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Office of Management and Budget Director Russell Vought.Bloomberg News (Bloomberg) — A federal judge ordered the Trump administration to pause plans to fire thousands of federal workers during the government shutdown, just moments after White House Budget Director Russell Vought said he expects layoffs to exceed more than 10,000 people. The ruling on Wednesday from US District Judge Susan Illston in San Francisco follows layoff notices that have gone out to more than 4,100 federal employees since last week.The order isn't a final decision on the merits of the case. It means that more than two dozen federal agencies cannot send out new layoff notices if they involve programs that include labor union members who sued. The decision also means the government must halt action on notices that already went out while the judge weighs whether to impose a longer-term block.More than 4,000 federal workers have so far lost their jobs — a number Vought called "just a snapshot, and I think it'll get much higher." "I think we'll probably end up being north of 10,000," Vought said before the ruling. The White House budget office on Tuesday vowed to continue reductions in force — the government's term for layoffs of federal workers. The administration has not detailed which agencies or jobs could be affected in future rounds of layoffs."We're going to keep those RIFs rolling throughout this shutdown, because we think it's important to stay on offense for the American taxpayer," Vought told the Charlie Kirk show.The White House has escalated the standoff with Democrats over federal spending by moving to terminate some federal workers, instead of just furloughing them as the shutdown continues. Republicans say the layoffs are necessary, an assertion that budget experts and Democrats dispute because workers aren't paid during the shutdown.Democrats have argued that the administration cannot spend resources during a shutdown to fire people because it isn't essential government work. "We believe that these firings are illegal, violate the law and will be reversed, either congressionally or by the courts," House Democratic leader Hakeem Jeffries told reporters. Trump also said he plans to release a list of "Democrat" programs he intends to cut as the shutdown — now in its 15th day — continues. The White House has seized the federal budget as a tool to make the shutdown as painful as possible for Democrats. Republicans in Congress have largely ceded their power of the purse to the executive branch, allowing Trump to go much further than any other modern president during a shutdown.The mass firings are broadly unpopular with voters, who continue to hold Trump and Republicans more responsible for the shutdown than Democrats. An Economist/YouGov poll conducted Oct. 10-13 found 54% opposed the layoffs, compared to 29% in support.Vought also used the interview to criticize the Consumer Financial Protection Bureau, where he serves as the acting head. The consumer protection agency, which is the brainchild of Democratic Senator Elizabeth Warren, was largely dismantled earlier this year as part of Elon Musk's Department of Government Efficiency effort."This agency, all they want to do is weaponize the tools of financial laws against, basically, small mom and pop lenders and other small financial institutions," Vought said.

Loandepot is raising serious accusations against West Capital Lending, accusing the brokerage of raiding its workforce, stealing its leads and skirting labor laws in California. The Irvine, California-based giant sued its city neighbor last week in state court, seeking unspecified damages for bad behavior allegedly involving hundreds of loan officers. The complaint stems from Loandepot's discovery last year that the competitor was in possession of a swath of its customer data. Amid numerous allegations, the suit's major claim suggests WCL has misclassified over 600 originators as independent contractors, violating lending laws, skirting taxes and giving it a competitive advantage in lower overhead costs. "A fair and balanced playing field is the cornerstone of the free enterprise system," a spokesperson for Loandepot said in a statement. "As our complaint alleges in detail, West Capital Lending has manipulated fair lending, privacy and tax laws and regulations to create an unfair competitive advantage. We plan to pursue every legal remedy available to demand accountability and fairness."The Irvine-based brokerage's co-founders, named as defendants, didn't respond to messages seeking comment Wednesday. The lawsuit also mentions up to 50 unidentified individuals, who allegedly profited off stolen customer information. Although the companies operate in different channels, they're among the industry's most competitive. Loandepot is a retail and direct-to-consumer leader, whereas WCL is a high-volume brokerage. The smaller firm, founded in 2016, is also a top broker partner to Rocket Cos., according to the lawsuit and a recent news article. Rocket, which was mentioned as WCL's partner several times throughout the lawsuit, was not accused of wrongdoing and didn't return a request for comment Wednesday. How a customer list sparked the larger lawsuitThe complaint originates from a WCL employee, James Williams, who notified Loandepot last June that the brokerage came into possession of Loandepot customers' nonpublic personal information. That sensitive data came via What's a Mortgage, a lead generation company Loandepot previously worked with. WCL came upon the Loandepot customer lists in question when it partnered with WAM. Williams' outreach began a correspondence between the lenders, in which Iskander and WCL co-founder Eric Hines allegedly told Loandepot the client lists were not uploaded to WCL servers. The brokerage