MBA Wants An Office to Regulate MBs
WASHINGTON-As Congress wrestles with regulatory reform, the Mortgage Bankers Association is lobbying for the creation of a new federal office to oversee independent mortgage bankers.
MBA is arguing that independent mortgage bankers are responsible for 40% of residential originations and should be subject to uniform lending standards that apply to all lenders.
This new "mortgage banker oversight office" would be part of a federal banking agency if MBA has it way. Mortgage bankers would have to pay a fee for federal oversight, but state regulators would continue to have a role in examination and enforcement. "We think this will provide better consumer protection and a more efficient marketplace," said MBA SVP Steve O'Connor.
The trade group is urging Senate Banking Committee chairman Christopher Dodd, D-Conn., to incorporate a mortgage banker oversight office in its regulatory reform bill.
SBC members have been working on a bipartisan reform bill that committee leaders hoped to unveil by February.
The committee is not expected to mark up and vote on the bill until March. Meanwhile, MBA and other industry groups are concerned about the new emphasis on risk retention on the sale and securitization of mortgages.
And they are particularly concerned about the approach taken in a House-passed regulatory reform bill, which gives regulators the discretion to set risk retention requirements as high as 5% on FHA, Fannie Mae and Freddie Mac loans.
MBA opposes this "one size fits all approach" and it wants a "safe harbor" exemption for residential mortgages that are considered very safe - such as fixed-rate, fully amortizing products.