Do Nonbank Mortgage Companies Pose Systemic Risk to the US Economy?

14 Pages Posted: 10 Feb 2020

See all articles by Richard Christopher Whalen

Richard Christopher Whalen

Whalen Global Advisors LLC; Economic Advisory Committee of FINRA; National Mortgage News; National Association of Business Economists (NABE)

Date Written: January 15, 2020

Abstract

This working paper reviews the work of the Financial Stability Oversight Council (FSOC) in terms of identifying potential systemic risk in the nonbank sector under authority from the Dodd-Frank Wall Street Reform Act of 2010. We discuss past efforts by the agencies represented within the FSOC to impose capital requirements on nonbank financial institutions such as insurers, mortgage lenders and servicers. The FSOC Annual Report issued in 2019 is then reviewed and assessed. Finally, recommendations are made to assist the FSOC in better understanding the systemic risks, if any, posed by nonbank companies engaged in lending and loan servicing.

Keywords: mortgage lending, mortgage servicing, nonbanks, FSOC, Federal Reserve, MetLife, systemic risk, mortgage servicing rights, banks

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

Suggested Citation

Whalen, Richard Christopher, Do Nonbank Mortgage Companies Pose Systemic Risk to the US Economy? (January 15, 2020). Available at SSRN: https://ssrn.com/abstract=3519454 or http://dx.doi.org/10.2139/ssrn.3519454

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