WASHINGTON (AP) ' The FBI said this week that it is investigating 'suspicious activities' on an internal system that contains sensitive information related to surveillance operations and investigations.

The bureau is working to determine the scope and impact of the problem, according to a notification sent to members of Congress that says the unnamed culprit is using sophisticated techniques to exploit FBI network security controls.

The notification, obtained Thursday by The Associated Press, says that the FBI on Feb. 17 began investigating abnormal log information related to a system on its network.

'The affected system is unclassified and contains law enforcement sensitive information, including returns from legal process, such as pen register and trap and trace surveillance returns, and personally identifiable information pertaining to subjects of FBI investigations,' said the notification reviewed by The Associated Press.

A pen register is a common surveillance tool that enables law enforcement to log phone numbers dialed by a particular line.

The FBI confirmed the cyber incident in a statement but did not provide additional details.

'The FBI identified and addressed suspicious activities on FBI networks, and we have leveraged all technical capabilities to respond,' the FBI said. 'We have nothing additional to respond.'

Neither the FBI statement nor the notification identified who might be responsible for the incident, but the bureau and other federal agencies have long been targets of foreign hackers seeking to spy on sensitive operations and decision-making.

In this instance, the FBI said, the techniques being used were 'sophisticated' and included leveraging a commercial internet service provider vendors infrastructure to exploit FBI network security controls.

Katie Jackson desperately wants a new treatment for Huntingtons disease. Her husband died from the devastating brain disorder. And because the disease runs in families, her three children have a 50% chance of inheriting the condition. Shes pinned her hopes on a cutting-edge gene therapy from UniQure NV.

But Jackson says Huntingtons patients have no desire to meet a new demand from the US Food and Drug Administration: to enroll in a new clinical trial where some people will undergo fake brain surgery without getting UniQures treatment. The FDAs request, intended to conclusively determine the therapys potency, has raised concerns the trial would be both unethical and impractical.

'It is inconceivable to us,' said Jackson, chief executive officer of Help 4 HD International, a Huntingtons advocacy organization. 'Subjecting participants to invasive procedures without the prospect of therapeutic benefit is unjustifiable.'

With little support from patients for a new trial, UniQure may have reached an impasse with the FDA over its gene therapy for the fatal neurological condition that leaves people unable to think, walk or talk. The companys one-time treatment aims to silence a gene thats linked to the disease. Its infused into a patients brain through burr holes drilled through their skulls.

After showing promising trial results in September, the company announced plans to file for US approval in early 2026, sending the stock soaring. But regulators arent convinced that the gene therapy and the arduous procedure to deliver it will make a meaningful difference for patients. They now want a study that compares those who got the treatment to those in a placebo group who undergo a sham surgery, the company said this week.

That request has set off fireworks, with UniQure and the agency openly feuding over what such a study would entail. In order to ensure that patients dont know if they received the gene therapy, the critical element for such a blinded comparison trial, even those who dont get it would need to go under anesthesia for about 10 hours, the company said. The agency denies this.

UniQures shares rose as much as 7.1% in New York, after falling 42% after the company disclosed the new FDA request through Wednesdays close.

Placebo effect

Placebos have long been a fixture of clinical trials, used to ensure that the psychological benefits of getting care arent mistaken for drug potency. But companies and patient advocates have been pushing the FDA for flexibility with rare diseases because it can be hard to recruit enough people and unethical to withhold treatment from dying patients.

And a placebo comparison for UniQures gene therapy is far more complicated than giving someone a sugar pill.

Performing a fake surgery would involve patients undergoing anesthesia for about 10 hours, a UniQure executive said Monday on an earnings call. Doctors would 'superficially drill a hole on the skull' without going through the bone, the company said.

The FDA disputes that patients getting the fake surgery would need to be under anesthesia for anywhere near that long, estimating it would be less than 30 minutes.

'The companys description of what the control arm participants are going through is completely distorted,' Andrew Nixon, a spokesman for the Health and Human Services Department, said in a phone interview Wednesday.

UniQure disagreed. The sham surgery 'requires a lengthy anesthesia period,' comparable to that of the actual brain surgery, to prevent patients from knowing if they are in the control arm, a spokesperson said in response to the agency. That has consequences.

