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While lenders need contingency plans to put into action if a cyber attack debilitates their in-house systems, they also need to ensure the flow of business is uninterrupted in the event that a vendor's technology goes offline. To get an idea of what they must do, consider the temporary shutdown of some title systems seen recently, said Donna Schmidt, managing director and owner of vendor DLS Servicing and co-founder of a technology called Waterfallcalc.The system outages at Fidelity National Financial's Servicelink and First American illustrate the value of working with multiple vendors, she said. Anyone reliant on just one title vendor could face procedural delays. In an area like default servicing where a title report is necessary to determine whether a modified loan can stay in a first lien position, it could jeopardize the ability to meet certain deadlines.Once default servicers have the information needed from a borrower to make a decision on a loan outcome like a modification, they have 30 days to deliver it under Consumer Financial Protection Bureau rules.Companies with multiple, pre-existing vendor relationships may not skip a beat in such tasks when system outages arise."They can keep plowing through what they have to get done. Others may have issues with delivery times," said Schmidt.That's because the approval process when signing a contract with a new vendor often requires more time than mortgage companies have if they want to avoid delays, she said.The CFPB's 30-day rule is just one of many time-sensitive tasks servicers have to fulfill promptly to avoid expenses."When you're dealing with anything in the default area, you are up against a very firm deadline that could cost you money," Schmidt saidShe said that's why she's been advising clients to have multiple vendors in areas where they're really needed."We're telling our clients to start looking at some redundancies in critical situations. Property inspections is another one. You have to do property inspections between 45 and 55 days in order to get reimbursed by HUD," said Schmidt.While the thin profit margins in the industry might make a mortgage company think twice before investing in contracts with multiple vendors, her company and some others do charge on a per-loan basis, which makes it easier to keep them on standby, she said."You can send all your business to one vendor, but you should have a relationship with another one as a backup to cover you if you can. I think we have to get there in these days of cyber attacks, Schmidt said.

After making headlines throughout 2023, artificial intelligence looks set to remain a dominant technology theme, with many mortgage professionals looking at how to make it work for them this year.But new technology trends also cause disruption, particularly when they lead to potential job loss. And the rise of generative AI continues to raise as many questions as it does answers regarding accuracy and fairness. While opinions about where AI tools fit across the financial services landscape vary depending on the industry, common themes are also emerging over the benefits and risks, according to a report released this week by Arizent, parent company of National Mortgage News. In the research, Arizent surveyed professionals across eight different financial segments: banking, insurance, mortgage, wealth management, municipal bonds, accounting and technology. Comments from mortgage respondents ran the gamut from "I don't see AI as being for the greater good" to "The uses for AI in the industry are infinite."Here are a few findings from the survey results looking at how mortgage businesses are approaching the growth of AI. 

Intercontinental Exchange is leveraging its recent acquisition of Black Knight in a string of new business relationships, including a partnership with Freddie Mac on automation aimed at ensuring loan quality. ICE also announced new customer relationships with Fifth Third Bank and Lennar Mortgage at its annual mortgage conference this week.Lennar is adding Black Knight's servicing software to a technology lineup that already includes ICE's loan origination system, Encompass. Fifth Third is adding both the company's new MSP servicing technology and the loan production platform. The announcements exemplify the new attractions ICE holds given that its technology offerings now include some of the widest-used origination and servicing automation in the mortgage business, with the exception of holdings Black Knight divested pre-acquisition."At Fifth Third, we're working to digitize the overall homebuying experience, giving our customers control, choice and transparency along the journey," said Jay Plum, executive vice president and head of the bank's mortgage division, in a press release."ICE's approach to modernizing housing finance with integrated technology and seamless data sharing aligned perfectly with what we're seeking to accomplish for our customers," he added.Meanwhile, Lennar's partnership in particular highlights a growing need for systems that bridge the point at which servicing and origination overlap in retention or the period just before a sale."We need to be able to move loans quickly and seamlessly from origination into servicing, and then on to their financial destination just as easily," Lennar Mortgage CEO Laura Escobar said in a press release. "ICE's mission to digitize and streamline all aspects of the housing finance lifecycle aligns perfectly with our goal."The loan sale functions that the