Business is booming.

Group touts role played by independent mortgage banks

Purchasing mortgage loans now is much safer financially than when the Fed bought at 3% levels, the report concludes.

The report also lays out how consumers benefit from a broad range of IMB lenders given the increase in competition and consumer choice. CHLA members have long contended that IMBs “decisively outperform” banks in mortgage loans to first-time, minority and underserved borrowers.

The group believes Ginnie Mae and GSE financial requirements, policies and supervision “…should place a high priority” on maintaining a broad base of qualified IMB leaders/servicers – including small IMBs.

The report also touts the lack of consumer risk for the industry. “IMBs particularly smaller IMBs – pose virtually no taxpayer or systemic risk,” according to the report. “The main IMB business model is to originate federally backed mortgages (FHA/VA/RHS/GSE) and sell the mortgages to third party aggregators or securitize them (with or without retaining servicing),” the CHLA wrote.

That model, officials contend, insulates IMBs from financial risks stemming from losses or declining values of mortgage loans. “Thus, the only impact from an IMB lender going out of business is they can no longer originate loans.”

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