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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.

Remax Holdings lost $2 million in the first quarter, with the mortgage brokerage franchise business playing a role in a near 5% year-over-year decline in organic revenue creation.The first quarter loss compares with net income of $5.8 million in the fourth quarter but was an improvement on the $3.4 million loss one year prior.Operating earnings, a non-GAAP measurement, of 24 cents a share beat Keefe, Bruyette & Woods' expectations of 19 cents and the consensus estimate of 18 cents.Other factors besides the lower mortgage segment revenue responsible for that 5% decline included lower agent counts and revenue from previous Remax acquisitions.The "challenging mortgage environment" is affecting that segment, which means it will take "a few more quarters" for the business to return to consistent revenue growth, pointing to positive signs popping up, said Karri Callahan, Remax chief financial officer, on the earnings call."In [fiscal year] 2024 network-wide transactions and volume increased compared to 2023," Callahan said. "Recently, we also experienced a flurry of franchise renewals with long-term Motto owners recommitting for another seven years."Even so, the number of open Motto Mortgage franchises fell to 224 as of March 31, down from 225 at the end of 2024 and 243 for the first quarter last year; the year-over-year drop was nearly 8%.Much of the revenue issues at both Motto, as well as the Wemlo processing business are "macro driven," with the biggest driver being the reduced office count compared with one year ago, Callahan said.But Remax has seen some stabilization on a sequential quarter basis, as well as good engagement at a Motto event in April, she added."So people still see the importance in the field in terms of ancillary services and mortgage," Callahan said. "It's something that we think is still a tremendous growth opportunity for us."Remax's U.S. real estate agent count fell 7.5% from a year ago, and by 2.8% from the fourth quarter. A seasonal decline is normal, but this was above KBW's 2.5% expected drop and the consensus model of 2%, said analyst Tommy McJoynt in a flash note."Home sale volumes have yet to show signs of a sustained rebound as we head into the spring season," McJoynt added. "This presents a challenging backdrop for Remax to curtail its agent rank decline, though it is taking proactive steps to further improve its value proposition to agents (e.g., sourcing lead referrals from digital marketing)."In March, Remax announced Ward Morrison, president of Motto Mortgage, along with the Wemlo business, will be retiring on June 15."We have a great team in place at Motto and Wemlo, and so that team is doing great things right now," CEO Erik Carlson said in response to a question about who might be stepping in those roles."First off Ward is just irreplaceable, I'll say that, but we do have an active search, both internally and externally," he continued. "Obviously, with the mortgage market, there's a lot of great candidates out there."

Not all mortgage rates are created equal.Why? Because lenders don’t price them the same for any number of reasons, whether it’s cost to originate or desire to make more profit.Just like when you buy a new TV or a car, the price might vary depending on the company or salesperson you deal with.The thing with a mortgage though is what you pay today could stick with you for the next 360 months.So putting in the time to get it right is more important than those other purchases.Home Buyers Will Overpay Their Mortgages by $11 Billion This YearA new study from mortgage lender Tomo argued that home buyers will overpay by a whopping $11 billion in 2025.Or put differently, seven out of 10 home buyers will pay an extra $4,500 (split between a higher rate and more fees) simply because they chose the more expensive lender.This is due in large part to rate disparity, an issue I’ve talked about in the past. Essentially, mortgage rates vary by lender, despite home loans mostly being a commodity.Even though two or three lenders can offer the same exact 30-year fixed product, its interest rate might differ tremendously, as can the loan origination fee.The only real difference is the service you receive during the 30 to 45 days it takes to close the loan.After that, there is no difference assuming it’s the same exact product. So you need to choose wisely, and most importantly, compare options.Problem is, most borrowers typically only speak to one lender, gather one quote, and proceed with that lender.In the process, they leave a lot of money on the table, as suggested by Tomo.Lately, this phenomenon has gotten worse, with mortgage rate disparity widening among lenders (it often does in volatile periods).For example, choosing the high-priced lender could cost you nearly $300 extra per month ($287) for the same exact loan.Back in 2018, making this mistake would only cost you about $80, so it’s more important than ever to get it right.How Efficient Is Your Mortgage Lender?Part of this might have