MBA Statement on FHFA Report to Congress
The Federal Housing Finance Agency last week released its 2016 Report to Congress, which provides details on the Agency’s activities over the course of the past year, including its actions as conservator of Fannie Mae and Freddie Mac (https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FHFA_2016_Report-to-Congress.pdf).
Yesterday, Mortgage Bankers Association President and CEO David Stevens, CMB, issued a statement on behalf of MBA, agreeing with several report findings but objecting to other findings.
“We strongly support a number of the recommendations made in this report, including the need for comprehensive housing finance reform as well as measures to reduce barriers to investor participation in credit risk transfers,” Stevens said. “Both of these recommendations would facilitate liquidity in the secondary markets, which ultimately benefits borrowers, lenders and investors.”
However, Stevens said MBA “vigorously objects” to FHFA’s request that Congress grant it examination authority over nonbank servicers.
“In its role as conservator, FHFA already has the ability to set GSE counterparty requirements on servicers and the [Consumer Financial Protection Bureau’s] comprehensive mortgage servicing rules apply to all mortgage servicers,” Stevens said. “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 in a space that has already seen spiraling costs due to regulatory duplication.”
Additionally, Stevens said the report’s mention of the Financial Stability Oversight Council’s concern regarding the security of third party service providers is, in MBA’s view, “irrelevant because 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.”
“MBA remains committed to working with FHFA and Congress on all of these matters to foster strong, vibrant and resilient mortgage markets,” Stevens said.
