Proposed "bright line" rule may threaten access to creditmortgagepress.comGSEs, legislation, bright line, automated underwriting systems, mortgage credit
The National Association of Mortgage Brokers has joined a
cross-section of housing, mortgage lending, mortgage brokering and
real estate industry groups in warning that the legislative
proposals to regulate the safety and soundness of the
government-sponsored enterprises (GSEs) go too far. In fact, they
could actually disrupt the mortgage delivery system they hope to
safeguard and jeopardize the ability of consumers to secure
affordable mortgage financing.
"NAMB supports ensuring the safety and soundness of Fannie Mae
and Freddie Mac so that they can continue to help more and more
Americans become homeowners," said NAMB President Bob Armbruster,
"But the 'bright line' proposal could actually increase the cost of
mortgages to consumers by destroying today's competitive
marketplace."
In a letter to Sen. Richard C. Shelby from Alabama (chairman of
the Committee on Banking, Housing and Urban Affairs) and Sen. Paul
Sarbanes from Maryland (ranking member of the Committee on Banking,
Housing and Urban Affairs), NAMB stated that the "bright line"
proposal is "unnecessary and redundant with existing law because
statutory language currently prohibits Fannie Mae and Freddie Mac
from originating mortgages." If enacted, the provision will
prohibit mortgage brokers from having direct access to the
automated underwriting systems of the GSEs. Mortgage brokers rely
on these systems to quickly assess a mortgage application and
provide consumers with mortgage credit. Should the proposal become
law, the competition in today's mortgage marketplace and the
development of market-driven mortgage products and programs could
be at risk. As a result, consumers may be denied the opportunity to
secure affordable credit to purchase their homes.
"Today, American homeownership is at an all-time high," said
Armbruster. "Since mortgage brokers originate over 65 percent of
residential mortgage loans, they have played a large part in many
of our nation's families becoming homeowners. By denying mortgage
brokers the ability to directly access the GSEs' automated
underwriting system, the 'bright line' proposal threatens the
current system that has allowed so many to enjoy the benefits of
homeownership."
For more information and a copy of the letter NAMB sent to
Sens. Shelby and Sarbanes, visit www.namb.org.