Complications

In an early part of UniQures testing, doctors performed fake surgeries on 10 patients at the request of the FDA.

On average, those patients were under general anesthesia for 10.3 hours, the company spokesperson said. One participant developed dangerous blood clots from lying on an operating table for too long, according to people familiar with the study who asked not to be identified discussing the private information.

Fake surgeries are unusual but not unprecedented in clinical trials. Researchers drilled holes in patients foreheads about two decades ago as part of a sham procedure to study whether fetal tissue transplants are effective for Parkinsons disease. Some sham surgery studies have proven that treatments are ineffective.

If UniQure were to agree to the new trial, depending on how long it goes, patients in the placebo group may not be eligible to get treated because their disease might have progressed. It could be difficult to recruit trial participants who are willing to accept that risk.

A sham surgery isnt necessarily unethical, though the potential scientific benefits must justify the risks, said Amy L. McGuire, a professor of biomedical ethics at Baylor College of Medicine.

The FDA should hold an advisory committee meeting to decide whether UniQures existing data justifies approval, said Steven Joffe, who chairs the department of medical ethics and health policy at the University of Pennsylvania Perelman School of Medicine.

The FDA 'has sent mixed or changing messages,' Joffe said. 'I believe they have a responsibility to patients and families to air the data publicly and get expert input.'

Benefits questioned

UniQures study was far from ideal. It was small, with only 17 people getting a high dose of the gene therapy. The company has three-year follow-up data for only 12 patients. By comparison, some other trials for Huntingtons drugs have involved hundreds of patients, though they didnt involve brain surgery.

The initial results from UniQures study, released in 2023, werent clear cut. After one year, there was no obvious difference between the people who got high doses and those who underwent a fake surgery on a common scale of Huntingtons symptoms. The sham group didnt decline at all on a rating scale of disease symptoms.

The data has raised questions at the FDA, according to people familiar with the matter. It was a negative study, and staff-level reviewers made the decision that a new trial was needed, said the people, who asked not to be identified discussing deliberations within the agency.

Company researchers concluded that Huntingtons disease progresses too slowly to notice a difference after one year. They needed to look longer to see if the treatment was working. But they couldnt track the patients who got the fake surgery. They had either quit the trial or gotten the actual treatment.

So the company compared patients who got its therapy to a different control group: a database showing how the disease normally progresses. While thats a common approach for rare diseases, it isnt considered as reliable as studies where patients are randomly assigned to get treatment or a placebo.

Changing goals

The studys original main goal was to determine if the treatment was safe. The company approached the FDA much later, after it was well underway, for permission to compare the fate of patients getting the gene therapy to the expected progression of the disease based on the external data.

After two years, patients given a high dose were doing 80% better than expected based on the external control arm, the company announced in 2024. Later that year, UniQure approached the FDA for guidance. While the agency didnt make any promises, the company said it reached an agreement that the revamped design could be used as the basis for a fast-track approval without the need for a new study.

UniQure conducted another year of analysis and announced the final results in September 2025.

But by then, the FDA leadership had changed. The division that oversees gene therapies is now led by Vinay Prasad, a well-known critic of companies that dont test their treatments against placebo controls.

During his watch, the agency has announced multiple new initiatives to speed rare disease drugs. But biotech companies and agency critics have said that behind the scenes the goalposts are shifting and the agency is taking a harder line on some new therapies.

UniQure says it plans to request another meeting with the agency in the second quarter to discuss potential study designs. On a call with investors Monday, Chief Executive Officer Matthew Kapusta said the company 'has a moral obligation, given the strength of our data, to continue to pursue this.'

As Texas waits on President Donald Trumps promised endorsement, Sen. John Cornyn isnt holding back on his runoff opponent in the Republican primary.

His campaign is releasing a new video Thursday with a litany of ethical and personal accusations against state Attorney General Ken Paxton. Its an initial salvo in a second round of campaigning that could be even more bitter and expensive than the first.

The video revisits issues like Paxtons impeachment trial on corruption charges, which ended in an acquittal but exposed an extramarital affair, and a state fraud indictment for securities fraud, which Paxton resolved with a plea deal without admitting guilt.

