Someone call Marie Kondo — there’s a huge mess 🧼 at Bill Pulte’s FHFA. Just a quick recap of the last 3 months:

None of that even holds a candle 🕯️to the absolute 💩show happening at the GSEs right now. Internal emails obtained by the AP showed that a close ally 🧑‍🤝‍🧑of Pulte improperly shared confidential mortgage pricing data from Fannie Mae to Freddie Mac, alarming senior Fannie Mae officials who said the disclosure could expose the GSE to accusations of rate-fixing or collusion‼

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The confidential lender-level pricing information was sent by Lauren Smith, Fannie Mae’s head of marketing, who was acting “at Director Pulte’s ask,” according to the email thread. When senior executives internally flagged the disclosure as illegal & “very problematic,” those same executives—including the CEO Priscilla Almodovar, top lawyer Danielle McCoy, and head of single-family Malloy Evans—were forced out days later, along w/ internal ethics staff who had been investigating Pulte (h/t WSJ). Smith kept her job & Pulte loyalists were promoted into leadership roles ✋ . 

The AP said that the email Smith sent “set off alarms at both companies.”

In the Oct. 11 message to Smith, Evans said he added others to the email chain b/c they “were involved with this week’s efforts to compile this information” & he wanted to “make sure you do not exacerbate this issue,” the AP reported. McCoy, Fannie Mae’s general counsel, weighed in, adding that such info should “never be shared” & “could put the company at risk.”

A day after the “terse email exchange,” Trump posted a graphic criticizing major homebuilders using Fannie Mae’s data. Pulte quickly retweeted it.

Then, on Friday morning, NYT published a profile of Pulte, focusing on his frequent familial invocations & his current real estate business interests. On the latter, the NYT noted that Pulte bought 5 aging mobile home parks in Florida in ‘23 & ‘24 for $3M w/ a $2M mortgage. In Jan. ‘24. Pulte told a podcast host that the “Pulte Family” was buying trailer parks & looking to revamp them amid a market of rising rents. 

NYT reporters recently visited & they are not in good condition—broken fences, overflowing trash bins 🗑 , broken ACs, busted stoves 🍳 etc. Residents in 2 communities told the NYT that Pulte’s companies have been slow to make any repairs & have been jacking up the rents. One resident at the Cottondale said in a court filing that rent increased to $950 a month from $550 after Pulte’s family took over.

A spokesman for Pulte said he owned “passive shares” in the mobile homes & had “no oversight or management in any of these companies.”

Messy.

Hey, everybody! The Mortgage Scoop launched about 2.5 months ago & I’ve been blown away by the support. Thank you 🙏 so much. I wanted to share an important update about the business. We’ll be moving to a paywall starting Wednesday, Nov. 19.

Paid subscribers will get exclusive MWF newsletters packed with scoops, analysis & insights you won’t find anywhere else (plus some bonus content). Founding Members can lock in the price of $240 per year. Monday editions will remain free & open for all subscribers. Hit me up w/ any questions you might have. - James Kleimann

The friction caused by ICE’s SDK transition could create an opportunity for…Better Mortgage? That seemed to be what Better founder Vishal Garg claimed on yesterday’s earnings call. 

"It's been an interesting moment where a lot of people are very, very frustrated with the incumbent solutions that are out there and are looking for something new," Garg said, per NMN’s Andrew Martinez. 

Better Mortgage lost $39M in Q3, a period in which its stock soared thanks to meme traders. The mortgage lender also raised $75M in late September, which I suspect may have had with mandatory net worth requirements. Given that Better doesn’t expect to turn a profit for at least a couple more quarters, I expect them they’ll do another capital raise fairly soon.

As for the ICE comment, that’s a fun one to unpack. It’s true that there is some frustration associated w/ ICE (I’ve reported on this extensively). But will other lenders be comfortable moving their tech platform over to a firm that’s hemorrhaging money & is also a rival lender? Hmm… 

Between steering claims, copyright suits, & commission chaos, Zillow’s lawyers are on pace to out-earn most top-producing agents this quarter. The latest lawsuit alleges that Zillow is pressuring Flex agents to steer 🐮buyers to Zillow Home Loans. 

Plaintiff Araba Armstrong says Zillow operates programs in which its affiliated real estate agents receive high-value sales leads only if they meet internal quotas for securing pre-approved mortgages from ZHL. Agents who failed to meet Zillow's targets received fewer leads or were cut off, the suit claims. (Homebuyers accused Zillow in a separate lawsuit in September of deceptively using property listings to steer them to its network of affiliated agents.)

Armstrong’s RESPA lawsuit also argues that ZHL simply isn’t a competitive mortgage lender. “Zillow’s system harms consumers, who are robbed of the disinterested advice of their fiduciary real estate agent, & instead are unknowingly steered towards ZHL’s limited & often uncompetitive mortgage products…industry reviews consistently rate ZHL average on affordability, w/ limited loan types & no rate transparency, & advise borrowers to comparison shop multiple lenders.” 

Zillow is on pace to do roughly $4B in mortgages this year & they’ve achieved double-digit attach rates in Enhanced Markets, often by using rate buydowns, so that ^ claim is interesting. Now, to be fair, as The Scoop reported last week, sometimes the buydown still doesn’t go well…

The legal feud between NEXA co-founders Mike Kortas & Mat Grella is intensifying. NEXA dropped new claims alleging that Grella & a branch manager conducted an “employee raid” to bring people to his broker shop Platinum One. 

Grella denied the charges and made some spicy🌶️ claims himself on social media. He said that since his departure, Kortas has “nearly doubled his own salary & taken distributions in the form of personal flights on Nexa’s jets, real estate shared w/ family members, luxury meals, extensive personal use of the company credit cards, & much more. That is why my lawsuit claims that he diluted his share of ownership & increased mine beyond its original 49.5%.” 

I am still trying to figure out how the private jet play makes any 🔢 sense in the mortgage business. Maybe jetNEXA did great business during the gov’t shutdown? Or perhaps it is some sort of tax strategy? Someone w/ a head for business plz explain it to me…

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