Trade Group Says Nonbanks Subject to ‘Additional’ Requirements on Servicing
By Paul Muolo
The Community Home Lenders Association has officially asked the Federal Housing Finance Agency to delay its proposal on nonbank capital standards for servicers, while suggesting that some firms have recently been subjected to “additional requirements.”
The trade group, which represents only nonbanks, believes that if the rule goes forward as is, it will result in the residential servicing business being concentrated in the hands of both “big banks and a few large nonbank specialty servicers…”
According to figures compiled by Inside Mortgage Finance, the servicing business has actually been “deconsolidating” the past few years.
CHLA lists four specific concerns about the proposed capital rule, including a complaint that a 25 basis point “add on” based on unpaid principal balance of servicing is too “severe.”
The Fannie Mae/Freddie Mac minimum capital requirement – as mandated by the GSEs under their seller/servicer guidelines – is $2.5 million. But CHLA claims this minimum has increased 10-fold since the 2008 housing crisis.