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Rep. Chip Roy, R-Texas, during a joint session of Congress in the House Chamber of the U.S. Capitol in Washington, D.C., on March 4, 2025. Bloomberg WASHINGTON — The House Budget Committee failed to advance House Republicans' tax and spending bill, a stunning failure for the bill that would have given banks many items on their legislative wish list. The House committee voted 21-16 to reject the bill, with Republicans Chip Roy of Texas, Ralph Norman of South Carolina, Josh Brecheen of Oklahoma and Andrew Clyde of Georgia joining Democrats in voting against President Donald Trump's "big, beautiful bill." "We don't need 'GRANDSTANDERS' in the Republican Party," Trump said in a social media post just hours before the vote on Friday. "STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!"The Republican holdouts are demanding more cuts to Medicaid and other programs. The Republican caucus is also balancing the interests of lawmakers from Democratic-led states who demand a larger state and local tax, or SALT, deduction, and more moderate members who don't want extreme cuts to Medicaid. "We are writing checks we cannot cash, and our children are going to pay the price," Roy told the committee. "So, I am a 'no' on this bill unless serious reforms are made." The panel will hold another vote on Monday, according to Rep. Lloyd Smucker, R-Pa., who changed his vote to "no" in order to bring up the bill again in the committee. This development throws into jeopardy many of the big wins that banks received in the original version of the tax bill, including making permanent the Section 199(a) pass-through deduction of 23%, which would apply to many community banks. The Section 199(a) provisions currently allow owners of pass-through entities to deduct up to 20% of their taxable income from those entities. Bank groups say extending the provision to 23% and making it permanent would keep community banks' tax rate in line with the corporate tax rate. Other measures favoring banks, particularly community ones, are also likely safe. The Ways and Means tax bill that passed through committee earlier this week included the ACRE Act, exempting taxation interest on loans secured by farmland and most residential mortgages in small towns, which is politically popular. Less sure is the future of so-called MAGA accounts. House Republicans included a measure called Money Accounts for Growth and Advancement, or MAGA accounts, for children born roughly within Trump's term. The government would seed these accounts with $1,000, and although balances would grow tax free, there would be taxes and penalties for withdrawing the money, especially if the child does so before age 30.Brokers and banks who hold these accounts might benefit from the added business.The conservative Republican revolt could also mean that lawmakers need to revisit other measures to please hardliners who want the bill to be budget-neutral, such as higher taxes on some trades, stock buybacks or corporate earnings. It could also present an opportunity for banks. Notably, the bill out of Ways and Means did not include any change to credit unions' tax exemption, a longtime ask of bankers on Capitol Hill. It's more likely that cuts will come on the spending side, but it will be difficult to balance the budget, or get close to it, without making cuts to programs that Republicans in vulnerable districts have warned would be politically toxic. 

The mortgage industry's comeback after years of economic challenges sputtered, as diminished loan volume and increased production costs made lending unprofitable at nonbanks in the first quarter.Still, the industry managed to narrow losses compared to three months earlier but production ended up in the red again for a second straight quarter, according to the Mortgage Bankers Association's performance report. The two-quarter downturn appeared after a profitable six-month period in mid 2024. Nonbanks and mortgage subsidiaries of chartered financial institutions reported an average pre-tax loss of $28 per originated loan, improving 30% from $40 in the fourth quarter. The latest number was also up from the first quarter of each of the previous two years when the average losses totaled $645 in 2024 and $1,972 in 2023."Production profitability was close to break-even in the first quarter of 2025," said Marina Walsh, MBA vice president of industry analysis. "Production revenues increased at about the same pace as costs, which mitigated losses," she pointed out.Per-loan losses came out to 7 basis points on average, compared to 4 bps in the fourth quarter of 2024. The historical average pre-tax profit per loan since 2008 is 40 basis points. Production revenue, comprising fee income, net secondary market gains and warehouse spreads grew to $12,551 per loan between January and March, increasing 12.2% from $11,190 three months earlier. Revenues were equivalent to 373 basis points in the first quarter and 339 bps in the fourth.Expenses offset rising revenue, rising 12% to $12,579 per loan from $11,230 quarter over quarter, which were equal to 381 and 344 basis points. Recent expenses are significantly above the historical post-2008 mean of $7,702 per loan. The latest quarterly numbers were based on average origination volume of $488 million per lender, down from $540 million in the previous reporting period. Production on a per-company basis came out to a mean of 1,448 loans, 10% lower from fourth quarter's 1,609.The numbers show many mortgage companies still need to look at belt tightening, particularly with economic and interest rate forecasts showing little sign that a surge in volume might be ahead.  "Accounting for both production and servicing operations combined, 58% of mortgage companies in MBA's sample are profitable, but that leaves 42% who are still not yet out of the woods," Walsh said. By comparison in the fourth quarter, 61% of businesses were profitable. How mortgage servicing performed in Q1 2024As in the previous quarter, servicing operations brightened the financial picture at some companies. Servicing net financial income over the recent quarter averaged $22 per loan, but the number was down from $142 in the prior three-month period. Operating income — excluding changes in servicing rights value and hedging adjustments — grew to $90 from $84. The full picture in comparing companies by size continues to show that the smaller the business, the greater the loss. Lenders with less than $100 million in volume lost more than $1,000 per loan on average.At  the same time, companies originating mortgages with smaller average sizes also fared worse. Lenders whose mean balance was below $250,000 reported losing over $1,300 on each origination. 