to do with how efficient a lender is, with costs to originate often passed along to consumers.Despite new technologies designed to make mortgage lending quicker and easier, somehow the cost to originate has gone up 35% over the past few years.Find a lender that spends less to make loans and you can benefit by receiving a lower rate and/or be subject to fewer lender fees.The chart above from Freddie Mac’s 2024 Cost to Originate Study reveals that costs to make a loan can vary by $10,000 between lenders.If you work with an efficient one you’ll probably be able to save some money because the margins will be better.For its part, Tomo Mortgage gives its loan officers flat-fee commissions to ensure there isn’t any steering or different treatment based on loan amount size.In the past, Better Mortgage didn’t have commissioned loan officers at all, or lender fees, but has since shifted to a more traditional commission-based model.The Many Ways Mortgage Lenders Sell Higher Mortgage RatesTomo laid out four ways mortgage lenders are able to “sell” higher mortgage rates.One is via point traps, where the advertised rate might be much lower than the competition, but requires a ton of discount points to buy down the rate.When you pay points at closing, you are essentially paying prepaid interest for a lower monthly payment over time.But you have to keep the loan long enough to realize the savings, which could take years. And you could miss out on a refinance opportunity in the process if you’re inclined to hang onto the existing rate.With mortgage rates so volatile, sometimes it’s better not to pay a ton in points as you might be able to snag an even better rate in the near-future.Be sure to keep a close eye on any points required for the advertised rate to get an apples-to-apples comparison.Another issue is the “free refi” pitch, which I’ve written about in the past. Use the lender today and you’ll get a refinance without fees when rates drop.Problem with this is their rate might be higher than competitors, and rates may not actually come down. So you could pay more to that lender today for a deal that never materializes.Then there is undercounting the cash to close, which can be accomplished by not including the cost of title insurance, or discounting how many months of taxes and insurance you must pay at closing.It directs the borrower’s eyeballs to a different part of the Loan Estimate to make it appear that they’re the better deal.Lastly, they call out “standard” fees that perhaps shouldn’t even be charged, whether it’s a admin fee, processing or underwriting fee, doc prep fee, along with a loan origination fee.Not all lenders charge some or any of these fees, while also offering a competitive or lower rate.The Solution Is Typically Just to Shop MoreI’ve talked about this before, on countless occasions. If you want to outsmart the lenders who try to charge you more, simply shop around.Several studies, including one from Freddie Mac, revealed that simply gathering an extra quote could save you $600 annually. And even more with three quotes, four quotes, and so on.This benefit of shopping has increased over time as rate dispersion has widened, with lenders today offering a larger range of mortgage rates.In addition, when you do put in the time to shop, you’ll also get the benefit of learning the mortgage lingo, seeing more Loan Estimates, fee breakdowns, etc.And you should grow more comfortable dealing with loan officers and mortgage brokers.This should give you the confidence to negotiate your mortgage rate, which is another key piece of the equation.Tomo points out that anything in Section A of the Loan Estimate is fair game. This section covers origination charges, which can vary widely by bank or lender.Of course, sometimes these fees can offset by a lender credit, and still result in a low mortgage rate for you.So you have to look at how much cash is actually coming out of your pocket at closing and what interest rate you wind up with.A combo that results in the lowest interest rate and out-of-pocket fees is the most desirable. Just make sure the lender doesn’t tack on the fees to your loan amount in the process! 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)

Mortgage servicing platform Sagent rolled out a dedicated portal for attorneys working on foreclosure proceedings and other legal cases revolving around borrower distress for the company's business customers..The technology firm added the attorney portal to its Dara default and loss mitigation tool, which will allow law firms and servicers to track foreclosure and default processes and documents in a shared technology space. The feature is expected to reduce costs and improve the customer experience."The Dara attorney portal's intuitive interface and real-time data is a true game-changer for law firms because it was built with their feedback," Sagent General Counsel Cynthia Treadwell said in a press release. "We're continually enhancing the platform as our default servicing law firm partners tell us what they need," she added. In addition to up-to-the-minute data that