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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.

Angel Oak Mortgage REIT emerged from the first quarter's market turbulence with a gain under standard accounting principles despite the challenging conditions.The real estate investment trust reported $20.53 million in net income in the quarter, up from $12.87 million a year earlier and a $15.06 million loss the immediately preceding fiscal period even with the market disruption.The real estate investment trust beat a S&P Capital IQ consensus estimate that it would earn $6.14 million.The company's earnings provide a window into the private secondary market for loans outside a standard "nonqualified mortgage" definition, which has been an important product sector for lenders facing limited refinancing and profitability challenges. Borrowers with nontraditional income typically pay up for non QM. But interest from investors buying residential mortgage-backed securities has fluctuated recently amid tariff-related concerns that have impacted the broader market, President and CEO Sreeni Prabhu said during the company's earnings call."Overall, securitization markets have been resilient with a deep pool of market participants willing to participate in the market. That being said, there has been some variation in execution levels in terms of spreads depending on the timing with data points and/or trade announcements," he said.The company did not securitize during the first quarter but has since completed a transaction. "What we saw, even with a lot of the tariff issues and volatility in equity markets and the bond markets, there was no illiquidity. So that's number one, right? We could at least do our securitization," Prabhu said.Angel Oak was the sole participant in its AOMT 2025-4 securitization, which we closed shortly after quarter end, and provided the company with capital to continue to purchase new loans, he said. The securitization released $24.7 million in cash and also paid down $242.4 million in warehouse debt."Spreads probably went from 130, 135 at the beginning of the year all the way to the first quarter and we printed that deal at 180," said Prabhu. Subsequent spreads have been in the 150-160 range, he said.Weighted averages for the securitization were 7.5% for the average coupon, 70.9% for the loan-to-value ratio and 752 for the credit score. Interest income for the first quarter was $32.9 million and net interest income was $10.1 million,"The AOMT securitization shelf has an exceptional credit performance history and has proven its ability to execute in choppy markets. We've laid a strong foundation by making an intentional effort to move up and credit for our loan originations and purchases," Chief Financial Officer Brandon Filson said during the call.In contrast to the fourth quarter of last year, when volatility led to a valuation decrease, this year's first quarter included $18.7 million of unrealized gains from the company's securitization and loan portfolios.The quarter-end weighted averages coupon rate and funding cost for the company's loan and securitization trust portfolio coupon were 5.6% and 4.3%, respectively. Following the AOMT 2025.4 securitization, the company expects the portfolio's WAC to increase to 5.8%."The securitization market remains active, and we plan to continue to access it via our methodical securitization strategy," Filson said.One trend that's been helpful as securitization market conditions have become more challenging is that mortgage rates have remained in a range that has continued to attract insurers, Prabhu said."When the rates come down from the demand side, insurance company demand may slow down," he said, reiterating a warning made in other earnings calls.Executives showed less concern about the prepayment risk that could result from a drop in rates."Our securitized loan and RMBS portfolios are weighted towards loans that are well below current rates, reducing or eliminating a homeowners incentive to refinance," Filson said.

