FHFA refers NY AG to DOJ for potential mortgage fraud

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1. CFPB to lay off 1,500 employees

The Consumer Financial Protection Bureau sent reduction-in-force notices Thursday to roughly 1,500 of its employees, according to a motion filed in federal court.

Affected employees will lose access to CFPB systems, including email, at 6 p.m. Friday, according to the motion. Those employees will be placed on administrative leave, and their terminations will take effect in mid-June.

• Such a move would leave the agency with a headcount of around 200, according to workforce figures reported in September.

The cuts come one day after the CFPB’s chief legal officer, Mark Paoletta, said in a memo that the agency would pivot its focus away from non-depository institutions and shift enforcement and supervisory matters to states.

2. Trump teases Powell's 'termination'

Donald Trump early on Thursday condemned the Federal Reserve chair, Jerome Powell, for not lowering interest rates, and expressed a wish for him to be gone from his role.

The president lambasted Powell as “always too late and wrong” in a post on his Truth Social platform. Trump noted that the European Central Bank (ECB) was poised on Thursday to lower interest rates again.

Addressing reporters later in the day, Trump claimed Powell would resign if he asked him to. Powell himself has said that he would not resign if asked to do so by the president.

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3. More Nuggets

📈 IMBs turn a profit of $443 per loan in 2024. (MBA)

💸 Congress proposes restoring mortgage insurance tax deduction. (Buchanan)

🚀 Rocket Pro to join ARIVE loan origination platform. (NMP)

📝 eXp rolls out advisory form for sellers considering a private listing. (eXp)

📊 Experts polled by Fannie Mae predict home price growth will ease in 2025. (FannieMae)

🤝 Checkr buying Truework in employment verification roll-up. (FinSMEs)

🚨 Coach’s corner

I hate the “Where do you see yourself in 5 years?” question. Instead I focus on this and it has helped me crush it…. Tune in! (VIDEO)

— Dave Krichmar CEO

4. FHFA refers NY AG to DOJ for potential mortgage fraud

The Federal Housing Finance Agency (FHFA) has referred New York Attorney General Letitia James to the Department of Justice for possible criminal prosecution, alleging mortgage fraud.

FHFA claims James falsified documents about her primary residence to secure favorable mortgage rates on a Virginia property purchased in 2023 and misrepresented a Brooklyn property's number of units to receive better financing terms dating back to 2001.

Additionally, FHFA alleges James previously falsified mortgage documents indicating she and her father were spouses in both 1983 and 2000. The agency has offered assistance to the DOJ for any potential prosecution.

Related: FHFA establishes a mortgage fraud tip line

5. Equity Smart Home Loans cuts ties to UWM, partners with Rocket

Equity Smart Home Loans, a major mortgage brokerage based in Pasadena, California, has ended its long-standing relationship with UWM to join rival Rocket Pro.

CEO Pablo Martinez described the decision as difficult but necessary, driven primarily by better pricing offered by Rocket Pro, a shift in business alignment, and his firm's desire to regain autonomy in lender relationships. Equity Smart has over 400 loan officers and originated 1,600 loans in 2024.

Martinez emphasized that current market conditions prioritize creativity and competitive pricing over speed, making Rocket Pro a more suitable partner for the firm’s growth and borrower satisfaction.

6. Ohio sues UWM over broker "scheme"

Ohio Attorney General Dave Yost has filed a lawsuit against UWM, alleging that the company deceptively steered borrowers into higher-cost loans by falsely presenting affiliated brokers as independent.

The suit, filed in Montgomery County, claims UWM used brokers to channel virtually all mortgage business back to itself, depriving consumers of true competitive shopping.

Ohio seeks restitution, civil penalties, and compliance with state lending laws. UWM denies wrongdoing, characterizing the lawsuit as frivolous and politically motivated, and vows to vigorously contest the allegations.

☀️ You’re all caught up. See you on Monday!

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