Intercontinental Exchange, the $100B parent of ICE Mortgage Technology, is placing an intriguing bet on the exploding Casino Economy.

Here’s what I mean: Before I published this newsletter, I jumped on Polymarket & bet $20 that Arsenal, my favorite football club, would win the Premier League this year. I’ll win $40 in May if I’m right. There are a wide variety of other real-world events I could have wagered on: Whether Zohran Madmani becomes mayor of New York City (89% likelihood), if Trump declares a housing emergency by the end of ‘25, & if mortgage rates are below 6% by Dec. 31 (there’s a 15% chance).

Gambling is everywhere (sports gambling alone is a $100B industry) & ICE’s $2B bet on Polymarket gives them real-time insights into customer sentiment & allows them to partner on tokenization initiatives. The potential w/ mortgage is somewhat fuzzy, but could be radical.

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“The U.S. real estate market is the largest asset class w/o a futures market,” noted mortgage tech exec Michael Kelleher in a recent LinkedIn post. “Think about that for a second. Stocks, bonds, commodities—all have sophisticated trading platforms. But the biggest asset class in America? Still traded like it's 1985. ICE is changing that by creating an index marketplace where:

• Multiple funding sources compete in real-time
• Automated decisioning replaces manual underwriting
• Mortgages become liquid, tradeable instruments
• Price discovery happens instantly”

Kelleher believes Wall Street is already positioning for this shift. “When ICE launches RFQ protocols for mortgage-backed securities and automates whole loan trading, they're not just improving efficiency. They're creating a new asset class. Banks will soon trade mortgage portfolios like they trade stocks—instantly, transparently, and at scale. And the lenders who own the best data will command the highest premiums.”

Eric Lapin, an expert in open banking & crypto, believes there will eventually be an intersection between ICE’s mortgage division & Polymarket.

“It would make sense based on what I read in their press release,” he said. “Real world assets (RWAs) would provide many positives. Tokenizing mortgages or MBS as RWAs can make them easier to trade 24/7, reduce frictions in settlement, & open possibility of new pools of capital. As infrastructure matures, originators may be able to sell slices of mortgages more freely, reducing capital burden.”

Each token would have to be tied to a special purpose vehicle that legally holds the mortgage note in a deed of trust, which is how token holders own the beneficial interest of that trust, not direct title to the property, Lapin said. Tokenization of mortgage assets is not quite ready for prime time b/c of capital markets, but the plumbing is there, he added.

Another source said he sees value in ICE simply having access to Polymarket’s trove of data, just as they did w/ Ellie Mae way back when. They're getting a forecasting engine & access to raw data on geopolitical trends that could move markets.

“But I’m still cloudy on what that means for ICE Mortgage Technology,” he said.

Could the bombshell lawsuit lobbed at Optimal Blue & 26 of the top lenders in America have the potential to end up being the mortgage industry’s $418M NAR moment?

It’s early yet, but there are parallels between the 2 cases.

“I think that there's correlations here w/ the NAR lawsuit in how they were saying agents were price-fixing through the MLS,” said one IMB exec who is not an OB client. “With OB, you're looking at what your competitors are setting their compensation at. Because you could go into the MLS and see what was offered for buyer agent commission across the board, the legal framework could be similar.”

Still, that IMB exec said he thinks the plaintiffs fundamentally misunderstand how lenders use PPEs.

“From the lender perspective, we're using [OB] to see how competitive we are in the market,” he said. “They’re saying there’s a direct correlation w/ lenders using it to set prices higher. But that’s just not what happens. Lenders are always saying we want to be more competitive in the market.”

One mortgage banking attorney questioned whether there is any consumer harm and asked, “Would that make the Kelley Blue Book guilty of enabling auto dealers to collude on auto pricing?”

Regardless, it could have a business impact.

“Is this going to deter growth at OB, with some lenders saying, ‘Well, I don't want to go do business w/ a vendor whose features might cause me to get sued or dragged into a lawsuit?’” the IMB exec added. “I don't recall any case where a vendor's feature got me dragged into a class action.”

NY AG Letitia James, Democrat who won a 2023 fraud judgment against Trump, was indicted on mortgage fraud charges by falsely claiming on loan documents that she intended to live in a Virginia house she purchased in 2020.

The five-page indictment released Thursday says James listed the 3-bed house in Norfolk as a secondary residence in the mortgage documents but she used it as an investment property that was rented to a family of 3. The alleged fraud allowed James to obtain a lower mortgage rate that prosecutors claim saved her nearly $19,000 over the life of the loan.

James has said she purchased the home w/ her niece & told the LO that she wouldn’t be living there. “The document that was signed by me in error was a limited power of attorney to my niece, and it was not the basis for determining whether or not my niece and I were eligible for a mortgage,” James said on a podcast last month. “In all of the financial documents, I indicated it would not be my primary residence. And so the case is flimsy at best.”

James called the charges nothing more than political retribution. Still nothing on the Lisa Cook case btw…

Remember that wild lawsuit that alleges loanDepot offered consumers inflated rates & punished LOs who couldn't close on the terms w/ reduce or no commission? Its claims appear to be borne out of another lawsuit, per NMN.

The latest filings quote an LO who described it as a “3-card monte.” The testimony came from loanDepot's 2023 poaching lawsuit against Movement Mortgage. A lawyer for Movement suggested that employees decamped loanDepot for Movement in part because of the illegal commissions scheme. New filings included screenshots from loanDepot's Mello software showing managers explaining ILC transfers, as well as emails between managers discussing transactions. 

One of those purportedly shows John Bianchi, the company's former head of distributed retail, telling other managers to make an ILC transfer prior to a pricing exception request, stating it "becomes problematic" to do the transfer after the fact. 

The complaint also claims execs told LOs the practice of eliminating comp on loans transferred based on pricing was approved by the CFPB... 

Despite solid producers leaving & the recent departure of highly respected COO Jason Stenger, the mood is pretty upbeat at Movement Mortgage, several employees tell The Scoop.

“99% of us have made our own moves/changes over the years so totally get needing to try a new challenge/opportunity,” said one manager. “We’ll all still be cheering [Stenger] on moving forward.”

“There’s always different reasons for people leaving companies I’ve found over the years,” he added. “Some are gently shown the door, some get offered huge checks that help them & their fam get out of debt instantly, some get sold a bag of goods & turn right around because what they were told going in changes as soon as they cash the check, or in a few months rates start getting moved up on the back-end.”

Hey, everybody! The Mortgage Scoop launched about 6 weeks ago & I’ve been blown away by the support. Thank you 🙏 so much. I wanted to let you know that we will soon be launching a paywall. Founding members ($240 a year) will get exclusive Wednesday + Friday newsletters packed with scoops, analysis & insights you won’t find anywhere else. Monday editions will remain free for all subscribers. Hit me up w/ any questions you might have. Thanks again! - James Kleimann

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