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Department of Housing and Urban Development Secretary Scott Turner told a group of state regulators this week that his efforts to rip away federal bureaucratic red tape and shift more decision-making power to the local level will have benefits for them.Turner informed attendees at a summit hosted by the Conference of State Bank Supervisors that one of his first actions in doing so was terminating the Affirmatively Furthering Fair Housing rule.He called eliminating the AFFH, which Democrats oppose and housing groups have mixed views on, one of his "proudest moments so far," and said that it will return flexibility back to the states."The rule took zoning power away from the states and concentrated it in the hands of bureaucrats here in Washington D.C.," the head of HUD said. "It made local authorities go through a series of complex paperwork and steps to prove their housing policies were fair and that they were fighting alleged discrimination. It's almost like you had to make up discrimination." "The AFFH sounds like a good thing, but really this is the crown jewel of bad regulation," Turner added. The rule, which required recipients of HUD funds to take proactive steps to combat segregation, promote fair housing choices, eliminate disparities and foster inclusive communities, was implemented in 2015 under President Barack Obama. Since then, it has remained in limbo, alternating between being repealed and enforced. Turner's actions alone may not be enough to formally end the rule, according to legal experts.HUD's Secretary also echoed earlier remarks that the department is focused on increasing the housing supply across the United States, noting that about 7 million units are needed to meet current demand.One approach HUD is considering, Turner said, is opening up federally owned land for new construction. Turner said that through a partnership with the Department of the Interior, more than 500 million acres of federal land have been identified as underutilized and suitable for affordable housing development."The horizons in this country are endless," he said. "We have a lot of space that can be used for new homes, but more than a quarter of that is owned by the federal government. Did you know that building homes in those areas has proven to be difficult? We want to take down the barriers in order that we can utilize these lands to build affordable housing."HUD's Turner noted that the federal government will "not touch national parks or forests." "They will remain what they are beautiful for the people of America to enjoy. We're talking about land that can actually be utilized," he claimed.Turner also criticized previous heads of HUD and added that Trump's administration represents a "paradigm shift," in which "the federal government is no longer the solution to all of the problems in America.""Washington doesn't have all the answers. Washington doesn't have our solutions. The government doesn't.  We are a great facilitator, if you will. But the solutions come from the private sector, from our nonprofits, from our faith-based institutions. We'll just need to partner and convene with them, but not the No. 1 solution."

Greenlite AI cofounders Alex Jin, left, and Will Lawrence. Greenlite AI, a San Francisco startup whose compliance software is used by financial institutions and fintechs including Grasshopper Bank and Mercury, has raised $15 million, the company said Wednesday.Greenlite aims to use the cash to  improve its technology and to onboard some of the banks and fintechs on its wait list, CEO Will Lawrence told American Banker. Greylock led the Series A round, with participation from Thomson Reuters Ventures, Canvas Prime and Y Combinator.Financial crime teams use Greenlite's software to gather information for and assist with sanctions-screening reviews, Know-Your-Customer compliance work and anti-money-laundering investigations. The compliance team at Grasshopper Bank, a New York financial institution with $1.4 billion of assets, uses Greenlite's software to conduct the enhanced due diligence and customer monitoring called for by the Bank Secrecy Act, which requires banks to have controls in place and provide notices to law enforcement to deter and detect money laundering, terrorist financing and other criminal acts. The software has reduced the amount of time it takes to do an enhanced due diligence review by close to 70%, Christopher Mastrangelo, chief compliance officer at the bank, said in an interview last year. The bank also uses the software to vet new clients.Coastal Community Bank has seen similar results. "Using Greenlite saved hours of effort that our enhanced due diligence analysts spent searching and synthesizing information," Andrew Stines, the bank's chief risk officer, said this week. "This resulted in better quality results at a significant cost savings."Investors seemed drawn to the company's focus on compliance efficiency and efficacy."Complex compliance issues are in many ways big data problems, and AI will enable financial institutions to fulfill their regulatory obligations not only more efficiently, but importantly, more effectively," said Tim Mayopoulos, Greenlite angel investor and former CEO of Fannie Mae. "Greenlite is a model for how financial institutions can better protect the financial system by using tools that are better and less expensive than just hiring more people."Greenlite is not the only company offering AI software that helps banks cope with financial crime-related compliance. In March, Oracle launched agentic AI for anti-money-laundering work and financial crime investigations. ThetaRay, Quantexa, Hawk, Feedzai, Nice Actimize, SymphonyAI and ComplyAdvantage are among the other tech companies that offer AI software to banks for AML, fraud and financial crime detection.How it worksGreenlite's AI agents gather and synthesize information such as documents and customer profiles to learn more about the customers. The agents also analyze transactions. A human analyst doing enhanced due diligence on a potential client, for instance, might turn to the internet for more information about that person or business. The analyst might also try to find any data the bank might have within its databases about that potential customer. Greenlite's generative AI model can collect data from multiple sources, including corporate registries, news articles, company websites and social media channels, and generate summaries.Using AI to take some of the routine data collection