After the change of management of the FHFA, what is the next step for brokers?


Recent changes to the management and regulatory environment of the Federal Housing Finance Agency (FHFA) will greatly affect the community, products and services of brokers. HousingWire recently spoke with Flagstar Bank Mortgage Chairman Lee Smith and TPO Senior Vice President of National Sales John Gibson to discuss how brokers can continue to maintain momentum. even with these changes.

HousingWire: There have been recent changes in the leadership of the Federal Housing Finance Agency (FHFA) that are going to impact the brokerage community. What have been the changes and how will this impact the brokerage community?

Lee Smith: With the appointment of Sandra Thompson as interim director of the FHFA in June, the agency will focus more on affordability, risk management and liquidity. And that’s good news for consumers, brokers and the industry as a whole.

Thompson’s decision to eliminate unfavorable market refinancing fees, which added several basis points to the cost of each refinanced agency loan over $ 125,000, is consumer friendly, increases the competitiveness of GSE loans, and should be positive for potential refinancing customers.


John Gibson: We’re hearing rumors of more affordable housing options under the new management, and any expansion in offerings should be good for the initiators. The question now revolves around other caps, such as the sale of investment property and GSE limits on purchases through the cash window, and whether we will see a movement there.

HW: How can lenders keep their momentum going with the investor ownership cap of government sponsored enterprises (GSEs)?

LS: Earlier this year, the Federal Housing Finance Agency imposed a 7% cap on purchases of second home and investment property mortgages from any direct lender loans”}” data-sheets-userformat=”{“2″:513,”3”:{“1″:0},”12″:0}”>direct lender loans. This has obviously led many lenders to rethink their sales strategies around unoccupied loans.

We believe we have an advantage at Flagstar. As a bank, not only do we have a balance sheet and are well capitalized, which means we can put loans in our portfolio, but we also have a strong residential mortgage-backed securities program. We are the perfect partner for brokers who issue unoccupied loans and are looking for an aggregator to sell these loans to. In the second quarter, we were the third-largest RMBS issuer in the country, with two of these securitizations on unoccupied loans. And we have more securitizations planned for the rest of the year.

HW: How does Flagstar Bank help brokers keep their business going as the industry continues to evolve?

JG: The industry is changing and change is the norm. At Flagstar, we always review the products and services we provide to our business partners to find ways to help them grow. Flagstar has been in the TPO business for almost 35 years. We are one of the only federally regulated entities operating in the brokerage business. For us, it is about listening to our partner brokers, investing to facilitate their use, advising, educating and advising.

From a secondary and financial market perspective, we have some of the best minds and industry leaders at Flagstar. They bring unbeatable value to our brokerage relationships. And as our merger with New York Community Bank unfolds, the ability to expand our product line and become more strategic and innovative will only grow. Ultimately, it’s about more resources to support our brokers and deliver the best, most diverse products available.

HW: What changes in the mortgage industry should brokers and lenders focus on the most right now and why?

LS: There are many changes happening in the mortgage industry right now, and everyone involved needs to be flexible and nimble enough to respond.

We have discussed the changes to the FHFA before, but the regulatory environment, in general, is likely to become more stringent and technology is likely to continue to disrupt the industry as consumers become more and more up-to-date. comfortable using their mobile devices and other technologies to do business. . Finally, Ginnie Mae has a proposal to comment on regarding the eligibility requirements for single-family MBS issuers that could impact Ginnie Mae’s market landscape.

On the technology front, we continue to invest in it to improve the customer experience for our brokers and ultimately our borrowers, and to ensure that doing business with Flagstar is smooth and easy. In addition to investing directly in technology, we also partner with fintechs that we believe can help us improve, be more efficient, and improve the overall customer experience. We are open-minded but focused on a great experience for our customers and partners.

Finally, as I mentioned, our balance sheet and diversified mortgage platform gives us a lot of flexibility and options to quickly pivot and find opportunities, depending on changing regulations and agency guidelines.

HW: You mentioned that Flagstar has really helped brokers excel in their business. Can you clarify what this means?

JG: One thing we do very well is help our brokers become pen pals, and we have been doing this for decades. You can start as a broker with Flagstar, then move on to a non-delegated correspondent, then a delegated correspondent, and then bulk loan delivery. We will support you every step of the way, with training, support and advice from our experienced account managers. And once you’re a pen pal, we can help you get warehouse credit lines. We understand collateral and are comfortable lending against it, which is perhaps why we are now the second largest warehouse lender in the country.

Flagstar has supported broker and correspondent communities for almost 35 years, and we remain committed to them through every change and every evolution of the business.

Lenders and brokers need to seriously consider who they are partnering with and how this will allow them to continue to grow through these changes in the industry. Flagstar Bank offers a wide range of solutions to help brokers excel.


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