MBA Statement on the Basel III Final Rule

  

WASHINGTON, DC – David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA), issued the below statement today following the release of the Basel III final rule:

David H. Stevens

“MBA applauds the federal banking regulatory agencies for bringing certainty to the marketplace through issuance of its final rule today on Basel III.

“We are pleased the final rule does not increase the risk-based capital requirements for the over $800 billion in mortgages secured by commercial real estate and for most loans secured by single-family mortgages held in banks’ portfolios. 

“However, provisions addressing mortgage servicing rights (MSRs) and warehouse lines of credit are particularly problematic.

“ The rule now requires that MSRs, deferred tax assets, and investments in unconsolidated financial institutions be limited individually to 10 percent and collectively to 15 percent of the common equity component of Tier 1 capital. Assets above these thresholds must be deducted from that component of capital.

“The Basel III final rule, when combined with the massive regulatory overhaul facing the real estate finance industry, will have the unfortunate effect of tightening credit, at a point in time when credit availability is one of the biggest challenges facing US home-buyers.

“MBA was pleased to be part of this decision making process and looks forward to working with the Federal Reserve, the OCC and the FDIC in the future, to ensure prudent availability of affordable real estate finance.”

For a complete copy of the company’s news release, please contact:

Rob Van Raaphorst

(202) 557-2799