Freddie Mac partnership primarily focuses on are digital validations of data, which the government-sponsored enterprise has found to reduce defect rates to 2.3-8.5% compared to 9.6% for mortgages processed without them.Freddie describes the collaboration with ICE as one that will "help lenders quickly and efficiently underwrite mortgage loans starting at the point of sale."The enterprise's loan quality initiative involves automation used to verify borrowers' assets, income and employment eligible for representation and warranty relief. The partnership also extends to technology used for cash-flow or rental-payment analysis used in underwriting. Freddie often accommodates these types of analyses in conjunction with private vendors like ICE.In answer to what may continue to be a growing need for appraisal compliance given Consumer Financial Protection Bureau Director Rohit Chopra's recent skepticism of current rules, ICE also announced new valuation tools at its conference.One tool, Validate ROV, was designed to handle the reconsideration of value process by allowing a consumer to use a mobile device to take geofenced, time-stamped property photos demonstrating why an appraisal might be flawed. The technology is a follow-on to the Validate software that Black Knight demonstrated at the 2023 Digital Mortgage Conference, which analyzes photos to deliver reports on a property's condition and estimated value.The other tool, Valuation Selector, applies an automated analysis to public data sources, listing and assessor information. It then recommends which of the following is optional: automated valuation model, AVM with inspection, desktop exterior, desktop interior or full appraisal.

The Federal Housing Finance Agency needs to put the title insurance pilot through its new activities rule for public notice and comment, a pair of letters from Washington insiders stated.The one from House Republicans promised an investigation into how the announcement got fast-tracked, especially in light of previous statements from FHFA Director Sandra Thompson on a similar proposal by Fannie Mae in 2023 that ended up being withdrawn."Eliminating the use of title insurance on any loan backed by Fannie Mae and Freddie Mac (the GSEs), and therefore taxpayers, is a significant change and one that requires rigorous scrutiny," a letter signed by a trio of Republican Congressmen, Warren Davidson, Bill Huizenga and Andrew Garbarino.They called for the Agency to follow the review process for new products put in place in 2023."Rather than abiding by this process, including allowing for notice and comment, FHFA approved this new pilot behind closed doors," the letter said.Furthermore, the Congressmen state the pilot program and its announcement as part of Pres. Biden's State of the Union speech belied the FHFA's independence from interference from federal officials or other agencies.They called it "a partisan agenda that is in direct contrast to FHFA's mission and to the detriment of the housing market and broader financial system," the letter said. "The implication that FHFA would undertake an action that could impact the safety and soundness of the GSEs to advance a political talking point is unacceptable."As a result, the House Financial Services Committee will be investigating the fast-tracking of the pilot's approval process, the letter promised.Bose George, an analyst at Keefe, Bruyette & Woods, weighed in on these comments in a flash note."While this letter is unlikely to change anything in the near term in terms of the timing of any pilot program, it is a good indication of the political opposition that is likely to develop if it looks like the GSEs are engaging in 'charter creep' and increasing their role in the mortgage market," George wrote.Ed DeMarco, who for five years served as acting FHFA director, took a more measured perspective."I am writing to ask that FHFA approach this issue with caution and a sensitivity to the role title insurers and title insurance plays in lowering risk for lenders and consumers alike," said DeMarco, who wrote his letter as president of the Housing Policy Council. "Removing a risk-mitigating mechanism from real estate finance requires careful study."Title claims are rare, but the costs are substantial, including the potential to wipe out both the lender's and the homeowner's positions in the property."Eliminating title insurance could transition title risk from today's low frequency, but high severity outcome to a higher frequency and high severity outcome," DeMarco said. "Surely, as the largest two holders of mortgage credit risk in the country, and being backed by taxpayers, Fannie Mae and Freddie Mac should be careful to avoid increasing title risk."DeMarco brought up several topics for potential discussion as part of a comment period during the evaluation process about how the pilot would work and the risks involved, including that borne by the GSEs."In sum, without additional details, this sort of critical policy making process is superficial at best," DeMarco said. "And it may mean that we are unaware of or are misunderstanding key elements of the proposal."DeMarco asked that FHFA engage in a transparent process that includes "a constructive dialog" before entering into this pilot program."A fair comparison of the current marketplace for title insurance with any alternative regime should include an assessment of both cost and of value," he wrote. "The value is the risk mitigation, including a true assessment of the financial strength of the party mitigating the risk."

