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The Federal Housing Finance Agency will allow Fannie Mae and Freddie Mac to "talk to each other" to combat fraud, Director Bill Pulte said. In a post to X (formerly Twitter) Monday evening, the FHFA leader said the collaboration between the government-sponsored enterprises would be subject to terms and legal conditions. Pulte said details would follow, and an FHFA spokesperson didn't respond to a request for comment Tuesday. Fannie Mae and Freddie Mac are both under FHFA conservatorship but remain competitors in the mortgage space. The GSEs collaborate in some forms, such as the Uniform Mortgage Data Program, but are largely barred from working together despite their conservatorship."FHFA has made clear, however, that the GSEs are operating as unique and separate businesses and will continue to exercise independent business judgment in the use of loan data," a Fannie Mae post about the UMDP states.The FHFA does include Fannie Mae, Freddie Mac, and the Federal Home Loan Banks in its Suspended Counterparty Program. The list includes around 200 companies and individuals barred from doing business with the GSEs or FHLBanks, but it hasn't been updated since October. Pulte has pledged to step up the FHFA's use of the resource.Ed Pinto, a senior fellow and codirector at the American Enterprise Institute Housing Center, said Pulte's assertion regarding GSE conversation was correct. The former Fannie Mae executive recalled asking the company's general counsel in 1986 about guardrails in speaking with Freddie Mac, long before the competitors were brought under FHFA conservatorship."The answer was, you can talk to them about things that are for the good of the order of the mortgage industry," said Pinto.He cited efforts such as uniform application and uniform appraisal rules, and said Fannie and Freddie couldn't discuss efforts that would restrict competition. Separate policies for Fannie Mae and Freddie Mac could also be disruptive."You don't want gaming to go on," said Pinto, suggesting a tighter set of rules at one GSE would lead counterparties to work with the other. Pulte has made fraud a prominent focus of his agency, announcing several efforts last month via social media posts. Those include a new mortgage fraud tip line, and potential "loan recalls" for both GSEs. The FHFA director has also repeatedly referenced occupancy fraud, and separately suggested in a social media post that the new tip line was receiving input. "If you are committing mortgage fraud, you are a risk to the system and we are going to take the appropriate steps within our statutory capability," he said in a televised Fox Business interview Monday afternoon. In that interview, Pulte said the regulator has made an unspecified number of criminal referrals to the Department of Justice. One of those includes New York Attorney General Letitia James, who has joined other state AGs in suing the Trump administration over its various executive actions. 

The House Committee on Veterans Affairs marked up a bill on Tuesday that would institute a successor to a last-resort relief program for distressed borrowers that ended this month.The VA Home Loan Reform Act would create a new form of the partial claim used during the pandemic. The original partial claim's successor, the VA servicing purchase program, just ended.Mortgage bankers have been supporting recent updates to the legislative proposal while urging legislators to fast-track it given the phaseout of VASP."Without swift legislative action and subsequent VA implementation, thousands of veteran homeowners recovering from temporary financial hardship could face heightened foreclosure risk," Bill Killmer, a senior vice president at the Mortgage Bankers Association, said in a letter.Updates to the bill that the MBA said it supported included a clarification that the new partial claim would not reduce the government guarantee on VA loans, and elimination of interest charges on the second-lien balance.Legislators also recently increased the maximum claim amount to 30% from 25%, and replaced what had been a fixed date at which the program would end to a rolling five-year implementation, according to the association."These changes, many of which echo recommendations in our March testimony, represent real progress toward creating a partial claim solution that protects veteran borrowers, provides servicer clarity and aligns with existing government-backed programs," Killmer said.While the industry had ideally hoped for a permanent partial-claim program, the Department of Veterans Affairs has struggled to add one due to limitations in its authorizations as written, and its budget. The department ended the pandemic partial claim in October 2022 due to budgetary considerations, but then later implemented VASP to replace it after finding the lack of a partial claim exposed tens of thousands of veteran borrowers to foreclosure risk.Federal officials' focus on the VA's budgetary constraints has recently intensified as the Republicans currently in power in Washington have broadly engaged in efficiency initiatives that have included staff cuts at the department.The bill's sponsor, Rep. Derrick Van Orden, R-Wis., has been critical of VASP's costs and questioned whether its loan purchases fit within the VA's authorization. He said the new partial claim is a better alternative. Van Orden chairs the House's VA subcommittee on economic opportunity. The committee's markup discussions suggest that the bill will have backing from the Republican majority, who said they have worked to strike a bipartisan compromise on the