Cornyns team said its spending tens of thousands of dollars to keep the video in front of voters eyes. Its pocket change in a race where spending surpassed $110 million before Tuesday, but a possible foreshadowing of a future deluge if the six-minute clip is edited into television spots.

Trump did not endorse a candidate in the primary, frustrating Republicans who fear that theyre wasting time and resources in Texas that could be devoted to more competitive battleground states. The president said Wednesday that he would weigh in on the May 26 runoff and expect the candidate without his endorsement to drop out, but he hasnt announced a decision.

Cornyn narrowly finished first in the primary that ended on Tuesday, but he did not cross the 50%-plus threshold necessary to avoid a runoff. U.S. Rep. Wesley Hunt finished third and was disqualified.

Party leaders are pushing for Cornyn, a stalwart incumbent seeking his fifth term, and warn that Paxton has too much baggage to be successful in a November general election against James Talarico, the Democratic nominee.

But Paxton has proven resilient to attacks over the years, and hes fashioned himself as a political warrior for Trumps 'Make America Great Again' movement. He told conservative influencer Benny Johnson that he wouldnt drop out, no matter what happens with the endorsement.

'Im going to give people in Texas a choice,' Paxton said. 'The people in Washington can have their own opinion. The president can have his own opinion.'

Paxton made a different offer on social media. There, he said he would consider dropping out if Senate Republican leaders lifted the filibuster to pass legislation supported by Trump to create strict new proof-of-citizenship requirements for voting. The proposal has stalled in the Senate.

Trump appeared frustrated by Paxtons intransigence.

'That is bad for him,' he told Politico. 'So maybe, maybe that leads me to go the other direction.'

The president previously wrote on social media that he would endorse a Texas candidate because the divisive contest cannot 'be allowed to go on any longer.'

U.S. homebuyers had to act fast last week to nab the first sub-6% mortgage rates in more than three years. Now theyre up, and the new conflict in the Middle East threatens to nudge them higher.

The average for 30-year, fixed loans climbed to 6% from 5.98% last week, which was the lowest point since September 2022, data from Freddie Mac showed Thursday. A year ago, it was 6.63%.

Also see: A ‘last resort HELOC allows borrowers to qualify for more home equity

Last weeks decline offered a psychological boost for Americans who may have been holding off on housing decisions for years. While this new increase may be jarring for some, rates are still down significantly from a year ago, giving house hunters more purchasing power and sparking optimism across the industry for a better spring sales season this time around.

The war with Iran throws a variable into the mix. As long as theres a quick resolution, economists say borrowing costs arent likely to rise enough to spoil the momentum. A lengthy conflict, however, would push up oil prices and generate higher inflation, keeping upward pressure on the Treasury yields that guide home loans.

'I dont think what were seeing in Iran is nearly enough to kill the spring buying season,' said Brad Case, chief economist for Homes.com. 'But it is enough to push mortgage rates up a little bit.'

Its a precarious time for a housing market that remains unaffordable for many Americans, even as price growth has flattened. The spring is traditionally a busy period for sales as the weather warms and families look to land a deal before the new school year starts.

'The most likely scenario' points to a quick resolution in the Middle East, said Mark Zandi, chief economist of Moodys Analytics. But if the war drags on for more than a few weeks, 'oil prices and interest rates will be higher, weighing heavily on the psyche of American households who are already on high alert over the cost of living.'

That, Zandi said, would 'do significant damage to the economy and housing market.'

Christopher Maloney, mortgage strategist for BOK Financial Securities, said if the war gets bad enough, it could also damage buyer confidence.

'Forget about your rate ' how are people going to feel about the economy?' Maloney said. 'Once you kick the football in a war, you never know where its going to go. People will ask should we be taking on buying a house now?'

Over the weekend in Crofton, Maryland, four sales contracts dropped on the desk of Ryan Paquin, branch manager with First Home Mortgage. Three came from buyers with closing dates scheduled for next month and they chose to lock in their rates for 30 days. The fourth decided to wait a couple days and see if loan costs came down.

'One gentleman is a risk taker,' Paquin said. 'He eventually locked in.'

