Why nobody really knows the scale of the U.S. housing crisis

Happy Friday! Welcome back. Today’s newsletter is 688 words, a 2.5-minute read.

1. Fair lending rule eliminated as FHFA cites regulatory redundancy

The FHFA is moving forward with its repeal of Biden-era fair lending requirements, dismissing objections from housing advocates who warned the change would make discrimination harder to combat.

The final rule, effective March 8, eliminates mandates requiring Fannie Mae, Freddie Mac and the Federal Home Loan Banks to create and report on equitable housing finance plans.

During the process, the FHFA received 26 comments, 25 of which are published on its website. "Almost all comments that were opposed to repeal" the commentary in the final rule stated.

2. Rocket sues broker over fraud case involving UWM

Rocket Mortgage has filed suit against California broker Sharp Loan Inc. and executive Reynaldo Reyes, alleging they submitted fraudulent mortgage applications in March 2020 that concealed borrowers' debts and caused $194,000 in losses.

The lender claims the broker failed to disclose that three borrowers had taken out multiple mortgages with United Wholesale Mortgage days before their Rocket loans closed, violating contractual obligations.

When investors discovered the undisclosed debts, the loans no longer met purchase requirements. Rocket was forced to buy back the mortgages and resell them at a loss. The company is seeking damages.

Insurance Volatility Is Now a Mortgage Ops Problem

Premium spikes, coverage lapses, and documentation gaps aren’t edge cases anymore. They create closing friction, drive escrow surprises, increase call center volume, and trigger lender-placed insurance events.

Covered was named a 2026 HousingWire Tech100 Award winner for building the infrastructure that helps lenders and servicers manage insurance inside the mortgage workflow.

Covered is purpose-built for mortgage institutions:

• 65+ top-rated carriers, including difficult markets

• Workflow-ready integrations with Blend, ICE Servicing Digital, Blue Sage, and more

• Lifecycle support across origination and servicing

Manage insurance as part of mortgage operations, not a downstream issue.

Learn how Covered strengthens mortgage operations →

3. More Nuggets

🏚️ Why nobody really knows the scale of the U.S. housing crisis. (Washington Post)

🎥 Why Rocket’s Redfin is kicking off a $1M home giveaway at the Super Bowl. (MarketingDive)

🏦 What’s fueling the mortgage M&A wave creating mega-lenders? (HousingWire)

🔎 ION: Why strangers are raising kids together. (The New York Times)

🚨 Coach’s Corner

Read less books. I know… sounds dumb at first 😂 But there’s a reason I’m saying it, tune in and I’ll break it down (plus my own story). (Video)

— Dave Krichmar CEO

4. Mortgage fraud risk continues upward climb

Mortgage fraud risk rose slightly to end 2025, with an estimated 1 in 118 applications showing fraud indications, according to Cotality's Q4 2025 National Mortgage Fraud Risk Index.

Key findings:

• Investment properties (1 in 43) and multi-family (1 in 27) remain highest-risk categories

• Undisclosed real estate fraud jumped 8.6% year-over-year—the largest increase

• Investment and multi-unit property applications surged 34% and 50% respectively, driven partly by popular DSCR loans

Despite refinances increasing 19% (typically lower fraud risk), overall fraud risk still climbed. Concerning trends include alerts around unverifiable employer information, property flipping with 100%+ value gains, and occupancy misrepresentation.

5. Prosperity Home Mortgage partners with Foyer on down payment savings platform

Prosperity Home Mortgage announced a national partnership with fintech platform Foyer to help prospective homebuyers save for down payments and prepare for homeownership.

Key details:

• Targets consumers 6+ months away from purchasing a home

• Provides guided savings tools, personalized education, and credit resources

• Includes savings-match feature to accelerate down payment goals

• Offers access to live financial advisers

Both companies emphasize supporting buyers earlier in the process, before traditional pre-approval stages. "The path to homeownership is no longer linear and it certainly doesn't start at pre-approval," said Foyer founder Landy Liu.

🤣 One great tweet

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

🚀 Wanna help our newsletter grow? Forward it to a friend or colleague.

Would you like to receive a ready-to-send weekly marketing email for your realtors and/or clients? Start your 30-day free trial here.

Was this email forwarded to you? Subscribe here.

Interested in advertising to 40k+ loan officers? Get in touch.