returned a thumb drive of information to Loandepot earlier this month, but Loandepot claims WCL didn't take further requested steps to confirm it did not retain the information. Loandepot raises poaching, labor, LO Comp claims against the rivalThe 27-page lawsuit lays out a laundry list of WCL's alleged wrongdoings, including WCL's poaching of Loandepot originators with active leads. Those loans are quickly closed at the competitor, and WCL obscures the theft by having a different LO sign off on them, Loandepot claims. The lender and servicer estimates 178 of its originators have been poached, costing it billions of dollars in revenue. Loandepot also suggests WCL is misclassifying 625 of its California-based originators as independent contractors. Such action gives the brokerage a competitive advantage as it skirts labor laws and lowers overhead costs by shifting benefits, reimbursements and millions of dollars of total expenses onto its originators, the lawsuit states. The complaint explains at length licensing requirements in California, in which WCL's originators are registered with the Department of Real Estate as salespersons with MLO endorsements. Loandepot claims its LOs who have departed to the competitor shed their MLO licenses with California's Department of Financial Protection and Innovation to adhere to WCL's structure. Loandepot points to evidence that the originators should be classified as employees, including WCL classifying its non-California-based LOs as employees; and the brokerage selling leads to its originators for a profit, inconsistent with their supposed unaffiliated status. Loandepot in shorter language further accuses WCL of paying LOs based on a "lucrative split" of revenue, violating the loan officer compensation rule. More litigation for LoandepotA summons was issued to the defendants Friday, and a case management conference is scheduled for next March, according to the docket in the Superior Court of California in Orange County. The Irvine-based Loandepot is facing its own accusations of violating LO comp rules, in a lawsuit from borrowers who say they were steered to higher rates. The company has denied those accusations as the sides have traded filings in recent weeks.

Figure Technology Solutions has introduced a new platform for debt-service coverage ratio originations aimed to support growth of nonqualified mortgages as well as the company's own blockchain-based marketplace. The fintech's lending platform aims to provide quicker access to capital for real estate investors, utilizing artificial intelligence and blockchain technologies to streamline underwriting and funding for mortgages based off of property cash flow. Along with the rollout, Figure also announced the DSCR platform's first two embedded broker lending partners, West Capital Lending and Axen Mortgage. "This launch shows the power of combining AI automation with blockchain standardization to eliminate the friction that has slowed DSCR lending for years," said Anthony Stratis, vice president, lending partnerships at Figure, in a press release. The New York-based fintech claimed the new platform has the ability to shorten processing times for DSCR originations between application and funding to as few as five days — a reduction of 80% of more from the current 21-to-30 day average — thanks to proprietary technology that can replace manual underwriting review. AI-backed automation will also lower costs of origination by as much as 80%, it said. The company also designed the platform that will serve brokers, lenders and investors to provide fraud prevention and achieve savings through scale, Stratis said.Along with artificial intelligence-assisted underwriting, the DSCR platform also employs optical character recognition for document review, automated valuation models for refinance loans below the $400,000 threshold and proprietary rental income verification technology. Figure's existing lending partners can add DSCR lending through application programing interfaces, it added.  Eric Hines, co-founder of West Capital Lending, said that his company signed on to the platform because Figure's automated approach fit in with its practice of backing companies "that are reshaping financial services with technology."Growth of the non-QM marketThe new launch comes as the segment of the market where DSCR loans fall under enters an expected expansion period, industry leaders have frequently said. Securitization data from Morningstar DBRS showed non-QM activity ahead of 2024's pace through the first half of the year, with growth likely to continue through the final two quarters. Potential changes on the regulatory front could also provide momentum going forward. Along with DSCR transactions, the non-QM sector also includes bank statement loans and other financing for borrowers with nontraditional incomes, lending to consumers with little or troubled financial histories, and several other types of non-standard mortgages.Between 2019 and 2022, the share of DSCR loans grew from 22% to 50% of total non-QM mortgage-backed securities, according to private lending platform Baseline Financial Technologies. Such loans are based on the projected income from a rental property relative to the debt incurred. They may be used to finance investment units turned into traditional single-family rentals, and the mortgages also attract interest from business owners looking to offer them as short-term vacation properties.Figure, which went public in the third quarter this year, has long been an advocate of blockchain technology and employs it in private credit trading. The company is behind the development of DART, or Digital Asset Registration Technologies, the platform that allows companies to file their loans on the system and expedite electronic promissory note sales in the secondary market. 

