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- Would you like fraud with that?
Would you like fraud with that?
By Jeff Walton & Kelly Guest
It seems fitting to use a fast food reference this week as the beloved In-N-Out Burger announced it's fleeing California for Tennessee for myriad reasons - including but not limited to regulation and the difficulty of keeping employees and customers safe in the Golden State. There are a couple eyebrow-raising stories about alleged fraud from Washington D.C. to the hotdish capital of the nation, Minnesota.
The U.S. Constitution requires that Members of the House of Representatives live in the state they represent. Former House Member and current Senator Adam Schiff is accused of mortgage fraud for claiming a Maryland property as his primary residence, which if true, begs this question: Should the Loan Officer, underwriter, or someone have raised a flag on that loan?
Seem shady? You betcha: Helping people with disabilities and senior citizens secure and maintain housing sounds like a good and worthy effort; Minnesota implemented a program to do just that. Multiple companies sprung up to help people in need take advantage of this benefit, but many of their "clients" claim they received little or no assistance from Housing Stabilization Services Program. The program cost was supposed to be $2.5M per year; it grew to $21M in 2021, and then ballooned to $104M in 2024. Several locations were raided, no charges yet announced. This scandal came to light as the prosecutions are ongoing in Minnesota's $250M "Feeding Our Future" scam, in which more than 70 people were indicted.
CHATTER
Gaining Traction? Rep Marjorie Taylor Greene Intros Bill to Eliminate Capital Gains on Primary Res
The “No Tax on Home Sales Act” would eliminate the federal capital gains tax on the sale of primary residences, purporting to bring tax relief to homeowners and to help increase housing supply nationwide.
The bill explicitly applies to individuals selling their primary residence and does not apply to home flippers or real estate investors.
VA Loan Reform Clears Congress (NMP)
The VA Home Loan Reform Act, now awaiting the president’s signature, would permanently allow veterans to compensate buyer agents and establish a new partial claim option to help delinquent VA borrowers avoid foreclosure.
The Trades Like It: Joint Statement on New Credit Score Model Acceptance
The Mortgage Bankers Association, American Bankers Association, Housing Policy Council, and Structured Finance Association released the following joint statement on the Federal Housing Finance Agency's (FHFA) recent announcement on credit scores: "FHFA Director Pulte’s July 8 directive to the GSEs to adopt a modernized credit score, VantageScore 4.0, was a promising first step to our shared goal of a more efficient, more transparent, and more competitive credit scoring system that serves as many creditworthy Americans as possible.”
What the Fee? ICE Analyzes Preventable Expenses Eroding Mortgage Lender Profits
The TRID rule requires mortgage lenders to provide borrowers with a detailed accounting of costs and fees associated with purchasing or refinancing a home. Any errors made in the disclosure are the lender’s responsibility to detect and rectify. (“Fee cure”) Depending on the specifics of the errors, lenders may be required to pay the difference between the disclosed and updated costs.
Keeping track of frequently changing closing costs, especially transfer taxes, can be a major pain point for lenders.
The study also found that over a period of just six months, more than one out of every three loans reviewed for this study required some type of fee cure.
NMN reports that Mitchell Sandler filed suit on behalf of a CA plaintiff against loanDepot, alleging steering and potential LO comp violations.
What the Fargo? Wells Fargo Sued Over Loan Fees (NMN)
The issue surfaced in 2022 when the bank sent "cryptic notices" to borrowers stating it had incorrectly assessed float fees during the loan origination process, according to a federal lawsuit filed in California by a customer.
The litigation claims, “Wells Fargo offered an apology and included cashier's checks with its notices, but the bank did not explain how the error occurred or provide recipients with an itemized breakdown of how the mistake affected their mortgage loan accounts, making it "impossible for borrowers to determine the amount of their actual damages, including their out-of-pocket harm."
Debunking DPA Myths: NMP Interview with Down Payment Resource CEO Rob Chrane
DPA makes financing riskier. “Not so…borrowers still have to qualify for a mortgage.”
DPA inflates home prices. “Helping buyers afford a home doesn’t raise prices, it expands access for only a segment of the housing market — primarily entry-level buyers.”
It’s too complicated and slow. “…many programs are designed for quick approvals and integrate seamlessly into the lending process.”
DPA is only for low-income or first-time buyers. “… a surprising number are open to repeat buyers and moderate-to-middle-income households.”
DPA is a niche tool. “In the first year after Zillow went live with its DPR integration in December 2021, more than a million unique users searched for their down payment assistance eligibility. That suggests the need is far more widespread. Further, 93% of people who searched on Zillow for eligibility were matched with at least one assistance program. During the first three years on Zillow, more than 5 million unique visitors completed the eligibility form found on qualified listings.
Industry AI Glossary (MISMO)
MISMO® Published its Artificial Intelligence (AI) Glossary: “This glossary serves as a growing collection of key AI terms and definitions to foster a shared language and mutual understanding among all mortgage stakeholders. As AI technology continues to evolve, new concepts, methodologies, and terminologies emerge. This resource will be regularly updated to reflect the latest advancements.” - Acting MISMO President Rick Hill.
