Level the Playing Field for Lenders

closing table

A core principle for MBA’s policy advocacy has been to promote a diverse and competitive mortgage market that allows banks and nonbanks, small lenders and large, to compete on a level playing field.  Because we have a large, diverse membership, it is one of our association’s key pillars.
The mortgage market and consumers benefit from competitive markets served by a large and diverse base of lenders. Smaller lenders, in particular, play a key role in strengthening the system for consumers by focusing on niche markets and leveraging unique knowledge of local consumer needs.

Today we released a white paper which provides a detailed picture of a reformed and revitalized secondary mortgage market end state. It is a follow up to GSE Reform:  Principles and Guardrails, which we released this past January. It is the also the result of over 15 months work by MBA’s Task Force for a Future Secondary Mortgage Market.

In the new paper, we lay out a proposal that ensures equal access to the secondary mortgage market for all lenders, regardless of size or business model and make the case for why Congressional action is critical to locking in key policy changes that have leveled the playing field in recent years.

MBA’s proposal relies on a number of key principles designed to ensure equitable market access for all lenders:

  • Ensure equitable, transparent and direct access to secondary market programs;
  • Prohibit G-fee pricing based on loan volume or asset size of single-family lenders;
  • Preserve cash window and small pool execution options for smaller lenders;
  • Maintain the “bright line” to ensure that Guarantors do not compete with lenders;
  • Prevent vertical integration by prohibiting lenders from owning or controlling a Guarantor.

Congress and the current administration have made clear they intend to tackle GSE reform in the near term.  Discussions are already happening, and MBA is putting forth its proposal today to ensure we have a seat at the table in order to ensure equitable, transparent, and direct access to secondary market programs for all lenders, large and small.

This morning, I went on CNBC to talk to more about this issue.  See the clip here.