Bloomberg News Key insight: Fed Governor Stephan Miran, one of the chief architects of President Donald Trump's trade policies, said China's move last week to limit rare earth exports, changed his "sanguine" outlook on economic growth.Expert quote: "It's about where the balance of risks has moved and risks exist now that didn't exist a week ago or a month ago," said Fed Gov. Miran.What's at stake: Previous concerns about how tariffs might affect inflation led the Federal Open Market Committee to hesitate in cutting short-term interest rates. Federal Reserve Governor Stephan Miran said Wednesday that rising trade tensions with China strengthen the case for the central bank to move more quickly toward a neutral policy stance.Speaking at the CNBC Invest in America Forum, Miran said China's decision last week to curb rare earth exports has shifted his economic outlook."Deals have been made for most of our large trading partners and then last week China decided that the deals that had been made earlier in the year … no longer bound to them," he said. "I had been operating on the assumption that the uncertainty had dissipated, and therefore I felt more sanguine about some aspects of the growth outlook and now potentially this is back."Miran, who is one of the chief architects of President Donald Trump's trade policies, said potential downside risks to economic growth necessitate policy adjustments."It is early to conclude that things are actually changing right," said Miran. "But it's about where the balance of risks is moved, right, and risks exist now that didn't exist a week ago, that didn't exist a month ago."The Chinese government announced Oct. 9 that it would restrict rare earth exports, specifically targeting their use in foreign militaries. In response, Trump threatened to impose a 100% tariff on Chinese imports.Miran said the shift in risks makes it "even more urgent that we get to a more neutral place in policy quickly, as opposed to waiting for downside data to materialize."He added that the Fed's current policy stance is "quite restrictive," making the economy more vulnerable to shocks. "If you hit the economy with a shock when policy is very restrictive, the economy will react differently than it would if policy was not as restrictive," Miran said. "It's even more important now than a week ago, that we move quickly to a more neutral stance."In earlier remarks, Miran argued that monetary policy is significantly tighter than widely assumed, a view that supports a course change he has previously advocated. In a past speech, he suggested that the federal funds rate should be near 2%, about half its current level.Previous concerns about how tariffs might affect inflation led the Federal Open Market Committee to hesitate in cutting short-term interest rates. It moved to slash rates by 25 basis points in September following signs of a cooling labor market. During the CNBC interview Wednesday, Miran said monetary policy should be forward-looking, which he believes is not currently the case."Monetary policy has to be forecast dependent and not data dependent," said Miran. "I think that the data can be quite backward looking. You want to be making policy where you think prices are going to be a year from now."He added that in his forecast, inflation is likely to ease next year, particularly due to disinflation in housing services, pointing to lags in market rent data."Shelter inflation, which is the largest component of inflation, it's about 45% of core CPI … I see a lot of disinflation coming from there," he said.Miran also noted that a decrease in migration could increase the available housing supply."If you took 10 million people out of the country and air dropped them somewhere else, you wouldn't magically have 10 million fewer houses," Miran said. "The supply is relatively fixed, and so there's a really strong feed through into inflation from there."In a separate appearance later Wednesday, Miran said he supports ending quantitative tightening in the near future."I don't know what the marginal benefit of additional reductions from here are," commented Miran, speaking at a Nomura Research Forum. "I also think that the size of the balance sheet is downstream of the regulatory environment, and what we should do is concentrate on getting the regulatory environment right, and then we should figure out what the right size of balance sheet is."A day prior, Federal Reserve Chair Jerome Powell said the central bank's "long-stated plan" is to stop balance sheet runoff, which is something that might be reached in the coming months.Since June 2022, the Fed has reduced its balance sheet by $2.2 trillion, from 35% to just under 22% of GDP.