AUSTIN, Texas (AP) ' Newly released police body camera footage shows bargoers and pedestrians fleeing and ducking for cover in the moments after a gunman began firing outside a Texas bar, leaving three dead in what is being investigated as potential terrorism.

'Everybody down!' one officer yells. 'Where is he?'

The terrifying moments captured on video by officers and surveillance cameras that were released Thursday show how the shooting that wounded more than a dozen others unfolded quickly early Sunday in downtown Austins entertainment district.

Austin Police Chief Lisa Davis said officers arrived within 56 seconds of the first 911 call, shooting and killing the suspect after he fired at police.

Davis said the investigation is ongoing and would not discuss a possible motive for the shooting that erupted a day after the U.S. and Israel launched an attack on Iran.

The FBI has said its investigating the shooting as a potential act of terrorism and a law enforcement official told The Associated Press that the gunman was wearing clothes with an Iranian flag design and bearing the words 'Property of Allah.'

Police have identified the gunman as 53-year-old Ndiaga Diagne and say he legally bought the pistol and rifle that he used in the attack outside Bufords Backyard Beer Garden. The venue is on Sixth Street, a nightlife destination filled with bars and music clubs close to the University of Texas at Austin..

Authorities now know 19 people were hit by gunfire, including the three who died, Davis said Thursday. One person remains in critical condition.

Most of those who were shot were outside the bar, including one victim who was waiting for a ride, she said.

Screaming and shouts of 'get down' can be heard on a 911 call released Thursday. 'There has been a shooting at Bufords,' one caller said. 'There are people dead over here. We need help right now.'

Diagne was not on the radar of authorities before he opened fire early Sunday. Davis said investigators have found he was the subject of a mental health-related welfare check, possibly in 2022, by an agency elsewhere.

He fired the first shots from his SUV then parked his vehicle and emerged with a rifle, police said. He shot another person before officers rushed to the intersection and shot and killed him, Davis said.

Jorge Pederson, 30, an aspiring mixed martial arts fighter, died from his gunshot wounds Monday. He had just moved to Texas from Minnesota. His former gym, the Academy Martial Arts Gym, said in a Facebook post that he brought 'light and joy into the grueling work of training.'

Also killed were 21-year-old Savitha Shan and 19-year-old Ryder Harrington.

Shan, a business student at the University of Texas at Austin, had a job waiting for her at a consulting firm, her family said in a statement released through the university. It said she was an only child and described her death as 'profoundly unfair.'

Harrington had attended Texas Tech University through last fall, and his former fraternity brothers at Beta Theta Pi recalled in an Instagram post his ability to 'make ordinary days unforgettable.'

Associated Press writers Jim Vertuno in Austin, Heather Hollingsworth in Mission, Kansas; John Seewer in Toledo, Ohio; and Alanna Durkin Richer in Washington contributed.

Concern is rising that the first major storm outbreak in the run-up to spring could strike the nation’s heartland, putting millions of Americans from Texas to Iowa at risk of potentially strong tornadoes.

Some scattered severe thunderstorms were expected to begin firing up late Thursday in the Texas Panhandle and across western Oklahoma and parts of Kansas, the National Weather Service said. Large hail, damaging winds and possibly a few tornadoes were also expected, according to the forecasters.

But the strongest storms were expected Friday in a zone that includes much of Oklahoma, Kansas and Missouri and extends into some nearby states, according to weather service projections.

More than 6 million Americans are at the highest risk of severe weather Friday in an area that includes the metropolitan areas of Kansas City and Tulsa, Oklahoma, according to the national Storm Prediction Center. Another 22 million people are at a slightly lesser risk in a zone that includes Oklahoma City; St. Louis; Omaha, Nebraska; and Milwaukee, Wisconsin.

The general setup for the strong storms is a clash between warm air streaming north from the Gulf coast and cooler Canadian air behind cold fronts, according to meteorologists with the private forecasting service AccuWeather.

In parts of the eastern U.S., this weather pattern is also expected to usher in extremely warm temperatures for this time of year by the weekend.

