The folks here in Austin are sarcastically asking, “Who’s in your wallet?” Hopefully not Jennifer Garner or Samuel L. Jackson. The Consumer Financial Protection Bureau (CFPB… which always has our backs, right?), sued Capital One, N.A., and its parent holding company, Capital One Financial Corp., for “cheating millions of consumers out of more than $2 billion in interest.” “The CFPB alleges that Capital One promised consumers that its flagship ‘360 Savings’ account provided one of the nation’s ‘best’ and ‘highest’ interest rates, but the bank froze the interest rate at a low level while rates rose nationwide. At least IMBs and brokers don’t have to worry about running afoul of that kind of thing. Instead, many lenders here in Texas, and around the nation, are wondering who, or what, is going to bring the FHA into a new century: streamline refis that include escrows, SFR construction loans, having the monthly MI drop if the LTV drops to 75 percent (or after 7.5 years), and answering the question, “If loan quality is higher now than in 2008, why are the LLPAs the same and not diminished?” (Today’s podcast can be found here and this week’s is sponsored by Calque. White-labeled buy-before-you-sell solutions powered by Calque help you increase purchase volume and increase realtor business by helping them differentiate with a better process. With coverage in the 48 contiguous states, what are you waiting for? Hear an interview with Calque’s Michael Bremer and Ruoff’s Clint Morgan on vendor management, product expansion, and what tech offerings to look forward to this year.)

QC, Audit, Fraud Prevention, and Compliance Tools

ACES increases financial services QC audit volume by 15% in 2024 and expands new client acquisition by 66%! ACES Quality Management® sought to support its customers through turbulent market conditions by providing critical technology innovations to its quality control audit suite. ACES added over 20 top lenders including one of the largest banks in the U.S., top 10 credit unions and national service providers. Specifically, ACES expanded its credit union network with the addition of 10 institutions such as Arizona Financial Credit Union, Lake Michigan Credit Union, and State Employees Credit Union of North Carolina. Other notable achievements include conducting more than 8.8 million quality focused audits, making over 23,000 changes to the ACES Managed Questionnaires, and adding 454 articles to its free Compliance NewsHub along with publishing over 138 calendar items. ACES also inked partnerships with Digilytics, Infrrd and Xactus, introduced two new Audit Packs (Call Monitoring and Deposit Account Opening), and earned 4 industry awards.

Looking for a recap on significant legislation and regulations from 2024 impacting lenders and servicers and a preview of what’s to come in 2025? Download the annual regulatory and legislative report from Covius Compliance Solutions. This year’s report offers in-depth insights into last year’s mortgage industry landscape, including the 2024 focus of the CFPB, new loss mitigation measures, foreclosure prevention legislation and major state and federal litigation outcomes. The report, titled “Navigating the Mortgage Industry Landscape: 2024 Review & 2025 Outlook,” also provides a forward-looking analysis to help lenders and servicers navigate the challenges and opportunities of 2025. Download your copy today.

FundingShield, the market leader in wire & title fraud prevention, released its Q4-2024 report showing nearly half (45%) of transactions had deficiencies. During Q4-2024, a record high 10.3% of transactions had CPL Validation issues, 44% had CPL issues and 8.1% had wire/bank account related risks. The heightened risk illuminates the need for real-time source data-based verifications with remediation to manage risk and drive efficiency. “Natural disasters, adverse weather, and recent fires have created emergencies that attract fraudsters and cyber criminals who exploit vulnerable parties and infrastructure. There is a need for loan-level safeguards to protect the mortgage industry against constantly evolving threats as evidenced in our all-time high CPL Validation error rate that reflects data inconsistencies during closing.” Shared, Ike Suri CEO. Contact Sales@fundingshield.com for demos and free trials, Meet us at the MBA IMB in Austin, MBA CREF in San Diego or ARVEST Mortgage Education Expo in Tulsa, OK in the coming weeks.

