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Significantly more Americans own a home now than a decade ago, but the disparity between Black homeownership rates and those of other racial and ethnic groups has grown wider, according to the National Association of Realtors.Overall, U.S. homeownership increased over the decade to 2022, with 10.5 million more homeowners across the country, the study by the trade group found, drawing on Census data. Asian Americans experienced the sharpest increase over the period, with ownership rates soaring to a historic high of 63.3%. Hispanic Americans saw a gain of 3.2 million households, to reach a new peak of 51.1%.While Black Americans also saw homeownership advance, the gain was modest. And at 44.1%, their rate is notably lower than that for Asian, Hispanic and White Americans. The gap between Blacks and Whites – the highest among the four major groups – widened by a percentage point from 2012, to 28 percentage points."Minority homeownership gained ground," Jessica Lautz, NAR deputy chief economist and vice president of research, said in a statement. "While the gains should be celebrated, the pathway into homeownership remains arduous for minority buyers."The NAR's analysis showed 55% of Asian and 51% of Black and Hispanic howe owners were first-time buyers, something that places them at a particular disadvantage in a market marked by high prices and limited supply. That's because first-timers "must rely on down-payment sources beyond gained housing equity," Lautz said.Other challenges for would-be buyers of color include difficulties in saving for a down payment — as they typically spend higher proportions of their income on rent and paying back student loans.Black homebuyers, for instance, reported the highest levels of student-loan debt among all groups, with 41% carrying a record high median debt of $46,000, while 29% of Hispanic buyers had student loan debt with a median of $33,000. The NAR has also cited data showing Black Americans draw on pension or 401(k) savings more than any other group.Citing data from the Home Mortgage Disclosure Act, the NAR last year said Black and Hispanic homebuyers face additional barriers in securing mortgages, such as higher denial rates compared with their White and Asian counterparts.For those who do obtain mortgages, the interest rates tend to be higher on average, Tuesday's report showed. For loans originated in 2022, 20% for Blacks and 21% for Hispanics exceeded 6%, in contrast with lower percentages among Asian and White borrowers.

Enjoy complimentary access to top ideas and insights — selected by our editors. Truist's agreement to offload the rest of its insurance business comes just weeks after it announced a $70 million deal to sell an asset-management subsidiary. Both moves are part of the bank's strategy to become leaner and more efficient.Scott McIntyre/Bloomberg Truist Financial is selling its majority stake in the regional bank's insurance brokerage unit after a year of speculation about its intentions in what was once a priority business line.The Charlotte, North Carolina, company said Tuesday that it has agreed to sell the remaining 80% of Truist Insurance Holdings to two private-equity firms and other investors. CEO Bill Rogers said on a call with analysts that the transaction — which values the overall unit at $15.5 billion — and a recent agreement to sell an asset-management subsidiary are part of a strategy to make Truist more efficient and pad its capital."You've heard me talk a lot recently about the work being done at Truist to simplify our organization and to better control our expenses in our core businesses to drive improved performance in the future." Rogers said. "By selling [Truist Insurance Holdings], we'll have capital capacity to play more offense. … In addition, our significantly stronger balance sheet will be positioned to weather an even wider range of economic environments."Stone Point Capital in Greenwich, Connecticut — which bought 20% of the insurance unit in February 2023 — and Clayton, Dubilier & Rice in New York led the all-cash purchase of Truist Insurance Holdings. Other investors, including Abu Dhabi's sovereign wealth fund, Mubadala Investment, are participating in the deal, which is slated to close in the second quarter, pending regulatory approval.The agreement is the latest example of financial institutions' selling their insurance units, as companies opt for big payouts to boost capital instead of the steady revenue those businesses provide. Eastern Bankshares, Cadence Bank, Evans Bancorp and CB Financial all fetched premium prices for their insurance subsidiary sales last year. Truist expects the latest deal to generate $10.5 billion in after-tax cash proceeds, $9.5 billion of capital and 230 basis points in Common Equity Tier 1 capital. The company had previously estimated that the sale of its remaining 80% stake in the insurance unit would offer more than 200 basis points of capital.Saul Martinez, head of U.S. financials research at HSBC Global Research, wrote in a note that the significant capital benefit of the deal is positive, "although exiting the insurance brokerage business does have a price."The latest deal isn't a surprise to Wall Street, as rumors of an insurance deal have floated since Truist sold a chunk of the business last year, Scott Siefers, an analyst at Piper Sandler, wrote in a research note Tuesday. The "wild card," he added, is what Truist will do with the proceeds."Now, we have a much better capitalized company with plenty of flexibility to address what has been a lingering issue for investors (large unrealized losses)," Siefers wrote in the note. "However, we're giving up presumably the highest-value portion of the earnings stream to get there." Chief Financial Officer Mike Maguire said on the analyst call that the sale would allow Truist to evaluate a variety of capital-deployment alternatives, including shifting its balance sheet away from low-yielding securities and growing its core banking franchise, like loans."While we recognize that there are trade-offs with any decision, we think it's timely to increase Truist's financial strength," Maguire said. "Truist's stronger relative capital position creates capacity for growth, allows us to maintain our earnings, gives us an opportunity to also improve our interest rate risk profile by reducing the duration of our balance sheet and, of course, capitalizes on historically high insurance-broker valuations."Maguire added that the company could replace the insurance unit's earnings through a $23 billion balance-sheet repositioning, in which it would reinvest the securities into a mix of cash, shorter-duration securities and off-balance sheet hedges, while still maintaining "substantial capital to play offense." He added the deal also increases Truist's ability to resume share repurchases.Rogers also said on the analyst call that Truist's growth has been affected by its desire to conserve capital due to economic uncertainties and potential regulation, such as the Basel III endgame proposal. The bank has been working on a $750 million cost-cutting plan that it announced in September, which entails streamlining lines of business, slashing head count and reducing its branch network. In the fourth quarter of 2023, the bank reported a net loss of $5.2 billion, largely due to high expenses.The CEO has expressed multiple times in the last year that the remaining stake in the insurance business provided flexibility for Truist to create capital. He said on the Tuesday analyst call that the company chose to sell now, as opposed to another time while insurance businesses are still highly valued, due to consolidation of the insurance industry. "We've been able to support it in the past, but it's consolidating at an accelerating pace that would require additional capital, and that just isn't the place where we're in a position to support that long term," Rogers said on the call.

