Congress should give serious consideration to allowing independent mortgage banking firms to be members of the Federal Home Loan Bank System, according to the Mortgage Bankers Association.
MBA chairman-elect Bill Cosgrove told the Senate Banking Committee Tuesday that housing finance reform proposals would expand FHLB powers to be mortgage aggregators as well as securitizers.
Expanding FHLB access to independent mortgage bankers would “enhance market liquidity and ensure a boarder range of mortgage options for consumers,” Cosgrove testified.
He pointed out that independents comprise 11% of all lenders nationwide yet they originated 40% of all purchase mortgages in 2012. That is based on 2012 Home Mortgage Disclosure Act data.
“In exchange for membership in the
Membership in the System has been expanded over time, says Council of FHLBs executive vice president David Jeffers. But the FHLBs “have never taken a position for or against any new category of new membership. It is Congress not us who determines who is eligible for membership in the Federal Home Loan Banks,” he told NMN.
Congress expanded FHLB membership to commercial banks and credit unions in the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
