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"The trading attitude, which is these assets have to move at a price tomorrow morning, isn't the way the banking system works," BofA CEO Brian Moynihan says of the patient view on lagging values in commercial real estate.Hollie Adams/Bloomberg Bank of America's CEO Brian Moynihan said it'll take time for the banking industry to work through issues with commercial real estate loans, after a New York regional lender alarmed investors with its exposure to troubled debt."Commercial real estate is a slow burn — it's a classic burn," Moynihan said in a Bloomberg Television interview Tuesday from the bank's trading floor. "The trading attitude, which is these assets have to move at a price tomorrow morning, isn't the way the banking system works."Last year was a bleak one across the banking industry. In the first half, dozens of regional lenders swooned — and some collapsed — as rising interest rates slashed the value of assets on their books, saddling U.S. banks with hundreds of billions of dollars of unrealized losses. Some lenders started raising the possibility of defaults on commercial real estate loans, and the problem has yet to subside, with New York Community Bancorp getting a cash infusion this month amid property-loan troubles of its own."We work with clients — you take a building and figure out what the ultimate end state rental rolls will provide, you refinance it, sometimes that wipes out the equity, sometimes it doesn't," Moynihan said. "We're careful in how we underwrite as an industry."The market disruption across the board last year allowed Bank of America to take market share, according to Wendy Stewart, the firm's president of global commercial banking. She added that the business she oversees has seen strong loan growth."We're really making investments in our team," Stewart said. "We continue to hire more bankers, and we're making a lot of investment in digital."Moynihan said the quarter has been strong for its trading business, and that investment banking revenues across the industry have stabilized. The firm reported net income of $26.5 billion last year, down from $27.5 billion in 2022. The Charlotte, North Carolina-based company has said it's focused on keeping expenses in check and has used attrition to bring its head count down without taking a meaningful severance charge, which can be a drain on profit.The bank is on track to meet its previous guidance for net interest income this quarter, Chief Financial Officer Alastair Borthwick said at a conference this month, with investment-banking revenue up as much as 15% from a year earlier and sales and trading revenue likely to be little changed.Bank of America is scheduled to report its first-quarter results next month. With interest rates remaining elevated and investors awaiting expected cuts by the Federal Reserve, lending and consumer spending have slowed. High rates have been a drag for earnings at Bank of America, which had piled into long-dated Treasuries and mortgage bonds in years when rates were lower. Still, consumers have been "remarkably resilient," Moynihan said Tuesday. Moynihan, one of the longest-serving heads of a large U.S. bank, has signaled his interest in staying on for years to come. He reiterated that he remains uninterested in a Washington post, saying, "I've got a great job here."

A series of data breaches hit the financial services sector at the end of 2023 and into the new year, highlighting how vulnerable the mortgage industry can be to attacks from bad actors. Millions of borrowers have had their personal identifiable information exposed, with Social Security numbers and bank account information shared to the dark web. These incidents have put mortgage stakeholders on alert regarding how they can protect their infrastructure going forward. Companies recently impacted include: Loandepot, Mr. Cooper, Academy Mortgage, Fairway Independent Mortgage, Planet Home Lending, Fidelity National Financial and First American Financial Corporation. Attacks have been carried out using third-party vendor vulnerabilities and other means, such as directly attacking companies through phishing, with spoofing emails. Bad actors have become more sophisticated, using generative artificial intelligence to mimic communications, making it harder to spot fakes, cyber security experts say.RELATED: What happens in a cyber attack? Experts discuss incident responseThese incidents not only hurt mortgage companies reputationally, but also financially. Loandepot and Mr. Cooper, both public companies, revealed the aftermath of being attacked amounted to millions in expenses, filings with the Securities and Exchange Commission show.According to Ike Suri, CEO of FundingShield, there truly is a rise in cyber crime that has impacted the mortgage industry – it's not just conjecture. Some of it stems from lenders beefing up vendor reliance during the recent mortgage boom, in a push to speed up originations."Lenders and large institutions have always counted [attacks] as the cost of doing business and have wiped it under the rug," Suri said. "There was a spike [during the pandemic] and there continues to be a spike."It is inevitable these attacks will continue, and as nefarious players get better at finding weak points in technology, there are steps mortgage companies should consider taking to protect their data and infrastructure going forward.