Freddie Mac wants lenders to pass on the cost savings to consumers from its latest enhancements to its Loan Product Advisor automated underwriting system.The company greenlighted what was described as an on-hold innovation to the system. The upgrades include the launch of a new feature, Freddie Mac Income Calculator. It is designed to help homebuyers in the gig economy by "more accurately and efficiently" calculating wage earner and self-employed income, a press release said.Freddie plans to add in features to factor in income from pensions, social security and rental properties.Who should benefit from the savings?"After the last four years of astronomical inflation, it is important that we lower costs any way we can, and we encourage lenders to use this technology to pass savings onto customers, effective immediately," said Bill Pulte, Federal Housing Finance Agency director and chairman of both Freddie Mac and its competitor, Fannie Mae.The Community Home Lenders of America is supportive of Pulte's comments, pointing to its past statements regarding junk fees in the mortgage process."CHLA is thrilled that Freddie Mac is making enhancements to LPA designed to reduce mortgage closing costs through technology innovations — and that FHFA Director Pulte is prioritizing such actions to reduce closing costs to consumers," a statement from Scott Olson, its executive director, said. "This has been a top CHLA priority in recent years, and we believe more can be done to address runaway FICO credit score costs, vendor access fees, and employment verification costs."What other changes did Freddie Mac make?Other enhancements to LPA include early insights on automated collateral evaluation, which Freddie Mac said has saved borrowers more than $2 billion in appraisal costs since 2017.Lenders will also be getting actionable LPA Choice feedback messages; this so far has enabled originators to qualify an additional 10,000 borrowers, according to Freddie Mac. Given where industry margins are, however, do some mortgage originators have the bandwidth to pass savings on to consumers? Adding to the problem is borrowers' notorious reluctance to comparison shop for lower rates and fees among originators, even with the Loan Estimate form provided under the TILA/RESPA Integrated Disclosures. This was confirmed in a 2024 LendingTree survey, as well as 2022 studies from Fannie Mae and Zillow.Mortgage lenders still operating on tight marginsDuring 2024, independent mortgage bankers made $443 on every loan produced, inclusive of fee income, net secondary market gains and warehouse line spread, the Mortgage Bankers Association said. This comprised $11,520 of revenue minus $11,076 of expenses. The latter included commissions, compensation, occupancy and equipment costs, among other things.The 2024 profits followed two years where IMBs lost money on every loan originated — $1,056 in 2023 and $301 in 2022.But in the first quarter, IMBs posted a net loss of $28 per loan originated, an improvement from the fourth quarter's $40 loss.Between origination and servicing, 58% of the companies in the study were profitable in the first quarter. Those which had less than $100 million in total volume had an average loss of over $1,000 per loan, while those whose average loan size was under $250,000 lost more than $1,300 per loan.How much money can lenders save?In its press release, Freddie Mac said by maximizing the machine learning automations in LPA, lenders are saving $1,500, have a 10% higher net margin and reduce the cycle time by five days; this is based on data from its 2024 cost to originate study."It's the year 2025, and the time to streamline the homebuying experience is now," said Sonu Mittal, Freddie Mac executive vice president and head of single-family acquisitions. "Under the leadership and guidance of Director Pulte, we expedited this version of LPA to increase efficiency and further lower costs."

