Hedging, Warehouse, Processing Tools; M&A Results; Declining Demand for Housing

This morning, we head to Los Angeles, the site of the fires in the Pacific Palisades area in January 2025. Governor Gavin Newsom recently announced that FEMA approved California’s request to extend critical disaster assistance for Los Angeles fire survivors. More than 18,000 structures were destroyed. Seventy percent of those families don’t have a place to live yet. On the flip side, a white paper from the Mortgage Bankers Association (MBA) argues any shortages could invert within the next decade and that the reversal carries direct consequences for mortgage brokers and loan officers: "Implications of a Persistent Slowing in Housing Demand." It projects that housing supply could expand by 10.6 million to 14.6 million units between 2026 and 2035. Gee, if U.S. fertility is dropping, and immigration numbers are going down, has the problem shifted from a lack of supply to a lack of demand for housing? What about President Trump called all the top 15 homebuilder CEOs in for a meeting earlier this year and explicitly threatening “either start more homes or prepare for changes you won’t like in the housing finance system”? Pay attention out there! Speaking of… On today’s Big Picture, at noon PT, Mark McArdle, SVP of Public Policy & Regulatory Affairs at Newrez and Bob Niemi, Director of Government Affairs for Weiner Brodsky Kider PC, will answer questions on the policy and regulatory issues shaping today's mortgage market: what should lenders watch? (Today’s podcast can be found here… this week’s ‘casts are sponsored by FICO. As the industry's most predictive credit score, FICO Score 10T combines proven performance with deeper insight into borrower behavior to help support a stronger and more resilient housing finance system. Today’s has an interview with FTI Consulting’s Creighton Oswald on how if capital treatment becomes more favorable, increased competition could drive aggressive pricing that benefits independent mortgage banks and borrowers while further compressing margins for warehouse lenders.)