The Federal Home Loan Bank of Atlanta exceeded its commitment to the Heirs' Property Family Wealth Protection Fund by nearly $1 million.It has awarded a total of $5.9 million to 21 organizations through its member banks in amounts ranging from $152,127 to $500,000.In September, the FHLBank Atlanta announced it increased its funding to $5 million from the original initiative of $1 million it announced in 2022.Heirs' property, also known as tangled titles, come about when the original owner of a home dies, typically without a will. Multiple family members, across several generations, have now inherited a stake in the property. But in many of these cases, the current occupants in the home, who are among the legal claimants to the property, do not appear on the deed.Bills go nowhere in CongressA model state law exists, The Uniform Partition of Heirs Property Act, which is on the books in 22 states. In the last session of Congress, a bill was introduced in both houses to incentivize other states to pass similar legislation, but was not acted upon.A second bill, the Heirs Empowerment and Inheritance Rights Act, was only introduced in the House and also failed to advance."As part of our broader work to address housing challenges, we added a program to focus on heirs' property issues," said FHLBank Atlanta President and CEO Kirk Malmberg in a press release."Without the proper paperwork or legal process, it is often difficult for homeowners or their heirs to benefit from those assets, which are often purchased with the goal of building generational wealth," he continued. "The organizations receiving these grants work with homeowners to resolve tangled titles, execute wills and estate plans and provide education to ensure their intended heirs can benefit from the hard-earned equity in their homes."The bank pointed to its 2024 Harris Poll survey which found 90% of homeowners expect the equity in their home to benefit their heirs, yet 43% lack either a will/trust or estate plan. More than a third surveyed, 38%, who do not have a will intend to leave their property to more than one heir.Tangled titles hold back Lake Charles recoveryThe Federal Home Loan Bank of Dallas, in its 2024 Affordable Housing Advisory Council Annual Report released last week, pointed out it provided $2 million in its Heirs' Property Program grants to 33 nonprofit, governmental and tribal entities for various initiatives.On March 28, it provided a $100,000 grant to Project Build a Future in Lake Charles, Louisiana. The group will use $25,000 to partner with the Southwest Louisiana Law Center for community experts to deliver information sessions, with the remainder of the funds to be used by SWLA to assist clients."One of the most significant and lingering challenges we face with housing recovery post-Hurricane Laura is the obstacle of clear titles on homeownership," said Lake Charles Mayor Nic Hunter, in the FHLB Dallas press release. That storm struck the region in August 2020."There are programs and funds out there to help our residents repair and, in some cases, rebuild their homes," Hunter continued. "Some residents are unable to access these funds because a succession was never completed."Earlier in the month, the FHLB Dallas, through Texas Capital Bank, provided a $100,000 grant to the Local Initiatives Support Corp. Houston and a $145,000 grant through Red River Bank to three recipients in Southeast Louisiana.What the Indianapolis bank is doingThe Federal Home Loan Bank of Indianapolis, working with LISC Detroit, provided the group with a $500,000 grant to create the Detroit Heirs' Property Program: A Community-Driven Approach.In Detroit, at least 5,525 properties have all of their recorded owners believed to be deceased, based on tax assessor records, a February 2024 report said.The program is designed to complement current efforts administered by the city and the Gilbert Family Foundation, whose co-founders are Dan and Jennifer Gilbert; Dan Gilbert is the founder of Rocket Cos.

When a mortgage originations shop acquires a competitor, a single misstep, like choosing not to retain a well-liked IT manager from the onboarding firm, can turn a smooth integration into a total flop. Seemingly smaller misalignments, like mismatched compensation structures, approaches to marketing spend and executive personality clashes can add up to make a costly strategic endeavor going sour not long after the paperwork has been signed. What differentiates these outcomes often comes down to transparency and communication from both parties among themselves and with employees. "Never say nothing's changing," warned Julia Brown, founder of Telescope, an M&A advisory firm. "You lose your credibility, and people start to feel like they can't trust you when things do."As the mortgage industry continues to consolidate, numerous examples have surfaced of acquisitions that have gone smoothly, and those that have not been as fruitful as expected.In the past few years a flurry of these deal have taken place ranging from Rocket Mortgage's acquisition of Redfin and Mr. Cooper to Guild Mortgage acquiring close to half a dozen firms. The industry consolidation has been a reaction to a volatile housing market, with business sellers wanting to get out of the origination space all together, while