Left to right: Michael Lima, Kim Schenck Addison, Texas-based Click n' Close welcomed Kim Schenck as correspondent manager. In the role, she will be responsible for driving growth of the wholesale and correspondent lender's down payment assistance program, drawing on her background in lending, loan acquisitions and secondary marketing. She joins the company, which was previously known as Mid America Mortgage, after holding leadership roles at the likes of Essex Mortgage, Freedom Mortgage and Bank of America.With her appointment, former managing director of correspondent lending, Michael Lima, will again take on responsibilities of leading the company's whole-loan trading business, a division he formerly headed. In the position, he will create a capital markets strategy as Click n' Close renews its presence in the whole-loan market. A member of the Click n' Close team since 2016, Lima was initially tapped to head its purchase and trading strategy in the scratch-and-dent market.

US housing starts increased in April as a pickup in multifamily home construction more than offset a decline in single-family dwellings caused by elevated inventory.New residential construction increased 1.6% to an annualized rate of 1.36 million homes, according to government data released Friday. That was in line with the median estimate in a Bloomberg survey of economists.The advance was driven by a 10.7% jump in construction of multifamily housing such as apartment buildings. Starts of single-family homes decreased 2.1% to the slowest pace since July, due to a slump in the West region.READ MORE: Mortgage applications for new homes soar to record highBuilding permits for single-family homes decreased 5.1% to an almost two-year low, suggesting new construction will soften in coming months.The starts and permits figures on single-family homes illustrate a housing industry that is struggling to gain traction as mortgage rates near 7% limit demand. Meanwhile, confidence among homebuilders stands at the lowest level since late 2023, with firms expecting tariffs to boost costs at the same time home prices are near record highs.READ MORE: Latest tariff threat adds to 2025 homebuilder painWith the supply of new homes at a 17-year peak, builders have little incentive to ramp up production. The number of single-family homes under construction eased for a second month in April to a four-year low. Some public homebuilders are pulling back especially on "spec homes," which contractors start without having a dedicated buyer and often appeal to entry-level customers. PulteGroup Inc. trimmed its overall housing starts by 10% in the first quarter, reducing the share of spec homes it had in production and boosting its share of generally pricier built-to-order houses, according to the company's latest earnings call.Before the starts report, the Federal Reserve Bank of Atlanta's GDPNow forecast projected virtually no impact from residential construction in the second quarter, and economists see lackluster homebuilding through the end of this year.The April drop in starts of single-family was entirely due to an 18.7% slump in the West region, the largest decline since August 2023. While new construction of one-family homes rose in the other three regions to a pace that marks a general slowdown from activity last year.The number of houses completed in April dropped nearly 6% to the slowest pace since October 2023.The new residential construction data are volatile, and the government report showed 90% confidence that the monthly change ranged from a 10.2% decline to a 13.4% gain.

Sean Grzebin stepped into the role of CEO of Chase Home Lending in November, armed with the advantage of having worked across functions at the bank since 2011. With a career that has taken him from PHH Mortgage in 1997, to Countrywide, to Goldman Sachs and then Chase, Grzebin has seen his share of market cycles and today describes how he's leveraging data and AI in order to help the business thrive amid whatever volatility external circumstances bring.During a discussion with National Mortgage News, Grzebin discussed the advantages Chase had over many of its competitors. According to Home Mortgage Disclosure Act data, Chase was the nation's sixth largest mortgage lender and third largest depository in the space in 2024, behind Bank of America and Navy Federal Credit Union. Sean Grzebin became the CEO of Chase Home Lending in November 2024. Chase's home lending business produced $40.8 billion last year, with $25.5 billion generated through retail channels and $15.3 billion via the correspondent channel, according to its 10-K filing. As a key player in correspondent lending, Chase maintains a complex relationship with independent mortgage banks, and Grzebin highlighted how the bank balances those connections.Chase serviced $648 billion for other investors as of Dec. 31, 2024.Grzebin began at Chase heading up its default operations, his first job on the servicing side of the business. By 2015 he was back on the origination side, and since 2016, he headed up consumer originations, which brought together home equity, consumer direct and retail as well as the operations associated with them.National Mortgage News's conversation with Grzebin has been edited for length and clarity.

