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Financial losses related to cybercrimes of all types increased 33% last year, even as the number of complaints fielded by the Internet Crime Complaint Center declined.Losses totaled $16.6 billion in 2024, with the average per-incident jumping to $19,372 from $14,197 in 2023.The No. 1 complaint to IC3, a part of the Federal Bureau of Investigation, was for phishing/spoofing, at 193,407 reports. Business email compromise, one of the leading causes of losses when it comes to real estate transactions according to CertifID, ranked seventh at 21,442. Real estate cybercrime had 9,359 complaints in 2024.In 2023, 21,489 instances of BEC were reported, while in the year before that 21,832. For real estate, this compared with 9,521 for last year and 11,727 in 2022. But by dollars lost, BEC was second at $2.8 billion; real estate losses were $173.6 million. This is just from the cases which were reported to IC3, CertifID's annual analysis of the data, written by Matt O'Neill, along with the company's Will Looney, noted. O'Neill is the former managing director of the Secret Service's Global Investigative Operations Center.BEC losses were down from $2.9 billion in 2023 but higher than $2.7 billion in 2022. In 2022, real estate losses totaled $397 million, but slipped to $145.2 million the following year.In a separate report released on April 16, after four straight quarters of decline, a higher percentage of mortgage loans had at least one issue which could contribute to wire and/or title fraud in the three months ended March 31, FundingShield found.On average, every problematic loan — whether residential, commercial or business purpose — had 2.5 issues, which is a new record, according to FundingShield. This indicates the lack of appropriate controls by closing agents and lenders to identify and fix issues, according to CEO Ike Suri.In the first quarter, 46.8% of mortgages in an almost $80 billion portfolio FundingShield examined were cited for potential wire or title fraud issues. This was up from 45.5% in the fourth quarter but down from 48% one year ago.During 2024, cyber-enabled fraud added up to $13.7 billion of losses, or 83% of the total, but just 38% of the complaints, IC3 said."While deepfakes, audio spoofing, and other forms of AI-enabled fraud indeed empower fraudsters, the truth is more frustrating," the CertifID report said. "The attacks that are winning aren't new or sophisticated; they're just effective," hitting on a similar theme to the FundingShield report.BEC works because it relies on trust, routine and some distraction, including a spoofed email and a rushed wire transfer. The fraudsters keep using this tactic precisely because it is working. "For the teams that want to combat this threat, that means refocusing on the basics," Looney and O'Neill said.For the sixth consecutive quarter, FundingShield found wire-related errors in more than 8% of transactions during the period, at 8.4%. But more importantly, record levels for closing protection letter validation errors were reached in the first quarter in 10.8% of transactions; this involved data points such as borrower information, vesting/vested parties, non-borrowing parties on title, property addresses, borrower information and more. The government-sponsored enterprises, likely prodded by Federal Housing Finance Agency Director Bill Pulte, are making an additional focus on closing agent risk management for loan sellers, the commentary to the report from Suri said."FundingShield received requests for data from many of its lender clients that sell to Fannie Mae who recently underwent Mortgage Origination Risk Assessment Audits during Q1 2025," Suri said. "Fannie Mae had reached out to our clients, asking them to confirm the risk framework, measurement, and tracking the lender used to conduct transaction-level risk reviews of the closing agent, the title insurance firm, and transaction-specific details at the time of closing on each loan sold to them."The FHFA was looking at whether the lenders did the check at the time the loan closed and it was transaction-specific, rather than just using a list of approved agents which was updated "'X' days, months or years ago," Suri said.The CertifID report compared fraud prevention to mastering the basics, using a play designed by Vince Lombardi called the Packer Sweep as the example. Much like the Tush Push run by the Super Bowl Champion Philadelphia Eagles, even though the defense knows it is coming, it is hard to stop.Lombardi would drill the Packer Sweep over and over. "We will run it, and we will run it again and again, until everybody in the stadium knows we're going to run it — and we'll still gain four yards," the CertifID report quoted Lombardi as saying."Business email compromise isn't new or clever," O'Neill and Looney said. "Yet many organizations still haven't mastered their basic plays to get yards on the fraudsters."