acquirers have been looking to grow market share and volume. Guild Mortgage and CrossCountry Mortgage have been touted as having the know how in effectively integrating new branches and other organizations.Paul Hindman, industry consultant, pointed out that if "operations, marketing spend or  pricing breaks it will negatively impact everything" and that CrossCountry, specifically, prioritizes replicating the same conditions for originators that they had previously. Those acquiring a competitor must take the time to understand what exactly they're purchasing and the people that make the firm operate, and the company selling must be open with its employees about the pending changes, consultants that advise in M&A transactions said.But transparency must be carefully timed. Oversharing too early can spook staff, especially originators who may start fielding offers from competitors. "In a deal I was working on, the CEO of the acquired company felt an irrational need to be honest with his employees," said Brian Hale, founder of Mortgage Advisory Partners. "After that, a bunch of people left: before close, at close, and after close."Ingredients for a successful M&A transactionIroning out an M&A strategy and successfully integrating the company acquired is not simple, said Hale, who has been involved in high profile M&A transactions, including selling parts of Stearns Lending to Blackstone Group in 2015. It can take months to years before a transaction agreement satisfies both parties.And even when a mortgage company sends out a press release that they've acquired another lender, the work done afterwards such as onboarding new employees and consolidating two companies into one can be riddled with pitfalls."No transaction ever integrates perfectly smoothly, no matter how well you plan it," said Brett Ludden, managing director at Milliman Strategic Advisory. The real key to success is focusing on culture, and it's not the "we're having happy hour or pizza on Friday night" type of culture, added Brown, who prior to running her own firm worked as a senior vice president of M&A at Lower."When we talk about mortgage culture it means how do we show appreciation to our operations staff, do we have the same paid holidays?," added Brown. "If I'm a loan officer, do I have to ask permission right now for a pricing concession?"Mortgage lenders that have succeeded at integrating firms often compromise with acquired employees by giving them tools or compensation packages similar to what they previously had, while highlighting exactly what will be changing.Additionally, having senior management from both organizations be "visible and available as soon as the deal is announced, and literally for the first couple of weeks after the deal has closed" is very important, said Ludden."You've got to know that you're going to have some problems with people learning new technology, people getting onboarded to that new technology," Ludden said. "In my experience, people are going to get frustrated with those things, but it's how they are treated at that transitionary time that matters more to them and cements whether they're going to stay."Where things go off the railsSome employee turnover is expected when a merger occurs, stakeholders say. But there's a threshold to what's perceived as a "normal" amount and exceeding it may be a signal of deeper problems. A number of factors can push an abnormal amount of acquired employees out, including not being prioritized, said Hindman."There's real people involved," he stressed. "Failure is not understanding the people and that's why originators and others leave. Deal makers typically feel the love, not the people."Brown echoed that idea, highlighting that deal makers sometimes "take for granted the human element.""A lot of time, the people involved on the deal team are working so hard to get to a yes that works for both the buyer and the seller, that once it's done, they're mentally fried, and they're like, yep, we did it," she said. "We're both mortgage companies. They both sell FHA, VA, USDA, conventional like, how different can it be?"Noting that originating a mortgage is very complex, Brown noted that "everyone has a different trigger of what's going to upset them when it comes to the way that loans are done."Different technology, how an underwriter handles a file or how the size of the marketing budget fluctuates could trigger dissatisfaction that leads to an exit.  Not having an open ear to concerns of new employees makes the likelihood that they will leave significantly higher. Other common factors that push new employees out include changed compensation structures and new technology, M&A consultants interviewed said. "Companies that are not successful in keeping new employees are those that don't do the diligence of understanding the social, economic compensation pricing dynamic that keeps sales people at your company," said Hale.Taking time to explain the differences between new technology platforms and old are key to reducing friction too, he stated. "The average originator in the US is north of 50 years old," Hale said. "Changing technology systems is a big problem, so many originators think 'If i have to do that, I might as well talk to five other companies and see if they have a better deal for me.'"