The agreement last week by the National Association of Realtors to settle home seller claims regarding commissions could have damaging impacts on home buyers. NAR's proposed rule changes, part of its $418 million settlement, aren't a "decoupling" of commissions, but could mitigate buyer agents if homebuyers forgo representation to avoid or are unable to pay those fees. That factor could make listing agents a stronger referral source for lenders, once updates are slated to go into effect in July. So the new rules could hurt groups such as minority, low income and first-time homebuyers, who are likely to struggle funding closing costs and downpayments in scenarios where the seller won't cover their agent's costs, industry veterans said. Those scenarios are compounded by impacts on lending for Department of Veterans Affairs and Federal Housing Administration loans, where rules on seller concessions and commission payments themselves conflict with the proposed new normal."Part of that settlement may be, does Congress act fast enough to make this available in July?" said Michael Downer, a Realtor with Coldwell Banker in Florida. "If they don't do it by then, it does affect so many people."What's changingThe pending changes include a ban on listing compensation offers on Multiple Listing Services, in an effort to address the prior, alleged anti-competitive structure. Traditionally, both buyer and seller agents split a 6% commission out of the home's sale price. NAR's settlement will also require written agreements between Realtors and clients, while commissions can still be negotiated outside an MLS.Experts believe the new buyer agent role will create more negotiating and commissions savings. Downer said the new guidelines will also prevent "guiding," or agents pushing buyers toward homes with larger commissions; a phenomenon often called "steering."  "There will be a dramatic amount of agents who will get out of the business because they don't know how to demonstrate that value that serves the consumer better," said Downer. "This transparency is a beautiful thing for the industry."Affordability concernsA new burden for home buyers to pay their agents, whether through an agreed-upon commission, flat fee or other compensation model, could dampen their purchasing power."When most first-time home buyers are struggling coming up with a total closing cost and downpayment to begin with, I think it's a challenge," said Gene Thompson, president and CEO of Houston-based InterLinc Mortgage. Homeowners won't be so motivated to cover a buyer agent's commission in a seller's market like today's beset by high home prices and low inventory, he added. David Dworkin, president and CEO of the National Housing Conference, cited a 2022 economic study which suggested altered commissions would have wide-ranging impacts. A commission burden on homebuyers would increase racial and economic disparities in homeownership rates, slice the demand for starter homes, and subsequently depress property values, researchers wrote."Some consumer advocates suggest that homebuyers who can't afford to pay their agent upfront may not be ready for homeownership," wrote Dworkin. "Under that logic, we will never close the homeownership gap for Black, Latino and Asian and Pacific Islander homebuyers."Beyond the monetary loss, buyers who forgo hiring a Realtor could miss out on proper negotiating expertise, said Christopher Thomas, a mortgage loan originator and co-founder of Michigan-based Iris Mortgage. "When you just don't have those buffers or mediators things can go south a lot quicker," he said. Government-sponsored loan hurdles The looming compensation requirements also run up against guidelines for FHA and VA mortgages. Buyers getting a VA-guaranteed mortgage can't pay commissions, and sellers can't pay more than 4% of the total home loan in seller's concessions, including broker's fees; that limit is 6% for FHA mortgages. Buyers in an altered landscape can run afoul of those rules. The Community Home Lenders of America is likely to address Congress soon regarding the issue, said Scott Olson, the organization's executive director. "We have noticed for several years that sellers already discriminate against first-time home buyers using FHA loans, as opposed to say all-cash buyers," he said. "And what we don't want to happen is that in this process, that phenomenon is going to be exacerbated."Analysts with Keefe, Bruyette and Woods have suggested the Federal Housing Finance Agency and other government housing stakeholders are discussing commissions updates to underwriting guidelines. The FHFA did not respond to multiple requests for comment. Mortgage veterans said they either hadn't heard of such talks, or were unsure what such changes would look like. "There's no scenario where Congress doesn't say, "We're not in favor of housing, we don't want to protect our veterans, we don't want to protect minorities and first-time buyers,'" said Downer. "They will figure that out, it's too big a market."Lender-Realtor relationships Buyers who can afford to close on a home but who don't pay a Realtor will still prequalify for mortgages. Those consumers will need more education from mortgage lenders, Thompson said. Matt VanFossen, CEO of Absolute Home Mortgage and board member at CHLA, has previously predicted risks for lenders as their buyer agent referral partners potentially exit the industry. Any exodus would make remaining Realtors, particularly listing agents, especially valuable. "The vendor list that I work with is more important than ever, because I have to get you the best value for your property," said Downer. Still, many experts are suggesting a wait-and-see approach as the changes unfold. The settlement is pending approval by a federal judge. The U.S. Department of Justice may also weigh in, as it did in a separate settlement agreement between an MLS and plaintiffs in Massachusetts. Borrowers meanwhile aren't asking many questions about the settlement and its changes yet, lenders said. Recent research shows consumers are largely unaware of the commission structure; Just 11% of Americans are aware of the average 6% commission rate, according to research by Clever Real Estate. "I haven't had a client speak about it because it's not in place yet," said Thomas. "I got an accepted agreement today showing that there was a 3% commission on the MLS ticket, which is about to be outlawed. But it's just not relevant at the time."