Pennymac's CEO David Spector doesn't agree with limiting mortgage broker choice. The company's executive believes brokers should be free to work with any wholesale lender they choose."It's really unfortunate that we're in a situation where brokers are having to choose who they're going to be aligned with at the expense of somebody else," Spector said. "I look at what's going on in the marketplace and I'm just trying to help brokers not become loan officers beholden to one broker or direct lender."Spector argues Pennymac's infrastructure and technology make it a worthy opponent to United Wholesale Mortgage and Rocket Pro, and with time the CEO sees his company taking the number one slot in the wholesale space. In differentiating itself from competitors, Spector claims that unlike UWM and Rocket, Pennymac does not sell the servicing of brokers and instead keeps these loans in-house. "The retention of servicing is vitally important because the broker cares about their customer and the fact that the customer has a loan closed and the servicing immediately transfers, creates a little bit of disruption that brokers will avoid with Pennymac," he said.The CEO said that, going forward, Pennymac will be more vocal in marketing itself to both borrowers and prospective mortgage broker partners. One of the first steps the company has taken to raise its public profile is sponsoring the 2026 and 2028 U.S. Olympic and Paralympic teams.Read on for more insights from National Mortgage News' interview with Pennymac's executive.

Al Drago/Bloomberg Two former Democratic members of the National Credit Union Administration are suing senior leaders of the Trump Administration after they were fired by President Donal Trump in April, a suit whose outcome could have implications for removal protections at other independent agency boards, including the Federal Reserve and Federal Deposit Insurance Corp. The suit, filed Monday in the U.S. District Court for the District of Columbia by former NCUA board members Todd Harper and Tanya Otsuka, argues that President Trump, Treasury Secretary Scott Bessent, NCUA executive director Larry Fazio, remaining Republican Board member Kyle Hauptman and White House staffer Trent Morse exceeded statutory authority and threatened financial stability by politicizing the previously bipartisan agency body."The President terminated the terms of Plaintiffs Todd M. Harper and Tanya F. Otsuka in the middle of their fixed terms as members of the Board of the NCUA, without explanation and without any cause," the lawsuit said. "That termination disregards the protections Congress established to preserve the Board's independence and threatens the integrity of a vital federal financial regulator."The Treasury did not immediately respond to American Banker's requests for comment on the lawsuit. The NCUA declined to comment. NCUA, the credit union industry's deposit insurer, was established in 1970 through the Federal Credit Union Act as an independent agency. While the agency was initially set up with a single director, the 1978 Credit Union Modernization Act modified the agency to consist of a three-member board whose members serve staggered six-year terms with no more than two members belonging to the same political party. NCUA manages over 4,000 credit unions around the country, which hold over $2 trillion of assets. The administration's decision to remove the two Democratic board members ahead of their terms' expiration is the first time a president has removed an NCUA board member since the board's modern structure was established in 1978."In 1978, Congress clearly determined that a credit union watchdog operating with three members — instead of a single administrator — was the better way to insure deposits, protect consumers, charter new credit unions, and maintain the system's safety and soundness," Harper argued in a statement on the lawsuit Monday. "This structure promotes continuity, expertise and independence. Dismantling the existing system of checks and balances established by Congress to protect credit union consumers and their deposits, as well as taxpayers from losses to the Share Insurance Fund, is risky, ill-advised and imprudent."Monday's lawsuit asks the court to rule on the legality of Harper and Otsuka's removals and whether or not their termination notification sent to them by the administration is legally valid. The suit also calls for the judge to halt any official action at NCUA taken by the administration in the removed members' absence and provide court fees, relief, wages and benefits to the removed members if the court deems they were improperly removed. Former board member Todd Harper was appointed by Trump in 2019 and he later served as the NCUA board Chair under President Biden, after being nominated to a six-year term. Tanya Otsuka, who was the first Asian American to join the board, was nominated by President Biden in 2023 and unanimously confirmed. Harper and Otsuka's terms would have extended until 2027 and 2029, respectively, before their removals in April. At the time of their removal, the two members were sent identically worded emails informing them their positions were terminated immediately and did not mention reasons for the firings. The legal filing states that the President overstepped his statutory authority when he removed the members without cause, and added that their removal leaves the board — which now consists of chair Kyle S. Hauptman, who is also a defendant in the suit — without a quorum, hindering NCUA's ability to fulfill its statutory responsibilities. The plaintiffs cite a Supreme Court precedent established in the 1935 case Humphrey's Executor v. United States, which provided members of multimember independent agency boards removal