Bloomberg News WASHINGTON — The White House's proposed budget pitches eliminating Community Development Financial Institution Fund's discretionary awards. In President Donald Trump's proposed budget, the White House said that past awards have "made race a determinant of access to loan programs to 'advance racial equity,' funded products and services that built so-called climate resiliency,' and framed American society as inherently oppressive rather than fostering unity." "The CDFI industry has matured beyond the need for 'seed' money and should at this point be financially self-sustaining," the White House said. "Remaining funding supports oversight and closeout of prior awards, maintaining CDFI certification, and support for New Markets Tax Credit administration and the zero-cost Bond Guarantee Program." At the same time, the White House budget would create a new $100 million award program to "spur economic development in rural America." The program would require 60% of CDFI loans and investments to go to rural areas.Industry groups immediately decried the cut."We are not aligned with the suggestion to eliminate the Community Development Financial Institutions (CDFI) Fund's discretionary awards," said Jim Nussle, America's Credit Unions president and CEO. "We do share the President's commitment to revitalizing rural communities — with credit unions currently operating roughly 900 branches that are the sole financial institutions in their census tracts, credit unions remain dedicated to serving all underserved communities, regardless of geography."The proposed budget comes after an executive order from the White House that would, among other measures, eliminate the CDFI fund to the extent allowed by law, given that the programs are set up by Congress. The order has sparked some confusion among Democratic lawmakers and within the industry, as CDFIs look ahead to recertification and the allocation of funds amid uncertainty about the future of the program.While the Treasury Department, which administers the CDFI Fund, has said that all 11 programs that it runs are statutorily mandated, the White House has suggested that it still expects cuts. Congress, meanwhile, is pursuing various versions of a spending bill that will extend the Trump tax cuts while lowering spending. The House Financial Services Committee earlier this week passed a bill that eliminates the Public Company Accounting Oversight Board and caps the Consumer Financial Protection Bureau's budget at roughly $249 million, a drastic reduction from its recent budgets. Sen. Tim Scott, R-S.C., chairman of the Senate Banking Committee, has also said that he would target the CFPB when looking for cuts by capping the budget. Trump's budget would also cut roughly $33 billion in funding for the Housing and Urban Development Department, including slashing more than $26 billion in funding for rental assistance programs. 

United Wholesale Mortgage is asking a Michigan federal court to toss out a countersuit filed by brokerage Atlantic Trust Mortgage Corp. The move comes shortly after the court declined the Florida-based brokerage's ask to dismiss UWM's original litigation, which accuses Atlantic Trust of breaching its All-In mandate. The wholesale lender called Atlantic Trust's fraud allegations "vague and unviable" in a court filing submitted April 30.In its motion to dismiss the case, UWM argued that Atlantic Trust's fraud claims are based on "a future promise reserved for a contract claim," lack any allegations of bad faith, and rely on an "unreasonable" interpretation that contradicts the parties' written agreement. UWM also said Atlantic Trust failed to show it suffered any damages as a result of the alleged fraud.Atlantic Trust's countercomplaint claims that in late 2022, as the brokerage was preparing to end its partnership with UWM, the lender offered a 60-day trial period during which the firm would not be bound by the terms of the All-In Addendum. Atlantic Trust accepted the offer but was later sued by UWM for violating the mandate.UWM argues, however, that the ultimatum, which Atlantic Trust was aware of, supersedes any alleged promises made.The wholesale lender in its filing, also included in the fact that America's Moneyline filed a similar countersuit against it and those allegations were tossed."The court held the promises cannot serve as the basis for a separate and independent tort claim. . . . And [America's Moneyline] has not identified any duties that UWM violated that are separate. The court accordingly dismissed the fraud claim," UWM wrote in its filing, stating that the same should be done to Atlantic Trust's countersuit.Atlantic Trust did not immediately respond to a request for comment Friday.Thus far, UWM has fared well in litigating against brokerages that allegedly violated its mandate. The controversial rule prevented brokers working with UWM from doing business with Rocket Mortgage or Fairway Independent Mortgage. In February 2024, Fairway exited the wholesale channel.Earlier this year, two federal judges in Michigan declined to dismiss UWM's All-In lawsuits against Atlantic Trust and District Lending. Both brokerages, sued by UWM for violating its ultimatum, had their motions to dismiss denied in the U.S. District Court for the Eastern District of Michigan, Southern Division, less than a week apart.The judges overseeing the two lawsuits ruled that Atlantic Trust and District Lending were bound by the wholesale broker agreement with UWM, despite not signing the ultimatum, because they continued doing business with the Pontiac, Michigan-based company.Other brokerages — including the previously mentioned America's Moneyline and The Okavage Group, which were also sued for violating UWM's All-In ultimatum and later countersued — face an uphill legal battle against the mortgage giant.A Michigan federal judge tossed AML's countersuit for fraud in March 2024, citing another court's decision where a judge earlier that year was unconvinced by The Okavage Group's similar arguments. The Okavage Group is currently appealing the court's decision.Another mortgage broker, Mid Valley Funding, agreed to settle and pay UWM $40,000 in June 2023.