Lender and Broker Services, Software, and Products

“It’s a new year: Time to set your new year goals. To make 2025 your best year yet, you need the right tools. That’s where CoreLogic comes in. Want to stay ahead of the market or outsmart the competition? We’ve got you covered. Lost a lead and need to know why? We’ll give you the answers. Worried about past clients going elsewhere for their next home or refinance? We’ll keep you in the loop, so you keep their business. And the best part? You can do it all from one powerful platform. Explore our latest solutions and schedule a demo today. Let’s make 2025 your most successful year yet.”

See Sagent during MBA Servicing ’25 plus a glimpse inside Dara! Sagent is rolling into MBA Servicing with a showcase of what it is bringing to the market: the end-to-end servicing platform, Dara by Sagent. On Wednesday, February 5 at 11 AM CT, the team will offer a peek at Dara’s next-gen capabilities on The HUB stage, and you can get an even closer look if you stop by for a demo at their booth #207 (which will be stocked with their infamous socks and other travel-friendly SWAG). Plus, if you're looking to enjoy some top-shelf sushi + sake, Japanese-inspired cocktails, and a whiskey tasting, be sure to reserve your spot for their party, hosted at the world-renowned TEN Sushi + Cocktail Bar (the venue is intimate so act fast). But to get the real scoop on what Sagent has in store for the servicing industry, you’ll need to schedule a private meeting because they’re keeping their latest development under wraps. To schedule time or get on the list, visit their MBA Servicing 2025 page here.

You may have heard that Smart Docs can transform your document management in ways that can exponentially increase your productivity. And you may have wondered what Smart Docs are. Mortgage Machine™ invites you to a webinar with Jonathan Kearns, vice president of technology at MISMO, to explore the transformative power of SMART docs on Thursday, Jan. 30th at 12 p.m. (CST). In this session, Jonathan will draw on his extensive experience in setting industry standards to share valuable insights into how SMART docs can streamline workflows and contribute to overall productivity and cost savings as well as guarantee the integrity of a document. Don’t miss this educational foray into technology which will continue to transform the mortgage industry. To register, please click "Register Here" to secure your spot for this must-attend webinar.

With the right data, at the right time, you can kickstart 2025 the right way! Collaborate with Xactus to simplify your workflows, cut costs, reduce data waste, and improve outcomes. Xactus’ experienced professionals are ready to guide you throughout the new year and beyond with its proprietary technology, Xactus360. This all-in-one platform can answer all your data and verification needs… And you only need to vet one provider. Xactus360 delivers solutions that span the entire mortgage ecosystem: credit, verifications, fraud, QC/QA, property valuations, flood reports, data mining, and more! Check out Xactus360 at the Independent Mortgage Bankers Conference in Austin January 27-29 or email Xactus to schedule a showcase. Make better decisions in 2025 with Xactus by your side. For the latest updates and news about important industry innovations, follow Xactus on LinkedIn.

Correspondent and Wholesale Offerings

“Verus Mortgage Capital leads the way in non-agency financing, providing innovative solutions to lenders for individuals who don’t fit the traditional lending mold. Kick off the new year by broadening your loan offerings, supporting more borrowers, and fueling your growth. As the nation’s top non-QM issuer, Verus is committed to helping lenders serve the self-employed, foreign nationals, property investors, and other underserved markets with responsible, flexible options. With 2025’s challenging market landscape, partnering with an experienced leader in the non-QM sector is more important than ever. Let Verus be your trusted partner in navigating these complexities and positioning your business for success. Curious if non-agency solutions are right for you and your borrowers? Explore our blog for insights. You can also connect with Verus at the Independent Mortgage Bankers Conference in Austin, January 27-29, or reach out to Jeff Schaefer, EVP of National Sales, for more details or 202-534-1821.”

According to a recent quarterly report to Congress from the U.S. Department of Housing and Urban Development (HUD), more than two in five FHA mortgages come with some form of down payment assistance (DPA). A 2023 study found that more than 80% of first-time FHA borrowers would have qualified for DPA. These numbers indicate that many originators may be turning away buyers because they are not aware of all the DPA options available. Click n’ Close’s suite of DPA is available nationwide with no income or first-time homebuyer restrictions. A new innovative feature allows the borrower to secure below market FHA financing with shared appreciation. In exchange for a minority share of the home’s appreciation during the first five years, borrowers can bridge the gap of home affordability and begin to build wealth immediately. Industry professionals interested in learning more should contact CNC’s Wholesale or Correspondent divisions.