comes directly from the loan servicing system, the portal is designed to simplify document uploads and integrate quickly with other systems already in use."By providing attorneys with a centralized platform for case management, Dara delivers faster solutions for servicers, attorneys and homeowners," said Perry Hilzendeger, Sagent's executive vice president of strategic growth.Sagent joins fellow servicing tech provider Intercontinental Exchange in creating a portal designed specifically for attorneys, with tool offered on the ICE platform for several years. Along with streamlining correspondence between parties and document collection, ICE Mortgage Technology's portal integrates with the bankruptcy and foreclosure applications found on the platform, according to the company. The new Sagent launch comes as various sources report a consistent rise in serious delinquencies — defined as past due by 90 days or more — in some lending segments. The uptick, combined with the recent expiration of a relief program offered by the Department of Veterans Affairs aimed at preventing property loss, lifted foreclosure inventory and sales higher in March compared to a year ago, ICE said.Similarly, Auction.com reported the number of completed public sales of foreclosed properties growing by the fastest pace in almost two years in the first quarter. Activity is still running behind the pace of pre-pandemic early 2020, however.The country's leading mortgage servicer, Mr. Cooper, owns a 20% stake in Sagent and is currently actively involved in testing Dara's functions as they are introduced. With the recent acquisition of Mr. Cooper by Rocket Cos., servicing for the latter business' originations is expected to move to Sagent. In their most recent earnings call, executives at Intercontinental Exchange noted, though, that Rocket is currently operating under a multiyear servicing contract with the company, and a complete transfer of loans to Sagent was still a ways off. 

The net positive gains to U.S. employment persisted to a surprising degree in the latest Bureau of Labor Statistics numbers, maintaining a neutral mortgage rate outlook.Industry hiring wavered in a tepid homebuying season in which the addition of 177,000 jobs to total employment in April was better than expected given federal cuts. Consensus expectations had been that the U.S. would add 135,000 jobs, down from 228,000 last month."These data will be enough to keep the Federal Reserve on the sidelines for now, as they assess whether the threat to economic growth or inflation is the bigger concern," said Mike Fratantoni, chief economist at the Mortgage Bankers Association"Mortgage rates are likely to stay within their current range," he added. (The Fed has power to move short-term rates that can influence the industry's long-term ones.) Estimates for nonbank mortgage payrolls, which are reported with more of a lag, inched down to 264,400 from a downwardly revised 264,700 the previous month. The declines were driven largely due to a drop in lending positions and despite a small increase in mortgage broker hiring.While the overall unemployment rate has remained unchanged at 4.2% and wage growth also remained stable at 3.8% in the latest number, there are some shifts in the data that suggest a slow creep up in economic weakness that could affect the industry's future rates and prospects."Federal government employment decreased by 9,000 in April and is down 26,000 so far this year," Fratatoni said in emailed commentary. "Given the plans for further reductions, it is likely that this category will also shrink in the months ahead."Fratantoni also noted that gains were limited to a few sectors in the market: heath care, transportation and warehousing. They also could be transitory, he added."We expect that transportation and warehousing jobs are at risk as the tariff effects kick in," he added.A recent survey on jobs openings and labor turnover shows "a steady weakening in demand for labor, with fewer vacancies and the lowest hiring rate in roughly a decade (outside the pandemic)," according to First American Senior Economist Sam Williamson.Williamson also foresees the Fed waiting to act on rates."The Federal Reserve will likely extend its 'wait-and-see' approach to further interest rate cuts as it assesses the impact of tariffs," he said.Job prospects in some parts of the property market outside the single-family sector show signs of improving, according to Lawrence Yun, chief economist at the National Association of Realtors."Overall job gains indicate increased occupancy demand for apartment and commercial buildings. Therefore, nearly 10,000 jobs were added to the real estate sector, primarily related to rental or leasing activity," he said in an emailed comment.Also, while the Department of Government Efficiency has been cutting federal payrolls, other public sector entities have been active when it comes to hiring, adding 13,000 positions in education, the National Association of Realtors economist said."The economy is progressing despite all the trade and tariff disruptions," Yun concluded.