Technology vendor Sagent rolled out a preview of its cloud-native servicing system on Tuesday and announced that it's making a few components available for use. Mr. Cooper, a servicer that holds a 20% ownership stake in Sagent, is on track to pilot the full end-to-end version of it by the end of the year.Consumer-facing loss mitigation, business-side claims, and certain artificial intelligence-driven servicing transfer and document management functions are now broadly available, said executives from the company. A variety of mortgage companies have been testing parts of the system."We certainly worked in collaboration initially with Mr. Cooper, but there also has been outreach to the entire industry to understand what the components they really feel the industry has been missing are," said Perry Hilzendeger, executive vice president of servicing at Sagent.Sagent aims to strengthen its foothold in servicing technology, going up against the recently acquired industry leader Black Knight. Sagent has named the system "Dara" in line with that goal. The word refers to the Celtic knot, which represents the roots of an oak tree."Dara is symbolic of the core root system that powers servicers," said Uday Devalla, Sagent's chief technology officer.The platform, which Sagent plans to demonstrate for the first time at the Mortgage Bankers Association's national servicing conference in Orlando, will have a simplified task-driven workflow.There will be six segments to the end-to-end system when it's complete: core, consumer, data, default, movement (referring to transfers) and AI. The technology released Tuesday bridges at least the last three with some crossover."You can take aspects of loan movement, say for instance, a bulk acquisition, bring it in, use the overlay of Dara artificial intelligence on that to evaluate the loans that you're purchasing, and then move that into your core system, even if it may not be Dara core yet," Hilzendeger said. Sagent singled out components it could develop on a standalone basis in choosing what to release first, he said."Those areas that can stand alone and interact with other systems are the main focus of what can be stood up today and delivered to the market. Once all the functionality is available in core, then we'll deliver the system all at once," Hilzendeger said.The AI component of the system that's available helps drive a document management process that can be used in various portions of the mortgage process from origination to transfers and loss mitigation, he explained."If someone were to provide us with income documentation, AI would be able to extract that data and put it directly into a tool in real time," Hilzendeger said, citing one example where it could be used when borrowers with hardships submit such paperwork for loan modifications.When used for transfers, the technology can effectively examine and match the data from the documents to the loan file and identify any advances that were already paid out."It can give you insights into the quality of the loans," Devalla said.The other functionality released Tuesday aims to improve the process for submitting claims to the mortgage investor for reimbursement of expenses and advances associated with servicing the loan, Hilzendeger said.When asked about the path forward, he said that more functionality would be rolled out through the year, culminating in the full system Mr. Cooper will test."It'll take a few months to get them stood up and running on the entire platform. Subsequent to that, then we'll work with the next customers to begin to establish integration and migration channels for them once Mr. Cooper is up," he said.