work from investigators can help them decide which alerts truly signify fraud or money laundering and let them focus on the more serious cases. The same is true for transaction analysis."Sometimes when a transaction-monitoring analyst is analyzing customers, they have to go through thousands of cases," Lawrence said. "We want to help them find the most useful information. So what Greenlite is ultimately doing is helping prepare a review, almost like a paralegal prepares a docket of information, for people to use to make really high-quality decisions."Greenlite offers governance, model validation and expert testing that enables strict adherence to bank regulations like the OCC's 2011-12 guidance on model risk management and NYDFS 504 (which requires New York banks to monitor transactions for signs of money laundering), he said. In-house experts monitor regulatory developments and help modify AI models accordingly.Lawrence sees the $15 million raise as "validation that we're on the right path here of continuing to build the best AI agent suite for financial services." The cash infusion will let the company continue to improve its technology and to onboard some of the banks and fintechs on its wait list, he said.Analysts caution that while AI can bring efficiency, it's not a complete answer to compliance, even with humans in the loop."There's no AML compliance program, no risk management program that is ever going to fully eradicate the risk of money laundering," said Charles Subrt, fraud and AML practice research director at Datos Insights, in an earlier interview. "The AML program is about providing intelligence to law enforcement and deterring money laundering. It's not going to find every instance, and so there are going to be isolated instances where these things happen. It's just that, are you putting together a program that ultimately provides a robust enough defense against that?"

The Mortgage Bankers Association expects regulatory easing in the first months of the second Donald Trump administration to provide favorable tailwinds for the lending industry, its top official said on Tuesday.With a release from a series of existing and pending rules put forth by financial regulators under former President Biden, the association's CEO Bob Broeksmit presented "a case for optimism" to members, touting the "quiet progress" it's made since January."We saw an opening immediately after the last election. We quickly reached out to the presidential transition team and had some great discussions. And since the new administration started in January, we've had countless conversations with the White House, Congress and key agency staff," Broeksmit said in remarks at the trade association's secondary markets conference in New York on Tuesday. "We have fewer worries of overregulation and policy proposals that hurt the industry and ultimately increase borrower costs," he later added. Among the wins touted by Broeksmit was termination of a policy prohibiting unfair or deceptive acts or practices, which he claimed turned government-sponsored enterprises into de facto compliance regulators. In the homebuilding space, he pointed to the waiver of Department of Housing and Urban Development building requirements for properties constructed on floodplains, as well as the temporary suspension of energy standards introduced by HUD and the U.S. Department of Agriculture last year as positive developments. "They've now delayed the standards by at least six months. Once again, we're calling for a full repeal, and we're optimistic that we'll succeed," Broeksmit said.Coming alongside changes, though, has been a gutting of employees working across housing agencies and Fannie Mae and Freddie Mac. Some industry leaders have questioned if the moves serve their businesses or customers well, concerns Broeksmit attempted to ease. "I think it's fair to say that not all the cuts have been necessary. But as we're hearing from those inside the administration, smaller teams will help keep agencies focused on doing their statutorily mandated jobs — and giving you the space to do your job."Regularly at odds with the Consumer Financial Protection Bureau under former Director Rohit Chopra, the MBA leader also celebrated the reversal of several Biden-era laws and the overall shifting deregulatory stance the agency has taken this year that effectively quashed its policymaking activity. Still, Brokesmit acknowledged the need for guardrails. "While we're continuing to push for more deregulation, we're also pointing out that not everything needs to go," he stated."Some CFPB guidance is helpful to both the primary and secondary markets, so it doesn't make sense to take a sledgehammer to everything."How GSEs are working to provide affordability reliefWhile a changed rulemaking landscape may produce a favorable business environment, it doesn't fully address ongoing affordability constraints facing the mortgage industry. Following Broeksmit's presentation, representatives at Fannie Mae and Freddie Mac took the stage to detail progress being made to alleviate cost pressures in front of both borrowers and lenders.Fannie Mae noted improvements introduced to its condominium-lending process in recent years that will help erase some of the repetitive underwriting processes and costs required for loans on properties previously financed. In its project manager tool, the enterprise is leaning into evaluating properties itself and designating them as approved if they meet eligibility requirements. In June, Fannie Mae will add the findings into its direct underwriting reports, offering the lenders the chance to quickly move forward on an application. "We've seen that save about $5 million in documentation costs throughout the course of 2024," said Malloy Evans, head of single-family mortgage at Fannie Mae. Evans also noted borrower savings coming from title initiatives, with modernization resulting in close to $12 million in overall savings to consumers. Its title-alternative pilot for a limited set of refinance transactions  also netted over $1,000 in savings per homeowner since it was first introduced in late 2024, he said. Meanwhile, Freddie Mac pointed to the launch of its income calculator tool this month, whose calculations can be plugged into its Loan Product Advisor underwriting system."It's not just for salaried borrowers, but it's also for self-borrowers, said Freddie Mac head of single-family acquisitions Sonu Mitttal. The company hopes to add additional types of income sources to the tool later this year.