protections. "Congress created the NCUA Board to be independent, because whether your money is safe in a credit union shouldn't have anything to do with politics. This administration's actions fundamentally undermine the NCUA's independence and its ability to protect our financial system [and] has implications for other independent financial regulators like the FDIC and the Federal Reserve," Otsuka said. "Everyone who puts their money in a credit union or a bank has a stake in this lawsuit."In Humphrey's Executor, the Supreme court ruled the President could not remove members of boards at independent agencies — specifically the Federal Trade Commission in that case. The precedent established in 1935 has been interpreted to apply to all such boards at independent agencies, but President Trump has been challenging the doctrine for some time. The President is already facing a similar legal challenge after he fired FTC board members Rebecca Kelly Slaughter and Alvaro M. Bedoya in March.The lawsuit also argues that the lack of quorum on the board makes any actions taken by the defendants illegal, citing the 1996 Swan v. Clinton case in which the D.C. Circuit court ruled NCUA board members are removable only for cause and that the 1978 restructuring of the board supported an "inference of removal protection" during board members terms. "In creating the NCUA, the FDIC and the Federal Reserve, Congress adopted organizational protections to insulate financial institution regulation and supervision from partisan politics and preserve the integrity of our financial markets," said Harper on Monday. "These actions could pave the way to the consolidated regulation of credit unions and banks and lead to the demise of our nation's vibrant credit union movement focused on its mission of meeting the credit and savings needs of members, especially those of modest means."

President Donald Trump suggested Sunday that his sweeping tariffs would help him reduce income taxes for people making less than $200,000 a year, as public anxiety rises over his economic agenda.Trump has previously argued that tariff revenue could replace income taxes, though economists have questioned those claims."When Tariffs cut in, many people's Income Taxes will be substantially reduced, maybe even completely eliminated. Focus will be on people making less than $200,000 a year," he said Sunday on his Truth Social network.Trump's tariff stances have roiled markets, led to fears of higher prices for Americans, prompted recession warnings and sparked bouts of concern about the U.S.'s haven status — a fear that Treasury Secretary Scott Bessent questioned in a Sunday interview."I don't think that this is necessarily losing confidence," Bessent said on ABC's This Week. "Anything that happens over a two-week, one-month window can be either statistical noise or market noise."Trump's administration is "setting the fundamentals" for investors to know "that the U.S. government bond market is the safest and soundest in the world," he said."We're going to make a lot of money, and we're going to cut taxes for the people of this country" through income from tariffs, Trump said on his way back to Washington from his golf club in New Jersey. "It'll take a little while before we do that," he added.For now, a CBS News poll released Sunday said 69% of Americans believe the Trump administration wasn't focused enough on lowering prices. Approval of Trump's handling of the economy in the poll declined to 42% compared with 51% in early March. Trump wants to extend reductions in income taxes that were approved in 2017 during his first presidency, many of which are due to expire at the end of 2025. He also has proposed expanding tax breaks — including by exempting workers' tips and social security earnings — while slashing the corporate tax rate to 15% from 21%. Trade dealsBessent said the administration is working on bilateral trade deals after Trump imposed so-called reciprocal tariffs on many countries in early April, which he subsequently paused for 90 days for all affected countries except China.The effort involves 17 key trading partners, not including China, Bessent said on ABC."We have a process in place, over the next 90 days, to negotiate with them," he said. "Some of those are moving along very well, especially with the Asian countries."Bessent reiterated the administration's argument that Beijing will be forced to the negotiating table because China can't sustain Trump's latest US tariff level of 145% on Chinese goods."Their business model is predicated on selling cheap, subsidized goods to the U.S.," Bessent said "And if there's a sudden stop in that, they will have a sudden stop in the economy, so they will negotiate."Trump has said the U.S. is talking with China on trade, which Beijing has denied. Bessent said he didn't know if Trump and Xi had spoken. He said he saw his Chinese counterparts when the world's financial officials gathered in Washington last week "but it was more on the traditional things like financial stability, global economic early warnings."Bessent said he thinks there is a path forward for China talks, starting with "a de-escalation" followed by an "agreement in principle." "A trade deal can take months, but an agreement in principle and the good behavior and staying within the parameters of the deal by our trading partners can keep the tariffs there from ratcheting back to the maximum level," he said.In Congress, the framework for a bill that Republicans agreed on in early April would allow for as much as $5.3 trillion in tax cuts over a decade. Trump trade advisor Peter Navarro has suggested Trump's tariffs will generate more revenue than that, while most economists project that they will bring in significantly less. 

