Brief Nonbank Servicer Regulation: New Capital and Liquidity Requirements Don't Offer Enough Loss Protection
Karan Kaul, Laurie Goodman
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The role of nonbanks in servicing single-family mortgages has increased tremendously over the past five years, mostly at the expense of large depository institutions. In response, the government-sponsored enterprises (Fannie Mae and Freddie Mac) and Ginnie Mae have issued new capital, liquidity, and net worth requirements for servicers of their mortgages. We examine these new regulations and conclude that while the recent steps taken to ramp up nonbank regulation are a good starting point, more needs to be done to ensure government agencies and taxpayers are adequately protected against the risks posed by the nonbanks under all economic environments.
Research Areas Economic mobility and inequality Wealth and financial well-being Housing finance Housing
Tags Federal housing programs and policies Housing markets Housing and the economy Single-family finance Agency securitization Housing finance reform Homeownership Financial products and services Public and private investment Finance
Policy Centers Housing Finance Policy Center