The market for mortgage servicing rights has some unusual dynamics, one panelist at the Mortgage Bankers Association's Secondary and Capital Markets Conference said Monday."It used to be that the bulk market wouldn't even be attractive on an execution level if there was a billion or more. Now you're seeing very small trades of a couple of hundred million, maybe 500 to a billion," said Michelle Richardson, senior vice president at Plaza Home Mortgage.The change in the typical dollar-volume size of trades in the bulk market is just one sign of how interest in MSRs has been departing from historical norms due to current market conditions, some experts say."There's still a tremendous amount of demand, yet we're in a 'higher than we have been in several years' rate environment and default rates are ticking up," said Cade Thompson, co-president and chief growth officer at Rocktop Technologies, in a separate interview.What lenders are thinking about in the MSR market todayIn the recent past, concern about loans originated at higher rates potentially prepaying and mortgage performance worsening weighs on servicing rights values. But in the current market some originators want MSRs so they have an edge in contacting customers if rates drop."Folks are pricing for whatever their strategy is, and I think a lot larger companies have been preparing for potential recapture," Richardson said.Lenders involved in servicing trades have been considering what the net best position for them is amid signs of mild pressure on loan performance from economic weakness, which could raise servicing costs and potentially lower rates.Another consideration is that investing in servicing at high prices can extend a buyer's risk because the more they pay, the longer they may need to profitably hold the asset to make money from it.Some companies "might actually buy and sell the same amount of servicing" based on the strategic value to the company or lack thereof, Seth Sprague, director of consulting services at advisory firm Richey May, said during the MBA conference panel.In terms of default risk, Richardson said she sees it as concentrated in the market for Federal Housing Administration insured loans, which tend to be made to borrowers who may live "paycheck-to-paycheck" and are more likely to be hurt by higher insurance rates or debt levels.VA partial-claim bill moves forwardIn other news related to distressed servicing developments, the MBA announced this week that a bill that would create a new partial claim to replace the Department of Veterans Affairs recently-discontinued servicing purchase program has advanced.The bill passed the House on Monday in a move supported by both the mortgage banking group and the National Association of Mortgage Brokers.Among the reasons for industry support is that while the VA has different considerations from other public entities that back mortgages such as the government-sponsored enterprises or the Federal Housing Administration, the new partial claim is similar to their equivalents."Our members that are in this space are comfortable with the structure like this, because it's in harmony with the partial claims that they have experienced with the other loan programs," Bill Killmer, senior vice president for legislative and political affairs for the MBA, said in an interview.