Rohit Chopra, director of the Consumer Financial Protection Bureau, said in a letter Monday that the Appraisal Foundation — a nonprofit tasked with setting standards for the home appraisal industry — is "an insular body controlled by a small circle, operating behind closed doors."Bloomberg News The organization tasked with writing rules for the home appraisal profession is ill-equipped to address issues of bias that have been a focal point for Washington regulators, according to the head of the Consumer Financial Protection Bureau. In a letter released Monday, CFPB Director Rohit Chopra said the Appraisal Foundation — a Washington, D.C.-based nonprofit — was "essentially a lawmaking body," albeit one that is held accountable to neither the general public nor market forces. "These issues are deeply troubling as the Appraisal Foundation is one of the most — if not the most — powerful players in America when it comes to appraisals and plays a controlling role in key issues contributing to appraisal bias," Chopra wrote. "As long as the Appraisal Foundation remains an insular body controlled by a small circle, operating behind closed doors, those issues will continue to go unaddressed."Banks and other lenders rely on appraisals to ensure the collateral value of homes they issue mortgages against. Appraisal bias became a top concern for the Biden administration after several high-profile instances of Black homeowners alleging discrimination by home appraisers in 2020 and 2021, amid a boom in purchases and refinancings.Chopra's letter summarizes his findings from a yearlong exploration of appraisal bias conducted by the Federal Financial Institutions Examination Council's Appraisal Subcommittee, an intergovernmental agency composed of the CFPB, the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, the National Credit Union Administration, the Department of Housing and Urban Development and the Federal Housing Finance Agency. The subcommittee has held four hearings on appraisal bias, during which it has interviewed industry participants, academics and regulatory officials — including leaders from the Appraisal Foundation."Throughout those hearings, the witness testimonies point to an insular and contorted governance structure that all but guarantees that the profession and practices remain out of tune with the needs of [the] housing market, and much less likely to address appraisal bias," Chopra wrote.Following one of the hearings last summer, Chopra singled out the Appraisal Foundation and its "byzantine" approach to regulation as an area of primary concern. The foundation was granted rulemaking authority over the appraisal profession in 1989 by the Financial Institutions Reform, Recovery, and Enforcement Act, or FIRREA — one of several pieces of legislation passed in the wake of the savings and loan crisis. It does this by issuing the Uniform Standards of Professional Appraisal Practice, or USPAP, which then inform state-level licensing and regulatory policies. Appraisal professionals must pay for USPAP materials. Fees from these sales and licensed rights for related educational programs and materials fund the foundation.In his letter, Chopra noted that the officials that set these standards and those that serve on the foundation's board of trustees are selected through a nontransparent process — one that has, at times, been influenced by a "pay-to-play" mechanism that gives special nominating priority to paying sponsors or "partners."The CFPB director also raised issues with the foundation's standards for avoiding conflicts of interest, drawing a sharp line between its code of conduct and that of the federal government."The Standards of Ethical Conduct applicable to executive branch employees are 77 pages. The Appraisal Foundation's conflict of interest policies are each under two pages. The code of conduct is four," Chopra wrote. "Unsurprisingly, there are substantial differences in the policies."The letter made no specific recommendations for how the foundation or the oversight of it should be changed.

Flagstar Bank branch in New York City Flagstar Bank has put the call out for entries into its next MorgageTech Accelerator class. The deadline for emerging fintechs to apply is April 15. Now in its fifth iteration, the program is aimed at providing support and mentorship to mortgage and property-related startups attempting to come up with innovations to solve challenges and streamline processes in home lending. Entrants will be judged on their potential for technology innovation, opportunities to scale and ability to deliver on Community Reinvestment Act goals. All companies with a role in the mortgage process, including origination, processing, marketing, servicing, compliance, sales, underwriting, credit, and quality assessment, are eligible if able to participate in scheduled sessions in the U.S."We look forward to meeting our next class of entrepreneurs," said Lee Smith, the bank's president of mortgage, in a press release."It's been incredibly rewarding to mentor and empower program participants to achieve new success, while simultaneously adopting some of these new technologies at Flagstar to improve mortgage operations and how we service and connect with customers." Along with mentorship from senior Flagstar leaders, benefits for companies selected to participate include a customized curriculum, opportunities to speak with experts from Fannie Mae and Freddie Mac and sessions on compliance and regulation with law firm Sheppard Mullin. The class of startups also will be able to test their products in real-world scenarios, with the potential for further investments or a vendor relationship with Flagstar following completion of the program. Previous participants of Flagstar's mortgage technology accelerator include Orangegrid, Volly, Stavy and Brace. The latter two firms went on to merge in 2023. Last year's honorees were Housetable, Landis and two artificial-intelligence focused fintechs, Certo/ai and Greenline. "Flagstar's MortgageTech Accelerator connected Greenline with an ideal launch pad in 2023," said Daniel Hayes, CEO of the income-verification solutions provider.While other financial institutions, such as Bank of America, have also rolled out similar innovation accelerators aimed at entrepreneurial fintechs, Flagstar's program remains the sole initiative specifically focused on the mortgage industry.The accelerator launched in 2019, prior to Flagstar's acquisition by New York Community Bank, which was completed in late 2022. At the time, New York Community pledged to continue the program. Recently the parent company found itself embroiled in a public relations nightmare after a fourth-quarter earnings report led to alarm over its commercial real estate portfolio. The company's stock value has plunged over 60% since January 30 when it closed at $10.38.Two weeks ago, former Trump administration officials Steven Mnuchin and Joseph Otting spearheaded an investment group's purchase to help rescue the Hicksville, New York-based bank. With the deal, Otting became the company's new CEO.