Figure Technologies has placed its lending division under a new umbrella company, it announced Monday.Doing so sets up the foundation for Figure to take its lending arm public. Speculation has been swirling that these plans will come to fruition sometime this year.  (Figure did not immediately provide commentary on whether the reorganization is in preparation for an initial public offering.)Figure Lending will now operate under Figure Technology Solutions, which will develop and distribute a proprietary platform to lending partners and investors."By creating a dedicated business, FTS will focus its resources on the continued success of its technology platform, delivering cutting-edge solutions to drive efficiency across the lending ecosystem," said Mike Cagney, co-founder and CEO of Figure Technology Solutions, in a press release.Making FTS its own entity is a reflection of  "growth and vision for Figure's technology-enabled lending platform that has been built to reshape the industry, starting with HELOCs," the company added. Figure has concentrated its efforts on growing market share in the home-equity line of credit space. Last year, it launched a HELOC wholesale loan production platform. The company also entered into partnerships with independent mortgage bankers to provide a private-label HELOC product.In the third quarter of 2023, Figure Lending originated over $1 billion worth of HELOC volume across its loan channels, it claims.Figure has tapped Goldman Sachs Group Inc., JPMorgan Chase & Co. and Jefferies Financial Group Inc. to help with an initial public offering, according to a Bloomberg article in late November.The timeline for when its lending arm will be taken public remains unclear, though a Bloomberg report pointed out it may happen in the first half of 2024, at a valuation between $2 billion to $3 billion. Cagney would find another CEO to take the helm of the unit it refers to internally as LendCo.Concurrently, Figure announced Monday the rollout of Figure Markets, a trading platform for blockchain-native assets. That platform has thus far secured over $60 million in a Series A funding round, Figure said. The  round was led by Jump Crypto, Pantera Capital and Lightspeed Faction with participation from Distributed Global, Ribbit Capital and CMT Digital."[One] of the macro trends that I believe [is] going to persist for many years is bank credit contraction," Cagney said, speaking at DC Fintech Week in late November. "There needs to be a construct for a private capital solution and blockchain is a tremendous way to do this. The cost and efficiencies that we can get from the technology — the ability to build homogenous assets, the ability to have immutable transaction history — that's the foundation that you need to create a liquid TBA and ultimately a pass-through market with a third-party guarantor."

