Adam Constantine on MLK Jr.’s impact on housing equality

During the interview, Constantine explains why the industry needs to focus on evoking intentional change rather than launching lackluster initiatives.

Managing Credit Risk in 2021 and Beyond

Join a panel of industry experts as they provide an economic outlook for 2021 and a discussion with regional bankers on how they are managing credit risk over the next several years.

Amid record-high origination volumes, mortgage fraud risk is down

CoreLogic's recently released Mortgage Fraud Report is the industry standard for nationwide fraud monitoring and analysis. Read the findings here.

Empowering women to be financially great with Dava Davin

Women of Influence winner Dava Davin joins Girlfunds to discuss everything from her best financial tip to her advice on starting the home-buying process.


HPC urges regulators to align nonbank servicer standards

Suggests FHFA, Ginnie Mae and state regulators come together to avoid disruption

The Housing Policy Council has weighed in on the Conference of State Bank Supervisors’ new proposed standards for nonbank mortgage servicers. In its comments, HPC suggests that regulators need to align on the regulations in order to avoid disruption.

In October, CSBS made a controversial move to issue a final rule with proposed prudential standards for nonbank mortgage servicers – standards that, if enacted, have some stakeholders, like the Urban Institute, worried.

The proposed rule addressed capital, liquidity, governance, policy related to entity survivorship and more.

And now HPC, headed by former Federal Housing Finance Agency President Edward DeMarco, is adding its voice to the comments.

“In the introduction to the Proposed Standards, CSBS recognizes the importance of nonbank mortgage servicers in the mortgage market,” HPC stated in its comment letter. “HPC agrees. Nonbank mortgage servicers are a vital conduit between mortgage borrowers and investors in mortgage loans. The mortgage market has evolved to rely on the services provided by these companies, especially for mortgage borrowers in the FHA/VA mortgage market.”

Achieving touchless mortgage automation

Effective solutions must be purpose-built for mortgages, rather than adapted horizontal technology. In this webinar, experts at SoftWorks AI and Tavant discuss critical components of a mortgage automation solution and how to evaluate technologies that best fit your business’ needs.

Presented by: SoftWorks AI

“Given the role of nonbank mortgage servicers in the mortgage market, HPC also agrees with the stated goal of the Proposed Standards, which is to ensure that nonbank mortgage servicers are in a sound financial condition and have implemented effective risk management practices,” the letter continued.

However, HPC argued that state regulators, the FHFA and Ginne Mae would need to work together to align their policies in order to achieve this goal.

“We also recommend that CSBS develop formal protocols with Ginnie Mae and FHFA to ensure that any actions taken by Ginnie Mae or by an FHFA-regulated entity, or by a state regulator, related to the resolution of a nonbank mortgage servicer be communicated and coordinated across all those parties,” HPC stated in its letter. “Such coordination is needed to minimize both market and customer disruption in the event of the failure of a nonbank mortgage servicer.”

HPC begins by recognizing CSBS sought to align its proposed regulations with the FHFA, but pointed out that its proposal is a “higher of” construct, and that standards may always increase from those at the federal level but would never decrease.

Below is a quick look at some of the specific suggestions HPC laid out in its 12-page comment letter:

  • The Prudential Standards should be consistent with federal requirements and uniformly applied and enforced by the states
  • The Prudential Standards should be designed to address the unique risks of mortgage servicing and the business models of mortgage servicers
  • The definition of net worth should be aligned with current practices by Ginnie Mae and the enterprises
  • Liquidity standards should recognize the array of liquidity sources relied upon in normal commercial practice and the types of liquidity risk to be managed
  • The liquidity requirements should be designed to cover near-term operating expenses and include a cushion to cover changes in market conditions
  • Committed but unused/available credit lines should count toward the liquidity requirement
  • The base requirement should reflect differences in remittance schedules
  • The incremental liquidity requirement is counterproductive and should be eliminated
  • A supplemental liquidity cushion for unexpected events could take alternative forms
  • Stress test requirements should be based upon Ginnie Mae’s approach to stress testing
  • The standard on living wills should be replaced with a standard on contingency and continuity planning that includes plans for servicing transfers and resolutions

Leave a comment

Most Popular Articles

Prepare for the rise in mortgage rates

Economists offer their takes on how high mortgage rates will climb, how lenders will respond and what impact this will have on the housing market. HW+ Premium Content

Jan 18, 2021 By

Latest Articles

CFPB clarifies role of supervisory guidance

The Consumer Financial Protection Bureau issued a final rule Tuesday clarifying that supervisory guidance is not backed by the same force as law or regulation.

Jan 19, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please