The "Sell America" trade that gripped markets this month has left a potentially lasting dent in investors' willingness to hold the US government's longest-maturity debt, a mainstay of its deficit-financing toolkit.For bond managers at BlackRock Inc., Brandywine Global Investment Management and Vanguard Group Inc., the problem is that as President Donald Trump approaches his 100th day in office, he has generated a growing list of unknowns, forcing traders to focus on a broad array of issues beyond just the likely path of interest rates.To name a few: What do Trump's trade war, tax-cut agenda and scattergun policymaking mean for already weakening economic growth, sticky inflation and massive fiscal shortfalls? Will he again threaten to fire Federal Reserve Chair Jerome Powell? Is he actively seeking a weaker dollar?The result is a heightened notion of risk that's leading bond buyers to question the traditional haven status of US government debt and require higher yields on longer maturities. By one measure, that added cushion, which traders dub the term premium, is around the highest since 2014. "We're in a new world order," said Jack McIntyre, who with his team oversees $63 billion at Brandywine. "Even if Trump backpedals on the tariffs, I think uncertainty levels are still going to be elevated. So that means term premium stays elevated."Of course, some of the angst around Treasuries could well fade should Trump strike trade deals or continue to signal that he's wary of a full-fledged rout in bonds. But as Treasury Secretary Scott Bessent prepares to unveil how the government plans to fund the latest borrowing on Wednesday, he faces the added task of calming investors grappling with a growing host of concerns. All the uncertainty is leading McIntyre to stay roughly neutral to his benchmark. It's also changing how he sees the long bond behaving in the event of an economic slowdown. In a nutshell, he says yields would remain higher than he'd otherwise expect.No FlightIt's not as if investors are fleeing Treasuries wholesale. JPMorgan Asset Management sees them as a better bet than European government bonds. And this month's 30-year Treasury auction showed that there's appetite for the maturity — at the right price. The result allayed fears of a buyers' strike, and long-bond yields have eased back from their recent peak. Sentiment, however, remains fragile. For example, while Trump last week said he had "no intention" of firing Powell, his criticism of the Fed chair leaves some investors worrying about the central bank's independence. Pacific Investment Management Co., which likened this month's episode of triple-weakening in the dollar, US stocks and Treasuries to something one might expect in emerging markets, has also been buying Treasuries. But it's been limiting how far out the yield curve it goes. The $2 trillion bond manager currently favors maturities from five to 10 years.There are other signs of investor anxiety around the long bond: After adjusting for inflation, 30-year yields this month reached the highest since the financial crisis. Although they've since receded, they remain higher than when Trump announced his plan for sweeping tariffs on April 2. Yields on US 30-year nominal debt were poised to snap a four-day run of declines, rising four basis points to 4.74% on Monday.For Vanguard, there's scope for the extra insurance being built into longer maturities to swell further, especially if widening federal deficits lead to more bond issuance."Term premium is no longer low, but you can't make a case that it's historically high," said Rebecca Venter, senior fixed-income product manager at the roughly $10 trillion asset manager. "When you see the fiscal risks in the background, term premium can build over time." Vanguard expects US growth below 1% this year, which would be the weakest since 2020, and Venter said "that does not bode well for the US budget deficit."Next ChapterWhen the Treasury releases its latest bond issuance plans this week, Wall Street expects steady auction sizes over the next three months. With Republicans debating how to pay for their tax-cut bill, the fiscal story is the next chapter for the term premium. One reason a fatter premium matters is that every fraction of a percentage point in extra yield counts for the government at a time when it's paying upwards of $1 trillion per year to service its debt.At BlackRock, which oversees almost $12 trillion, the broad slide across US asset classes earlier this month magnified its concerns around the government's finances post-pandemic, and how US bonds were vulnerable to shifting investor confidence.The selloff in US markets "suggests a desire for more compensation for risk and brought that fragile equilibrium into sharp focus," BlackRock Investment Institute said in a report. George Catrambone at DWS Americas sees how the term premium might recede, but only so far, given all the shifting signals out of the White House on tariffs and other policies. "Once greater clarity is given and agreements are reached, I'd expect term premium to abate," said the firm's head of fixed income. "Although not back to the lows of the past decade as fiscal will be an ever-present concern."