With clients more likely than ever to belong to a homeowners association, financial advisors and tax professionals are fielding more questions about planning strategies for the hefty fees.The costs on top of mortgage payments, property taxes and other homeownership expenses often run up to several hundreds of dollars per month depending on inflation, location and the level of amenities available to members, according to an analysis by personal finance website Bankrate. Self-employed business owners who rent out the residence or use the home as their office could qualify for a deduction from income taxes, according to Jack Oujo of Wall, New Jersey- and Fort Lauderdale, Florida-based Oujo Wealth Strategies. Others may be able to defray some of the expense by using the "Masters" or "Augusta" rule to deduct up to 14 days' worth of rent payments from their income, he noted. Those living in the home as their primary residence should weigh questions like "Where is the money going?" and "What am I paying for?" against services such as security, community pools, gyms or other perks and the potential impact of any pending lawsuits or other financial issues that may affect their homeowners association, Oujo said in an interview."The big thing with homeowners associations is that people — especially when they're moving into a place — should ask to see the documents, the financial statements," he said. "Homeowners associations are nonprofit. They're supposed to benefit everybody."READ MORE: 24 tax tips for self-employed clientsHomeowners associations are growing fast. The number of residents who are part of them or other associations such as planned or condominium communities or housing cooperatives has soared to 75.5 million residents in 28.2 million units in 365,000 communities across the country, according to the Foundation for Community Association Research, an industry research organization. In 1970, the 10,000 community associations were home to just 2.1 million residents. In 2023, the associations collected $108.8 billion in assessments of all types from homeowners."Assessments fund many essential association obligations, including professional management services, utilities, security, insurance, common area maintenance, landscaping, capital improvement projects and amenities like pools and clubhouses," the foundation's latest annual factbook said.In 2021, residents paid an average of $191 a month and a median of $72 for homeowners or condominium association fees, according to the Department of Housing and Urban Development's American Housing Survey. Those figures may obscure how much many homeowners must pay their association for the fee and any other special assessments for particular maintenance or upgrade projects, an analysis by Quicken Loans said."HOA fees can vary widely depending on where you live, the type of home you're in and the association's amenities and services," the loan provider's blog post said. "Your monthly HOA fee may be less than $100 or more than $1,000. HOA fees typically cost $200- $300 per month on average. When house hunting, check the monthly fees for any HOA communities you're considering. It's not enough to be able to afford the mortgage payment. You must be able to comfortably afford your HOA fees to avoid potential fines, liens, lawsuits or even foreclosure. It's vital to factor HOA fees into your monthly housing costs."READ MORE: 11 tax tips on mortgages and homeownershipSince the IRS views the expense as "a personal expenditure," those dues are generally not tax-deductible for homeowners using the property as their main residence, according to Liting Chuang, the director of tax planning and an associate wealth advisor with Menlo Park, California-based Bordeaux Wealth Advisors. Rentals and business usage represent the two main exceptions, she said in an email."HOA dues paid on a property that is being rented out can be deducted as an ordinary and necessary rental expense. If the property is only partially being rented out, then take a proportionate share of the HOA dues as rental expense," Chuang said. "If part of the property that is subject to HOA dues is being used for business purposes, a proportionate share of the HOA dues can be deducted as business expense. This exception most likely will only apply to self-employed individuals (i.e. Schedule C filers)."She and Oujo pointed out that the 2017 Tax Cuts and Jobs Act ended the possibility of a deduction for employees who work from home for a company owned by someone else — although that is one of many provisions that will expire at the end of next year. Certain employees could potentially offset the expense of homeowners association fees by getting a reimbursement from their company which, in turn, could get the deduction, Oujo said. But that would qualify "only if you work exclusively" from the home, he noted. "It would not work if you have an office to go to, because the IRS would take the position that that's your office."

