Industry Continues to Push for Warehouse Initiative

The Mortgage Bankers Association and its partner, the Warehouse Lending Project, are continuing to push for a warehouse solution that includes Fannie Mae and Freddie Mac and are asking for what they call a "constructive dialogue" with the GSEs and the government. In a letter sent to Treasury secretary Tim Geithner on Friday, the MBA and WLA included a legal opinion from Buckley Sandler LLP that says the GSEs are within their charter authority to buy participations in warehouses lines of credit. The groups have held meetings with both Treasury officials and regulators at the Federal Housing Finance Agency. The MBA/WLP project that residential fundings will total at least $2.6 trillion this year but argue there could be a $630 billion shortfall in origination capacity because of a lack of warehouse credit to non-bank lenders. The two say that depositories cannot pick up the slack, adding that, "independent mortgage banks with local market knowledge are critical to maintaining liquidity and competition in our real estate finance markets."