While some policymakers have long pushed to release Fannie Mae and Freddie Mac from government conservatorship, experts caution that a return to full privatization would be far from a fairy tale.Panelists Tuesday at the Mortgage Bankers Association's Secondary & Capital Markets Conference weighed the many downsides of the complicated, and increasingly unlikely move if it ever occurred. They emphasized the common refrain from stakeholders that the process could be long and arduous."We would question the fascination, the sort of obsession with releasing the GSEs in the first place because we don't understand what objectives it would actually achieve from a policymaker perspective," said Libby Cantrill, managing director and head of public policy at PIMCO. Analysts weighed in on the government-sponsored enterprises on the same stage where Federal Housing Finance Agency Director Bill Pulte less than 24 hours earlier said the consequential decision would be made by President Trump. GSE investors such as hedge fund billionaire Bill Ackman, have speculated that a potential exit could net the government a $300 billion windfall. Cantrill mulled policy objectives for a release, noting the mortgage market today is fairly liquid. Borrowers with wide varieties of credit profiles can access the same mortgage rate. Shrinking the GSE's footprint is better achieved under conservatorship, she said, referencing former FHFA director Mark Calabria's calls for the GSEs to curb lending outside of primary homeowners. "In terms of socializing losses and privatizing gains, we would say that's a bad deal for taxpayers," said Cantrill. How Fannie Mae and Freddie Mac's credit ratings would be affectedAs Moody's downgraded the credit rating of the U.S., Fannie Mae and Freddie Mac's ratings also fell from an "Aa1" to "Aaa". Should the GSEs exit conservatorship, a further downgrade for the GSEs may occur, said Warren Kornfeld, senior vice president of Moody's Analytics CRE."We think there could be some scenarios where the government does not bail out Fannie and Freddie," said Kornfeld. "We think that the level of downgrade would be somewhat modest, maybe 1-3 notches, from Aa1 to as low as A1."A lack of an explicit guarantee for the GSEs by the government would disrupt financing and required yields for mortgage-backed securities substantially, said Scott Ulm, CEO and vice chairman of Armour Residential REIT."Our capital structure has depended on the kindness of others in the repo market, in the market for mortgage-backed securities, so, it's really not something that we can decide," he said. PIMCO's clients, such as sovereign wealth funds and public pension plans, view MBS and Treasuries as interchangeable, Cantrill said. Introducing credit risk would alter their views on their portfolios. Cantrill suggested lawmakers "don't fix what's not broken," in favor of shrinking the GSE's footprint in-house. She offered an additional argument for hanging onto Fannie Mae and Freddie Mac."A really important function of the GSEs is a countercyclical one," said Cantrill. "ThInk about what they did during COVID, during any recessionary period of time. They are providing that type of support when actually borrowers need it the most."

For mortgage originators, the push to become a "one-stop shop" and build lasting client relationships has taken on new urgency in light of current market pressures."We really want to be able to meet the clients where they're at," Heather Lovier, chief operating officer at Rocket said during a panel discussion at the Mortgage Bankers Association's Secondary & Capital Markets Conference on Tuesday. In line with that, she mentioned Rocket's recent acquisitions, including pending deals for Mr. Cooper and Redfin."What we're trying to really bring together is just that home ownership journey and having all of the pieces of the puzzle there," Lovier said. "So the client wants to go from one step to the next to the next, we have that available."Rocket tried to do some of those things on its own, but realized other companies might be better suited for the task, so it made those deals, Lovier said.It is doing so while still supporting the broker channel "because we want them to have choice," she said.Rocket is building the capabilities for this end-to-end journey. "How you interact with that is completely up to you, but we're here to provide those tools to make it easier for the client and for the broker and then any of our partners that we're interacting with," Lovier said.Putting together Rocket's strategic plan for 2026 and beyond "is going to be going to be quite amazing, because we'll have so many different levers that we'll be able to make sure that our clients are taken care of at the end of the day."Discussing the one-stop-shop concept from the lender perspective, loan officers want to be the consumer's advisor for the life of the mortgage, said Paul Akinmade, chief strategy officer at CMG Financial.When CMG examined this, "we were looking at setting up technology, building engineering, it's really looking at the customer experience" and providing a unified encounter, he explained.The panel moderator, Julian Hebron, CEO of the Basis Point, asked whether the transformation at CMG was motivated by the desire to improve the LO and customer experience or if it was the result of industry circumstances."It happens when you have a certain level of maturity and scale," Akinmade said. "Being that we've been in a position where you're able to capture the low hanging fruit, we've got some additional scale that allows additional opportunities," and that is through a consumer direct channel, he added.Furthermore, this particular channel at CMG does not do purchase mortgages in order to avoid conflict with its distributed retail loan officers."They're no longer threatened, and it opens up, and they exchange their refinances, and there's a different annuity that distributed retail people can take advantage of," Akinmade said.When competing against Rocket, Akinmade would use their strengths against them, noting that because of the big acquisitions, the Detroit-based lender is not likely to be able to be nimble for the next couple of years.Furthermore, Rocket is centralized, while CMG has a decentralized structure. But enough of a market exists to go around, he added.How CMG and Rocket are deploying AIWhen it comes to technology and artificial intelligence, CMG has "jumped in pretty deep in certain areas, and it's kind of evolving based on risk," Akinmade said.For example, a current use case is on purchase advice from investors."We now have automated agents that go in and pull that and/or receive it and start doing investment conditions," he said. "So that not only reduces the staff headache on that, it shortens your duration time for being able to clear them."The goal is to make the life of the loan officer and the processor much easier, he continued.Lovier added that a personal mission of hers is to use technology to scale as much as possible, to avoid the hiring and firing cycles that happen when volume moves up and down.The goal is to free up Rocket team members to do what they do best, which is interact with clients."Because of the systems and the processes that we built to create efficiency, we can now serve the agents how they want to be served, versus how we're capable of doing it from a scale perspective," Lovier said. "The sky's the limit, obviously AI is going to make things faster and cheaper, but I want to be able to eliminate the task completely as much as we possibly can."