During a National Association for Business Economics (NABE) conference in Philadelphia, Fed Chair Jerome Powell admitted they maybe went too far buying up mortgage-backed securities a few years ago.The Fed’s controversial purchases of MBS led to the lowest mortgage rates on record, with the 30-year fixed falling to 2.65% in early 2021.While the move was apparently intended to “ease broader financial conditions” we all know it led to a massive home buying frenzy.And it came at a time when housing affordability was already at a tipping point.But instead of easing conditions, it led to home prices roughly 50% higher in many markets nationwide, creating an even bigger housing crisis.Should the Fed Have Stopped MBS Purchases Earlier?Powell told attendees at the NABE conference yesterday that they maybe shouldn’t have carried out that final round of Quantitative Easing (QE) during the pandemic years.“With the clarity of hindsight, we could have and perhaps should have stopped asset purchases sooner,” he said.Adding that “Our real-time decisions were intended to serve as insurance against downside risks.”Now it would be unfair to go after Powell here because the pandemic was an unprecedented time and extreme measures were taken.But it does seem painfully obvious that we didn’t need record low mortgage rates during that time.The 30-year fixed was already quite low in early 2020, averaging around 3.75%. Speaking of hindsight, I’m sure anyone would jump at a rate that low today.In March 2020, the Fed announced its final round of QE, pledging to increase “its holdings of agency mortgage-backed securities by at least $200 billion.”The argument at the time was that agency MBS were “central to the flow of credit to households and businesses.”Sure, we should always have a functioning mortgage market, but did we need the 30-year fixed to go from 3.75% down to nearly 2.50%?Probably not, and with the benefit of hindsight, we know it created even bigger problems for the housing market.Aside from it arguably leading to significantly higher home prices (some markets went up another 50% or so), there’s also the matter of mortgage rate lock-in.Pandemic-Era Mortgage Savings Are Locked In for Another 25 YearsThe problem with artificially suppressing mortgage rates is that it’s not just temporary.The most common mortgage type in the United States is far and away the 30-year fixed-rate mortgage.As the name implies, you get a fixed interest rate for a full 30 years (the entire loan term).So the Fed’s purchases of MBS during 2020 that pushed rates to all-time lows by 2021 will remain until the year 2050, assuming the borrower keeps the mortgage.While it perhaps should have been temporary relief for homeowners (and home buyers), the Fed provided relief for the next 30 years.It’s great for the haves, but awful for the have nots.We now have a weird dynamic known as the mortgage rate lock-in effect, where the gap between outstanding rates and today’s market rates is huge.For example, a homeowner with a 2.75% 30-year fixed now faces a rate of say 6.25% or higher if they were to move.This locks them into their property, thereby exacerbating the housing market’s problems even more.There’s even fewer available homes for sale because there’s a lot less willingness to sell and face massive payment shock.Powell also said, “We would certainly not engage in mortgage-backed security purchases as a way of addressing, uh, mortgage rates or housing directly, that’s not what we do.”While also saying, “We do have, as I mentioned, a very large amount of mortgage-backed securities…”So he’s basically acknowledging that it’s not in their toolbox moving forward, even though it was in the past.They will NO LONGER buy MBS as it seems to have exacerbated problems already present in the housing market.In other words, don’t expect the Fed to help lower mortgage rates again. Look at typical market dynamics instead, like economic data for future rate movement.If you want lower mortgage rates, root for a slowing economy, not another Fed “bailout.”Just one caveat though. While Powell admitted it was a tool used in the past, though apparently not to lower mortgage rates, it probably won’t be in the future, at least with him at the helmThough that’s kind of the rub…would a new look Fed run back QE and let the housing market “cook” again?(photo: Kevin Dooley) 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)

