In a letter to the Federal Home Finance Agency, the Credit Union National Association urged the agency to ensure that changes made to the secondary mortgage market allow small institutions to maintain access to the market.
CUNA urged the FHFA to provide equal access to the secondary mortgage market, allow for an independent third party to serve as a conduit to the market, promote enhanced oversight and supervision, ensure that mortgage loans will be available in times of economic downturn, provide qualified borrowers with predictable and affordable payments, promote the growth of affordable housing and enough time to transition to the new housing finance system.
“Credit unions exist to serve their members, and allowing direct access to the secondary mortgage market is critical to small lenders relying on the market for liquidity purposes,” CUNA said in the letter.
The FHFA requested assistance this fall in identifying the key components of mortgage securitization that will be necessary in the future housing finance system. The notice is part of larger mortgage reform efforts on behalf of the Obama administration, which is considering a number of options to reform the mortgage markets.
Several options under consideration by the administration include the near-complete privatization of the housing finance system, restriction of government intervention in the mortgage market during times of economic distress and the use of reinsurance as a backstop for mortgage guarantors in certain mortgages.