In a sign of how expectations can shift suddenly in the mortgage industry, Fannie Mae increased its rate expectations for this year by 0.5 percentage points in its March housing and economic outlook.Not only that, but rates will not fall below 6% in 2025, according to the government-sponsored enterprise's forecast."Hotter-than-expected inflation data and strong payroll numbers are likely to apply more upward pressure to mortgage rates this year than we'd previously forecast, as markets continue to evolve their expectations of future monetary policy," Chief Economist Doug Duncan said in a press release. "Still, while we don't expect a dramatic surge in the supply of homes for sale, we do anticipate an increase in the level of market transactions relative to 2023 — even if mortgage rates remain elevated."Those factors have the market now expecting the Federal Open Market Committee, meeting on Tuesday and Wednesday, to hold off on any short-term rate reductions until later this year.That in turn is impacting the 10-year Treasury yield, which led Duncan to raise his fourth quarter 2024 rate forecast to 6.4% from 5.9%. For the same period next year, he now sees rates at 6%, versus 5.7%.The 10-year yield was at 4.31% at noon on March 19; the yield was as low as 3.82% on Feb. 1.Duncan reduced his 2024 originations outlook to $1.76 trillion from $1.91 trillion in the February forecast, with originations reduced to $1.37 trillion from $1.46 trillion. Refinance volume is now expected to come in at $397 billion from $459 billion. Fannie Mae estimated that total volume in 2023 was $1.47 trillion, with $1.22 trillion coming from home purchase originations.In 2025, Fannie Mae now expects $2.18 trillion of volume, versus $2.36 trillion one month ago.Separately, mortgage applications for newly constructed homes increased 15.7% year-over-year and by 1% month-to-month in February, the Mortgage Bankers Association said. The numbers from its Builder Application Survey are not seasonally adjusted.Rising rates actually hampered activity during the month, but a competitive market kept volume up, said Joel Kan, deputy chief economist, in a press release."The average loan size increased to its highest level since March 2023 at almost $406,000, but it was still below the record high in MBA's survey of more than $436,000 in April 2022," said Kan. "The Federal Housing Administration share of purchase applications, which provides a read on first-time homebuyer activity, increased to 25.7%, indicating that first-time buyers continue to turn to new homes due to the lack of affordable existing home options."New single-family home sales were running at a seasonally adjusted annual rate of 689,000 units, down 1.6% from January's pace of 700,000 units. Unadjusted, an estimated 62,000 new home sales occurred in February, down 1.6% from 63,000 the prior month.Besides the FHA share at 25.7%, conventional loans made up 63.9% of the volume, Department of Veterans Affairs comprised 10.1%, and the U.S. Department of Agriculture program just 0.3%.Meanwhile, the FHA made it official — boosting the loan limits for Title 1 manufactured housing mortgages. This is the first increase in 15 years, but it won't be the last, as the agency promised to recalculate the limits annually to keep pace with home price changes.Starting March 29, the limits are $105,532 for a single-section manufactured home and $193,719 for a multisection dwelling. The lot loan limit is $43,377."Updating the Title I loan limits was the next critical piece in our ongoing efforts to make the Title I Manufactured Home Loan Program work for lenders and homebuyers for whom manufactured housing offers an affordable way to meet their housing needs," said Federal Housing Commissioner Julia Gordon in a press release. "We hope these changes will prompt more lenders to consider using the Title I program to meet the financing needs of consumers purchasing or refinancing manufactured homes."Manufactured housing is seen by advocates as a tool to relieve the inventory shortage.That shortage has kept home prices elevated. But the February report from First American Data & Analytics found that while prices increased 6.3% year-over-year, it was the slowest annual pace since October 2023.The increase from January was 0.7%.The second consecutive decline in the monthly pace clarifies the trajectory for price movements, First American Chief Economist Mark Fleming said."In February, our preliminary estimate of annualized appreciation dropped by almost a full percentage point," Fleming said in a press release. "The last time there was a slow-down of this magnitude was in early 2023 when the Fed was aggressively raising interest rates."While indications are that the supply of homes for sale is on the rise, inflation is keeping prices elevated, he said.Still, "the relative increase in homes for sale is a welcome sign for prospective home buyers and seems to be helping to normalize house-price appreciation, an added benefit heading into the spring home-buying season," Fleming said.