Uncertainty around federal policy and tariffs has rocked the capital markets this year, and that has added to challenges for the mortgage industry, but there's a silver lining for larger nonbank players.Companies like United Wholesale Mortgage, Pennymac, Rocket, Mr. Cooper, Loandepot, Provident, Freedom and Planet Financial are in a good position to weather the market's volatility and gain market share through accelerated consolidation, according to Fitch Ratings.That's because mortgage rate volatility has intensified challenging conditions for originations that have put less efficient smaller players at a disadvantage in the last few years."While they're not recording the record profits that they did in 2020 and 2021, they are still — for the most part — profitable, and able to achieve enough volume where they can continue to invest in the business, improve their product offerings, and make acquisitions," said Eric Orenstein, senior director at Fitch and sector lead for nonbank mortgage companies.Those acquisitions range from deals like the Rocket-Mr. Cooper combination to MSR purchases aimed at growing the servicing book, he added.Reductions in near-term debt maturitiesThe majority of large mortgage companies have recently demonstrated an ability to contend with one of the risks Fitch had previously called out: near-term maturities for some of their unsecured debt.Fitch's analysis of the aforementioned companies' unsecured maturities initially found only United Wholesale Mortgage, Pennymac and Loandepot had unsecured debt due in 2025. All three have since taken measures to address the risk, Orenstein said. Most of the unsecured debt nonbank mortgage companies currently have will mature after 2028, according to Fitch's report.Pennymac is issuing $650 million in new unsecured notes with an expected high-end speculative grade rating of BB to repay a portion of the older debt of this type, which it noted in a recent earnings call, is due in October.UWM raised funds through a new debt issuance in December aimed at ensuring funds would be available to redeem $800 million in notes when they come due later this year. The older notes have rates lower than what's currently available so it was advantageous to leave them outstanding, Orenstein said.Fitch doesn't rate Loandepot, but Orenstein said he was aware based on reports the publicly traded company issues that it had exchanged the bulk of its near-term unsecured debt for secured notes earlier and only $20 million from the original amount is left.Nonbank mortgage companies have leaned into unsecured debt in the past year or so, with some executives noting that it has the advantage of not being subject to margin calls if there's an abrupt interest rate shift the way some secured financing can be.Fitch has generally encouraged unsecured debt use recently for that reason, but had warned that companies with large volumes of notes immediately maturing still could be forced into replacing their borrowing at a time market conditions aren't optimal.Differentiation in the level of riskThe ability of nonbank mortgage companies to take steps to address risk around near-term unsecured debt maturities and the recent restoration of calm in the broader markets have allayed many concerns, but some players still may struggle with it more than others."Some of the lower rated or unrated issuers might not have as much liquidity on hand so if they can't access the markets, they're going to face a real problem," Orenstein said.Finance of America, a reverse mortgage lender, no longer has any near-term unsecured debt, but it did previously and found itself forced to exchange some it had coming due near-term to avoid a likely event of default because it faced challenges issuing new notes, he said.Fitch initially downgraded the company to RD or restricted default prior to that debt exchange. The rating agency later upgraded the company to a low-end speculative grade rating of CCC to reflect the post-exchange capital structure, Orenstein said.

Senate Democrats say they'll continue to press Federal Housing Finance Agency Director Bill Pulte after the regulator's watchdog demurred on their investigative demands. According to letters obtained by Politico, the FHFA's Office of Inspector General last week deferred Democrats' questions about the FHFA to the agency itself. Senators on the Committee on Banking, Housing and Urban Affairs asked the OIG last month to probe the legality of Pulte's reshuffling of the boards of directors of Fannie Mae and Freddie Mac, and for further details of a mass firing. FHFA IG Brian Tomney, a Biden appointee, wrote to lawmakers that the FHFA had already offered continuing dialogue on five of senators' six questions. Regarding terminations and staff placed on administrative leave, the FHFA said it was monitoring "workforce planning efforts" including the government's Deferred Resignation Program. "FHFA also appears to be best situated to provide information regarding its involvement in the termination of employees," wrote Tomney. The OIG meanwhile said it's working on its annual reports addressing the FHFA's performance challenges and information security practices. In a statement shared Thursday with National Mortgage News, Committee Ranking Member Sen. Elizabeth Warren, D-Mass., said Committee Dems will continue to speak with the FHFA and its IG regarding accountability. "FHFA Director Pulte needs to answer for the chaos he has created that could undermine the stability of American mortgages," said Warren in a statement. Tomney's letter also didn't address senators' question whether President Trump's cost-cutting task force was involved in any FHFA action. Pulte, in a past social media post and a recent interview, suggested the Department of Government Efficiency was involved in cutting 25% of