The Top Producers Survey is open to individual loan officers who work at depository, nonbank and mortgage brokerage firms in the United States. The Top Producers survey has been in existence for 27 years and is the successor to those conducted by Broker magazine and Origination News (former National Mortgage News sister publications) as well as Mortgage Originator Magazine, which Arizent owns the content rights to.Submissions were made by the participants or their representatives. The information was verified to the best of our ability but National Mortgage News cannot claim the absolute veracity of the data. Some entries might have been removed due to submission errors or following the check on the data.Check back on National Mortgage News for Top Producers 150-51, 50-1 and the full list to be published in the following days. Additional cuts of data, including top women, top originators by region and by loan type will be published shortly thereafter.

Digital mortgage loan closings have become ubiquitous, if not quite universal, in the real estate finance business as 90% of lenders state they offer some form of the process to their borrowers.That is an improvement from 74% in 2023, according to a study conducted by National Mortgage News and its parent company Arizent for Snapdocs of 100 lenders in February and March. Snapdocs was not identified as the sponsor of the research.Digital closings have been around for a long time, noted Todd Maki, vice president of customer experience at Snapdocs. Garth Graham, now of Stratmor Group, did a pilot digital closing on his own mortgage in 1999, Maki pointed out. So even though they have been possible for several decades, digital closings are still in their growth phase, he said. The needs created during the pandemic so real estate transactions could take place has served as a catalyst for further growth.In looking at the survey results, "The biggest surprise is the gap in what's being offered [in terms of digital closings] to the level of adoption in the industry," Maki said. It is also a matter of being able to meet customer expectations at a time when other parts of the economy are digitizing.Of the lenders which do offer digital closings, several have multiple formats available. The most cited, by 61% of the respondents, is for a hybrid closing combined with the use of an e-note, with 55% have a stand-alone hybrid closing available. Remote online notary was available at 25% while a "wet" closing was used by 37%; in this scenario, the borrower receives and reviews the documents electronically but a physical meeting takes place to sign and notarize them.In the 2023 survey, 44% of lenders had e-note capabilities, while 11% offered RON. On the other hand, 26% had no digital offerings while 53% of the respondents' had a wet closing process.Still, actual usage of digital closing proceedings still lagged in popularity. A minority percentage, 31%, confirmed that six-in-10 or more of their loans closed electronically; at the 80% mark, the share slipped to 14%."Lenders who are not achieving high adoption levels often miss out on the full value of their investment," a comment in the report added.Cost was the biggest barrier to adoption of e-closings, cited by half of all respondents. Meanwhile, 42% found the lack of adoption by other stakeholders in the process was an impediment, followed by 41% who claimed "issues with digital closing technology."Yet other studies have shown that eClosings actually reduce transaction costs. A 2022 finding from Notarize put the cost savings for lenders at $444 per loan.Still, even with the cost conundrum, 60% of the non-digital lenders plan to adopt some form of this technology in the future.For 2025, 48% of the lenders said automation and artificial intelligence integration were their No. 1 priority in their general technology goals."There are different types of AI that are appropriate for different tasks," Maki said. "Particularly in mortgage lending, particularly in closing related and back office tasks, the accuracy and precision of AI models needs to be extremely high because we're dealing with transactions where errors can prevent a successful close [and] can cost significant sums of money [and more], which is why there's such a focus in the industry on ensuring accuracy of documents right and reducing errors."Snapdocs, for example, has a variety of AI technologies as part of its offerings, including those that help to reduce the "stare and compare" for loan documents, reducing errors.When it comes to digital closings, 49% wanted to have an increased application of the hybrid process in their portfolio. Next on the list, implementing a new digital closing technology was one of the primary goals for 44%. Maximizing e-note adoption and offering RON were each named by 41% of those asked.