In a sign of how expectations can shift suddenly in the mortgage industry, Fannie Mae increased its rate expectations for this year by 0.5 percentage points in its March housing and economic outlook.Not only that, but rates will not fall below 6% in 2025, according to the government-sponsored enterprise's forecast."Hotter-than-expected inflation data and strong payroll numbers are likely to apply more upward pressure to mortgage rates this year than we'd previously forecast, as markets continue to evolve their expectations of future monetary policy," Chief Economist Doug Duncan said in a press release. "Still, while we don't expect a dramatic surge in the supply of homes for sale, we do anticipate an increase in the level of market transactions relative to 2023 — even if mortgage rates remain elevated."Those factors have the market now expecting the Federal Open Market Committee, meeting on Tuesday and Wednesday, to hold off on any short-term rate reductions until later this year.That in turn is impacting the 10-year Treasury yield, which led Duncan to raise his fourth quarter 2024 rate forecast to 6.4% from 5.9%. For the same period next year, he now sees rates at 6%, versus 5.7%.The 10-year yield was at 4.31% at noon on March 19; the yield was as low as 3.82% on Feb. 1.Duncan reduced his 2024 originations outlook to $1.76 trillion from $1.91 trillion in the February forecast, with originations reduced to $1.37 trillion from $1.46 trillion. Refinance volume is now expected to come in at $397 billion from $459 billion. Fannie Mae estimated that total volume in 2023 was $1.47 trillion, with $1.22 trillion coming from home purchase originations.In 2025, Fannie Mae now expects $2.18 trillion of volume, versus $2.36 trillion one month ago.Separately, mortgage applications for newly constructed homes increased 15.7% year-over-year and by 1% month-to-month in February, the Mortgage Bankers Association said. The numbers from its Builder Application Survey are not seasonally adjusted.Rising rates actually hampered activity during the month, but a competitive market kept volume up, said Joel Kan, deputy chief economist, in a press release."The average loan size increased to its highest level since March 2023 at almost $406,000, but it was still below the record high in MBA's survey of more than $436,000 in April 2022," said Kan. "The Federal Housing Administration share of purchase applications, which provides a read on first-time homebuyer activity, increased to 25.7%, indicating that first-time buyers continue to turn to new homes due to the lack of affordable existing home options."New single-family home sales were running at a seasonally adjusted annual rate of 689,000 units, down 1.6% from January's pace of 700,000 units. Unadjusted, an estimated 62,000 new home sales occurred in February, down 1.6% from 63,000 the prior month.Besides the FHA share at 25.7%, conventional loans made up 63.9% of the volume, Department of Veterans Affairs comprised 10.1%, and the U.S. Department of Agriculture program just 0.3%.Meanwhile, the FHA made it official — boosting the loan limits for Title 1 manufactured housing mortgages. This is the first increase in 15 years, but it won't be the last, as the agency promised to recalculate the limits annually to keep pace with home price changes.Starting March 29, the limits are $105,532 for a single-section manufactured home and $193,719 for a multisection dwelling. The lot loan limit is $43,377."Updating the Title I loan limits was the next critical piece in our ongoing efforts to make the Title I Manufactured Home Loan Program work for lenders and homebuyers for whom manufactured housing offers an affordable way to meet their housing needs," said Federal Housing Commissioner Julia Gordon in a press release. "We hope these changes will prompt more lenders to consider using the Title I program to meet the financing needs of consumers purchasing or refinancing manufactured homes."Manufactured housing is seen by advocates as a tool to relieve the inventory shortage.That shortage has kept home prices elevated. But the February report from First American Data & Analytics found that while prices increased 6.3% year-over-year, it was the slowest annual pace since October 2023.The increase from January was 0.7%.The second consecutive decline in the monthly pace clarifies the trajectory for price movements, First American Chief Economist Mark Fleming said."In February, our preliminary estimate of annualized appreciation dropped by almost a full percentage point," Fleming said in a press release. "The last time there was a slow-down of this magnitude was in early 2023 when the Fed was aggressively raising interest rates."While indications are that the supply of homes for sale is on the rise, inflation is keeping prices elevated, he said.Still, "the relative increase in homes for sale is a welcome sign for prospective home buyers and seems to be helping to normalize house-price appreciation, an added benefit heading into the spring home-buying season," Fleming said.