The financial-technology firm Plaid Inc. is launching a credit-score service to provide banks and fintechs more detailed and timely information on consumers' financial health.Plaid — whose services connect banks and fintechs — is launching LendScore, a rating that will range from 1-99 with a particular focus on helping lenders serving subprime and near-prime consumers, according to a statement Wednesday. Real-time cash-flow data will be used to generate the ratings, unlike other scores that may present a delayed assessment of a consumer's creditworthiness. Traditional scores typically take into account factors such as payment history and age, as well as varieties of credit already utilized and to what extent. Cash-flow data is different, given its timeliness."If you get a new job and you have more income, yet your expenses stay the same, then you should qualify for a better loan rate," Plaid Chief Executive Officer Zach Perret said in an interview.Fair Isaac Corp. has until now faced virtually no competition for its well-known FICO scores. But VantageScore Solutions, a venture by the three major credit-reporting firms, recently gained a government stamp of approval to expand in the mortgage space, edging in on FICO's territory. Plaid said LendScore should be viewed as complementary to FICO scores and other traditional players in the space, but there could be room for disruption in the future.Plaid's advantage in introducing LendScore is the extensive consumer data the company already has access to, given its network connections with financial-services firms. At least half of all US consumers have encountered Plaid's technology in some way. Through those connections, Plaid's score can provide lenders with real-time insights about would-be borrowers, such as cash flow into and out of bank accounts.Revenue from Plaid's new lending, payments and anti-fraud products has doubled in the past year, according to a person familiar with the company's financials.LendScore can be used in tandem with traditional scores, and ratings can also be combined to come up with a weighted composite, according to the statement.Plaid also has a tie-up with Experian Plc, a company well-known for creating consumer credit reports. "Our view is that the cash-flow underwriting space is so nascent right now that there is value in working together," said Rich Franks, Plaid's head of credit.

Key insight: PNC hit or beat expectations across the board for its third quarter financial results.What's at stake: After years of mild dealmaking and loan growth, banks are starting to reap the benefits of more certainty and a frothier market.Forward look: While PNC logged record revenue for the third quarter, its fourth-quarter outlook was more reserved.PNC Financial Services Group saw record revenue in the third quarter as it raked in more fees and made more loans, but that growth may slow as the year winds down.The Pittsburgh-based bank reported Wednesday that it met or beat nearly all its financial expectations for the latest quarter. PNC reeled in $1.8 billion for the quarter, or $4.35 in diluted earnings per share, handily beating the analyst consensus estimate of $4.04."We delivered another great quarter with better than expected financial results and steady client growth across all our business lines," said PNC CEO Bill Demchak in a prepared statement Wednesday morning.The company is starting to see stronger rises in net interest income, which increased 7% from the prior year, due to the continued repricing of fixed assets from the zero-rate era, and loan growth. While borrower demand has been tepid for years, PNC started guiding for stronger loan origination earlier this year amid more political and economic certainty.But the $569 billion-asset bank also guided for a slightly weaker fourth quarter, predicting fee income to drop some 3%, a decline in noninterest income, total revenue to be stable or down 1%, a higher amount of net charge-offs and slower growth in lending and net interest income.In the third quarter, loans grew 1% from the prior quarter, and 2% year-over-year, driven by commercial and industrial lending. The bank offset some of its loan growth as it continues to pull back on its commercial real estate lending portfolio, which is down 13% from the previous year, as the sector has proved a thorn in many banks' balance sheets for nearly three years.Banks have seen their Wall Street business spike in 2025, attributable to a renaissance in dealmaking and an active trading market. PNC saw jumps in its capital markets and advisory business and its residential and commercial mortgage business push fees to $2.1 billion for the quarter, up 9% from the prior quarter and up 6% from 2024. Recent moves for scalePNC's earnings news comes about five weeks after it announced plans to acquire Lakewood, Colo.-based FirstBank Holding Co. for $4.1 billion. The deal, expected to close in the first quarter of 2026, will rapidly scale the bank's presence in Arizona and Colorado.Alex Overstrom, head of retail banking at PNC, told American Banker when the transaction was announced that the purchase of the $26.8 billion FirstBank will "take 10 years of investments, and bring it forward to today" in those markets. PNC will more than triple its branch footprint in Colorado, to 120, and grow its branch count in Arizona to more than 70."We just effectively bought Colorado," Demchak said at a conference the day after the deal was announced.But he said the company won't make a habit of buying smaller banks, mainly because of how those institutions are priced today. Although he added at the conference on Sept. 9 that big banks aren't putting themselves up for sale.