the FHFA's workforce. The recent letters didn't indicate if the OIG was refusing to open a probe. The OIG in response to a media inquiry Thursday said it doesn't comment on the existence, or non-existence, of investigations. Pulte speaksThe FHFA director, in a recent interview with cryptocurrency influencer Anthony Pompliano, shared his view on the letter from Senate Democrats, and asked lawmakers to give the FHFA "the benefit of the doubt." "It seemed to me it was almost accusatory in nature," said Pulte. "We should all be working together to fight fraud, no matter where it comes from. I like to work with people no matter what side of the aisle they're on."Pulte also spoke about his changes at the Fannie and Freddie boards, suggesting leadership were handcuffed by bureaucracy in the past four years. He blamed inflation and housing unaffordability on the previous Biden administration. His interview was posted between Fannie Mae and Freddie Mac's first quarter earnings. Pulte, chairman of both government-sponsored enterprises, spoke briefly during Fannie's earnings but not Freddie's. The director also said Wednesday he's signed between 50 to 80 orders, although he's only made a dozen of those actions public via posts on X. A spokesperson for the FHFA didn't respond Thursday to a question about the number of orders, or where further information could be found. The FHFA head also downplayed concerns over tariffs, stating that he didn't believe they were as impactful on the housing and home building markets as some had feared, and that people know what President Trump's strategy is. "I think that, the punchline is, you have somebody in President Trump who's going to get this economy roaring again, but we've got to reverse what's happened with these last four years," he said. "And these nations have been ripping the country off, and the president is going to take care of it."

Redwood Trust expects to see an upside from housing policy shifts in Washington, as it rebounded to a first-quarter profit to start the year. The real estate investment trust managed to navigate early-year rate volatility and lauded some of the recent developments at government-sponsored enterprises Fannie Mae and Freddie Mac as tailwinds for future business prospects. The Mill Valley, California-based company posted net income of $14.4 million in the first three months of the year, improving from an $8.4 million loss in the fourth quarter of 2024. The latest number decreased on a year-over-year basis from $29 million.  "There remains strong demand for the assets we create," said CEO Christopher Abate, whose company specializes in secondary market investments and issuances of products outside conventional lending. "With trillions of dollars raised by private credit institutions, we're actively looking to crowd their capital into the residential mortgage space. The fact that they have not already done so in greater scale is a direct byproduct of the government's outsized role in housing," Abate continued during Redwood's first-quarter earnings call. The quarter saw Redwood's Sequoia jumbo correspondent platform rake in $25.8 million in profit, up 18.3% from $21.8 in the prior reporting period. The platform locked $4 billion worth of loans, up from $2.3 billion in fourth quarter 2024."We saw billions of dollars of seasoned jumbo loans change hands in the first quarter, and we positioned ourselves to be in the hunt for much of that production," Abate said.Abate pointed to the growing presence of loans with $1 million balances or more that the GSEs had guaranteed, as well as investment and vacation home mortgages and second liens, as falling outside their intended scope. Instead, the markets would be better served through companies like Redwood, he said. "All of these are examples of products that we believe can and should be financed by the private sector without government support."Also included in Sequoia's latest quarterly lock volume was $111 million of loans from Redwood's Aspire subsidiary, which both originates and buys home equity investment agreements, debt service coverage ratio loans and other "alternative" lending products for borrowers with nontraditional sources of income.Elsewhere, Redwood's investment arm garnered $22.9 million, surging from $2.8 million largely resulting from a decline in interest rates leading to higher valuations in its third-party portfolio. Meanwhile, its business-purpose residential lending business Corevest reported net income of $1.3 million, off the fourth quarter's $1.5 million. Funding of $482 million was provided for first-quarter loans, pulling back from $501 million over the prior three months.Corporate expenses of $35.6 million, though, offset the positive numbers across Redwood's business segmentsWith a change in leadership in Washington and a flurry of changes already in place, Redwood hopes to see regulations loosened to open up the housing finance market to more players. "There is room to rationalize outdated securitization rules that are holding back private-capital formation and to sensibly update disclosure and execution burdens that would make the mortgage capital markets far more efficient," Abate said. Frequently changing tariff policies and overall economic uncertainty are leading Redwood to apply a "broad risk-off tone" in approaching its operations and finances this year. Share repurchases are not off the table, according to Brooke Carillo, Redwood's chief financial officer. "As many economists are now pricing in heightened recession risk, we've positioned our balance sheet to benefit modestly from declining rates and increased volatility," she said.The company's stock, which trades on the New York Stock Exchange under the ticker symbol RWT, opened Thursday at $6.10 per share, down 1.8% from its previous close of $6.21.