The Trump administration wants to cut the Department of Housing and Urban Development's budget by 43.6%, a reduction that would require eliminating some programs. The recommendations for discretionary funding for fiscal year 2026 released Friday propose slashing HUD's budget from $77 billion in FY25, to $43.5 billion in FY26. The potential $33.6 billion reduction is part of a push to pass responsibility to state and local governments, and to eliminate spending that's "contrary to the needs of working Americans," wrote Russell Vought, director of the Office of Management and Budget and current acting director of the Consumer Financial Protection Bureau.HUD Secretary Scott Turner in a statement Friday afternoon said the recommended budget cuts will thoughtfully consolidate and streamline existing programs. "Importantly, it furthers our mission-minded approach at HUD of taking inventory of our programs and processes to address the size and scope of the federal government, which has become too bloated and bureaucratic to efficiently function," he said. The budget suggestions follow moves by President Trump's cost-cutting task force to eliminate over 100 vendor contracts at HUD for a stated savings of at least $130 million. The department has repeatedly touted $260 million in savings and the recovery of $1.9 billion in "misplaced" funds, which have since been revealed to be master subservicing line items. HUD in a separate statement Friday touted its work with the Department of Government Efficiency to cut fraud, waste and abuse. That acknowledgement came in response to an inquiry regarding a Wired report alleging that a college student was using artificial intelligence to propose rewrites of HUD regulations. A spokesperson said HUD doesn't comment on individual personnel. See the full list proposed housing changes in the table at the end of this story.Proposed changes at HUDThe largest cut suggested in the Trump budget proposal is a $26.7 billion reduction to HUD's "State Rental Assistance Block Grant," which provides funding for rental assistance, public housing, elderly and disability housing. The proposed budget would use a state-based formula grant in lieu of a "dysfunctional" federal system. The budget would also place a new 2-year cap on rental assistance for able-bodied adults. HUD is also looking to eliminate its $3.3 billion Community Development Block Grant, suggesting funds have been poorly targeted. The budget cites improper funding for improvement projects for a brewery, a concert plaza and skatepark. The government is also proposing to eliminate the HOME Investment Partnerships Program, another formula grant to fund the expansion of housing supply. Other nine-figure cuts include slashes to Native American Programs and a cost-cutting consolidation of Homeless Assistance Programs. A $100 million Pathways to Removing Obstacles program is on the chopping block for advancing "'equity' under the guise of an affordable housing development program."HUD emphasized that it is maintaining support for its Fair Housing Assistance Program, which funds state and local agencies responsible for processing 80% of the nation's fair housing complaints. At the onset of the Trump administration, HUD's fair housing enforcement operations were reportedly considered for layoffs. CDFI Fund changesThe Trump administration is also calling for changes to the Community Development Financial Institutions Fund, a collection of federally mandated programs that aid underserved borrowers. The budget calls for a $100 million increase for a new Rural Financial Award Program, which would require 60% of CDFI Fund loans and investment to go to rural areas. At the same time, the Trump administration calls for a $291 million reduction to CDFI Fund discretionary awards, citing past awards' focus on racial equity and climate resiliency. "The CDFI industry has matured beyond the need for "seed" money and should at this point be financially self-sustaining," the budget said.