'Temperatures will be 20-30 degrees above average, with 80s reaching as far north as parts of the Ohio Valley and Mid-Atlantic,' federal forecasters wrote in their long-range forecast discussion. 'Daily records could become widespread.'

The high temperature in Louisville, Kentucky, for instance, is expected to reach 81 degrees (27.2 Celsius) by Friday, the weather service predicts. Atlanta’s high temperature is expected to hit 82 degrees (27.8 Celsius) by Saturday. The forecast for Washington, D.C., calls for a high temperature of 74 degrees (23.3 Celsius) on Saturday.

The spring storms in the forecast come near the start of what many call tornado season, which generally begins at different times in different parts of the United States.

In what has historically been known as Tornado Alley ' a designation that typically includes Kansas, Oklahoma and Texas ' the peak of tornado season is May into early June. But the season starts earlier in whats often called Dixie Alley made up of southern states such as Arkansas, Louisiana, Mississippi, Alabama and Georgia.

Experts recommend a few simple safety steps to take before tornadoes hit.

WASHINGTON (AP) ' A Florida handyman who was sentenced on Thursday to life in prison for molesting two children had been convicted of storming the Capitol on Jan. 6, 2021, but was pardoned by President Donald Trump.

Andrew Paul Johnson, 45, is among several Jan. 6 defendants who have been charged with new crimes since Trump’s sweeping act of clemency for Capitol rioters. On his first day back in the White House last year, Trump pardoned, commuted prison sentences or ordered the dismissal of cases for all 1,500-plus people charged in the attack.

Johnson was convicted last month of two counts of lewd or lascivious molestation of a child and one count of electronically transmitting material harmful to a minor, according to prosecutors in Hernando County, Florida. County Circuit Judge Judge Stephen Toner handed down Johnson’s life sentence.

Sheriffs deputies began investigating the child molestation allegations against Johnson in July 2025. One of his victims told investigators that the abuse started around April 2024, several months before Johnson was sentenced for his Capitol riot conviction.

Johnson told one of his victims that he expected to be compensated for being a pardoned Jan. 6 defendant and would be putting the child in his will to inherit any leftover money, according a sheriff’s office report.

'This tactic was believed to be used to keep (the child) from exposing what Andrew had done,' the report said.

Investigators found sexually explicit messages that Johnson exchanged with one of his victims on the Discord messaging app, according to Fifth Judicial Circuit State Attorney Bill Gladsons office.

“In the messages, Johnson attempted to have the victim download another application for a more private conversation and encouraged the victim to delete their messages afterwards,” Gladson’s office said in a news release.

Chief U.S. District Court Judge James Boasberg in Washington sentenced Johnson in August 2024 to one year behind bars after he pleaded guilty to four misdemeanor charges stemming from the riot. Johnson had asked to withdraw his guilty plea, claiming that he was pressured into it, but the judge rejected his request before sentencing.

Johnson, of Seffner, Florida, was carrying a bullhorn as he marched to the Capitol after attending Trump’s 'Stop the Steal' rally near the White House. He entered the building through an office window that other rioters had smashed, according to federal prosecutors. Johnson cursed and yelled at police officers after they used tear gas to disperse the mob of Trump supporters, prosecutors said.

A woman, who flew with the suspect to Kauai the day after the shooting, was also arrested and faces a charge of accessory after the fact, Sheriff Robert Luna and Los Angeles County District Attorney Nathan Hochman said at a news conference.

The shooting occurred on Feb. 22 as a deputy was responding to the 600 block of Deer Valley Drive on a report of multiple vehicles speeding, the Sheriff’s Department has said.

Shane Mahoney, 39, fired an “assault-style rifle” at the deputy’s SUV, Luna said. The bullet penetrated the passenger-side trunk compartment and lodged in the back seat.

The deputy had just finished responding to the call and was driving away as the shot rang out. Mahoney allegedly fired from a balcony of a nearby apartment complex, prosecutors said.

The deputy, working an overtime shift, was not injured.

The shooting led to a lockdown of the surrounding neighborhood for hours while authorities searched for the suspects.

“This deputy … simply left his home, went to work, donned his uniform and like the amazing people that we have, they volunteer to do this,” Luna said. “We understand inherently this is a dangerous job, but nobody expects, nor should it ever happen, to be fired upon while wearing this uniform.

