{"id":8649,"date":"2024-05-10T22:55:40","date_gmt":"2024-05-10T22:55:40","guid":{"rendered":"https:\/\/internationalpulse.net\/?p=8649"},"modified":"2024-05-10T22:55:40","modified_gmt":"2024-05-10T22:55:40","slug":"yellen-urges-action-to-curb-us-mortgage-market-risks","status":"publish","type":"post","link":"https:\/\/internationalpulse.net\/?p=8649","title":{"rendered":"Yellen urges action to curb US mortgage market risks"},"content":{"rendered":"<p><\/p>\n<div>\n<p><em><small>Wall Street in the Financial District of New York City. \u2014 \u00a9 AFP<\/small><\/em><\/p>\n<p>US Treasury Secretary Janet Yellen flagged risks posed in the mortgage market Friday, as regulators released recommendations to address the sector\u2019s vulnerabilities.<\/p>\n<p>\u201cThe vulnerabilities of nonbank mortgage companies can amplify shocks in the mortgage market and undermine financial stability,\u201d said Yellen at an open session of a Financial Stability Oversight Council (FSOC) meeting.<\/p>\n<p>She added that the council has laid this out in detail for the first time.<\/p>\n<p>Nonbank financial companies do not have a full banking license but can offer various banking services.<\/p>\n<p>On Friday, Yellen said further action is needed to promote sound operations and address liquidity and other risks.<\/p>\n<p>Nonbanks originate and service most of US residential mortgages, a share that has risen since the 2008 financial crisis, according to Yellen who chairs the FSOC.<\/p>\n<p>This means that exposures to the sector have grown substantially.<\/p>\n<div id=\"attachment_3725426\" style=\"width: 778px\" class=\"wp-caption alignnone\"><img decoding=\"async\" aria-describedby=\"caption-attachment-3725426\" class=\"size-full wp-image-3725426\" src=\"https:\/\/www.digitaljournal.com\/wp-content\/uploads\/2024\/05\/a08c61830cedce2e4effb801e12ba0511b75a34b.jpg\" alt=\"US Secretary of the Treasury Janet Yellen said vulnerabilities of nonbank mortgage companies can undermine financial stability\" width=\"768\" height=\"511\"\/><\/p>\n<p id=\"caption-attachment-3725426\" class=\"wp-caption-text\">US Secretary of the Treasury Janet Yellen said vulnerabilities of nonbank mortgage companies can undermine financial stability \u2013 Copyright GETTY IMAGES NORTH AMERICA\/AFP\/File SCOTT OLSON<\/p>\n<\/div>\n<p>Such companies present risks as their business model makes them \u201cespecially susceptible\u201d to housing market fluctuations like changes in housing prices and interest rates, she said.<\/p>\n<p>They also rely on the value of mortgage servicing rights, which could slump in a housing market downturn.<\/p>\n<p>Widespread disruption in the mortgage market, Yellen noted, could \u201clead to a temporary restriction of mortgage credit,\u201d making credit harder to obtain for certain borrowers.<\/p>\n<p>In its report released Friday, the FSOC urged state regulators to improve standards and \u201crequire recovery and resolution planning\u201d by major nonbank mortgage servicers.<\/p>\n<p>It also encouraged Congress to set up a fund, financed by the industry, to provide liquidity to failing nonbank mortgage servicers.<\/p>\n<p>The fund should be designed to help with the continuity of servicing, such as with \u201closs-mitigation activities for borrowers and advancement of monthly payments to investors,\u201d said the report.<\/p>\n<p>Such a fund should also avoid bailouts funded by taxpayers.<\/p>\n<p>Nonbank mortgage lenders include United Wholesale Mortgage and Rocket Cos.<\/p>\n<p>In February, Yellen said regulators have been eyeing risks in this sector.<\/p>\n<\/p><\/div>\n<p> Yellen urges action to curb US mortgage market risks<br \/>\n<br \/>#Yellen #urges #action #curb #mortgage #market #risks<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Wall Street in the Financial District of New York City. \u2014 \u00a9 AFP US Treasury&#8230;<\/p>\n","protected":false},"author":1,"featured_media":8650,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[7],"tags":[2268,4637,90,4638,2165,1312,627],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.10 - 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