Mergers and Acquisitions

Whether motivated by age, expansion, weariness, helping their staff, becoming more efficient, or “taking chips off the table,” there is no reason to think that owners of lenders and vendors won’t be open to a phone call on either side of a deal. I am sure that it will continue through the year, large and small.

Yes, there are plenty of major rumors out there, but the latest example of concrete news came yesterday with the announcement that Ohio’s Go Mortgage and Oregon’s Pacific Residential Mortgage are entering into a strategic merger. Go Mortgage is well known in the Midwest and East Coast, and Pacific Residential Mortgage (PacRes) is well known in the Pacific Northwest, today announced their merger.

“The merger positions Go Mortgage as the surviving entity, with headquarters remaining in Columbus, Ohio, and expands its national footprint into new markets. This strategic alignment is designed to leverage cutting-edge technology and the combined strengths of both organizations, providing enhanced services for borrowers, business partners, and team members… The merger will deliver economies of scale, creating cost efficiencies and higher lending volumes that will enable competitive pricing and an expanded product offering. The unified organization will also benefit from a robust leadership team, bringing together the best of both companies to drive future success.”

Capital Markets

Finally, a little rally! Between the Producer Price Index (a measure of wholesale inflation) rising less than expected in December, and rumors that the Trump administration will take a gradual approach to implementing tariffs, bond markets received some relief from the selling action that has been forcing yields higher of late.

The Producer Price Index rose 0.2 percent month-over-month last month, slightly below expectations and a decline from November's numbers, with energy being the primary driver. Excluding food and energy, core PPI remained flat, showing a 3.5 percent year-over-year increase. While the cooler-than-expected monthly PPI figures initially boosted Treasuries, the year-over-year readings highlight persistent inflation at wholesale levels, which remains well above the Federal Reserve's 2 percent target. This number is an encouraging data point, but a much less important figure than today’s CPI reading.

As far as the Trump tariff news reports, and of course this wasn’t mentioned during the campaign, the strategy of gradually increasing tariffs by a few percentage points over time is being considered to give businesses and foreign suppliers time to adjust, potentially easing concerns about inflation among investors. Reports indicate that Trump's economic team is exploring a gradual tariff increase of 2 percent to 5 percent per month, aiming to strengthen negotiation power while avoiding inflationary pressure. This prospect of incremental U.S. tariffs has sparked some optimism in the markets, though the impact of Trump's trade policies on the economy remains uncertain. If inflation were to rise by 4 percent in the coming year, it could prompt interest rate hikes, undermining Trump's growth agenda and escalating tensions with the Federal Reserve.

The preliminary look at February agency prepayments were released yesterday, and according to consensus, FN30 speeds are seen decreasing 17 percent month-over-month on average as weaker turnover seasonals more than offset a modest uptick in refinancings. Day count is expected to be unchanged. FN15s are seen slowing slightly less at 14 percent on average, while GNII are projected to slow more at 22 percent. Month-to-date gross issuance of $55.2 billion is currently running behind recent month numbers.

Today’s economic calendar kicked off with mortgage applications increasing 33.3 percent from one week earlier, according to data from MBA for the week ending January 10. Last week’s results included an adjustment for the New Year’s holiday.

We’ve also received (boom!) the all-important December CPI report. Prices at the consumer level rose .4 percent, core +.2 percent, year over year +2.9 percent, core year over year +3.2 percent, all about as expected. Other economic releases today include Empire manufacturing for January, some Treasury activity that will be highlighted by a buyback (for liquidity purposes) in 5- to 7-year coupons for up to $4 billion, and remarks from four Fed presidents. Bank earnings are also underway with Citigroup, JP Morgan, Wells Fargo, and Goldman Sachs, as well as BlackRock all reporting. After the inflation data Agency MBS prices are .250-.375 better than Tuesday’s close, the 2-year is yielding 4.29, and the 10-year is yielding 4.71 after closing yesterday at 4.79 percent.