The Mortgage Bankers Association sent a letter to Mark Calabria, director of the Federal Housing Finance Agency, urging him to allow companies like mortgage real estate investment trusts and independent mortgage banks to become part of the Federal Home Loan Bank network.
“Increased diversity in FHLB members would more accurately reflect the breadth of institutions that contribute to the national system of housing finance, in effect creating a ‘21st Century’ FHLB System,” Robert Broeksmit, MBA’s CEO, said in the letter.
Broeksmit said FHFA should change its 2016 rulemaking on FHLB eligibility to allow captive insurer members, with the addition of new safeguards related to both mission and “safety and soundness.”
Expanding membership would strengthen the broader housing finance system by increasing the supply of reliable, longer-term liquidity to companies that provide mortgages, the letter said.
“This outcome is appropriate, given the contributions that both sets of institutions make to housing finance and community investment,” Broeksmit wrote. “The addition of well-managed mortgage REITs and IMBs to the FHLB system represents a strengthening of the system in line with FHFA’s stated objectives.”
The FHFA did not respond to HousingWire’s request for comment.
In February, the FHFA issued a request for industry input regarding membership criteria to become part of the FHLB system, charted by Congress in 1932 to bolster the availability of mortgages.
Like Fannie Mae and Freddie Mac, they are so-called government-sponsored enterprises, or GSEs, that can borrow cheaply because of the assumption the federal government won’t let them fail. And, like the two GSEs, they are regulated by the FHFA.
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