Small Lenders Should Have Access to the Secondary Mortgage Market | 2021-06-03



Small lenders’ access to the secondary mortgage market is vital to ensure that the home finance market benefits consumers, CUNA Senior Director and Counsel Elizabeth LaBerge said Thursday at a Federal Housing Finance Agency (FHFA) hearing.

“The secondary market should be open to lenders of all sizes on an equitable basis. CUNA understands that secondary market users will have to pay to use such a market through fees, associated risk premiums and other means, ”she said. “CUNA would like to thank FHFA for officially ending the discounts on mortgage volumes in 2019 and it is very important that guarantee fees or other fees / premiums never have anything to do with future lenders’ volumes.

“In addition, CUNA will caution against regimes that require lenders to withhold significant amounts of risk beyond that represented by the actuarially applicable guarantee fees, as these risk retention mechanisms may have a disproportionately negative impact on small lenders who are less able to manage such risk. and may therefore lead to fewer consumer choices, ”she added.

LaBerge also urged FHFA to continue to prioritize small lender access so that the home finance market continues to benefit American consumers.

  • Calling on FHFA and Fannie Mae / Freddie Mac to focus more on affordable housing;
  • Requesting FHFA to reconsider the use of median income by district in eligibility criteria for affordable housing programs;
  • Encourage FHFA and Treasury to carefully consider the impact of the 7% cap on financing for non-owner-occupied homes and second homes, as this could increase the cost of financing affordable rental housing;
  • Encourage FHFA to expand its use of complementary assessments to address borrower health and safety concerns and to provide flexibility wherever possible; as well as
  • Asking FHFA to consider a program to provide secure access to secondary market liquidity for the smallest credit unions.


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