Intercontinental Exchange's mortgage technology business continues to report operating losses, although the first quarter results were an improvement over the comparable periods.Servicing business drove improved resultsThe segment lost $27 million for the quarter, using GAAP accounting, compared with an operating loss of $36 million in the fourth quarter and $48 million for the same period last year.It is the 10th consecutive quarter, and 11th out of the last 12 quarters in which the mortgage technology segment has an operating loss.ICE also reports a pro forma metric that makes an assumption the company has owned Black Knight since 2021, rather than the actual September 2023 completion date. Using those computations as adjusted pro forma operating income, the unit made $203 million in the first quarter, up from $177 million three months prior and $185 million a year ago.The year-over-year improvement was largely driven by the servicing business, Warren Gardiner, Intercontinental Exchange's chief financial officer said on the earnings call."While we benefited from $2 million of one-time revenue that we do not anticipate will repeat, growth was also driven by new customers implementing on MSP," he continued."Transaction revenues totaled $113 million, up slightly year-over-year, driven by revenue growth related to Encompass closed loans and applications, an increase in closing solution fees and higher default management revenues as foreclosure starts within our servicing business have begun to tick higher from historic lows."Rocket-Mr. Cooper deal brings future headwindsDuring the quarter and into April, ICE had several big wins for its platforms but also had to prepare for the loss of a large client.Rocket Cos., when it completes its acquisition of Mr. Cooper, will be bringing its servicing portfolio to Sagent. Mr. Cooper owns 20% of Sagent.But at the end of April, United Wholesale Mortgage announced it is bringing the servicing function in-house and is licensing the MSP platform. It had been using Mr. Cooper as a subservicer prior to the Rocket news. A Keefe, Bruyette & Woods note after the Rocket/Mr. Cooper deal was announced said the shift to Sagent could "negatively impact ICE's servicing revenues" by approximately $30 million using a $10 per loan assumption for the 2.8-million-unit portfolio.Taking a dig at the competitionICE Mortgage Technology added 20 new Encompass loan origination system clients, as well as the addition of UWM, "a significant new MSP client," said Ben Jackson, Intercontinental Exchange president and chairman of ICE Mortgage Technology.In what might be considered to be a subtle dig at Rocket/Mr. Cooper/Sagent, Jackson said over the past decade, the company looked to build a life-of-loan platform "operated by a trusted, neutral third party." He later used the phrase "our neutral platform" during the presentation and brought the topic up again during the Q&A portion of the call.A questioner asked how ICE sees Rocket's business strategy, comparing that with what it does across the mortgage lifecycle from consumer marketing to secondary marketing and recording.Jackson, while not directly mentioning Rocket, responded "the headline is that it's a validation of our strategy."Gardiner added Flagstar's servicing portfolio, which the bank sold to Mr. Cooper and is being switched to Sagent, was about 1% of the unit's revenues and Rocket is a little less than 3%.Rocket isn't leaving right awayRocket recently signed a multiyear contract, "so in the event they even do choose to move off of MSP, just be clear that it's going to take a couple of years," Gardiner said. "And there's no change to this year's guidance as a result of any of that." But the impact of what had been the Flagstar MSRs leaving should start to be felt by the end of 2025, he continued.UWM also referred to ICE as "an independent, neutral and proven technology provider" in its statement on the agreement."They're already in our ecosystem and it was a cross-sell to bring them onto the MSP platform," Jackson added during the call.

