The Mortgage Bankers Association (MBA) is opposed to a recommendation by the Federal Housing Finance Agency (FHFA) that it have examination authority over nonbank servicers.
The recommendation was one of several FHFA made in its annual report to Congress.
“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 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,” MBA President and CEO David Stevens said. “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.”
Stevens added that MBA supports several of the recommendations in the report, including the need for comprehensive housing finance reform as well as measures to reduce barriers to investor participation in credit risk transfers. He said these recommendations would facilitate liquidity in the secondary markets, which ultimately benefits borrowers, lenders, and investors.
“Also, FHFA’s mention of the Financial Stability Oversight Council’s (FSOC) concern regarding the security of third party service providers is, in our 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,” Stevens said.