issue.The attempt to reach a middle ground appeared closer to achieving it than a previous version of the bill, which had left some Democrats dissatisfied.Rep. Herb Conaway, D-N.J., called for a temporary restoration of VASP to help existing borrowers who need such assistance, which would give legislators more time to work on a bipartisan partial claim solution.Rep. Mark Takano, D-Calif., sought a return to the foreclosure ban the department had previously had in place to bridge the gap between the original partial claim and VASP with a similar interest in giving borrowers who needed the last-resort assistance but missed the cutoff a break.Van Orden indicated VASP's purchase structure was inappropriate given it's not a loan buyer but a partial guarantor of mortgages, and the cost of the program was excessive, so he would not favor a return to it that could jeopardize department funding for other initiatives.He also characterized a moratorium as a return to the kind of department overreach Republican legislators are trying to end. Van Orden expressed disappointment with the two Democrats' caveats after what he said was bipartisan discussion on the bill's current form, while Conaway asked when he couldn't consider providing relief from a foreclosure when that can be less expensive than going through with one."Unless we can trust each other, this is never going to work," Van Orden said.

Dream Finders Homes touted recent mergers and continued growth momentum in an unsettled economic environment, as its revenues accelerated but profits stalled in the first quarter. The Jacksonville, Florida-based homebuilder and lender posted net income of $54.9 million for the three-month period ending March 31, inching up 0.8% on a year-over-year basis from $54.5 million. Compared to the fourth quarter of 2024, though, the bottom line receded 57.5% from $129.3 million. The company made no mention of potential tariff headwinds that recently led other new-home construction businesses to advise of price hikes at the end of the 2025. Instead, the company's CEO gave a favorable assessment of where Dream Finders stood, maintaining expectations for growth this year. "All in all, given the continued challenging environment from a mortgage rate and affordability perspective, I am pleased with the performance of the team and our results," said Dream Finders Chairman and CEO Patrick Zalupski in a press release. The company did not offer a formal earnings call.Although net income stayed near its level of a year ago, revenue across both its building and mortgage lending units surged 19.6% to $989.9 million from $827.8 million in the equivalent period last year. The latest number reflected a 36.5% pullback from fourth quarter's $1.56 billion.Home building accounted for $970.1 million of first-quarter 2025 revenue, with financial services providing $19.8 million. In the same three months of 2024, totals were $825.2 million and $2.6 million. Home building and mortgage lending brought in $1.53 billion and $26.6 million, respectively, in fourth quarter 2024. New orders picked up by 17.8% year over year to 2,032 from 1,724 in the first quarter. Order numbers also were higher from fourth quarter's 1,611.Home closings also grew to 1,925 from 1,655 one year prior but decreased from 3,008 reported between October and December. The average price of closed homes in the first quarter clocked in at $498,284 compared to $494,995 and $507,477 three and 12 months earlier.  While sales of existing homes stagnated for much of the past two years, builders of new properties maintained much of their growth, generating interest thanks to pent-up consumer demand. Threats of a trade war and macroeconomic challenges are throwing cold water on previous optimism, as builders plan the rest of their year. Dream Finders, though, still expects the number of closed units to increase in 2025 to an estimated 9,250, up almost 8% from 2024's 8,253.       Dream Finders' acquisition activityGrowth is likely to come as recent merger-and-acquisition activity bears fruit for the company. Profits flattened last quarter despite higher revenue, as Dream Finders simultaneously pushed forward on closing key deals and wrapping up others that stand to expand homebuilding, mortgage lending and title capabilities. To start the year, it completed its purchase of fellow homebuilder Liberty Communities. "Liberty provides us a great opportunity to expand into the Atlanta market, which is the largest housing market in the Southeast and the only major Southeastern market where DFH was lacking a presence," Zalupski said. In March, Dream Finders subsequently closed on its purchase of lending-related assets previously belonging to Cherry Creek Mortgage, folding them into its subsidiary Jet Homeloans. Since first-quarter's end, the homebuilder announced the completion of two new mergers, expanding the financial services side of the business with the addition of title insurance provider Alliant National. In early May, the company also closed on the acquisition of assets of Green River Builders, opening up further access to the Atlanta market. With the two latest transactions, Dream Finders has completed ten acquisitions in six years. It now owns and operates communities in 10 states in the Mid Atlantic, Southeast and Southwest. At the end of 2024, it counted 242 active communities in its portfolio. "We are confident all of these transactions will provide significant growth opportunities in our homebuilding and financial services segments, allowing us to continue to grow our earnings and deliver above-average shareholder returns," Zalupski remarked. 

