Editor’s Note: The Mortgage Mix is RISMedia’s biweekly highlight reel of need-to-know mortgage-industry happenings. Watch for it every other Friday afternoon.
- The ongoing litigation between the Department of Justice (DOJ) and Rocket Companies has continued, with the DOJ now asking a Colorado federal court to deny Rocket’s claims that it is not liable for alleged appraisal bias. The DOJ launched its suit against Rocket in October 2024, prompting a countersuit from Rocket against the DOJ and Department of Housing and Urban Development (HUD) in December. Rocket’s lawsuit argues the DOJ’s rules mandating both appraisal independence and lender liability for bias are counterintuitive. The DOJ maintains that Rocket is indeed liable for third-party appraisal bias, while Rocket countered that they twice offered their client (the Black homeowner alleging bias) a chance to challenge the appraisal via value reconsideration, which was denied.
- On January 7, the DOJ announced it had reached a $1.75 million settlement agreement with Florida-based lender The Mortgage Firm. The DOJ had previously brought charges that The Mortgage Firm, from 2016 to 2021, engaged in redlining (denying services or avoiding communities of color) against predominantly Black and/or Hispanic neighborhoods in the Miami-Fort Lauderdale-West Palm Beach metro area. The DOJ cited data that The Mortgage Firm engaged in noticeably less lending to majority Black-Hispanic neighborhoods compared to its peer lenders during that timeframe. Despite the settlement, The Mortgage Firm denied wrongdoing, saying the agreement was struck “to avoid the cost of litigation and to move on from this disagreement.”
- Changes to robocall rules by the Federal Communications Commission (FCC) will go into effect on Jan. 27, 2025. Designed to close the “lead generator loophole,” this rule will require callers and texters to obtain a customer’s written consent before sending automated messages. If a mortgage lender purchases a lead, then under these new rules, the burden falls on them to ensure it was properly generated with sufficient consent. As consent is given to specific companies, National Mortgage News writes that this new rule could make it more difficult for mortgage loan officers to move between employers and maintain an existing network of leads.
- The ongoing wildfires in the Los Angeles metro area have left many local homeowners uncertain about the status of their mortgage payments while their homes are in peril. On January 13, Fannie Mae and Freddie Mac put out public notices about their disaster relief options, such as forbearance plans or a disaster payment deferral plan. HUD has also placed a 90-day foreclosure moratorium on Los Angeles homeowners’ mortgages that are insured by the Federal Housing Authority (FHA). Reuters reported that JP Morgan and Bank of America are preparing mortgage relief to customers affected by the fires, with the possibility of forbearance depending on consumer circumstances. Finance industry professionals interviewed by National Mortgage News also project that the California fires will “slow” mortgage trading.
- On January 9, the Mortgage Bankers Association (MBA) announced the two new chairs of its political action committees. Nanci Weissgold, a partner at the law firm Alston & Bird LLP specializing in consumer financial services, will chair the Mortgage Bankers Association Political Action Committee which supports federally elected officials who support the mortgage lending industry. Bill Nelson, a mortgage operations executive, will chair the Mortgage Action Alliance, which focuses on making mortgage industry legislative priorities heard at the state and local levels. MBA 2025 Chair Laura Escobar praised both Weissgold and Nelson in separate press releases announcing their new positions.
- On January 10, Atlanta’s Kimberly Johnson pleaded guilty to participating in a mortgage fraud conspiracy. Over three years, Johnson forged documents (such as bank statements and W-2s) from mortgage applicants in order for lenders to approve loans the applicants were unqualified for. Johnson reportedly helped secure 450 fraudulent mortgages in this way, with the loans totaling around $161 million. In a release from the DOJ, U.S. Attorney for the Northern District of Georgia Ryan Buchanan said: “Criminals like Johnson, who engage in mortgage fraud, threaten the soundness of the real estate market in our communities.”
- On January 8, Detroit-based Ally Financial confirmed that it was ending its mortgage origination business—as well as cutting about 5% of its workforce. A spokesperson said the reduction would be gradual and include reductions in other divisions of the company as it seeks to “right-size.”
- A&D Mortgage has announced that it has acquired the wholesale and non-delegated correspondent mortgage business from Mr. Cooper Group Inc. “We took a very careful and measured approach to finding a potential partner to grow our (qualified mortgage) business,” said Max Slyusarchuk, CEO of A&D Mortgage in a release. “A&D’s goal is to be an industry leader, and this transaction is a big step forward.”