Dan Thompson, chief executive of mortgage servicing management firm PMSI, numbers among industry veterans who managed mortgages during and prior to the Great Financial Crisis, so he's seen worst-case scenarios and worked to help the industry avoid them since.The instances where exceptions from common servicing procedures were used averaged around 1% in 2024, which is many multiples lower than during the days when he was creating a platform to handle special servicing at Credit Suisse. But the seemingly small number is more important than it may suggest at first glance.That's because the impact of exceptions is magnified in the secondary mortgage market, where influential government-sponsored enterprises that currently buy a significant number of loans in the U.S. weigh them heavily in servicer scorecards.READ MORE: CFPB proposes end to pandemic servicing requirement"What Dan has done over the course of 25 years at PMSI is work to ensure that data is accurate, so that you are not facing a surprise from Fannie Mae or Freddie Mac," said Rhonda Gallion, senior vice president at the company, which was previously known as Preferred Mortgage Services.Such a "surprise" can cost a mortgage servicer hundreds of thousands or even millions of dollars even when exception rates are as low as they have been recently, Gallion said. In the excerpts of a conversation with Thompson that follows, he more fully explains why the importance of identifying exceptions, researching their root causes and correcting them has an outsized importance relative to the rate at which they occur currently.

OceanFirst Bank in New Jersey has earned the highest possible Community Reinvestment Act rating less than a year after settling federal charges related to alleged discriminatory lending practices.The Office of the Comptroller of the Currency gave the bank an "outstanding" rating on its most recent CRA exam, which covered the 2021-2023 period. That was a sharp upgrade from the "needs to improve" rating OceanFirst received for the prior three-year period.Christopher Maher, chairman and CEO of the bank and its parent company, OceanFirst Financial, told American Banker that the latest CRA rating was the result of "a significant effort" to introduce the bank's lending products in markets it entered via acquisitions between 2015 and 2020.The 2018 acquisition of Sun Bancorp in Mount Laurel, New Jersey, was particularly challenging because Sun had discontinued all of its consumer lending, creating "a little bit of a lag" in ramping up OceanFirst's loans in the markets that Sun had served, Maher said."We just had the bad timing that the last CRA exam fell during those acquisitions," Maher said.OceanFirst's latest CRA rating comes about two years after it received the "needs to improve" rating for the 2018-2020 examination period. Prior to that rating, the $13.3 billion-asset bank received a "satisfactory" grade, a result that followed nine consecutive "outstanding" ratings from the OCC.In September 2024, OceanFirst entered into settlement agreements with the Department of Justice and the Department of Housing and Urban Development. The DOJ's complaint alleged that from 2018 through at least 2022, OceanFirst did not provide mortgage lending services to predominantly Black, Hispanic and Asian neighborhoods in Middlesex, Monmouth and Ocean counties — and discouraged people looking for credit in those communities from getting home loans. The bank agreed to pay more than $15 million to resolve the redlining claims.In the OCC's latest exam report, the agency provided several reasons for its improved rating of OceanFirst, saying the bank's lending levels "reflected excellent responsiveness" to credit needs, particularly in the New York City-Newark-Jersey City metropolitan area. The OCC also stated that the bank "exhibited an excellent geographic distribution of loans" in that region, as well as "a good distribution of loans" among individuals with different income levels and among businesses of different sizes.The report also described OceanFirst as a leader in making community development loans. The OCC's most recent review of OceanFirst and its affiliates did not uncover any discriminatory or other illegal credit practices, according to the exam report.In last year's settlements, OceanFirst agreed to add at least $14 million to a loan subsidy fund to increase access to home mortgage, home improvement and home refinance loans for residents of majority-Black, Hispanic and Asian neighborhoods in Middlesex, Monmouth and Ocean counties.It also agreed to open a loan production office and to spend $700,000 on advertising, outreach, consumer financial education, and credit counseling focused on predominantly Black, Hispanic and Asian neighborhoods in those counties.Maher said OceanFirst would continue to do "community walk-abouts," in which the bank's senior leadership team meets with community members in disadvantaged neighborhoods to better understand their banking needs. As a result of those walks, the bank has tailored some