United Wholesale Mortgage announced the rollout of two artificial intelligence-powered tools designed to give mortgage brokers an added edge in competing for and retaining borrower business.One of the tools is an AI-powered voice bot named Mia, which acts as a personal assistant for brokers. The other tool, called LEO, helps brokers present more competitive loan offers to borrowers than those offered by rival wholesale lenders.Chatbot Mia, announced at the UWM LIVE! event Thursday, functions as a loan officer assistant that works around the clock to field client questions, schedule appointments and take messages for UWM broker partners. "By doing so, brokers never have to worry about answering or missing a call," the company said in a news release. But it also helps with consumer retention via Mia's outbound call capabilities.The voice bot, built by UWM's in-house technology team, can contact consumers 20 days after a loan closes to remind them of their first mortgage payment, check in with past borrowers 180 days after closing, and notify them when rates drop for refinancing opportunities."Consistent follow-up with past clients is one of the biggest challenges loan officers face, and Mia handles that for them," said Mat Ishbia, CEO of UWM, in a statement. "All of this allows clients to scale in a way that's never been seen in this industry or any other industry."Meanwhile, the LEO tool, also announced during UWM's annual event, allows brokers to drag and drop a competitor's loan estimate into the company's ChatGPT-powered platform. The system then generates opportunities to beat the competitor's offer and provides brokers with talking points to help them initiate a conversation about a counterproposal with the client.Ishbia compared the tool to "having the most intelligent LO in America review a loan estimate and tell you how to beat it." "We already know brokers are the best choice for consumers, and LEO equips them with the tools and insights they need to succeed in a matter of seconds, giving them the competitive edge they need to win every loan," he added in a statement. The two technology rollouts Thursday follow a previously announced suite of six other technology enhancements, including the introduction of a pipeline that helps brokers manage their past client contact information, even if the borrower wasn't previously originated with UWM.Most recently, Ishbia announced goals of doing $280 billion in production by 2028. The number is double the $139.4 billion the wholesale lender originated in 2024.Technology tools aimed at consumer retention, which results in repeat consumers may be part of the business strategy to notably increase loan volume at the mortgage shop.

New-home purchase activity is showing renewed strength this spring, with loan applications hitting their highest mark on record, according to the Mortgage Bankers Association.Mortgage applications for newly constructed single-family homes in April accelerated 5.3% from a year ago, the industry trade group said. On a month-over-month basis, loan volume increased a nonseasonally adjusted 2% from March.  "The applications index reached its highest level in the survey's history dating back to 2012," said Joel Kan, MBA's vice president and deputy chief economist, in a press release. "Despite the ongoing economic uncertainty and mortgage rate volatility, April was a strong month for new-home purchase activity, with applications posting an annual gain for the second straight month," he added. April's elevated activity followed the previous month's annual rise of 5.5%, while volume between February and March leaped 14%. Recent numbers reflected a significant rebound from a pullback in February when year-over-year lending activity retreated for the first time in almost two years.  A growing number of new constructions on the market helped push buyers to the table, as builders attempted to offload supply amid macroeconomic challenges, Kan remarked. "As the unsold inventory of new homes continues to grow in many parts of the country, reduced buyer competition and pricing pressures supported more buying activity over the month," he said. The average loan size on new-home purchase applications decreased to $376,992 in April from $381,921 in March.Federal Housing Administration-backed loans, often attractive to first-time buyers searching for  affordable properties, continued to increase their market share, expanding to a survey high 39.2% of total volume. FHA loans garnered 37% one month earlier. Meanwhile, conventional mortgages accounted for the largest slice of the total, with 46.4% of all applications in April, down from 49% in March, MBA said. New-home mortgage applications coming from the Department of Veterans Affairs represented a 13.5% share in April, up from 13% the previous month. U.S. Department Agriculture-backed activity took 0.9%, the same as in March. Elevated buyer interest led the  estimated volume of annual new-home sales to jump up to a seasonally adjusted 718,000 units last month, rising 14.1% from 629,000 in March.   Unadjusted monthly sales totaled 65,000 units in April, 6.6% higher from 61,000 in March, MBA said. Why homebuilders are pessimistic despite the upswingWhat appears to be positive news for lenders may mask problems for homebuilders and the rest of the housing market, though.  More than one-third of builders said they resorted to price cuts this month to attract customers, the highest share since late 2023. The latest number is up from 29% in April, according to the National Association of Home Builders. Economic pressures, notably the ongoing threat of tariffs, led construction industry sentiment to plummet in May, NAHB's monthly homebuilder survey showed. Its index fell to a reading of 34  — the lowest in over two years — as the spectre of tariffs clouded future outlook. However, the majority of data was collected prior to a temporary pullback earlier this week of the highest rates imposed on China, the association advised.   "Policy uncertainty stemming in large part from the stop-and-start tariff issues has hurt builder confidence, but the initial trade arrangements with the United Kingdom and China are a welcome development," said NAHB Chief Economist Robert Dietz. "Still, the overall actions on tariffs in recent weeks have had a negative impact on builders, as 78% reported difficulties pricing their homes recently due to uncertainty around material prices," Dietz added. In recent earnings calls of the largest publicly traded homebuilders, several executives reported to increase their prices on new constructions later this year as a direct result of tariffs on imported materials. Sales conditions and expectations for future transactions dragged NAHB's index downward. Builders also reported more pessimism surrounding customer traffic compared to April. 

