Lenders One Opposes GSE Test

Lenders One, a cooperative of 60 independent mortgage bankers, has warned the Mortgage Bankers Association that they oppose a "bright line" test contained in Senate GSE bill because it could cut off their access to Fannie Mae and Freddie Mac's automated underwriting systems."In the absence of a consensus among mortgage bankers, we question whether [MBA's] unqualified support" for the bright-line test is "appropriate," Lenders One chief executive Scott Stern said in a letter to MBA. The bright-line test is designed to give a new GSE regulator a clearer test for approving or reviewing the business activities of two government-sponsored enterprises. MBA is planning to meet with a cross section of its members to address the rumblings. "A lot of the concerns will turn out to be false fears upon closer examination," MBA senior vice president Kurt Pfotenhauer said. MBA's goal is to require Fannie and Freddie to certify other lenders' AU systems to increase competition, the MBA executive said, not to force the GSEs to get rid of their AU systems.