MBA Critical Of FHFA Recommendations

Posted by Michael Bates on June 19, 2017 No Comments

The Mortgage Bankers Association (MBA) says it is supportive of many recommendations contained in the Federal Housing Finance Agency’s (FHFA) annual report to Congress, released last week. However, the organization has also expressed concerns about certain measures the FHFA is eyeing.

The MBA is getting behind a couple of significant proposals that the FHFA highlights in its report, including “comprehensive housing finance reform” and “measures to reduce barriers to investor participation in credit risk transfers.”

“Both of these recommendations would facilitate liquidity in the secondary markets, which ultimately benefits borrowers, lenders and investors,” says David H. Stevens, president and CEO of the MBA.

But the group has taken issue with some of the FHFA’s objectives.

“MBA vigorously objects to FHFA’s request that Congress grant it examination authority over non-bank servicers,” Stevens explains. “In its role as conservator, FHFA already has the ability to set GSE counterparty requirements on servicers, and the CFPB’s comprehensive mortgage servicing rules apply to all mortgage servicers. By statutory design, this is also an area of significant state authority and examination activity. Granting FHFA this additional authority absent preemption of duplicative state requirements would result in an even more burdensome regulatory regime.”

Additionally, the MBA finds the Financial Stability Oversight Council’s (FSOC) concerns regarding the security of third-party service providers (which the FHFA references in its report) “irrelevant.”

“The FSOC’s recommendation was made specifically in the context of cybersecurity concerns and does not reference mortgage servicers or any risks that are inherent to the business of servicing loans,” Stevens says.

Read the FHFA full report here.

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