MBA Statement on IMBs Following This Week’s Congressional Hearings on FSOC’s Annual Report to Congress
February 8, 2024
WASHINGTON, D.C. (February 8, 2024) — MBA’s President and CEO Bob Broeksmit, CMB, released the following statement in response to commentary made on independent mortgage banks (IMBs) during this week’s Congressional hearings on the Financial Stability Oversight Council’s (FSOC) Annual Report to Congress:
“IMBs play an indispensable role providing sustainable mortgage credit to, and servicing loans for, first-time and low- and moderate-income homebuyers. IMBs already face requirements related to capital, net worth, and liquidity that have increased sharply over the past 15 years at the direction of the Federal Housing Finance Agency (FHFA) and the government-sponsored enterprises (Fannie Mae and Freddie Mac), Ginnie Mae, and the Federal Housing Administration (FHA). On top of that, they face additional risk-management requirements from their warehouse lenders, state regulatory exams for capital, liquidity and governance standards, and consumer compliance supervision and enforcement by the CFPB.
“If regulators are concerned about the market share and stability of IMBs, they ought to go back to the drawing board on the Basel III endgame proposal, which would drive banks even further out of the mortgage business and make it more difficult for them to serve consumers directly and provide the vital financing that sustains IMBs.
“Consumers win, and the real estate finance system is the healthiest, when multiple actors utilizing a range of business models and strategies compete on a level playing field. If FSOC elects to impose higher costs across the system, it will only burden prospective homeowners with higher prices and less choice at a time of constrained housing affordability.”