Digital mortgage loan closings have become ubiquitous, if not quite universal, in the real estate finance business as 90% of lenders state they offer some form of the process to their borrowers.That is an improvement from 74% in 2023, according to a study conducted by National Mortgage News and its parent company Arizent for Snapdocs of 100 lenders in February and March. Snapdocs was not identified as the sponsor of the research.Digital closings have been around for a long time, noted Todd Maki, vice president of customer experience at Snapdocs. Garth Graham, now of Stratmor Group, did a pilot digital closing on his own mortgage in 1999, Maki pointed out. So even though they have been possible for several decades, digital closings are still in their growth phase, he said. The needs created during the pandemic so real estate transactions could take place has served as a catalyst for further growth.In looking at the survey results, "The biggest surprise is the gap in what's being offered [in terms of digital closings] to the level of adoption in the industry," Maki said. It is also a matter of being able to meet customer expectations at a time when other parts of the economy are digitizing.Of the lenders which do offer digital closings, several have multiple formats available. The most cited, by 61% of the respondents, is for a hybrid closing combined with the use of an e-note, with 55% have a stand-alone hybrid closing available. Remote online notary was available at 25% while a "wet" closing was used by 37%; in this scenario, the borrower receives and reviews the documents electronically but a physical meeting takes place to sign and notarize them.In the 2023 survey, 44% of lenders had e-note capabilities, while 11% offered RON. On the other hand, 26% had no digital offerings while 53% of the respondents' had a wet closing process.Still, actual usage of digital closing proceedings still lagged in popularity. A minority percentage, 31%, confirmed that six-in-10 or more of their loans closed electronically; at the 80% mark, the share slipped to 14%."Lenders who are not achieving high adoption levels often miss out on the full value of their investment," a comment in the report added.Cost was the biggest barrier to adoption of e-closings, cited by half of all respondents. Meanwhile, 42% found the lack of adoption by other stakeholders in the process was an impediment, followed by 41% who claimed "issues with digital closing technology."Yet other studies have shown that eClosings actually reduce transaction costs. A 2022 finding from Notarize put the cost savings for lenders at $444 per loan.Still, even with the cost conundrum, 60% of the non-digital lenders plan to adopt some form of this technology in the future.For 2025, 48% of the lenders said automation and artificial intelligence integration were their No. 1 priority in their general technology goals."There are different types of AI that are appropriate for different tasks," Maki said. "Particularly in mortgage lending, particularly in closing related and back office tasks, the accuracy and precision of AI models needs to be extremely high because we're dealing with transactions where errors can prevent a successful close [and] can cost significant sums of money [and more], which is why there's such a focus in the industry on ensuring accuracy of documents right and reducing errors."Snapdocs, for example, has a variety of AI technologies as part of its offerings, including those that help to reduce the "stare and compare" for loan documents, reducing errors.When it comes to digital closings, 49% wanted to have an increased application of the hybrid process in their portfolio. Next on the list, implementing a new digital closing technology was one of the primary goals for 44%. Maximizing e-note adoption and offering RON were each named by 41% of those asked.

Maryland has relieved the most pressing industry worries about recent licensing added for mortgage assignees with a new exemption for some entities. But certain secondary market participants should still conduct legal reviews of whether they have additional responsibilities.Gov. Wes Moore signed legislation this week specifically exempting passive mortgage-backed securities trusts from the new licensing set to be enforced starting this summer. The move is significant because the trust component of the licensing mandate was the biggest concern for the industry, said Stephen Ornstein, an attorney at Alston & Bird, and author of a report on the new law."The urgent issue was not having to get trusts licensed. In the residential lending space it's unheard of," he told this publication.What's still at stakeThe trust exemption added under Maryland's new Secondary Market Stability Act doesn't mean the industry can ignore the new licensing enforcement that's been pending altogether.The exemption that Moore signed into law turned out to be narrower than an earlier version, according to a report by Krista Cooley, Francis Doorley, and Daniel Pearson, all of whom are attorneys at law firm Mayer Brown.The exemption is specifically for "a trust that acquires or is assigned a mortgage loan and does not make mortgage loans, act as a mortgage broker or mortgage servicer or engage in the servicing of mortgage loans," they said.State-level licensing for mortgage assignees that are not trusts does exist in other jurisdictions is not consistent throughout all 50 jurisdictions. State servicing licensure beyond traditional bank regulation has been spreading throughout the United States for roughly the last decade.Industry reactionA coalition of housing and securities groups that included the Structured Finance Association had responded to the inclusion of MBS trusts in Maryland licensing earlier this year with alarm upon seeing it interrupt both loan purchases and foreclosure by their members.The coalition had argued that the court decision that led to the Maryland Office of Financial Regulation's licensing action should not have been