Washington – RealEstateRama – Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), issued the following statement on the Federal Housing Finance Agency’s (FHFA) announcement that it will conduct a comprehensive review of the Federal Home Loan Bank System:
“MBA applauds FHFA’s announcement to examine the appropriate role of the Federal Home Loan Bank (FHLB) system. We have long supported the responsible expansion of FHLB membership eligibility to better reflect the diverse providers of single-family and multifamily housing finance throughout the country. The Banks’ membership framework has only seen piecemeal updates since its creation, and there’s a need for an FHLB system that better reflects today’s housing finance market — not one from the 1930s. Independent mortgage banks have been the largest provider of single-family mortgages for much of the past decade and now service about half of all home loans. Similarly, REITs are significant investors in both single-family and multifamily mortgages, as well agency MBS.
“Today’s housing finance market is also dominated by the securitization process. Any comprehensive review of the FHLB System should also include examining the ways in which the Banks’ perform their critical mission as a liquidity backstop by rethinking the type of securitization-related collateral members can pledge.
“The business activities of these currently-excluded entities are strongly aligned with the FHLB housing mission, and FHLB membership could provide added resiliency to the housing finance system if these entities could participate as members.
“This announcement is well-timed, as MBA and the entire industry seek to address housing affordability and the racial homeownership gap.”