WASHINGTON — As congressional Republicans try to pull together what President Donald Trump calls his "big, beautiful bill," House committees scrambled to put together their own version of the tax legislation this week. The bill that passed out of the House Ways and Means Committee after an overnight markup is the first comprehensive insight into what Republican lawmakers — who will be the deciding votes on whatever final bill emerges from the House Budget Committee — are thinking on broader tax measures that could also affect banks.The tax portion of the bill passed out of the House Ways and Means Committee is separate from a spending section passed earlier this month by the House Financial Services Committee, which promised to slash the Consumer Financial Protection Bureau spending by roughly 70% among other measures. Financial regulators have typically been exempt from these big budget contests since their agencies tend to be self-funded, but Republican ire over the CFPB, a tough budget backdrop and the Trump administration's determination to downsize agencies is making this fight more relevant to the industry. And this is an opening salvo, rather than a final product. The bill is still too pricey to please many of the toughest GOP budget hawks, and it's likely that many measures will be tweaked or changed entirely in the coming weeks. Here are the top measures for bankers to watch for. 

Fannie Mae has announced plans to discontinue use of a platform used to handle certain distressed mortgage processes and is directing mortgage professionals using it to take certain steps in response.Servicers must leave the HomeSaver Solutions Network, which is utilized for loan workout reporting functions, and transition to a broader platform Fannie provides to handle default management before a deadline later this year.Why Fannie Mae is ending use of HomeSaver Solutions NetworkFannie's discontinued use of HSSN is in line with far-reaching efficiency reviews at the government-sponsored enterprise at the direction of its regulator, Federal Housing Finance Agency Director Bill Pulte, and the Trump administration's broader aims."As a part of our commitment to streamlining servicing, HSSN loss mitigation workout reporting functionality will transition to Fannie Mae's Servicing Management Default Underwriter platform," the GSE said in a servicing notice. "All workout reporting activities will be managed by SMDU."Pulte said earlier this month in one of his social-media posts that reforming automation at Fannie and its competitor is a priority for him as their regulator and conservator."So much money has been WASTED at Fannie Mae and Freddie Mac in the last four years on so called 'technology,'" Pulte said in an X post in which he also pledged to do "a full review" of their automation spending and realign automation so that its use is more efficient and effective.Under Pulte, the FHFA also has shown interest in making distressed mortgage servicing more efficient, recently directing Fannie to end a strategy used to manage foreclosure properties based on what the agency found to be financial and operational drawbacks.Why this is the second attempt to transition away from the networkFannie Mae had originally planned to have mortgage professionals transition away from HSSN by the end of 2020, but the enterprise postponed the move in May of that year due to feedback from servicers during the pandemic.Fannie said it has wanted to move away from HSSN and use the broader default management system because the latter has better policy alignment."SMDU offers much more for your workout reporting needs. It not only allows you to report a workout to Fannie Mae (same as HSSN), but it also follows Fannie Mae's servicing guide regarding workout eligibility and workout case structuring (unlike HSSN)," the GSE said.Action items for servicers still using HSSNSeveral functions related to loss mitigation for distressed mortgages will no longer be available through the network later this year, so servicers who haven't already stopped using it must move to SMDU by then, if not sooner.The following functions will no longer be available through the network starting on Dec. 1.Creating, submitting, updating, or closing loan mod-cases, including reporting associated with trial period plan paymentsSubmitting or creating cases for a deed-in-lieu of foreclosure, short sale, chargeoff, second-lien consideration or other workout optionClosing any approved casesCanceling any loan modification casesEntering a trial period data request Viewing previously generated letters related to a workout caseUploading documents that are part of a workout caseAlso users will generally no longer be able to query workout case details through the HSSN.However, some information such as delinquency status, reclass transactions and reports will still be available through Fannie's Asset Management Network where HSSN has resided. (HSSN is a series of links within AMN.)