so broadly interpreted.The licensing guidance originally stemmed from a state appeals-court decision in the lawsuit Estate of Brown v. Ward in which a home-equity line of credit foreclosure got dismissed because the assignee, which was as trust, did not have an installment loan license.Maryland's Office of Financial Regulation interpreted lender responsibilities to extend even further to even closed-end first mortgages in response to the lawsuit."The Maryland legislation exempts passive trusts holding Maryland mortgages from the licensing requirements promulgated via emergency regulation by the state's Office of Financial regulation. That represents a positive development for the Maryland mortgage market, and resolves the principal concerns of secondary market participants," said Dallin Merrill, director of MBS policy at the Structured Finance Association, in an email."At the same time, the expanded licensing requirements will now apply to ownership structures other than passive trusts. And there are still some open questions about the applicability of the licensing regulations in other contexts. We expect to continue to work with the Maryland office of financial regulation to resolve outstanding concerns and questions," he added.Private mortgage market ramificationsThe new exemption came on top of an earlier clarification in which the OFR indicated government-related instrumentalities like Fannie Mae and Freddie Mac were not subject to the licensing requirement.Maryland had added that exemption earlier this year, according to a report by law firm Sheppard Mullin.That development was significant because government-related entities like Fannie, Freddie and Ginnie Mae currently play a central role in the U.S. mortgage market.A broader exemption for trusts in the smaller private MBS market also was important given that the Trump administration has been generally scaling back the public sector. There also are plans to eventually release Fannie and Freddie from government conservatorship.

Stefani Reynolds/Bloomberg Liquidity constraints in both stock and bond markets could jeopardize financial stability, the Federal Reserve warned on Friday.In its latest financial stability report, the central bank found that liquidity — which measures the ease of buying and selling assets — was at or near historic lows for both equities and U.S. Treasuries, raising the prospect of price volatility and market destabilization. Lackluster liquidity is not necessarily a new development. The Fed has been flagging constraints in the Treasury market in its stability reports for several years. Likewise, data in the latest report, released Friday afternoon, shows equity market liquidity has been below its long-run average since 2018, though it has been on a steeper downward trajectory since the beginning of this year.The report, which includes data collected up to the close of business on April 11, notes that both Treasury and stock markets remained functional in the immediate aftermath of President Donald Trump's April 2 tariff announcement."In early April, yields on Treasury securities exhibited considerable volatility, which contributed to a deterioration in market liquidity," the report states. "Nonetheless, amid this increase in volatility, trading remained orderly, and markets continued to function without serious disruption."Despite the sell-offs that followed the tariff rollout, stocks and other financial assets remain priced notably above their fundamental values, according to the Fed's report, with values exceeding 12-month profit forecasts. Similarly, residential real estate values — measured in relation to 10-year Treasuries and based on rental equivalencies — were also elevated, nearing peaks not seen since before the subprime mortgage crisis.Commercial real estate prices, on the other hand, showed signs of stabilizing albeit at levels that are low by historical standards. The report also flagged the potential for a wave of refinancing activity that could necessitate substantial write-downs. "Refinancing risk remained a potential vulnerability for CRE prices. Industry estimates suggest that about 20 percent of all outstanding CRE loans, just shy of $1 trillion, will mature in 2025," the report states.Another area of notable risk in the biannual report was the use of leverage by financial institutions. Specifically, it pointed to hedge funds, which are financing their investments at a historically high rate — largely driven by borrowing done by a handful of very large firms. The report noted that leverage among this group might have been reduced materially in recent weeks as hedge funds involved in basis trades have unwound their positions to deleverage their portfolios. The report stated that leverage within the banking system is low, adding that increased levels of capital have made banks a source of strength for the broader financial system. Household and business balance sheets were also in good shape, with collective borrowing by those two groups trending toward historic lows relative to gross domestic product.As is customary, the report also included results of a survey conducted by the Federal Reserve Bank of New York on the risks in financial market that participants are most concerned about. Global trade was far and away viewed as the biggest concern, with 73% of respondents citing it, up from 33% in the prior survey. The next most cited concern was the national debt at 50%, down from 54% in November, when it was seen as the top threat. Half of respondents listed policy uncertainty, while 41% said persistent inflation and 36% cited a risk asset price correction. Treasury market function rounded out the top six with 27% of respondents including it as a chief concern, up from 17% last fall. The sample size of the survey is small, consisting of 22 contacts at broker-dealers, investment funds, research and advisory firms and academic institutions. Most of the responses were collected before Trump's April 2 tariff announcement.