Atlantic Trust Mortgage is asking a Michigan federal court to throw out a suit pegged against it by United Wholesale Mortgage, which accuses the company of flouting the wholesale lender's All-In ultimatum.The independent mortgage broker argues it never signed an amendment to UWM's agreement in 2022, and thus, the legal action should be permanently scrapped, a filing submitted March 15 shows. "UWM's complaint should be dismissed with prejudice as a matter of law because the 2022 unsigned amendment to the 2018 wholesale broker agreement which UWM claims was breached and which is attached [as an exhibit] to UWM's complaint, was never completed nor executed by the parties and therefore is unenforceable on its face," Atlantic Trust said in its suit.Per Michigan law, if an amendment is not memorialized in writing it is not valid, the defendant's attorney argues.UWM declined to comment. Atlantic Trust did not immediately respond to a request for comment.At the beginning of the year, UWM accused Atlantic Trust of sending 71 loans to Rocket Mortgage or Fairway Independent Mortgage since December 2022, "intentionally and directly undermining the entire purpose of the All-In Intuitive." As such, UWM said it's seeking $355,000 in damages, according to the suit filed Jan. 26. The wholesale lender claims the breach of contract has damaged it in various ways "including but not limited to, allowing Atlantic Trust to reap the benefits of UWM's investments in and services provided to it as a broker partner, including UWM's proprietary technology."Atlantic Trust dubbed the damage demand "onerous" in its recent filing and reiterated UWM's suit has no standing because the broker never renewed the agreement."The purported 'amendment' to the 2018 wholesale broker agreement attached by UWM as Exhibit B to its complaint is undisputedly not signed by either party and UWM does not even allege that the purported "amendment" was ever signed," an attorney for Atlantic Trust wrote in the filing. In January, a spokeswoman for UWM said Atlantic Trust "is one of the companies who signed a contract and then knowingly breached it, therefore we will follow the agreed upon contract and win damages." Another mortgage broker facing similar allegations of breaching the wholesale lender's contract is District Lending.A suit filed by UWM in mid-December claims the independent mortgage broker sent 84 loans to Rocket or Fairway since pledging in March 2021 to abide by UWM's All-In initiative. The lending giant claims District Lending's refusal to abide by the agreement has resulted in damages of at least $420,000. The case is still pending.

A majority of first-time buyers are finding the means to maintain homeownership over years, but not always without a gap, according to a new government working paper. In a study conducted by the Federal Housing Finance Agency, approximately 60% of homebuyers who made their first purchase between 2003 and 2006 are currently still holding a single-home mortgage, its researchers said. "Most homebuyers have remained homeowners, and the persistence of homeownership has increased, especially since the Great Recession," they wrote. Also, 40% of first-time buyers between 2003 and 2019 were still in possession of their original loan as of early 2020. But following the pandemic-era refinance boom and migration wave, the share had fallen to just 19% by March 2023. Although the percentage of borrowers refinancing the mortgage on a first home increased only slightly, owners who had obtained another loan rose from 25% to 37%.The FHFA examined data from the National Mortgage Database, jointly managed by the agency and Consumer Financial Protection Bureau. Individual first-time buyers were identified and segmented into various cohorts by year of purchase, race and geography in an effort to understand challenges potentially facing various groups."Measuring homeownership sustainability is a significant contribution to our understanding of homeownership persistence. While this study sheds light on the dynamics of homeownership, several fundamental normative questions remain unanswered concerning the optimal homeownership rate," the researchers wrote. Homeownership sustainability among minority groups trended higher over time, but problem points still emerged among racial cohorts who bought their first homes before the Great Recession. When looking at mortgages that lenders originated before 2007, Black and Hispanic first-time buyers accounted for the lowest share of borrowers holding an existing home loan 16 years later compared to other racial or purchase-year segments. Still, between pre-recession 2006 and 2022, minority populations have managed to grow their share of the new-buyer segment. Black FTHBs now account for a 9% share, climbing back close to the 10% mark they held in 2006. Asians also made up 10% of the first-time buyer market, doubling their share, while Hispanics represented about 18% in 2022, up from 15%. Homeowner longevity, defined as the share of months since first purchase the buyer has held any mortgage, is approaching racial parity in the years subsequent to the Great Recession. Although first-time Hispanic buyers in 2006 saw only a 64% rate of longevity compared to 74% among white consumers that year, that gap has gradually narrowed to approximately 1 to 2 percentage points across all racial groups. The paper didn't identify specific reasons FTHBs may have dropped out of homeownership for an extended length of time, but researchers noted the availability of resources aimed at keeping new homeowners current on their mortgage, insurance and tax payments contributed to increased longevity. Credit-risk models show that the first five years after a purchase as the period first-time buyers are most likely to run into delinquency issues that would threaten their ability to keep possession of their homes. "Although homeowners may voluntarily transition back to renting, a number of subsidies are in place to expand access to homeownership and assist homeowners with remaining in place," the working paper said.FTHBs with a first mortgage eligible for secondary-market sale to Fannie Mae or Freddie Mac have the highest longevity compared to other types of conventional products or government-backed loans.Among first-time buyers of the past two decades, the median age sat between a range of 29 and 32 years old. In early 2023, males accounted for 58% of new buyers, compared to 53% in 2003, but the female share dropped to 42% from 47%.

