Increasing Capital & Liquidity for GNMA Mortgage Servicing Rights

75 Pages Posted: 23 May 2018 Last revised: 9 Jul 2019

See all articles by Richard Christopher Whalen

Richard Christopher Whalen

Economic Advisory Committee of FINRA; Indiana State University - Networks Financial Institute; Association of Private Enterprise Education (APEE); National Association of Business Economists (NABE)

Date Written: June 19, 2018

Abstract

This paper reviews the research literature concerning mortgage servicing rights (MSR) and mortgage finance more generally. We then review the history of financing the acquisition of MSRs in the market for loans guaranteed by the Federal Housing Administration (FHA) and securities guaranteed by the Government National Mortgage Association (GNMA). The paper then focuses on the credit relationship between GNMA and the issuers operating in that market, with particular emphasis on separating the loan servicing function from the investment in the MSR. The paper notes that state law regulation seems to be suppressing competition for GNMA MSRs by limiting participation by smaller investors. The paper makes several proposals as to amendments to the GNMA Acknowledgement Agreement (AA) governing the credit relationship between the FHA, GNMA and the issuer to support the goal of increasing the liquidity of the GNMA MSR market.

Keywords: Mortgage, Mortgage Servicing Rights, MSR, Federal Housing Administration, Ginnie Mae, HUD, Non-Banks, Lending, Servicing, Funding

JEL Classification: G00, G20, G23, G32, G33, G38, K2, K23, M2, M48, N2

Suggested Citation

Whalen, Richard Christopher, Increasing Capital & Liquidity for GNMA Mortgage Servicing Rights (June 19, 2018). Available at SSRN: https://ssrn.com/abstract=3176147 or http://dx.doi.org/10.2139/ssrn.3176147

Richard Christopher Whalen (Contact Author)

Economic Advisory Committee of FINRA ( email )

1735 K Street NW
Washington, DC 20006
United States

HOME PAGE: http://tinyurl.com/2bne6p

Indiana State University - Networks Financial Institute ( email )

Terre Haute, IN 47809
United States

HOME PAGE: http://tinyurl.com/4ckcoxo

Association of Private Enterprise Education (APEE) ( email )

313 Fletcher Hall, Dept. 6106
615 McCallie Avenue
Chattanooga, TN 37403-2598
United States

HOME PAGE: http://https://www.apee.org/

National Association of Business Economists (NABE) ( email )

1920 L St. NW, Suite 300
Washington, DC 20036
United States

HOME PAGE: http://www.nabe.com

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