Bloomberg News Treasury Secretary Scott Bessent on Tuesday told lawmakers in the House Appropriations Committee that the U.S. is renegotiating trade deals with 17 of its 18 largest partners — with the notable exception of China — and expects most to be finalized by year's end. In defending the Trump administration's aggressive use of tariffs, Bessent sought to downplay concerns about a sprawling trade war, arguing that the U.S. was making progress with major trading partners. He acknowledged the tariffs were unpopular with many American allies but framed them as necessary, especially given that some other countries have put tariffs on the U.S. in the past."Approximately 97 or 98% of our trade deficit is with 15 countries. Eighteen percent of the countries are our major trading partners, and I would be surprised if we don't have more than 80 or 90% of those wrapped up by the end of the year," Bessent said. "And … in negotiating with some of them, they may not like the tariff wall that President Trump has put up, but they have [tariffs as well]."In an exchange with committee chair David Joyce, R-Ohio, Bessent said some renegotiated trade agreements could come as early as this week. "I expect that we can see a substantial reduction in the tariffs that we are being charged, as well as non-tariff barriers … so that is proceeding very well," he said. "Perhaps as early as this week, we will be announcing trade deals with some of our largest trading partners."Bessent was pressed by committee ranking member Steny Hoyer, D-Md., on whether the U.S. was in a recession, alluding to President Donald Trump's assertion in a recent NBC interview that a recession would be "OK" in the short term. Despite Trump's comments, Bessent rejected the idea of a U.S. recession, traditionally defined as two consecutive quarters of contraction in the gross domestic product. "I believe in data, and there is nothing in the data that shows that we are in a recession," Bessent said. "As a matter of fact, the jobs report has surprised to the upside."Bessent's optimism comes in contrast to the economic concerns wracking the financial industry. Nearly three-quarters of bankers believe the U.S. is either already in a recession or will enter one within the next year, according to a new survey of 427 community bank executives conducted by fintech firm IntraFi.When Hoyer asked Bessent if he would reconsider his position if the next quarter shows continued negative growth — meeting the textbook definition of a recession — Bessent cautioned against reading too much into the data, which he said could contain a lot of short-term fluctuations. U.S. GDP is estimated to have slipped 0.3% in the first quarter of 2025, marking the sharpest decline since early 2022. "Congressman, these economic numbers are noisy and subject to substantial revision," Bessent said. "So I, having looked at a detailed analysis, would believe that the first-quarter GDP would be revised upward."Hoyer expressed concern also with steep cuts the Trump administration has proposed for the Internal Revenue Service, noting the agency had long been underfunded and lacking in staff. The Maryland lawmaker warned that slashing up to 40% of the agency's workforce and 20% of its budget would cripple enforcement, gut morale and allow wealthy Americans to cheat on their taxes. "[Tax cheating], of course, increases what others pay and explodes the deficit," Hoyer said. "The story is the same across the federal government. Americans are reeling from this uncertainty in their economy and in their government, they need answers, more than that, they need an adult in the room."Bessent defended the cuts as focused on reducing paper-heavy processes and trimming outdated IT and inefficiencies, claiming Treasury had already saved $2 billion without affecting operations. "We achieve these cost savings by eliminating renegotiating and de-scoping wasteful IT and professional services contracts and addressing longstanding inefficiencies, such as auto-renewed licenses unused for years [and cutting] administrative costs, with a particular focus on paper processing," Bessent said. "Last year, the IRS spent approximately $450 million on paper processing with nearly 6,500 full-time staff dedicated to the task through policy changes and automation. The Treasury aims to reduce this expense to under $20 million by the end of President Trump's second term."Bessent said the IRS is decades behind on IT modernization, estimating such inefficiencies have wasted up to $50 billion, and said current staff cuts are simply returning the agency to levels it was at before a temporary personnel and infrastructure surge he said was driven by the Inflation Reduction Act, which former President Joe Biden signed in 2022.According to the U.S. Treasury Inspector General for Tax Administration, the Inflation Reduction Act initially provided the IRS with $79.4 billion in supplemental funding through fiscal year 2031. However, as of March 2025, Congress reduced that amount to $37.6 billion through a series of legislative rescissions.The Department of Government Efficiency, led by Elon Musk, has significantly reduced the IRS's operations since January, cutting roughly 3,600 auditors and with apparent plans to cut nearly 40% of overall staff under a reduction in force plan. 

