MBA Asks for Meeting with Treasury on Warehouse Crisis

The Mortgage Bankers Association is asking the Treasury Department to take quick action on a plan to offer federal guarantees on warehouse lines of credit, warning that many non-banks are facing a severe liquidity crisis as refinancing applications swell. In a letter to Treasury secretary Timothy Geithner, MBA president John Courson requested a meeting with the government to discuss the issue. Among other ideas, the trade group wants regulators to relax the risk-based capital charge on warehouse lines. MBA's plea comes as rumors mount that some non-banks are struggling to maintain warehouse lines and complaints from loan brokers about delivery fees and turnaround times. The government has yet to adopt a policy or plan on warehouse lending but lobbyists say both the Treasury and Federal Reserve are rapidly being educated on the issue. Glenn Corso, who runs a group called The Warehouse Lending Project, said he has a meeting with Federal Reserve officials next week to discuss the matter. Mr. Corso said the Federal Housing Finance Agency is aware of the warehouse crisis "and they understand it." One idea being promoted by the industry is to have Fannie Mae and Freddie Mac buy participation interests in warehouse lines, thus adding liquidity to the market. (For more on the story see the Monday, February 9 issue of National Mortgage News.)