Alphv, or Black Cat, a ransomware gang, is taking responsibility for the hack that took down Loandepot's systems in early January and exposed the data of past and current customers. The same group has allegedly targeted other players in the mortgage industry, including Academy Mortgage and Fidelity National. The criminal organization claims Loandepot initially offered $6 million for the stolen data, but then asked for more time to secure a bigger ransomware payment. After which, the mortgage lender allegedly "disappeared," a post by Alphv shared by cybersecurity outlets, said. Alphv announced it is in the process of selling said customer information on the dark web after the alleged negotiations with the mortgage lender broke down. It previously threatened to do the same with data stolen from Academy Mortgage in May.Loandepot declined to respond to a request for comment Monday.At least 16.6 million current and former Loandepot customers' personally identifiable information was exposed. Alphv claims in its post that the attack was much wider in scope. The criminals allege that Loandepot did not fully disclose the amount of data stolen and that "multiple databases" were downloaded from credit bureaus that included the personal identifiable information on customers that weren't Loandepot borrowers.In mid-December, the Department of Justice claimed to have launched a disruption campaign targeting Alphv's operations. Per the department's announcement, the FBI developed a decryption tool that allowed law enforcement to offer over 500 affected victims the capability to restore their systems. That same month international authorities seized the ransomware gang's dark-web leak internet site. Despite this, Alphv has continued to target companies in the financial industry space. The FBI has publicly discouraged companies from paying ransoms, because a payment doesn't guarantee data recovery and could encourage further attacks. At least three class action suits are currently pending against Loandepot, which allege the mortgage lender failed to adequately protect PII of customers.One of the suits brought by Jonathan Rosa, a Loandepot borrower, claims the company "[willfully failed] to prevent the data breach" by making claims that customer PII was safe when in reality it was not. Rosa's suit also accuses the mortgage company of not investing adequately in privacy and security protections.

Mortgage servicing technology is coming into its own, according to John Reicher, chief digital officer of Cenlar.As a technology expert who crossed over into mortgages early in his career and works for a subservicer, Reicher has a unique view of how the industry's automation compares to the broader landscape.Servicing has lagged in digital development compared to the origination side of the business, but as adoption of technology has broadly accelerated, it's catching up, he said.In the interview that follows, Reicher offers details on how he started his career and the broader landscape he works within, which is being transformed by developments like advances in artificial intelligence, vendor consolidation and cyber security.Reicher's comments on these topics below are in response to questions from this publication, both of which have been edited for clarity and length.

The U.S. Supreme Court refused to question New York's decades-old rent-control system, turning away two appeals from apartment-building owners.The rebuff Tuesday ends months of deliberations over the cases, which had been fully briefed since late September. The court as a whole gave no explanation for either the rejection or the unusually long delay. In a two-paragraph statement outlining his views, Justice Clarence Thomas said the court eventually should consider whether the city unconstitutionally restricts some landlords from evicting tenants. But he said the apartment owners' lawsuits involved mostly "generalized allegations about their circumstances and injuries" and didn't provide a clear enough picture of how the city's regulations work.The rebuff follows an Oct. 2 rejection of an appeal that raised related issues. The challengers said a state law governing a million units in New York City unconstitutionally takes private property without compensation.The New York Rent Stabilization Law, which dates back to 1969, is among the most tenant-friendly in the nation. It requires landlords to renew leases except in limited circumstances, including a failure to pay rent, and lets family members take over a lease if they have lived in the unit for at least two years. The law also gives the city's Rent Guidelines Board authority to set maximum rent increases every year. The board considers a list of factors, including the economic condition of the residential real estate industry, vacancy rates and the cost of living in the area. The law applies to buildings that were built before 1974 and have six or more units.City and state officials urged the Supreme Court to leave the system intact and not take up the appeals.