While it’s been said countless times, it bears repeating: the Fed doesn’t set mortgage rates.The Fed simply sets short-term interest rates, driven by its dual mandate of price stability and maximum employment.Nowhere on the Fed’s to-do list is ensuring mortgage rates remain attractive for home buyers.It’d be nice, but it’s simply not the case. Instead, mortgage rates are driven by longer-term debt, namely the 10-year Treasury.And the price/yield of the 10-year is dictated by economic data, which has continued to show strength, for now.The Fed Will Hold Rates Steady TomorrowAs seen in the chart above from MND, the last two Fed meetings had no impact on mortgage rates.It’s basically a foregone conclusion that the Fed will hold its short-term fed funds rate steady again tomorrow at a range of 4.25% to 4.50%.At last glance, the CME FedWatch Tool has odds of 96.8% for no action, meaning bonds and mortgage rates won’t be swayed (not that they necessarily would anyway with a cut/hike).But the takeaway is there isn’t a compelling case at the moment for the Fed to take any action.This means mortgage rates should also remain relatively flat for the foreseeable future, barring any new economic data that comes in overly hot or cold.The last meaningful economic report was the monthly jobs report (NFP), which surprised on the upside and had many speaking to the resilience of the U.S. economy.Some 177,000 jobs were added in April, significantly higher than the estimated 133,000 median forecast.However, there are growing concerns of a recession, especially as the effects of the trade war begin to show up on Main Street.There’s a theory that businesses are front-running tariffs, meaning business looks hot because they’re jamming in as much of it as possible before it gets more expensive.But you talk to people on the street and things don’t look or feel so rosy.So there’s a chance the data is lagging and might be painting an overly optimistic picture for an economy on the brink.That would actually spell good news for mortgage rates, as bad economic news is often an effective way to lower interest rates.Trump Again Asks for the Fed to Cut Rates Now!On his Truth Social platform, Trump applauded the jobs report and argued that due to a lack of inflation, the Fed should lower rates.As noted, even if they did, it likely wouldn’t lead to a lower 30-year fixed if economic data didn’t support it.Ultimately, bond yields drive mortgage rates, and if those don’t come down, even if the Fed were to cut, mortgage rates won’t either.The Fed, like bond traders, don’t appear to be in any rush and are in what feels like a perfectly appropriate holding pattern.After all, there’s just too much uncertainty regarding the trade war and tariffs that has yet to show up in the data.Making any major move when you don’t know the impact wouldn’t be prudent. We simply don’t know what this will look like, nor how long it will go on.Or if the White House will strike a deal with China. That’s the one thing that could move rates more than anything else right now, perhaps.With so many unknowns, and economic data arguably good enough to maintain the status quo, the Fed won’t cut.The last Fed rate cut was on December 18th and the next one isn’t expected until July at this point.That can change, but the takeaway recently is the expected Fed cuts have been pushed back.There are still four quarter-point cuts projected by January, but until recently, four were expected during 2025.Why I Expect Lower Mortgages in the Second Half of 2025Simply put, lower mortgage rates have been delayed, as I kind of anticipated in my 2025 mortgage rate prediction post.I always felt that the second quarter would see an uptick, as it normally does, before easing began in the third and fourth quarter.This is especially true this year due to the trade war, and the next big shoe to drop is the proposed tax cuts, known as “one big, beautiful bill.”While it’s supposed to help real wages for Americans and boost take-home pay, it’s also expected to significantly increase government spending and debt issuance along with it.That’s slated to go down around Independence Day, so that too should limit what the Fed can do, while keeping bond traders in a tight range.But as the economic data weakens, as many suspect it will, chances are bond yields will drop and mortgage rates will come down with them.It’s probably a matter of when, not so much if, though if the tariffs prove to be inflationary (still unclear), that could dampen any improvement in rates.The Fed will be watching these developments (and data) closely to determine its next move, but bonds will likely lead the way before they act.So pay attention to upcoming jobs reports, the 10-year bond yield, and the price of MBS to track mortgage rates.If the economic data points to a recession and/or slowing economic growth, the silver lining will be lower mortgage rates.It might just take a bit longer to get there than originally expected if we see a temporary economic “boom” from front-running tariffs. 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)