MOVING & SHAKING
Realtor.com operator Move Inc. acquired buyer/agent collaboration tool Zenlist.
HW Media ventures into home building space by acquiring "The Builder's Daily."
Newrez appointed Leslie Gillen as Chief Commercial Officer.
AnnieMac appointed Jeff Hutchinson as SVP of Retail Production.
Richard Grieser joined Monster Lead Group as CMO.
Logan Finance announced the addition of Dave Weatherford as Sales Director to aid in Logan's continuing expansion efforts.
MARKET/INDUSTRY
Mortgage Rates Continue to Move Up: Freddie 7-17-25
July was a tough month for interest rates, but we got some good news: In his latest Master the Markets segment, Bill Bodnar explains that and what to expect this week as the Fed enters "the quiet period."
Mortgage Applications Decreased 10% From One Week Earlier – But Look at the YoY Comparisons: MBA Weekly Survey for the week ending 7-11-25. Last week’s results included an adjustment for the Fourth of July holiday.
The Refinance Index decreased 7% from the previous week and was 25% higher than the same week one year ago.
The seasonally adjusted Purchase Index decreased 12% from one week earlier. The unadjusted Purchase Index increased 11% compared with the previous week and was 13% higher than the same week one year ago.
New home purchases up in June - MBA Builder App Survey
Credit Availability Down in June (MBA)
Housing Non-Starters: NAHB Says Rates/Inventory Increases an Issue
Single-family housing starts declined in June to the lowest rate since July 2024 as elevated interest rates, rising inventories and ongoing supply-side issues continue to act as headwinds for the housing sector.
However, multi-family production was the catalyst for an increase in overall starts.
Builder Boost: NAHB/ Wells Fargo Housing Market Index (HMI)
Builder confidence in the market for newly built single-family homes was 33 in July, up one point from June.
38% of builders reported cutting prices in July (the highest percentage since NAHB began tracking this figure on a monthly basis in 2022) compared with 37% of builders who reported cutting prices in June, 34% in May and 29% in April.
The average price reduction was 5% in July, the same as it’s been every month since last November.
The use of sales incentives was 62% in July, unchanged from June.
International Flair-Up: NAR 2025 International Transactions in U.S. Residential Real Estate Report
Foreign buyers purchased $56 billion worth of U.S. existing homes from April 2024 through March 2025
This is a 33.2% increase from the previous 12-month period.
International buyers purchased 78,100 properties, up 44% from the prior year and the first year-over-year increase since 2017.
Record # of Homes are Equity-Rich: ATTOM Data
The number of equity-rich mortgages remain historically high in the nation overall: Although equity-rich rates fell in 47 states quarterly, annually, the rates in the majority of states were higher.
In the first quarter of 2025, 46.2% of mortgaged residential properties in the country were considered equity-rich, down from 47.7% in the fourth quarter of 2024.
The top 10 equity-rich states are: 1. Vermont 2. New Hampshire 3. Rhode Island 4. Montana 5. Maine 6. Hawaii 7. California 8. Massachusetts 9. Idaho 10. New York
Foreclosure Facts: ATTOM Data's Mid-Year 2025 U.S. Foreclosure Market Report
Foreclosure activity continues to climb, with a 5.8% increase year-over-year and 1.1% from 2023. While still below pre-pandemic levels, the steady uptick signals ongoing financial strain for some homeowners. In Q2 2025 alone, foreclosure filings were up 13% YOY, and in June, foreclosure starts were up 17% from June 2024.
Foreclosure starts were up 7% YOY in the first half of 2025, and REOs were up 12% from 2024.
Alaska, Rhode Island, and Wyoming posted the largest YOY spikes, while Illinois, Delaware, and Nevada had the worst foreclosure rates.
The average time to foreclosure was down 21% from 2024, with Wyoming and Texas having the shortest completion timelines.
Downplaying Delinquencies: Uptick in FHA Delinquencies Not Significant - Urban Institute
“…though the delinquency increase might seem large on a percentage basis, the actual delinquency rate simply brings us back to 2017 and 2018 FHA delinquency levels, not nearly a large enough increase to affect the health of the Mutual Mortgage Insurance Fund. Moreover, improvements in the loss mitigation waterfall will substantially offset financial losses from the increased delinquencies.”
The Squeeze Gets ‘Em Starting & Staying: First American
Housing cost burdens reached a new peak in 2023, with 16.9 million homeowners spending more than 30 percent of their income on housing—the highest level in over a decade.
Nearly 60% of the increase in newly burdened homeowners since 2019 came from those spending over half their income on housing—showing that affordability challenges have grown more common and more severe.
Cost-burdened younger and older homeowners have driven most of the increase since 2019, making up 87% of the three million newly affected households—highlighting growing pressure at both ends of the age spectrum.