The Credit Union National Association (CUNA) sent a letter to the Senate Banking Committee last week to express support for an efficient and fair secondary mortgage market.
“Credit unions that elect to sell mortgages into the secondary market do so for a variety of reasons, but predominantly it is a tool to help them manage long-term interest rate risk in order to continue to meet their members’ mortgage lending needs,” the letter stated. “Particularly today, with long-term interest rates at or near historic lows but expected to rise, access to a highly liquid secondary market with relatively low transaction costs is vital for the health of credit union mortgage lending. Credit unions, therefore, have a deep interest in the structure of the housing finance system going forward.”
CUNA believes an effective secondary market must include a neutral third party. Specifically, the independent third party would ensure that no market participant or class of participants enjoys an unfair advantage in the system. CUNA also supports equal access for lenders of all sizes and strong oversight for the entities providing secondary market services to ensure safety and soundness.
There should also be an emphasis on financial education and counseling as a means to ensure that borrowers receive appropriate mortgage loans. Also, among other recommendations, CUNA calls for consumer access to products with predictable and affordable payments to qualified borrowers.