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Hundreds of thousands of people nationally are signing up with state insurers of last resort as home insurers pull back from disaster-prone areas, the Wall Street Journal reported. More than 30 states have some form of last-resort plan for people who can’t get coverage elsewhere. Plans can be statewide or restricted to coastal regions. Coverage varies between states, ranging from all-perils policies to those that cover wind, hail or fire only. The plans were designed to be temporary safety nets. As the private market shrinks, however, the plans are becoming insurers of first, not last, resort in some high-risk areas. In Florida, the Citizens Property Insurance last-resort plan is the biggest home insurer in the state with 1.4 million policies. Florida, California and Louisiana have each seen policyholder numbers for their last-resort plans more than double within the past five years, according to plan representatives, and there’s no sign of a letup. The California Fair Access to Insurance Requirements Plan is piling on policies, adding what a spokesman called a historic 25,000 policyholders in August — more than three times the 7,000 monthly cap on new home policies Farmers Insurance imposed recently in the state.

The company that has been sued by various states for alleged deceptive business practices surrounding 40-listing agreements, has filed for chapter 11 bankruptcy protection in 33 states, the Real Deal reported. Florida-based MV Realty came under scrutiny for allegedly paying homeowners a few hundred dollars in exchange for the right to be the listing agent in the event a homeowner decided to sell their home. Under the 40-year contracts, MV Realty would receive money if the company sold the property, the homeowner canceled the agreement or if the property was transferred in some other way, including foreclosure or a transfer when the owner dies. The contracts also allegedly permitted MV Realty to obtain mortgages on the homes, unbeknownst to the homeowners. North Carolina, Florida, Pennsylvania, and Massachusetts, among others, have sued MV Realty for alleged deceptive, unfair trade practices. The lawsuits in every state seek to stop MV Realty from entering into new contracts, void the existing contracts and have courts assign civil penalties to the company. MV Realty, which operates in 33 states nationwide, previously denied it engaged in any false or deceptive practices.

A new reality has finally started to set in across American households: Higher interest rates are here to stay, according to a Wall Street Journal analysis. The economy has held up relatively well ever since the Federal Reserve started aggressively raising rates early last year. Many households have breathing room because they locked in low rates on their mortgage or car loan before the rate increases started. And in at least one significant way, the high rates can help consumers: Savers can get more bang for their otherwise idle cash. But these higher-for-longer rates are starting to exact a toll on households that need to borrow now, especially for major purchases such as homes and cars. Those who have to rely on credit-card debt, where rates rise along with the market interest rates, are also feeling the bite. In some ways, this tightening is what the Fed wants, because its rate hikes are meant to slow down the economy to curb inflation. The Fed this week signaled it could raise interest rates once more this year. In other words, rates aren’t expected to go down soon. Inflation, for the first time in a long time, is stinging less. This summer, wage gains surpassed inflation for the first time since 2021. Price increases have slowed more than expected, while competition for workers has put pressure on employers to raise pay. Consumers have continued to spend, including on travel, restaurants, clothes and other discretionary purchases. Households have drawn down the glut of extra cash they were able to save early in the pandemic. Still, account balances are elevated compared with 2019 levels.

The U.S. Securities and Exchange Commission is probing The Change Company, a California lender that pledges to promote homeownership in underserved communities, over its mortgage-backed securities, Bloomberg News reported. As part the investigation, the regulator is also looking into some of the actions of its chief executive officer, Steven Sugarman, said the people, who asked not to be identified discussing the investigation that hasn’t been made public. Buyers of instruments backed by The Change Company’s loans have included some of Wall Street’s largest money managers, according to data compiled by Bloomberg. “Neither Change nor its leadership is aware of any SEC investigation,” the firm said in a statement. “Loans included in Change’s mortgage-backed securities have been vetted by third-party due diligence firms who have issued certifications attesting to the accuracy of the data and sufficiency of the scope of their reviews,” the company added, in addition to providing an Aug. 24 attestation letter from an outside lawyer.

Nomura Securities International agreed to pay $35 million as part of a non-prosecution agreement with the federal government over residential mortgage backed securities trading fraud dating back more than a decade, Bloomberg News reported. Nomura, a US-based broker-dealer subsidiary of Japanese financial services firm Nomura Holdings, will also pay almost $808,000 in restitution to victims of the scheme, the Connecticut District of the US Attorney’s Office said in a statement Tuesday. The firm previously paid more than $20 million to victims as part of a settlement with the Securities and Exchange Commission. “Nomura is pleased to have resolved the matter and grateful that the DOJ recognized the firm’s remediation and cooperation,” a representative for the bank said in an emailed statement. “The resolution will have no material financial impact as the agreed sanctions were recognized in prior periods.” A government investigation found Nomura misrepresented “material facts” to “deceive and cheat its customers in trades,” according to the statement. In some instances, employees lied to the buyer about the seller’s asking price, or vice versa. In other cases, Nomura said bonds it held were being sold from a third party and charged an “extra, unearned commission” on the sale.

UBS will pay U.S. authorities $1.44 billion to settle the last lingering legal case over Wall Street's role in the housing bubble of the early 2000s, which ultimately led to the 2008 financial crisis and Great Recession, the Associated Press reported. The Swiss bank agreed to pay a civil penalty over how it handled the sale of 40 mortgage-backed securities issued in 2006 and 2007. The settlement argues that UBS bankers gave false and misleading statements about the health of the mortgages in those bonds to the buyers in violation of federal securities law. For example, UBS bankers knew that the underlying mortgages in these bonds were poorly underwritten or violated consumer protection laws. The bonds in question ended up with substantial losses for investors. With the UBS settlement, the last remaining outstanding legal case from the Great Recession has now come to a close, the Justice Department said. Banks paid collectively more than $36 billion in civil penalties for their conduct related to the mortgage crisis, but that does not include other settlements that banks have made to state and local authorities as well.