Yellen urges action to curb US mortgage market risks
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US Secretary of the Treasury Janet Yellen has highlighted the risks posed by nonbank mortgage companies to the financial stability of the US mortgage market. Yellen stated that these vulnerabilities can amplify shocks in the mortgage market and undermine financial stability. Nonbank financial companies, which do not have a full banking license but offer various banking services, originate and service most of the US residential mortgages. Yellen emphasized the need for further action to promote sound operations and address liquidity and other risks in the sector. The Financial Stability Oversight Council (FSOC) has released recommendations to address these vulnerabilities, urging state regulators to improve standards and require recovery and resolution planning by major nonbank mortgage servicers. The FSOC also encouraged Congress to set up a fund, financed by the government, to provide liquidity to failing nonbank mortgage servicers. The fund should help with the continuity of servicing and avoid bailouts funded by taxpayers. Nonbank mortgage lenders such as United Wholesale Mortgage and Rocket Cos are included in this sector. Yellen had previously mentioned that regulators have been monitoring risks in this sector.

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https://www.legit.ng/business-economy/economy/1591864-yellen-urges-action-curb-mortgage-market-risks/