February 20, 2009
Dear MBA Member:
The Mortgage Bankers Association (MBA) has been vigorously advocating for solutions to restore warehouse lines of credit.
We understand how the reduction in warehouse lines threatens the viability of many independent mortgage bankers and limits
consumer choice for competitive mortgage products. Because of the importance of this issue, we have taken various actions
to raise the profile of the problem and advocate for solutions in the regulatory, legislative and media arenas. Below is an
update on what MBA has been doing thus far on your behalf, as well as an outline of next steps:
- MBA convened an Ad Hoc Working Group on Warehouse Lines of Credit to define the warehouse lending issue and identify viable
solutions.
- MBA staff met with the Obama Transition Team, prior to President Obama taking office, and educated them on the emerging crisis
in warehouse lending.
- MBA sent a letter to Treasury Secretary Timothy Geithner on February 5, 2009, outlining potential solutions to the warehouse
lines shortage and requesting a meeting to discuss further. The letter was also sent to the heads of the Federal Reserve Board
(FRB), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Office
of Thrift Supervision (OTS). We requested a warehouse lending meeting with these agencies and the Federal Housing Finance
Agency (FHFA).
- MBA met with Federal Deposit Insurance Corporation (FDIC) Chairman Sheila Bair and staff in early February and educated them
on the warehouse issue and potential solutions.
- MBA senior government affairs staff discussed the warehouse shortage last week with Joe Murin, President of Ginnie Mae. Ginnie
Mae has committed to helping find a solution.
- MBA has met with Fannie Mae and discussed options, within its charter, that could be helpful to the industry. This discussion
is ongoing.
- MBA has met with representatives from several Federal Home Loan Banks (FHLBs) and discussed the needs of independent warehouse
lenders and how the FHLBs can be part of a solution. These discussions are ongoing.
- MBA has published a warehouse Issue Brief that our lobbyists and advocates are actively distributing in Washington. The paper
is available at: http://www.mortgagebankers.org/Advocacy/2009IssueBriefs.htm.
- MBA lobbyists have been educating key Members of Congress to define the issue and the scope of the problem affecting independent
mortgage bankers and the impact on consumers.
- On February 3rd, MBA delivered testimony before the House Financial Services Committee and clearly told the committee about
MBA’s serious concerns regarding warehouse lending and what MBA hopes the government will do to help.
- Because of MBA’s efforts, Representative Meeks (D-NY) asked Federal Reserve Chairman Bernanke a question about warehouse lines
of credit during a recent House Financial Services Committee hearing.
- As part of MBA’s annual New York media tour and State of the Industry press conference, we brought the issue to the attention
of dozens of national, local and trade media.
- The Wall Street Journal published an article on Wednesday, February 5th that highlighted the problem and MBA’s efforts to help restore warehouse
lines of credit.
At this time, MBA is advocating for federal regulators and the administration to take steps to help maintain existing lines
of warehouse credit and create new warehouse lending by providing a short-term federal guarantee of warehouse lines that are
collateralized by Fannie Mae, Freddie Mac, FHA, VA and RHS-eligible mortgages. Going forward, MBA will continue to aggressively
seek a viable solution that suits the mortgage industry and those that may be in a position to help. Below is a list of our
immediate next steps:
- MBA is continuing to identify and consider additional solutions, which may or may not directly involve the federal government.
- We sent a letter last week to Federal Reserve Chairman Bernanke requesting a meeting as a follow-up to Representative Meeks’
question. MBA will be meeting with federal agencies in the coming days and weeks.
- As a follow-up to our discussion with Joe Murin, we will meet with Ginnie Mae to determine how MBA can assist with its plans
to help the industry, especially if any statutory changes are needed.
- MBA’s legislative affairs staff will continue to talk to Members of Congress about the issue in an effort to raise its profile.
- MBA’s spokespeople will continue to highlight this issue in media interviews in an effort to raise the profile of the issue
both for media members and policymakers.
- MBA will continue to look for opportunities to place opinion and commentary pieces in influential media outlets highlighting
this issue.
- As part of MBA’s ongoing Congressional Education Series we will devote our March session to the warehouse lending issue. MBA
will soon be publishing a new Resource Center on Warehouse Lines of Credit on its Web site, which will be available through
http://www.mortgagebankers.org/IndustryResources/ResourceCenters.
We thank you for your support in helping us find immediate and long term solutions to this difficult liquidity problem. I
and the MBA staff will keep you informed of our progress.
Please feel free to contact me if you have any questions.
Yours Very Truly,
John A. Courson
President and Chief Executive Officer
Mortgage Bankers Association
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