Home Depot Inc. reported a fifth consecutive quarterly decline in revenue, underscoring a drop in demand for house improvement due to high mortgage rates and a slowdown in construction. Comparable sales fell 3.5% in its fiscal fourth quarter, Home Depot said Tuesday. The company forecast a 1% decline in comparable revenue this year. Analysts have been expecting an increase of 0.2%.While mortgage rates have come down from October's 23-year high, they continue to impact home sales and construction. In January, new-home construction sank by the most since the onset of the pandemic, indicating that any pickup in housing demand will be delayed until borrowing costs come down further."2023 was a year of moderation," Chief Executive Officer Ted Decker said in a statement. Despite current signs of weakness, analysts remain confident in the long-term success of Home Depot. In January, analysts at Wedbush Securities upgraded their rating of the retailer from neutral to outperform, pointing to "a rebounding industry environment with healthy Pro and general employment, solid wage growth and homeowner spending power from continued home-price appreciation."The stock traded 1.3% lower in pre-market trading. The shares have gained 14% in the past year.

A report from the government watchdog for the Federal Reserve said this month that Shan Hanes, the CEO of Heartland Tri-State Bank, had fallen victim to a type of investment fraud known as pig butchering, which led his bank to fail in July.American Banker reported previously that the bank's failure had been hastened by a scam and that the bank had rapidly borrowed $21 million from an unnamed Federal Home Loan bank. Details on the scam that led to the transactions were unclear until this month, when the Office of Inspector General for the Fed and Consumer Financial Protection Bureau released a report reviewing Heartland Tri-State's failure."Heartland Tri-State Bank failed because of alleged fraudulent activity conducted by the bank's chief executive officer (CEO), who initiated a series of wire transfers totaling about $47.1 million of Heartland's funds, among other suspicious activities, as part of an apparent cryptocurrency scheme referred to as 'pig butchering,'" the report said.People at the Federal Reserve Bank of Kansas City whom the OIG interviewed said Hanes' wire transfers appeared to be part of the cryptocurrency scam. As early as January 2023, Hanes executed small cryptocurrency transactions through another bank unnamed in the report. Some of those transactions appeared to involve his personal funds and funds potentially belonging to other entities, according to the report."In subsequent weeks and months, the CEO began transferring larger dollar amounts including the 10 wire transfers that caused the bank to fail," the report, which does not mention Hanes by name, said. "These transactions to cryptocurrency exchanges that are of increasing amounts over time appear to be consistent with the progression of a pig butchering scam."Fed staff in Kansas City conducted two interviews with Hanes during the week of the bank's failure to better understand the events that occurred. Hanes provided screenshots of messages and supposed cryptocurrency account statements, but Fed staff found his explanations "unreliable and inaccurate" because they "did not make sense and were difficult to follow," according to the report.The U.S. Attorney's Office for the District of Kansas charged Hanes with one count of bank embezzlement on Feb. 12, punishable by up to 30 years in prison, for allegedly defrauding Heartland Tri-State of $47.1 million.Dream State Bank, which took on Heartland Tri-State's deposits, did not respond to a request for comment. Hanes could not be reached for comment.Some scams work by playing into fear — a scammer convinces the victim their child is being held hostage (when they're not), and they need to send money immediately to ensure their safety. Others play into a sense of longing — many romance scams involve convincing the victim the scammer is in love with them, then one day, the scammer asks for money.Pig butchering works a bit differently. The scammer offers the victim an investment opportunity — often cryptocurrency-related, according to the Financial Crimes Enforcement Network — then misrepresents that the investment is growing, as a means of taking even more money.According to the FBI, scammers often make initial contact with victims through social networking and online communications platforms, dating websites, and phone calls and text messages that are meant to appear to have been misdialed. According to FinCEN, The scammer may claim to be an investor or money manager and create a social media profile that showcases wealth and an enviable lifestyle.Fraudsters in these schemes often ask for a modest investment to start, "to build confidence," according to the Financial Industry Regulatory Authority. Over time, as the investment seems to grow, the scammer will ask for larger investments.Pig butchering schemes "usually involve some type of fake claim or falsified dashboard that shows assets exponentially growing, with the intent being to encourage larger and larger investments," according to FINRA. These falsified dashboards may be websites that look like legitimate trading platforms, applications that victims download onto their phones, or malicious smart contracts accessed through cryptocurrency wallet software, according to the FBI.At the end of the scheme, the scammer might represent to the victim that the investment has plummeted in value, perhaps even convincing the victim they now owe money. By that time, or anytime prior, the scammer will rebuff attempts to withdraw supposed earnings."If the victim attempts to withdraw their investment, the scammer may demand that the victim pay purported taxes or early withdrawal fees," a FinCEN alert about pig butchering last year said. "Once the victim is unable or unwilling to pay more into the scam, the scammer will abruptly cease communication with the victim, taking the victim's entire investment with them."Statistics on pig butchering are sparse, but the FBI does track statistics on the broader category of investment fraud.Investment fraud is not as common as phishing, business email compromise, tech support scams, or other more common forms of internet crime. While more than 300,000 people reported instances of phishing to the FBI last year, 30,529 reported investment fraud.Yet investment fraud cost victims the largest amount of money of any category in 2022, according to the FBI's 2022 Internet Crime Report. Victims lost $3.31 billion to investment fraud that year; only one other category that year (business email compromise) exceeded $1 billion in total losses. Schemes involving cryptocurrency represented most of this investment fraud, increasing 183% from 2021 to $2.57 billion in reported losses in 2022.