“This was not a random act, this was an attempted murder of a peace officer,” Luna continued. “We’re not going to tolerate this.”

Arianna Charmaine Mitchell, 22, was identified as the accomplice who helped Mahoney avoid capture.

Both suspects live in the same block where the shooting occurred, Luna said.

Detectives found surveillance video and learned that the suspects drove a white, four-door sedan to Los Angeles International Airport, then boarded a flight to Kauai, Luna said. They were arrested on March 3 with the help of Kauai police and the U.S. Marshals Service.

Further information about how Mahoney and Mitchell were identified as the suspects was not disclosed.

A search of the suspect’s home turned up an assault rifle, three semi-automatic firearms and ballistic evidence, Luna said.

The charges against both suspects were filed on Feb. 25, Hochman said. If convicted as charged, Mahoney faces a maximum sentence of 35 years to life in state prison, while Mitchell faces a maximum sentence of three years.

“Each one of these individuals thought they could run out of the city, out of the state … to Kauai,” Hochman said. “But the long arm of the law is long. This is a very small world. Whether we’re going to track you across a city, state or ocean, you will be found.”

WASHINGTON (AP) ' President Donald Trump on Thursday fired his embattled Homeland Security Secretary Kristi Noem, after mounting criticism over her leadership of the department, including the handling of the administrations immigration crackdown and disaster response.

Trump, who said he would nominate Oklahoma Republican Sen. Markwayne Mullin in her place, made the announcement on social media after Noem faced a two-day grilling on Capitol Hill this week from GOP members as well as Democrats.

Noems departure marks a stunning turnaround for a close ally to the president who was tasked with steering his centerpiece policy of mass deportations. But she appeared to increasingly become a liability for Trump, with questions arising over her spending at her department and over her conduct in the aftermath of the shooting deaths of two protesters in Minneapolis earlier this year.

Trump said Noem 'has served us well, and has had numerous and spectacular results (especially on the Border!).' He said he was making her a “Special Envoy for The Shield of the Americas,' a new security initiative that he said would focus on the Western Hemisphere.

Noem, who appeared at a law enforcement event in Nashville, Tennessee, moments after Trump’s announcement, did not address her ouster there. She read from prepared remarks and was not asked by attendees about the development.

Later, in a social media post, she thanked Trump for the new appointment and touted her accomplishments as secretary.

'We have made historic accomplishments at the Department of Homeland Security to make America safe again,' she wrote.

The administration’s immigration crackdown faced criticism, especially in Minnesota

Noem is the first Cabinet secretary to leave during Trumps second term. Her tenure looked increasingly short-lived after hearings in Congress this week where she faced rare but blistering criticism from Republican lawmakers. One particular point of scrutiny was a $220 million ad campaign featuring Noem that encouraged people in the country illegally to leave voluntarily.

Noem told lawmakers that Trump was aware of the campaign in advance, but Trump disputed that in an interview Thursday with Reuters, saying he did not sign off on the ad campaign.

Noem has faced waves of criticism as shes overseen Trumps immigration crackdown, especially since the shooting deaths of the two protesters in Minneapolis at the hands of immigration enforcement officers. The former South Dakota governor was also criticized over the way her department has spent billions of dollars allocated to it by Congress.

Her department, DHS, has been at the center of a funding battle in Congress over immigration enforcement tactics and has been shut down for 20 days, although many of the employees are continuing to work, often without pay.

Even before Noems appearance before key congressional committees this week, Republican lawmakers had been anticipating the secretarys eventual ouster, particularly after her handling of the immigration enforcement crackdown in Minneapolis.

As they tried to end the ongoing Homeland Security shutdown, Senate Republicans had noted privately to Democratic senators that Noem was likely on her way out and that that should prompt Democrats to move forward with agreeing to fund the department again, according to two people familiar with the discussions.

Democrats did not see that as an actual concession by Republicans, considering Noem was becoming a political liability for the GOP, said the people, who spoke on condition of anonymity to discuss private negotiations.