The Supreme Court has declined to review a challenge to retroactive interpretation of a New York law that applies a new statute of limitations to foreclosures.The high court turned down without explanation a petition for a writ of certiorari in the case US Bank National Association, Trustee v. Cassandra Fox, marking the end of the road for a lawsuit that otherwise could have been proved decisive for the Foreclosure Abuse Prevention Act.This leaves the industry and borrowers to follow other New York cases for guidance on FAPA, which Holland & Knight attorneys Joshua Prever and Jonathan Marmo said in a report could affect thousands of foreclosure actions affecting hundreds of millions of dollars worth of loans.All eyes are on the New York Court of AppealsWith the Supreme Court out of the picture, the question of whether FAPA should be interpreted retroactively or not will largely be in the hands of the New York Court of Appeals. In New York, this is the highest court in the state.It was the New York Court of Appeals that originally put in place a decision that allowed a clock on the state's six-year statute of limitations to be reset if a servicer took certain "affirmative" actions such as de-accelerating the debt. FAPA's passage in the state legislature and Gov. Kathy Hochul's subsequent approval reversed that decision.That meant foreclosure cases that had extended their timelines under the old rules could face dismissals, creating risk not only for the holder of the loan in question but for the broader secondary market for seasoned mortgages in New York."The way FAPA has been interpreted by the New York Court of Appeals has essentially had a huge impact on loans," said Joshua Prever, an attorney with Holland & Knight who represents clients in the financial services industry.Cases such as Article 13 v. Ponce De Leon Bank, et al., or Van Dyke v. US Bank, calls upon the courts to address individual legal challenges to FAPA that generally revolve around the interpretation of the state statute, the federal constitution or the state's equivalent. In Article 13, the United States Court of Appeals for the Second Circuit certified questions in that case around the law's retroactivity, which means it wants to make its own determination on federal constitutional issues, but also directed New York to provide a view to consider.Industry arguments against retroactive interpretationEarlier this year, a law firm representing the Mortgage Bankers Association and other trade groups filed a "friend of the court" brief in the Article 13 case. In it they argue against retroactive interpretations based on potential harm to members and on constitutional grounds.Arguments from the MBA, American Bankers Association and their state affiliates assert conflicts with protections for due process and contracts, and also with the "takings" clause in the U.S. Constitution. The law firm Hinshaw & Culbertson also asserted conflicts with equivalents of the due process and "takings" clauses in the New York Constitution.The takings clause states that "private property shall not be taken for public use, without just compensation."

Amidst a credit score war, Experian has thrown the latest punch.The data and technology company will now offer VantageScore 4.0, a credit scoring model, for free to its mortgage clients in the United States."Experian is dedicated to fostering a more competitive mortgage landscape, creating a safer and sounder market, and expanding access to homeownership for a wider range of consumers," Experian CEO Brian Cassin said in a press release Tuesday. "Making VantageScore 4.0 more easily accessible and widely available for the mortgage market accelerates the adoption of VantageScore 4.0 among mortgage lenders."Access to the model will give lenders time to evaluate the benefits of VantageScore, a joint venture of Experian, Equifax and TransUnion, during the underwriting process.If Experian does charge for VantageScore 4.0, it will be offered for at least a 50% discount compared to what Fair Isaac Corp. charges for its FICO score, the company said. Equifax announced last week that it will offer the scores for $4.50 through the end of 2027.FICO rolled out a new program model earlier this month that let mortgage resellers bypass the three major credit bureaus and receive scores directly to avoid additional markup fees. The new program has a base price of $4.95, and a $33 per borrower per score charge will apply if a FICO-scored loan is closed and avoids reissuance charges lenders previously paid.Experian's response is one of many since Federal Housing Finance Agency Director Bill Pulte announced in July that Fannie Mae and Freddie Mac will allow lenders to use VantageScore 4.0 when submitting loans to them, the only other metric outside of FICO's. The decision was made to increase competition in the credit score ecosystem, Pulte wrote on X.Pulte's action was criticized by some, who said it would help the three credit bureaus monopolize credit scoring and hurt homebuyers and homeowners. But most of the industry adjusted, as the U.S. Mortgage Insurers welcomed the announcement and Fannie plans to update disclosure files in November to allow for sellers and servicers to opt for VantageScore 4.0.The public feud between advocates of the two metrics has since flared up, with the American Enterprise Institute claiming that VantageScore's methodology is flawed and VantageScore delivering a detailed response. The move to offer VantageScore 4.0 for free marks another step in Experian's support of Pulte's incentive to make the credit scoring industry more competitive and mortgages more affordable, the company said."True to our culture of innovation, this latest move provides lenders with choice and flexibility, while advancing fair and affordable access to financial resources for more consumers," Cassin said. "We remain committed to helping deliver real progress in credit score competition and driving more financial opportunity for Americans."