United Wholesale Mortgage is suing Ramon Walker, owner of brokerage Client Direct Mortgage and creator of a Facebook group dubbed "Rocket Pro TPO vs. UWM," for trademark infringement and not paying an outstanding early payout balance of $124,011.37.In December, UWM sent a cease-and-desist, warning Walker that it was closely monitoring the Facebook group he created and asking the broker to remove all improper use of the wholesale lender's intellectual property. Simultaneously, UWM demanded that Walker pay the amount due.The wholesale lender followed up with a suit filed Feb. 14 in Michigan federal court accusing Walker of using its logo in the Facebook group's banner. Doing so has intentionally caused confusion in the mortgage marketplace and among customers of UWM's products and services, the wholesale lender claims. (The group removed it as of Jan. 5.) Regarding the early payout balance, Walker had done business with UWM as a non-delegated correspondent lender. From June 2020 through May 2023 at least twelve loans delivered by the broker were paid off within 180 days of disbursement, the suit states. Client Direct Mortgages' "failure to pay its early payoff balance is a breach of the correspondent agreement that has caused UWM damage," the wholesale lender said. The brokerage did business with UWM between 2015 and December 2023, Walker said in a previous interview.Walker has claimed that UWM has filed this suit as a warning to showcase "to all the other brokerages right now, those who may own millions in EPO, of what can happen [if they walk away]." UWM declined to respond to a request for comment. Walker did not immediately respond to a request for comment.Since the cease-and-desist was issued, Walker's Facebook group has doubled in membership, growing from 2,000 members to close to 5,000 members. The group's users discuss broker-related topics including loan products offered by Rocket or UWM, the latter lender's ultimatum, comparisons of both companies' technology and Federal Reserve interest-rate policy.In January, Walker said he created the group to give brokers a channel for open, unfiltered dialogue."I think it's worth having a discussion around who's better, especially with the ultimatum in place," Walker told National Mortgage News. "The group is causing people to have open discussions and it's actually aggregating people that have been silenced." "The notice says that I'm defaming them and having a negative impact on the relationship between them and the broker community– which I don't think is viable, though the one argument they may have is about their logo, so that's fine," he added.Apart from this suit, UWM has been pursuing other cases against brokers that allegedly flouted its All In ultimatum. The wholesale lender filed litigation against Atlantic Mortgage Trust Corporation and District Lending for purportedly undermining said agreement. Both cases are still pending.

For the second time in three months, Finance of America has received a delisting notice from the New York Stock Exchange, the company disclosed in a press release and a Securities and Exchange Commission filing.The notice was sent on Feb. 12, two months to the day a prior letter was sent. In both cases, the NYSE stated the company is failing to meet the requirement of having an average closing price of $1 for 30 consecutive days to maintain its listing.As it did in December, the company stated that it plans to take action to regain compliance."Finance of America plans to notify the NYSE within ten business days of its receipt of the Notice that it intends to bring the Company into compliance with this listing standard within the six month cure period," read the company's press release, which was posted after the market closed on Feb. 16. "Finance of America intends to remain listed on the NYSE and is considering all available options to regain compliance with the NYSE's continued listing standards."FOA did close above that $1 mark at $1.02 per share on Feb. 15, as it has on multiple occasions since Dec. 12, when the first letter was sent. But it has not been able to do so on a sustained basis and in fact on Feb. 16, the stock price fell back below to 98 cents per share. "Compliance can be achieved if on the last trading day of any calendar month during the cure period (or the last trading day of the cure period), the security has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the prior 30 trading-day period," the press release pointed out.Finance of America restructured its operations in October 2022, when it exited forward mortgage lending to concentrate on niche markets in reverse mortgages, home improvement lending and commercial real estate lending. Its Incenter business also sold off operations in title insurance.The company has yet to announce when it is releasing fourth quarter earnings.