Sentiment among U.S. homebuilders climbed to an eight-month high in March as a limited number of existing homes for sale and mortgage rates that are down from their peak spurred demand.The National Association of Home Builders/Wells Fargo index of housing market conditions increased by 3 points to 51, according to data released Monday. The median estimate in a Bloomberg survey of economists called for a reading of 48.Builder sentiment has been improving so far this year, though it's still well below prepandemic levels. A measure of expected sales in the next six months rose to 62, the highest since June. Gauges of prospective buyer traffic and current sales advanced to seven-month highs, NAHB data showed.Even with the recent pickup, builder sentiment may remain below its longer-term average until borrowing costs fall more significantly, and the Federal Reserve has delayed cutting interest rates because of stubborn inflation. Before the pandemic, builder sentiment was in the 70s and it peaked at 90 in the frenzied market of late 2020."With the Federal Reserve expected to announce future rate cuts in the second half of 2024, lower financing costs will draw many prospective buyers into the market," Robert Dietz, NAHB chief economist, said in a statement. In recent months, builders have generally cut back on the price breaks they've offered consumers to boost sales. In March, 24% of builders reported cutting prices, down from 36% in December and the lowest share since July. The share of builders offering customers some form of incentives was 60% in March, and it's hovered between 58% and 62% since September, the NAHB said.Builder sentiment rose in the Midwest by 11 points to 49 in March, the most of any region, while also climbing slightly in the South. Sentiment declined slightly in the Northeast and West. The government will offer a snapshot of home construction Tuesday when it releases February housing starts and building permits data.

Over the past few months, cybercriminals have been attacking mortgage players at an alarming rate.Major companies like Loandepot and Mr. Cooper are reeling financially from recent incidents, while businesses continue battle lawsuits from affected customers. Some of those complaints have revealed more color about the hacks and the companies' respective responses, details which aren't typically disclosed.One major cyberattack began when an employee clicked on a search result about road maintenance agreements in Florida, according to court filings. Another sizable breach began when a threat actor exploited the credentials of a bank's contractor, which eventually led to a previously undisclosed bitcoin ransom payment. Attacks may appear more frequent because of new notification requirements, but experts say the pain isn't felt only by the largest lenders and servicers. "We're really seeing two kinds of parallel crises," said Jordan Bingham, founder and CEO of Utah-based cybersecurity firm LendSafe. "The larger companies are freaking out about ransomware and at the same time, the smaller shops are undergoing quite a bunch of pressure from attackers."To understand what happens during a cyberattack, National Mortgage News spoke to cybersecurity veterans who described the typical timeline of an incident. Lenders, servicers and technology vendors may follow similar game plans.

At age 20, Christy Soukhamneut was "dropped in the deep end of the pool" and found herself a mortgage president and CEO in her first job out of college.Since those early days cutting her teeth as the leader of Marble Mortgage in Montgomery, Alabama, Soukhamneut has carved out a career that led her to several of the industry's top lending firms, including Countrywide Home Loans, Certainty Home Lending, Flagstar and Texas Capital. She has also served as a director on multiple company boards.In 2023, her experience in mortgage led her to the role of chief lending officer at University Federal Credit Union in Austin, Texas, or UFCU, where she now is responsible for a full array of transactions beyond mortgage, including auto, commercial and small-business loans.  Soukhamneut recently spoke with National Mortgage News on several topics, including her entry into home lending and how it paved a path toward leadership on the national stage, technology's place in the industry's future and women's growing roles in financial services. The interview has been edited for clarity and length.