Like several of its independent mortgage banker peers who previously reported, UWM Holdings needed to take a servicing adjustment to earnings, which pushed the company into the red for the first quarter.Even with the GAAP loss, UWM Chairman and CEO Mat Ishbia said during the earnings call the company was profitable in all the measurements it looked at.For the period, UWM lost $247 million, inclusive of a $388.6 million mortgage servicing valuation write-down. This compared with net income of $40.6 million in the fourth quarter and $180.5 million for the first quarter of 2024. Investors reacted to the news by driving UWM's stock price as of noon Wednesday to $4.28 per share, down 49 cents from its previous close.Earlier, Pennymac and Mr. Cooper both reported they had to take MSR write-downs as well, of $98.7 million and $82 million respectively. But on a GAAP basis, both companies remained profitable.UWM's gain on sale was at the lower end of prior guidance, at 94 basis points. That missed Keefe Bruyette & Woods' expectations of 110 basis points but "the lower margin quarter-to-quarter was in line with what we have seen in the broker channel from other large broker originators in [the first quarter]," Bose George said in a flash note put out prior to the earnings call.Total revenue of $613.6 million compared with $720.6 million the prior quarter and with $585.5 million the previous year.In terms of volume, the company had its best first quarter since 2022, with production of $32.4 billion, up 17% compared with one year ago, when it did $27.6 billion. But it was lower than the fourth quarter's $38.7 billion. This was also below KBW's $32.9 billion estimate for the period.The company's volume has exceeded $20 billion for eight consecutive quarters, executives said during the call.Purchase originations were lower from both comparative periods, at $21.7 billion, versus $21.9 billion in the fourth quarter and $22.1 billion for the first quarter of 2024.But refinance production of $10.6 billion, while lower than the fourth quarter's $16.8 billion, was an improvement over one year ago, when it did $5.5 billion.The industry-wide broker share of volume at 28% is the most since 2008, Ishbia pointed out, showing UWM made the right decision going exclusively wholesale.UWM's servicing strategyIshbia discussed UWM's decision to bring the servicing function in-house using ICE Mortgage Technology, as something it had been contemplating for many years."By leveraging the latest technology and AI, our plan is to be the most efficient servicer in America," said Ishbia. "We are getting control of this part of the process."During the Q&A Ishbia added that UWM expects to start boarding loans at the beginning of 2026 and handle the portfolio entirely by the end of next year.He also anticipated better service levels for borrowers and even improved recapture rates through its mortgage brokers by having the function done in house.But it does not mean UWM will change its strategy regarding MSR package sales."We were not selling MSRs because we were subservicing and we're not going to hold them because we're servicing ourselves," Ishbia said. "We're going to be opportunistic, like we always have."While having its own platform does make UWM lean towards retaining, any decision to sell is dependent on the opportunities and the pricing in the market for packages, he continued.UWM's approach to M&A, techWhen asked about any possible mergers or acquisitions, Ishbia said while he looks at everything, UWM is "a build versus buy type of company."This point of view applies to both production and technology.Ishbia used the call to tease some things the company will be rolling out in the coming weeks and months that he called "game changers."Ishbia guided to second quarter volume of $38 billion to $45 billion; if anything, he expects the company to break the $40 billion threshold in the current quarter. Gain-on-sale guidance remained in the 90 basis point to 115 basis point range."While the macro environment may remain choppy, we will continue investing and winning," Ishbia said. "I can promise you there is no other mortgage lender better equipped and prepared to help brokers [and] borrowers, regardless of what the market does."

