Community Home Lenders Association (CHLA) Releases Recommendations For Mortgage Finance Reform
Emphasis on Consumer Choices, Broad Market Competition
CONTACT: Scott Olson 571-527-2601 FOR RELEASE: May 29, 2013
The Community Home Lenders Association (CHLA) today released its principles and specific policy recommendations for reform of the mortgage finance system. These recommendations (attached) are designed to avoid concentration of mortgage markets by a few large lenders, maximize the availability and reliability of mortgage loan choices for borrowers, and protect taxpayers.
“Almost everyone in Washington says they are concerned about access for smaller lenders,” said William J. McCue, President of the McCue Mortgage Company in New Britain, Connecticut. “CHLA agrees – but we also go beyond general principles to a number of specific recommendations to help make this goal a reality.”
CHLA supports mortgage reform based on creating a GNMA-type guarantee for qualified mortgage loans, with protections and guarantee fees to control taxpayer risk. CHLA is not proposing a specific GSE reform plan at this time, but plans to focus its efforts on convincing Congress to structure reform in a manner which preserves the critical role of community lenders, in order to maintain consumer choices, including the option to work with locally based lenders.
Therefore, CHLA is releasing the following recommendations, which could be structured as legislative provisions for inclusion in whatever reform proposal is adopted, in order to help achieve the goals of maximizing consumer choices and having a diverse mortgage market:
(a) Require full and equal access for all qualified loan originators, regardless of size or type.
(b) Prevent steering by guarantors to mortgage lending affiliates.
(c) Place loan loss risk sharing on well capitalized guarantors, with originator responsibility to do sound underwriting.
“We need to do mortgage reform the right way or we could end up with a mortgage market dominated by a few large lenders,” said Robert Eustis, President and CEO of Eustis Mortgage Corporation in New Orleans. “That outcome would limit consumer choice in the mortgage market, eliminate the personalized service that community lenders provide, and ultimately be bad for housing markets and the broader economy.”
CHLA members want to make sure that as Congress debates mortgage reform, community mortgage lenders, community banks, and credit unions have a seat at the table, so that policies are not developed which create market concentration only among the largest financial institutions. Community lenders are generally closer to borrowers, and more committed to staying active in mortgage markets and lending in their local or regional communities. CHLA’s release today offers Congress specific proposals to maintain this role which can be written into final legislation.
“Mortgage reform should not just be an inside game,” said Scott Olson, CHLA Executive Director. “The ultimate goal should be a broad mortgage market that works for all Americans.”
The Community Home Lenders Association (CHLA) is a national non-profit association of small and mid-sized community-based mortgage lenders. The mission of the CHLA is to promote federal mortgage programs, rules, and regulations which treat community mortgage lenders fairly, and which reflect the critical importance that community mortgage lenders play in providing broad access to credit for borrowers, in increasing competition in mortgage markets, and in providing borrowers with quality mortgage services and access to loans at a local level.
COMMUNITY HOME LENDERS ASSOCIATION
Scott Olson, Executive Director