The mortgage banking industry, to say the least, is ticked off at Fannie Mae/Freddie Mac regulator Mark Calabria.
On Tuesday, the Federal Housing Finance Agency told Inside Mortgage Finance that the two mortgage giants are undercapitalized, highly leveraged and hence cannot lend money or provide credit to mortgage servicers. An agency spokesman said Director Mark Calabria has not issued a directive on providing credit but has been very clear that Fannie and Freddie must prioritize their own safety and soundness.
Other media organizations filed similar stories yesterday as well. In short, Calabria’s comments were not warmly received by the Mortgage Bankers Association.
Late Tuesday night, around 10 p.m., MBA President and CEO Bob Broeksmit issued the following statement: “The FHFA Director’s recent statements send a troubling message to borrowers, lenders, and the mortgage market. Servicers are required to offer borrowers widespread forbearance under a plan devised and approved first by FHFA and then codified by the CARES Act. Fannie Mae and Freddie Mac are contractually obligated for the payments to investors. Since Fannie Mae and Freddie Mac will eventually reimburse mortgage servicers for the payments they must advance during forbearance, Director Calabria should advocate for the creation of a liquidity facility at the Fed to ensure the stability of the housing finance market.“
He continued: “We also strongly disagree with his characterization of the customer experience as it relates to the size of a mortgage servicer. Millions of Americans are well-served by their local independent mortgage bank, community bank, or credit union, and many chose to obtain their mortgage from those institutions for that precise reason.”
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