Michelle Bowman, governor of the U.S. Federal Reserve, said the central bank and other regulators should pay close attention to the Treasury market as it draws down its balance sheet.Zach Gibson/Bloomberg WASHINGTON — The Senate Banking Committee voted on party lines to recommend Michelle Bowman as the Federal Reserve's vice chair for supervision to the full Senate. The panel voted to advance Bowman's nomination in a party-line 13-11 vote. She now joins a queue of financial policy nominees including Jonathan McKernan, who President Donald Trump tapped to lead the Consumer Financial Protection Bureau and Jonathan Gould, nominated to head the Office of the Comptroller of the Currency. Bowman, already a Fed governor, is expected to sail through the full Senate vote relatively easily as both the industry and Republicans have stood uniformly behind her nomination so far in the process. Her elevation to vice chair for supervision will come as the Fed board, through a chunk of 2026, will still be controlled by Democratic members, unless Trump removes them as he did at the credit union regulator. Doing so would be unprecedented at the Fed, and would likely be subject to a legal challenge. The panel also advanced the nominations of Andrew Hughes to be deputy secretary of Housing and Urban Development, David Woll to be general counsel of the same agency and John Hurley to be under secretary for terrorism and financial crimes at Treasury, among others. "These nominees are not just capable but essential to our nation's prosperity," said Senate Banking Committee Chairman Tim Scott, R-S.C.,  in a statement. "Their roles demand accountability and expertise to protect American interests both at home and abroad." Sen. Elizabeth Warren, D-Mass., led Democratic lawmakers in voting against Bowman. "Bowman wants to lead a key part of the Federal Reserve, but refuses to acknowledge what economists know to be true: Trump's tariffs are breaking our economy," Warren said at the vote. "She also signaled that more Wall Street deregulation is on the way, putting small businesses and households at even greater risk." Warren and other Democrats also voted against the HUD nominees. "Mr. Hughes and Mr. Wall want to be confirmed to positions at HUD, but they seem unwilling to stand up against cuts that will undermine fair housing and make it harder to tackle skyrocketing housing costs," she said. "They both refused to answer whether they had signed a loyalty pledge to the President." Banking groups immediately applauded the Senate's vote. The Independent Community Bankers of America trade association "and the nation's community bankers have long been strong supporters of Governor Bowman, and we call on the Senate to take up and approve her nomination to serve as vice chair for supervision at the Fed," said ICBA President and CEO Rebeca Romero Rainey in a statement. "Governor Bowman has been a strong proponent of regulations that prioritize safety and soundness, pragmatic oversight that targets stresses in the financial system, and rules that meticulously follow administrative procedures." The Financial Services Forum said that the country's "leading banks urge swift action" to confirm both Bowman and Gould.  "They are well-qualified nominees and it is crucial that these roles be filled," the trade group said. 

Aspiring young homeowners are managing to find their way to the purchase table this year, leading to a spike in government-backed lending.  The growth in the share of first-time home buyers shows some are taking advantage of a slow thaw in challenging affordability levels and rising inventory, picking up the borrowing slack from "locked in" current owners. Activity varied greatly by market, though, ICE Mortgage Technology noted. At the same time, a jump in delinquency rates within the set of borrowers is also an emerging concern. "Younger home buyers are picking up market share with lenders this spring," said Andy Walden, ICE's head of mortgage and housing market research in a press release."While first-time homebuyers continue to face affordability headwinds, they don't have the same disincentive to transact as many repeat buyers, who remain locked in the golden handcuffs of relatively low monthly payments on their existing homes," Walden said. First-time buyers comprised 58% of all purchase lending in the first quarter this year, the highest share on record, according to ICE's May Mortgage Monitor report. Among that group, members of Generation Z accounted for approximately one in four mortgage originations and 15% of purchase loans overall. Gen Z homeownership picked up particularly in the Central U.S., where the group garnered more than 20% of all purchases in both North Dakota and South Dakota, Indiana, Louisiana and Kentucky. California came in at the bottom in Gen Z purchase transactions with just 13% of first-time buyers and 8% overall.  