Editor’s Note: The Mortgage Mix is RISMedia’s highlight reel of need-to-know mortgage-industry happenings. Watch for it every other Friday afternoon.
Start with the numbers: Mortgage rates are climbing fast, with Freddie Mac’s benchmark survey reporting 6.76% on average this week for the 30-year, while other sources found rates crossed the 7% threshold.
-Rates are pushing higher based on a turbulent bond market and macro uncertainty, with expectations of a near-term Fed hike.
-Realtor.com® Senior Economist lamented a “market that could have been,” saying the Iran war and inflation will continue to stymie housing.
Are buyers reacting? Not dramatically, as mortgage purchase applications remained flat according to the Mortgage Banker Association (MBA). Refis and ARMs fell and rose, respectively as consumers navigate the shift in rates.
-Looking ahead, a mixed inflation report appears to have made a rate hike next week more likely, something that will certainly weigh on consumers.
How about the government?: Treasury Secretary Scott Bessent failed to stop a bond sell-off this week with a buyback plan and a media tour. Storied economist Paul Krugman called the effort insufficient, while adding the Trump administration isn’t entirely to blame for the bond crisis.
Separately, FHFA Director Bill Pulte directed the GSEs to approve all lenders in the use of VantageScore. Pulte was sharply critical of FICO, and added the FHFA is “studying using only a single credit report” without clarifying exactly what that would look like.
‘Rig the rules,’ or just rulemaking: A lawsuit is accusing the Federal Reserve and Fed Vice Chair Michelle Bowman of manipulating the Basel III rulemaking process. The nonprofit that filed the lawsuit wants the rule thrown out, claiming Bowman had private conversations with Wall Street leaders about the capital restrictions and urged them not to publicly object.
Meanwhile, companies making moves: CrossCountry and Rocket both announced new conforming loan limits this week, both setting the mark at $845,000. That is above the FHFA’s $832,750 benchmark, which will be updated later this year.
-Interestingly, National Mortgage News reported that rates for jumbo loans are actually lower than conforming at this point, and have swapped multiple times over the summer.
Better battle drags on: Former Better CEO Vishal Garg is campaigning hard to get his job back after being abruptly ousted last month. This week, he put forward a plan to turn the company around, promising $2 million in monthly savings.
-Better and Garg continue to spar over his leadership, with the company citing the lender’s previous struggles under Garg while also taking him to court.
And finally, some AI caution: While mainstream AI headlines this week focused on claims of societal collapse and superintelligence, AI models continue to cause issues in the industry
-Specifically, a foreclosure suit in Washington D.C. is on uncertain ground after a bank’s outside lawyer submitted a brief with AI-generated non-existent citations. Deutsche Bank National Trust had the entire brief struck by a judge, who suggested the full appeals court may “wish to address this situation” while adding that the situation “unfortunately penalizes the innocent client for its counsel’s offense.”