of its products to meet community needs and hired more employees with multilingual skills, he said.On Tuesday, New Jersey Citizens Action, a statewide advocacy organization, gave credit to OceanFirst for working to improve its CRA rating. Leila Amirhamzeh, the group's director of community reinvestment, said in an email that "it is clear … that OceanFirst Bank has been actively reaching out to and partnering with community-based organizations to better meet the needs of the low- and moderate-income communities in Middlesex, Monmouth and Ocean counties." Still, the group remains concerned with what Amirhamzeh characterized as "inflation of CRA exam ratings, as performance evaluations don't accurately reflect the granular data we see with regard to underserved communities."

One silver lining to elevated mortgage rates, other than the refinance opportunity later, has been a shifting psychology.A few years ago, I wrote that your brain (and my brain and everyone else’s) would soon think a 5% mortgage rate is pretty good.That was prior to mortgage rates going even higher, cresting at around 8% and then coming back down to earth (a bit).The logic was that after seeing higher, you might forget about lower and come to terms with something in between being not so bad.Now, your brain might think the same of a 6% mortgage rate.A 6% Mortgage Rate Doesn’t Look Too Bad AnymoreThe higher-for-longer mortgage rate environment has lasted longer than most imagined, including myself.And it might persist even longer than that. Nobody knows for sure. We make educated guesses and are often wrong.A lot of pundits expected the 30-year fixed to fall closer to 6% by the end of 2025, including myself.That’s still in play as it’s still only May, and we’re technically not that far away. But we still need something to drive rates lower.Lately, there’s been nothing but headwinds, whether it’s tariffs, a global trade war, and the latest, a credit rating downgrade of the United States.However, underneath all the headlines the economic data is showing more and more signs of cooling. And ultimately that’s what dictates the direction of mortgage rates.The rest is a sideshow and something to banter about from day to day.Anyway, I got to thinking lately that the so-called magic number for mortgage rates has risen, perhaps in light of these higher-for-longer rates.In the past, it may have been 5%. At some point a year or so ago, it was said to be 5.5%.Today it might be 6%, or anything on the better side of 6.50%, e.g. 6.49% and below.Just looking at this chart from MND over the past year, there have been two periods where rates got to those levels.During those times, the housing market seemed to get a pep in its step, and mortgage refinancing also got a huge boost.So maybe just maybe the answer for prospective home buyers (and some existing homeowners looking for rate relief) isn’t all that far off.Coming to Terms with Higher for LongerGone are the days of hoping you can simply date the rate and marry the house.Those who thought they could probably have a much higher mortgage rate than anticipated today.Of course, they might have something below current market rates the way things went over the past few years.For example, someone may have purchased a home with a 5.5% mortgage rate, expecting to hold it only temporarily.But in retrospect, their 5.5% rate doesn’t look so bad anymore. It’s a “good rate” all things considered.This is the same psychology I’m talking about with prospective home buyers today. Their mindset may have changed regarding what’s good and what’s bad.And as time goes on with higher-for-longer rates, that number they’re comfortable with appears to be climbing as well.Simply put, the longer we have these 7% mortgage rates, the better things will look if/when rates come down a bit.The Mortgage Math Still Needs to PencilBut there’s a caveat. You might be more comfortable with a higher mortgage rate today because you’ve grown accustomed to seeing them.However, you still need to qualify for the mortgage at the higher rate. So it’s one thing to think, “Hey, it’s not so bad.”And another to actually keep your debt-to-income ratio (DTI) below the maximum threshold.There’s also the matter of finding a suitable property that remains in budget, despite the higher rates on offer.This could require some concessions on the side of the home seller, whether it’s a price cut or seller concessions that can be used for buying down the mortgage rate.For the record, this is a handy tool for today’s home seller to pitch to buyers. If they offer some credits toward closing, they can be used to pay for discount points.These discount points are a form of prepaid interest that can lower the mortgage rate for the life of the loan.And that’s one way to get to your own “magic number” without needing mortgage rates to fall.An alternative is using concessions to create a temporary buydown fund where payments are lower for the first year or two.But that would require some action on your part, a rate and term refinance eventually, assuming you want a permanently lower payment.The point is we don’t appear to be too far off when it comes to mortgage rates, with action picking up when rates get closer to 6% than 7%.And given many of the 2025 mortgage rate forecasts have rates falling toward those levels, relief could be in sight.Just mind the rest of the economy, which is looking a little shaky of late.(photo: Chris Hsia) Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.Latest posts by Colin Robertson (see all)