Millennials had the largest share of first-time purchases at 53% and an overall percentage of 48%. Generation X, meanwhile, made up 17% of the new homeowner cohort, and 27% of all purchase transactions.Purchase lending was still down overall in 2024 compared to the two-year period prior to the Covid-19 pandemic by approximately 25%, ICE said. However, the 19% contraction among first-time buyers came in less pronounced than it did for repeat homeowners at 31%.The pendulum swings back toward FHA loansThe housing boom and heated competition for limited inventory earlier this decade drove a shift in the types of mortgages preferred by new homeowners. While Federal Housing Administration-guaranteed mortgages have historically appealed to many first-time buyers, close to 60% opted instead for conventional loans backed by Fannie Mae and Freddie Mac in the peak sales year of 2022 due to their perceived favorability among sellers.  While the conventional market still accounted for almost half of such originations in the first quarter, the pendulum swung back toward FHA loans, which nabbed a 35% share of all first-time buyer mortgages, the biggest slice since 2017, ICE said.  But rising housing costs have also led to elevated debt-to-income ratios among new property  owners, particularly those belonging to Generation X, ICE reported. DTIs among first-time Gen X buyers came in as high as 41.5% compared to younger cohorts, who kept their ratio closer to 40%.The average down payment in March for a first-time purchase came in at $49,000, compared to the mean for repeat buyers of $134,000. The difference was especially stark in the FHA market, where loans often require smaller upfront amounts and buyers may be able to take advantage of down payment grant programs.Among first-time buyers, FHA borrowers put down an average of $16,000, while those who went for a conventional loan typically had a mean of $77,000. The growth in the first-time buyer transaction rate comes as the housing market sees listings rising and prices further moderating. Early reports of April housing costs show prices rising by 1.9% annually, the slowest rate in almost two years.While sluggish sales volumes contributed to increased inventory levels, new listings also are higher, increasing 10% in March, ICE said. At the recent rate of growth, inventory levels are poised to return to pre-pandemic levels on a national basis in mid-to-late 2026, but some markets in the West have seen supply already exceed those numbers.  FHA performance shows weaknessAt the same time their share of purchases increased, first-time home buyers also had a higher rate of defaults, ICE performance trends showed. A worrying sign for the FHA market is the recent surge in distressed mortgages. Loans backed by the office now account for nearly half of all serious delinquencies of 90 days or more, the highest rate since the data provider began tracking the metric at the turn of the century. "Mortgage delinquency rates remain near historic lows but are trending higher year over year, propelled almost entirely by FHA loans, with Southern states leading 90-plus-day delinquency rates," the report said. The South leads the country after enduring a particularly destructive 2024 hurricane season. With Covid-related loss-mitigation workouts and other modifications set to end this year, "it will be worth watching to see how many of those loans roll from 90-plus days delinquent into foreclosure."  The annual rate of serious delinquencies have risen across the housing market for each of the past eight months, ICE said.The growing economic influence of Gen Z and other young consumers as they reach home buying age means their mortgage performance is worth examining now for clues into broader market trends, Walden said. "Capital markets participants should closely monitor how this shift may influence loan performance and portfolio behavior as these buyers gain a stronger foothold in the housing market," he said.

Bloomberg News The Consumer Financial Protection Bureau is expected to amend, or rescind and reissue, the rule on consumer financial data rights, potentially throwing out years of work under the Biden administration on a regulation that banks have long opposed, experts say. How the Trump administration will change the open banking rule is still unknown, but there are several paths and legal strategies that the bureau could take. The rule is named 1033 for its section in the Dodd-Frank Act mandating that consumers have financial data rights and that banks must provide access to customers' account data, which can be shared with other companies. The rule could radically reshape consumer finance and allow fintechs to better compete with banks.  After issuing the final rule in October, the CFPB was sued by the Bank Policy Institute, a Kentucky bank and trade group. That lawsuit alleges Congress never intended for banks to be compelled to share consumers' data with fintechs or other third parties. It also alleges that the bureau exceeded its statutory authority and risks the safety and soundness of the banking system by limiting banks' discretion to deny third parties access to sensitive financial information.Bloomberg first reported on the rule potentially being reopened. Under 1033, financial firms would have to provide their customers with access to data on checking accounts, prepaid cards, credit cards, digital wallets and payment apps. Banks are concerned the rule will expose them to greater liability and require costly oversight of third-party fintech companies. Fintech providers object to the rule because it severely limits secondary uses of data that fintechs rely on to be profitable. For example, though fintechs could use consumer-authorized data to improve an existing product or service or the