Nonbank

As 2019 got underway, weakness in the housing market drove the number of workers employed by nondepository mortgage companies down to a low not seen since August 2016.

Mr. Cooper Group took a net loss of $136 million in the fourth quarter after lower rates hurt the mark-to-market value of its larger mortgage servicing rights portfolio harder than its peers.

Policymakers could improve independent mortgage banks' financial stability by giving these companies improved access to liquidity, according to the Mortgage Bankers Association.

Ginnie Mae should not overreact in supervising smaller, more diversified mortgage bankers, but rather scale its approach in line with the concentration of risk that different-sized servicers pose.

Nonbank mortgage companies cut payrolls by 3,100 full-time employees in December, bringing the level of the hiring in the industry to its lowest point in more than two years.

Residential mortgage-backed securities servicers are better able to weather a downturn and the resulting loan defaults today versus before the crisis because of their investments in technology and regulatory compliance, Fitch Ratings said.

Some hopeful souls in Washington believe the commercial banking industry will return to originating and servicing higher-risk mortgages, but most banks are more likely to continue withdrawing from the sector.

Independent mortgage banks have been instrumental in filling the void left by banks that have retreated from the home lending market since the Great Recession.

While Fannie Mae's multifamily origination volume took a step back from 2017's record high of $67 billion, its delegated underwriting and servicing program provided $65 billion in financing in 2018, led by Wells Fargo.

Policymakers should not let mortgage REITs, hedge funds and other firms gain membership through captive insurance companies.