MBA Statement in Response to Comments by FHFA Director Calabria
|Rob Van Raaphorst|
WASHINGTON, D.C. (April 7, 2020) - Statement by MBA President and CEO Robert D. Broeksmit, CMB, responding to Federal Housing Finance Agency (FHFA) Director Mark Calabria's recent comments about mortgage servicers.
"The FHFA Director's recent statements send a troubling message to borrowers, lenders, and the mortgage market. Servicers are required to offer borrowers widespread forbearance under a plan devised and approved first by FHFA and then codified by the CARES Act. Fannie Mae and Freddie Mac are contractually obligated for the payments to investors. Since Fannie Mae and Freddie Mac will eventually reimburse mortgage servicers for the payments they must advance during forbearance, Director Calabria should advocate for the creation of a liquidity facility at the Fed to ensure the stability of the housing finance market.
"We also strongly disagree with his characterization of the customer experience as it relates to the size of a mortgage servicer. Millions of Americans are well-served by their local independent mortgage bank, community bank, or credit union, and many chose to obtain their mortgage from those institutions for that precise reason. In the Director's own words, 'Fannie and Freddie were created to provide small lenders, community banks, and credit unions with access to the market.' We urge the Director to follow that principle in responding to this crisis.
"The Director's unwillingness to offer support from Fannie Mae and Freddie Mac for the very firms that he and Congress asked to execute his agency's forbearance plan only reinforces why the Federal Reserve and U.S. Treasury must create a financing program to help residential and commercial/multifamily mortgage servicers who will have to provide unprecedented levels of mortgage payment forbearance. Servicers are eager to provide this help, and while we all hope that the duration and severity of the economic dislocation caused by the pandemic will be manageable, we must plan now for a more extended disruption, as I made clear to the Director this evening."