data is prohibited for use in research and anti-fraud tools, to train underwriting models or for product development. It remains to be seen how the CFPB intends to balance the different concerns and lobbying of large banks, Big Tech players, fintechs, data aggregators and consumers. On Monday, a Kentucky judge held a hearing on a motion by the Financial Technology Association to intervene in the case. Judge Danny C. Reeves of the U.S. District Court for the Eastern District of Kentucky agreed to lift a stay that the CFPB had requested for all pending Biden-era rules. The CFPB and the Bank Policy Institute have until May 12 to respond to the motion to intervene, while the FTA has until May 16 to reply. Penny Lee, FTA's president and CEO, said rolling back the 1033 rule goes against the historic bipartisan support giving consumers the right to access and control their own financial data. "A few of the nation's biggest banks shouldn't be able to dictate where and how people manage their financial lives," Lee said. "Rolling back the 1033 rule, which provides important protections for Americans' fundamental data rights, would undercut innovation and limit choice, which is bad for consumers and businesses."Steve Boms, executive director of the Financial Data and Technology Association, said it would be a major setback if the CFPB started over by rescinding and reissuing another advance notice of proposed rulemaking."If the CFPB rescinds the rule and goes back to an ANPR, they're basically resetting the clock four or five years," Boms said. "It risks the progress that the industry has made collaboratively to get to this point and 95% of the rule that everybody agrees is generally pretty good."The CFPB under the Trump administration has already moved to negate rules issued under the Biden administration. The bureau under acting CFPB Director Russell Vought has told financial firms that it will not not enforce nor supervise major rules issued by former CFPB Director Rohit Chopra. Last week, the bureau said it will not enforce nor supervise the small business lending rule known as 1071 for its section in the Dodd-Frank Act. Last week, the CFPB joined with two trade groups that sued the agency in January and jointly asked a federal court to vacate a rule that would remove medical debts from credit reports.The agency also has backed off from enforcing or supervising the payday lending rule and the nonbank registry of repeat corporate offenders, reversing years of work conducted by the bureau. Separately, in another major win for banks, a judge in April threw out the CFPB's credit card late fee rule for refusing to allow banks to charge penalty fees, as allowed by law. Vought, whose main job is directing the Office of Management and Budget, has sought to eliminate 90% of the CFPB's workforce. Vought has been stopped by a federal court from dismantling the agency. Bank trade groups and open banking experts have been talking for weeks about whether and how the Trump administration would change the rule. "The default position under the Trump administration is that regulation is bad, and 1033 falls into that bucket by default. That's the starting point," said Eyal Sivan, general manager for North America at Ozone API, a platform that facilitates the sharing of financial data with authorized third parties. 

Rocket Mortgage has secured a $1.15 billion revolving credit agreement with JPMorgan Chase, which can increase to $2.25 billion pending the megalender's acquisition of Mr. Cooper. The credit line, which matures in July 2028, is unsecured and meant for general corporate purposes, according to a Securities and Exchange Commission filing last week. Redfin, which Rocket has also agreed to acquire, could also be used as a guarantor for the $2.25 billion amount should the companies carry any obligations tied to any senior debt.The Detroit-based industry giant in March agreed to buy Mr. Cooper for $9.4 billion, a deal which would increase Rocket's servicing portfolio to over $2 trillion. A few weeks prior, the lender said it would pay $1.75 billion for Redfin. Those deals are expected to close in the second half of this year.Rocket's new agreement replaces a similar $1.15 billion line with JPMorgan Chase which the lender signed last year and was set to expire in 2027. According to the filing, Rocket didn't incur any termination penalties nor prepayment premiums.Further details of the agreement, including an interest rate, will be disclosed in Rocket's first quarter earnings report Thursday, it said.The deal contains covenants regarding minimum liquidity and specific quarterly net leverage and corporate debt ratio figures. The brief filing also describes covenants on Rocket regarding taking on additional debts or creating liens on certain assets.Rocket has the largest coffers among industry peers, with $8.2 billion in total liquidity at the end of last year, according to its most recent earnings report. That includes $3.3 billion total in undrawn lines of credit, separate from mortgage servicing rights, cash and other monies to self-fund loan originations.The company has also weathered headwinds in the housing market with $636 million of net income in the fourth quarter. Despite stubbornly high mortgage rates and lofty home prices, the lender generated $101.15 billion in loan volume last year.