Mortgage borrowers who allege past loan-modification errors at Wells Fargo led to unnecessary foreclosures and unjustly hurt their credit histories filed a new putative class action in federal district court this month.Curry, et al. v. Wells Fargo Bank NA, which the Northern California Record reported on earlier, alleges breach of contract, intentional infliction of emotional distress, negligence, and fraudulent concealment. The lawsuit also alleges violations of two laws in the Golden State and one in Illinois for subclasses of plaintiffs in each respective state.The complaint alleges that Wells violated the California's Homeowners Bill of Rights because the bank had "an obligation to ensure that competent and reliable evidence, including the borrower's loan status and information, supported its right to foreclose."The lawsuit further alleges that Wells violated the Golden State's law around unfair competition by denying eligible borrowers their right to government loan modifications.Plaintiffs also claim the bank was out-of-step with Illinois prohibitions against fraud and deceptive acts because of language in the law around "false promises" and other verbiage that can be applied to offers of relief consumers were qualified for, but did not receive.The plaintiffs in the lawsuit see it as distinct from two others filed over faulty calculations the bank ran for hundreds of modifications between 2010 and 2015: Alicia Hernandez, et al. v. Wells Fargo and Ethan Ryder, et al. v. Wells Fargo Bank NA. Wells agreed to multimillion-dollar payments in settling those two lawsuits."Plaintiffs do not reasonably believe that the modification errors committed by Wells Fargo in their loans or the loans of the putative class members in this action are the same errors," they said in a court filing.But plaintiffs in another case that is open, Beloff v. Wells Fargo Bank, have filed an administrative motion successfully asking the court to vacate a previously planned hearing for the Curry lawsuit to determine whether the two cases' actions should be considered related.Wells has faced multiple lawsuits and regulatory actions due to its errors, in which several hundreds of people who might otherwise have gotten modifications ended up in foreclosures, with one borrower describing it as a case where he lost his home due to "a computer glitch."The bank had to pay billions of dollars in a 2022 consent order it entered into with the Consumer Financial Protection Bureau due the modification issues and others involving auto loans and deposit accounts. In 2021, it paid a $250 million fine to the Office of the Comptroller of the Currency and faced servicing restrictions for violations of an earlier 2018 consent order.The lawsuit filed in the Northern District of California stresses that the miscalculation Wells' proprietary software applied to loans being evaluated for the Home Affordable Modification Program persisted for years before Wells divulged it in a public company filing in 2018."Between 2010 and 2018, Defendant failed to detect, or ignored, multiple systematic errors in its automated decision-making software," plaintiffs said in their complaint. "This software determined customers' eligibility for a government-mandated mortgage modification during a time of extreme financial distress. Its importance to these customers' lives cannot be overstated."The bank, which eventually replaced its in-house system with Black Knight's widely-used software, said it is "a different company today, with new leadership and revamped structure, processes, controls and culture in place."Wells Fargo is committed to providing customers with the products and services that can help meet their financial needs. Our ongoing outreach is a continuation of our efforts to work through legacy issues and make things right for customers."

New U.S. home construction bounced back sharply last month from weather-related weakness at the start of the year as builders benefit from slightly more favorable mortgage rates and a dearth of existing houses for sale.Residential starts increased 10.7% in February, the largest since May, to a 1.52 million annualized rate, government data showed Tuesday. The median estimate of economists surveyed by Bloomberg called for a 1.44 million pace.Building permits, a proxy for future construction, rose to a 1.52 million rate, the fastest since August. Both permits and starts figures for January were revised higher.Single-family home construction increased to a two-year high, while multifamily home starts rose 8.3% after a steep drop the prior month.After a January slump in starts, which was the largest since May 2022, the rise adds to evidence the housing market is on the mend. Builders are taking advantage of a limited resale inventory, though a bigger decline in mortgage rates would help bring more prospective buyers off the sidelines and provide a bigger boost for the industry.Home-financing costs may retreat later this year when the Federal Reserve is expected to start reducing interest rates. Economists widely see policymakers leaving the benchmark interest rate unchanged at the conclusion of their two-day meeting on Wednesday.Figures on Monday showed homebuilder sentiment climbed to an eight-month high in March as demand picked up. With sales firming, less than a quarter of builders in the National Association of Home Builders/Well Fargo report said they reduced prices to lure buyers, the smallest share since July.What Bloomberg Economics says"Improving sentiment among home builders bodes well for construction of new single-family homes. With housing inventory low and mortgage rates expected to come down later this year, pent-up demand for housing creates an opportunity for builders," said Eliza Winger, economist. "Homebuilders also can offer incentives — such as variable-rate mortgages at below-market rates — to entice buyers."Authorizations for one-family homes increased to the highest level since May 2022, and permits for multifamily construction also rose.The government report showed housing starts advanced sharply in the Midwest after a winter weather-related plunge a month earlier. Construction in the South rose to the fastest annual pace in nearly two years. The number of single-family homes completed surged by the most since June 2010 after slumping a month earlier.