Aside from immigration, Noem also faced criticism ' including from Republicans ' over the pace of emergency funding approved through the Federal Emergency Management Agency and for the Trump administrations response to disasters.

Critics welcomed Noem’s departure. Minneapolis Mayor Jacob Frey wrote 'good riddance' on social media, a sentiment echoed by Senate Democratic Leader Chuck Schumer.

Some immigration activists questioned whether her departure would change the execution of an immigration agenda that they fundamentally disagree with.

'This is not accountability, just a reshuffling of the enablers of the agenda of President Trump,” said Vanessa Cárdenas, Executive Director of Americas Voice, an advocacy group. She said Noems tenure was 'marked by cruelty.'

Gregory Bovino, a Border Patrol official who was elevated under Noems watch to lead immigration crackdowns in cities including Los Angeles, Chicago and Minneapolis, was one of the few who applauded Noems tenure.

'She is the best Secretary I ever worked for, period. The others werent even close. Noem is the ultimate patriot,' Bovino told The Associated Press.

DHS leadership changes come at a pivotal time

Mullin would need to be confirmed by the Senate, but under a federal law governing executive branch vacancies, he would be allowed to serve as an acting Homeland Security secretary as long as his nomination is formally pending.

Voting in the Senate just after Trump’s announcement, Mullin said he has 'no idea' how quickly his nomination will move.

'The president and I are good friends. So we look forward to working closer with the White House, and obviously Im gonna be over there a lot more,' he said.

Mullin would need to be confirmed by the Senate, but under a federal law governing executive branch vacancies, he would be allowed to serve as an acting DHS secretary as long as his nomination is formally pending.

Mullin would take over the third-largest department in government that has responsibility for carrying out Trumps hardline immigration agenda. And he would assume the role at a pivotal time for that agenda.

Immigration enforcement during the first year of Trumps administration was largely defined by high-profile, made-for-social-media operations with flashy names, often led by Border Patrol commander Gregory Bovino, who reported directly to Noem. Noem herself often went out on those operations, riding along with officers when they went out to make arrests.

But those high-profile operations in places like Los Angeles, Chicago and Minneapolis often led to clashes with activists and protesters that were captured on video and drove opposition to the presidents immigration agenda.

That culminated with the shooting deaths in Minneapolis after which Trump shuffled leadership of the operation. The number of officers there was drawn down shortly after.

Associated Press writers Seung Min Kim and Mary Clare Jalonick contributed.

Today, I’ll share an alternative HELOC for homeowners who need to tap more equity but with a lower monthly payment.

First, let’s review the standard equity loan.

A HELOC typically has an optional interest-only component for the first 10 years, allowing the homeowner to borrow more, assuming they didnt take the maximum amount of the equity to begin with.  Then it allows the borrower to repay, amortizing the remaining balance over 20 years.

Lets say you had a $250,000 HELOC at a 9.5% interest-only rate for the first 10 years. The minimum, interest-only payment would be $1,979. The fully amortizing payment over 30 years is $2,102. To qualify, the lender typically takes the amortizing payment plus the first mortgage payment and other bills, divided by your monthly gross income.

In the case of a HELOC, the lender assumes the borrower will not pay the balance down in the first 10 years. So, they must qualify at 9.5% over 20 years, which provides a principal and interest payment of $2,330.

An interesting new HELOC named Equity Select is available from High Tech Lending. It allows you to qualify for a much lower payment through a complicated formula that Im not going to try and explain here (email or call me if you want the exact formula).

Full disclosure: My firm does business with High Tech Lending.

While I consider this something of a “last resort” loan, the program is aimed at people looking to tap equity to pay for medical or consumer debt or just to live. In my experience, I’ve seen that many people are equity rich and cash poor, living on fixed incomes which makes it difficult to qualify for a regular mortgage or a traditional HELOC.

This new HELOC has a maximum loan to value that I consider very conservative. In other words, the borrower must have a lot of remaining equity to even qualify for the loan. In some cases, the only other choice for many homeowners is to sell the property.

The Equity Select HELOC comes with a 9.66% rate, and the payment for $250,000 borrowed is just $326. In a standard HELOC, the payment would be $2,330.