Last year marked yet another year where high debt-to-income income ratios were the leading cause of denial for mortgage applicants.While a low credit score can also be a significant factor, often it might just lead to a higher mortgage rate.That means you can still get approved for a home loan with marginal credit, but it’ll be more expensive.In other words, you want to focus on keeping your other liabilities as low as possible when applying for a mortgage.Interestingly, this should actually help your credit score in the process as well!High DTIs Top Reason Mortgages Are DeclinedIn 2024, the top reason mortgages were declined was due to an elevated debt-to-income ratio (DTI).This was the case across all types of applications, according to a new study from iEmergent.And it has been a continuous trend, “increasing steadily from 32% in 2020 to 39% in 2023,” though there was a slight drop to 37% in 2024.This didn’t come as much of a surprise given the increase in both home prices and mortgage rates in recent years, not to mention rising property taxes and homeowners insurance costs.Long story short, the higher the mortgage payment, the higher your DTI ratio, all else equal.The second leading cause of denial was credit scores, aka low ones.Lenders have minimum credit score thresholds, but they are often quite liberal.As a result, you can get approved for a mortgage with the score as low as 620 for Fannie Mae and Freddie Mac.And even get approved with a score below 600 for other types of loans such as an FHA loan.When it comes to DTIs, the guidelines are a little more gray and flexible.Instead of a hard cut off, you might see a range that factors in income, assets, down payment, etc.It’s more of a holistic view of total risk, which may allow DTIs to go higher if you have compensating factors.For example, Fannie Mae generally allows DTIs as high as 45%, but up to 50% if you have lots of liquid reserves, or a strong credit history.A good way to look at this is that you can get away with a low credit score, but you might be locked out entirely if you’re DTI is too high.DTIs and Credit Scores Are Within Your ControlWhile some might throw their hands up and say it’s not fair, or that these things are outside their control, it’s simply not true.Both of these variables are within your control. Whether it’s paying bills on time or limiting your outstanding credit balances.What’s also interesting is DTIs and credit scores go hand-in-hand as well.Someone with more outstanding revolving debt will likely have a lower credit score, all else equal.But you’re more likely to get denied outright if you have a high DTI than you are a low credit score.What this means is you should pay close attention to your monthly liabilities when determining how much you can afford.Two borrowers with the same amount of income aren’t necessarily created equal if they have different amounts of outstanding debt.For example, a borrower with a $600 car lease payment versus a borrower with a paid off vehicle.If you have $600 less per month available for a mortgage, it will lead to a higher DTI ratio.As noted, this can also have the unintended consequence of lowering your credit score as well.In a nutshell, the credit bureaus will view you as more risky if you have more outstanding revolving debt (or installment debt for that matter).A best-case scenario for a mortgage applicant would be having little to no revolving debt.This would mean all or most of their monthly income could go towards the home loan obligation instead.And this would lead to a lower DTI ratio, which would boost their approval odds.The beauty of this is these things are intertwined so if you do well to limit debt, you can also enjoy a higher credit score.So if you’re a perspective home buyer, or someone looking to refinance an existing mortgage, paying close attention to your DTI can help your credit score as well.Two Borrower’s Incomes Might Not Be Created EqualThis also explains why it’s difficult to provide a universal answer when people ask how much house can I afford?As noted, two people at the same exact income level will be able to afford different loan amounts based on their other, non-housing related debt.Your DTI ratio is actually two numbers, a front-end ratio for your proposed housing payment, and a back-end ratio that includes all monthly debts.If you’re able to keep all the other stuff low, whether it’s an auto loan or credit card debt, you’ll have more income available for your mortgage.Bringing it all together, less debt typically results in a higher credit score, which in turn results in a lower interest rate on your mortgage.And by definition, that gives you a lower housing payment, which would further lower your DTI. You see how it’s all connected?So the two biggest things to pay attention to if you want to qualify a mortgage are your DTI and your credit score. But your DTI can dictate your credit scores, meaning putting even more emphasis on that.Aside from saving for a down payment, you should also pay down any other outstanding debt to increase your home purchasing power (if necessary).Doing so should increase your odds of getting approved for a home loan.While there are many other reasons you can get declined for a mortgage, these are the leading causes and they should be your focus.Keeping a close eye on these issues will ideally help you avoid any unwanted surprises once you do apply.(photo: Joel Kramer) 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)