Nonbank lenders could get access to FHLB funding

Good morning, Ian here. Today’s newsletter is 630 words, a 3-minute read.

1. Nonbank lenders could get access to FHLB funding

US officials are looking at ways to give a broader swath of financial firms, including nonbank mortgage lenders, the ability to borrow from Federal Home Loan Banks.

The closed-door discussions, which are part of a regulatory review of the sprawling $1.4 trillion FHLB network, may be a first step to giving many more companies access to a coveted financial backstop now reserved mostly for banks. Any expansion would ultimately need congressional action, and would likely require firms to agree to more government oversight.

Since their creation to boost home lending during the Great Depression-era, the FHLBs have become a general liquidity provider for banks. At the same time, their importance in housing finance has declined as nonbank mortgage firms have grown in importance. LINK

You’ve drafted your fantasy football team. 🏈 
Now draft your processing dream team with wemlo®.

Ready to pass the processing operations to a team you can trust? Brokers that work with wemlo get something better than man-to-man coverage – our processing pod setup means you’ll have a go-to manager and two dedicated processors you can count on for every loan submitted. Plus, wemlo processors offer game-changing support for dozens of loan products and lenders.

Work with wemlo processors that know the drill.

2. Catch up quick

😬 Housing market affordability is so strained that couples want down payment cash rather than a wedding gift. (Fortune)

🌪️ More than four in five US homebuyers are factoring in climate risks when they shop for a new house, according to a new survey by real estate firm Zillow.

🤝 Cerberus Capital Management has agreed to acquire Pennsylvania-based Spring EQ, a provider of home equity financing solutions. No financial terms were disclosed. (PE Hub)

3. ICE completes $11.9B acquisition of Black Knight

Intercontinental Exchange (ICE) completed its $11.9 billion purchase of software, data, and analytics company Black Knight after federal regulators dropped their opposition to the deal.

The operator of the New York Stock Exchange (NYSE) indicated that the agreement, first made in May 2022 and revised last March, gives Black Knight investors 0.6577 shares of ICE stock for every Black Knight share they own, equal to about $75.87.

The transaction had been delayed after the Federal Trade Commission (FTC) filed a lawsuit to stop it, arguing that the merger would give ICE too much control over the mortgage data market, costing consumers and stifling innovation.

4. Black Knight spots potential housing market transition

Black Knight, Inc. released its Home Price Index for July 2023, providing fresh insights into a U.S. housing market that has become a subject of both hope and caution. Even as interest rates float near a considerable 7.25%, home prices reached a new record high for the third consecutive month.

Andy Walden, Black Knight's vice president of enterprise research, emphasized that this wasn't the whole story.

The report also found other indications that the market may be cooling off. Black Knight's rate lock and sales transaction data revealed lower average purchase prices and seasonally adjusted prices per-square-foot in recent sales. “All of these factors combined underscore the need to focus on seasonally adjusted month-over-month movements rather than simply relying on the traditional annual home price growth rate,” Walden added.

☀️ See you on Friday!

p.s. ​Somebody get me a ride with this cab driver immediately.

Thanks for reading! Was this email forwarded to you? Subscribe here.