Say you are a borrower with monthly income of $5,000 wanting a $250,000 HELOC. You have a first mortgage payment of $2,000 and no other bills. Add the Equity Select payment of $326 and you get a ratio of 46.5% ($2,326 divided by $5,000). This program allows for an income and debt ratio up to 50%. So, you qualify for the $250,000 HELOC.

Now, lets say you are qualifying for a HELOC using the standard qualifying example that usually allows a debt ratio up to 45%. Take $2,000 plus $2,330 totals at $4,330. Divide $4,330 by $5,000 of income you have a debt ratio of 86.6%. That’s way too high.

Youd have to take a HELOC of just $25,000 at 9.5% to qualify for the standard HELOC. The formula is $2,000 plus $233 ($25,000 at 9.5% over 20 years). Take $2,000 plus $233 divided by $5,000 equals a debt ratio of 44.7%.

The Equity Select HELOC provides a loan amount 10 times the $25,000 standard HELOC at $250,000. Thats really a big deal when you are trying to qualify for more than $25,000. (The lender, by the way, makes its money through the higher interest rate.)  

Now, lets go through the fine print of this program.

Like a reverse mortgage, the Equity Select HELOC is potentially a negatively amortizing mortgage. This means the loan balance can increase if you dont at least make the full monthly interest-only payment. In the example above that would be $2,000 monthly.

The HELOC provides for three payment options: minimum interest-only payment of anywhere between 1% and 5% of the loan balance, interest-only payment on the whole loan balance or the fully amortizing payment. In the olden days, this type of mortgage was called Pick-a-Payment or Option Arm.

During the mortgage meltdown days of the Great Recession, negatively amortizing loans were one of the predatory loan culprits. When minimum required payments were less than paying full interest-only, the shortage was added to the principal balance.

Unlike the old negative amortization ARMs requiring just 20% down, this program is very conservative in its maximum loan-to-value. It uses an actuary table like a reverse mortgage to max out eligibility for a borrower.

For example, the maximum loan-to-value of a 65-year-old is just 51%. On a $750,000 property, your loan maximum (between your first mortgage and the Equity Select) would be $382,500. The big idea here is to never allow the borrower to get close to being underwater, even if the borrower made the bare minimum payment each month.

You can do this as a first mortgage or a second. On a first mortgage, the maximum loan is $4 million. As a second mortgage, its a $1 million loan limit.

The mortgage term is 40 years. The interest-only or minimum payment portion is good for the first 20 years. There is no prepayment penalty.

This is a non-recourse loan, meaning the lender cant go after your personal assets if you were to default on the mortgage. They could foreclose the property though.

There are an awful lot of people out there who struggle to qualify for a HELOC but want to tap their equity.

This financial instrument is especially helpful for folks with high debt ratios for typical HELOCs. Even if they cant afford to make the full monthly amortizing payment or the full interest-only payment, it might be OK with them if the loan balance moves up some.

The loan is similar to a reverse mortgage (but carries no age restrictions) and also is aimed at seniors. But better than a reverse, these HELOC borrowers are mandated to pay something every month so the negative amortization is much less. And their heirs may look more favorably on this type of loan rather than a reverse because there will be more equity left in the home when the parent dies.

The big takeaway here is this alternative HELOC allows homeowners to keep their low, pandemic-era mortgage rates and still tap needed equity.

Freddie Mac rate update

The 30-year fixed rate averaged 6%, 2 basis points higher than last week. The 15-year fixed rate averaged 5.43%, 1 basis point lower than last week.

The Mortgage Bankers Association reported an 11% mortgage application increase compared with one week ago.

Bottom line: Assuming a borrower gets an average 30-year fixed rate on a conforming $832,750 loan, last years payment was $342 more than this weeks payment of $4,993.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.375 %, a 15-year conventional at 5.125%, a 30-year conventional at 5.75%, a 15-year conventional high balance at 5.625% ($832,751 to $1,249,125 in LA and OC and $832,751 to $1,104,000 in San Diego), a 30-year high balance conventional at 6.125% and a jumbo 30-year-fixed at 5.99%.

Eye-catcher loan program of the week: A 30-year mortgage, fixed for the first five years at 5.125% with 30% down payment and 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.