Mortgage-related securities could experience performance issues as the White House moves to furlough and potentially cut some staff amid a congressional budget impasse, an analysis by Kroll Bond Rating Agency shows.KBRA's assessment of Congressional Budget Office, Federal Reserve Bank of St. Louis, private-label securities and credit-risk transfer data finds concentrations exist most notably in older PLS deals. The CRTs primarily used by government-sponsored enterprises Fannie Mae and Freddie Mac to share some of their loan performance risk with the private market tend to be larger and more diversified transactions than the PLS affected."The largest D.C. [metropolitan statistical area] exposure in any CRT transaction is less than 6%, while concentrations in PLS transactions can approach or exceed 20%," KBRA said in its report on the government shutdown. The ratings agency's analysts found more than 100 private-label residential mortgage-backed securities transactions had exposures to the Washington area greater than 5% of their current unpaid principal balance.Tiers of potential borrower distressWithin the Washington metropolitan statistical area, an estimated 5.5% of residents are federal workers. Around 12% of the federal workforce is concentrated in the region, according to the St. Louis Fed, which marks the highest MSA concentration, according to KBRA."Depending on the length of furloughs, and, more importantly, the degree of permanent job losses, transactions with substantial exposure to affected borrowers could experience meaningful performance impacts," KBRA analysts wrote in the report.Some federal workers are "exempt" and get paid through the shutdown while those in the "excepted" category have been on track to get back pay when it ends. Altogether, the number of federal employees in the Washington area is around 350,000 or so."The most significant impacts are likely to be felt by those who experience permanent job losses. However, even for employees who ultimately return to previous positions, temporary income disruption may result in elevated short-term delinquencies," the analysts wrote.Loans made outside the ability-to-repay rule's qualified mortgage definition also could be particularly exposed to impacts on private contractors dependent on business from federal worker clients."Service-sector employees may be particularly hard hit, potentially leading to higher delinquencies among loans in the non-QM segment, where a large portion of borrowers are self-employed," the analysts said in the report.KBRA estimates contractors dependent on business from federal worker clients could magnify the number affected by 50%.An extended shutdown with heavy layoffs that not only downsize incomes but lead to borrowers moving out of the Washington MSA could affect home prices in the region, according to the report. "Given current home inventory shortages and the availability of alternative employment for some workers, this impact may be muted," the KBRA analysts said.Other areas the government shutdown may impactA Congressional Budget Office report indicates that as of Sept. 30, estimates for the total number of federal workers that could be furloughed in a shutdown was 750,000, pointing to impacts beyond Washington.Regions outside of Washington, where there are higher percentages of federal workers and might even outweigh the capital's concentration, include metro areas with large military workforces "Workers tied to military activities often face less disruption compared to their non-defense peers, given national security priorities," according to the report primarily authored by Sharif Mahdavian, Colleen Kelley, and Jack Kahan. (Yee Cent Wong also contributed to the study.)Job priorities can shift over time in a shutdown, the CBO report notes, pointing to circumstances like a recent decision to recall some Bureau of Labor Statistics' workers to publish an inflation report. Some of the mortgage functions the shutdown affects could impact some areas more than others, such as the suspension of federally-backed rural loans.The cessation of new National Flood Insurance Program policies and renewals is hitting certain states hardest, according to a separate AM Best. Florida is the largest flood market, followed by Texas and Louisiana. Combined they represent more than half of U.S. flood premiums.