Bill Pulte, director of what has been known as the Federal Housing Finance Agency, shed light on certain plans he has for the government-sponsored enterprises during an appearance at an industry event on Monday, but deferred to President Trump on a conservatorship exit.Pulte told attendees at the Mortgage Bankers Association's secondary market conference in New York that whether or not to privatize the GSEs "is a decision for the president of the United States." Were a conservatorship exit to occur, Pulte said he would work closely with Treasury Secretary Scott Bessent, who has said he would not want to put upward pressure on interest rates in the course of one."We'll see what happens but ultimately Scott Bessent and I are very aligned, and we meet regularly about this and every other topic," Pulte said.Where reorganization at the GSEs is headedPulte also explained how the cuts and changes he's been instituting at the enterprises tie into building up the GSEs' finances in such a way that they'd be in advantageous position for a release from conservatorship."In many ways, we're trying to do our own DOGE effort," Pulte said, referring to the Department of Government Efficiency. He reiterated previous statements indicating he would welcome DOGE help but also noted that he didn't think it would be necessary.He said his focus on efficiency at the GSEs, which are quasi-governmental agencies that buy a high volume of mortgages made in the United States, will be done while preserving their soundness and aimed at building value for them.Pulte said he has just recently found a couple hundred million dollars of savings at the GSEs, which he described as multilayered bureaucracies. He indicated there could be more details on some company cuts released later this week."I think their earning potentials can go up," Pulte said of the GSEs. "A lot of people say that the businesses are worth a certain amount. I think they're worth way more than what some people are saying that they're worth."He noted that other countries, such as Saudi Arabia, have found the U.S. model attractive. Pulte was dismissive of Democrats' allegations that some of the cuts and reorganization he has done could be illegal, calling it "nonsense." He said he had a conversation with Sen. Elizabeth Warren, D-Mass., about this in which she lacked understanding of the housing market.Thoughts on affordable housing supplyPulte, whose family has long been involved in the homebuilding industry, said he's interested in seeing more done to support manufactured housing as a source of affordable housing. "I don't think that the average American fully understands how much new construction is advanced in terms of technology," he said, noting that this is true both when it comes to traditional home and factory built structures.However, a lot of building is done locally, and the federal government's role will likely be limited outside of deregulation, said Pulte."I wish I could tell you that we could do more than the federal level, but a lot of it is just getting the hell out of the way," he said.Pricing in the second-home market, credit modernization at GSEsPulte was noncommittal when asked separately about the size of the lending markets the GSEs operate in and loan-level pricing adjustments for non-primary residences, but offered some insight on the framework for his thinking.Pulte said his focus is on operational efficiency at the GSEs more than the size of the market they're involved in or what particular loans they buy.As for loans on second homes, Pulte said simply, "We're looking at that." "Generally, things should be priced for their risk," he added.Pulte said he would be open to using more advanced credit metrics at the enterprises, as long as the process is cost-effective."I don't like some of the things I've heard in terms of the cost," he said.What's in a name, social media useWhen MBA Chair Laura Escobar asked Pulte about his use of the "US Federal Housing FHFA" to refer to his agency, Pulte explained that it puts a focus on something that has been  "underrepresented" and central to its role."It's literally saying what the name is," he said, noting that at some point he may stop using "FHFA" in references to the agency.In response to a question about his use of social media platform X to post signed documents indicating policy changes, he said it has been an effort at immediacy and transparency."Do you want to know that I just signed this? Or do you want to wait two to seven days?" Pulte said, recounting how he has explained his posts.