porqueno - stock.adobe.com Prosperity Bancshares in Houston said Monday that it completed its long-pending acquisition of Lone Star State Bancshares in Lubbock.The cash-and-stock deal, first announced in October 2022, was initially expected to close in the first quarter of 2023. It was ultimately finalized on Monday.The acquisition of Lone Star was part of a two-pronged M&A play to expand in West Texas. Prosperity, which started this year with $38.5 billion of assets, announced in late 2022 it would pay $341.6 million for First Bancshares of Texas in Midland, which had 16 branches and assets of $2.1 billion at the time, and $228.7 million for Lone Star State, which had nine branches and $1.3 billion of assets.Prosperity closed the First Bancshares deal last May. But the Lone Star transaction got held up in the regulatory approval process. The buyer provided few details about the delay over the past year, save to say there was a challenge tied to one of Lone Star branches.That noted, regulators over the past two years ramped up scrutiny of acquisitions following guidance from President Biden to do so after years of consolidation across the banking sector and other industries. Several deals were delayed in the wake of that change, slowing down the overall pace of bank M&A.Banks announced 99 M&A transactions in 2023 and 157 in the previous year. Both were down notably from the 202 bank combinations inked in 2021, according to S&P Global Market Intelligence tallies. The two deals in West Texas marked Prosperity's first acquisitions this decade. It had acquired 10 banks in the decade leading up to the 2020 pandemic; the latest was its 2019 purchase of LegacyTexas Financial Group in Plano for about $2 billion.

A federal judge has moved to toss another antitrust suit against United Wholesale Mortgage and its All-In initiative. America's Moneyline, one of the first mortgage brokers to be targeted by UWM for breaking the All-In ultimatum, filed a countersuit in February 2022, claiming the wholesale lender is "seeking to create a monopoly in the wholesale mortgage lending industry." A Michigan federal judge threw out the complaint March 29, relying on a recommendation made by a Florida judge one month earlier as justification.In February, U.S. Magistrate Judge Laura Lothman Lambert recommended a suit filed by  Florida-based brokerage The Okavage Group, which also accused UWM of violating federal antitrust laws, be dismissed because it failed to convince her that the wholesale lender's ultimatum is anticompetitive. "Plaintiff includes no factual allegations to plausibly allege the potential for genuine adverse effects on competition and thus, fails to allege a sufficient link between the ultimatum and harm to competition within the overall mortgage market or the wholesale retail mortgage market," Florida's magistrate said. (The Okavage Group filed an objection to Lambert's filings, which will eventually be reviewed by the U.S. District Judge Wendy W. Berger in the Middle District of Florida, based in Jacksonville.)Michigan-based U.S. District Judge Laurie J. Michelson wrote she agrees with and adopts the Florida ruling and is granting UWM's motion to dismiss. Despite this, Judge Michelson said that if Judge Lambert's recommendations get reversed, the Michigan court would "consider those rulings and whether they merit reconsideration of this one." AML did not respond to a request for comment. A spokeswoman for UWM said the company is "not surprised with the decision from the Federal court." "This is exactly what we expected and know it's the right decision based on the law and the contracts that were signed," the company's spokeswoman added. As of Monday, AML's website was no longer functioning and it currently sponsors only two loan officers, per the Nationwide Mortgage Licensing System. Meanwhile, Mortgage Moneyline, an entity created two years ago by AML's owner Shawn Nevin and Dean Lob, the company's former chief operating officer, has over a dozen AML employees registered and an active website. Mortgage Moneyline was created in May 2022, three months after UWM filed its $2.8 million suit, documents show. UWM is suing three other companies for selling loans to Fairway and Rocket, with two of those cases filed in the past four months. Another lender, Mid Valley Funding, agreed to settle and pay UWM $40,000 last June, the company confirmed. (Since February, Fairway is no longer involved in wholesale lending.)

Kentucky became the latest state to pass legislation prohibiting NTRAPS, or non-title recorded agreements for personal services, where homeowners find themselves tricked into signing contracts that impede their ability to sell their property in the future.In late March, house Bill 88 passed unanimously by a vote of 96-0 in Kentucky's House of Representatives after similarly sailing through the Senate a week earlier. It is expected to be signed by Gov. Andy Beshear in the coming weeks. Rep. Michael Meredith was the bill's lead sponsor."Several real estate companies have been using a predatory business model to target seniors and financially insecure homeowners," said Gary Adkins, volunteer state president of AARP Kentucky, in a press release. "Invariably, older adults are targeted specifically, and therefore, need extra safeguards to be protected from such an unfair, deceptive, and abusive practice," he added. Businesses engaging in the practice frequently approach homeowners with offers of a cash gift in exchange for an agreement that obligates their services be used exclusively for any sale in the future. But the length of agreements and often hefty charges for early termination are hidden within the contracts, with the business' names sometimes appearing in title searches. NTRAPs have been observed in property records since 2018, according to the American Land Title Association. Among the alleged perpetrators of NTRAP activity is MV Realty, who began marketing the "service" in Florida in 2017. To date, 10 states have sued MV Realty, including Missouri, which is the most recent to file a lawsuit in mid March.  Kentucky's bill will prohibit such agreements to appear in property records and penalize violators. The legislation will also provide a means to remove NTRAPs already appearing on records and make them unenforceable by state law.  The passage of the bill adds further momentum to policy trends that began in 2023, when Utah became the first to pass legislation against NTRAPs. Since then, 15 other states have followed suit, while four other bills await governors' signatures. Along with the Bluegrass State, chambers in both Indiana and Virginia both passed new laws in the past several weeks. Both ALTA and AARP have been at the forefront of initiatives pushing for greater enforcement against NTRAPs. "A home often is a consumer's largest investment, and the best way to support the certainty of land ownership is through public policy," said Elizabeth Blosser, ALTA vice president of government affairs, in a press release.  "We have to ensure that there are no unreasonable restraints on a homebuyer's future ability to sell or refinance their property due to unwarranted transactional costs."