This week, the Community Home Lenders of America (CHLA) released our latest annual CHLA Report on Independent Mortgage Banks (IMB). As the only national trade group that exclusively represents IMBs, we are taking this opportunity to explain what IMBs are, the role they play in mortgage markets, the issues that are critical to them, and what CHLA recommends regarding those issues.
Why should policy makers in Washington care about this? Because, as our report highlights, IMBs currently originate over 83% of all mortgage loans. And statistics and independent analyses consistently show that IMBs out-perform banks in making loans to minorities and other underserved borrowers. For years, IMBs have originated around 90% of FHA loans, 90% of VA loans, and 90% of Ginnie Mae securities issuance — all key programs for first-time homebuyers.
Policy makers should also care because as our report notes: “High mortgage rates, combined with home prices still sticky on the high side, continue to cause significant affordability challenges for homebuyers.”
What takes place in Washington plays a big role in mortgage lending and homebuyer affordability, which is why CHLA’s detailed policy agenda is included in the report. This includes the need for regulatory streamlining for smaller IMBs, a sustained effort by FHA, VA, and the GSEs to lead the way in gaining greater access to mortgage credit, and taking action on consumer concerns, like reining in abusive trigger lead solicitations and breaking up monopolies like FICO credit scores that artificially raise mortgage closing costs.
Effective advocacy in Washington is crucial to IMBs — particularly smaller ones — and 2024 was a very good year on that front. One of the biggest challenges facing mortgage lenders was the exploding cost of repurchase demands, which was reaching loss levels of as high as 40% on performing loans! CHLA is proud to have taken the lead as early as 2022 in calling on Fannie and Freddie to replace repurchase demands with fair indemnification offers — and both effectively did so in 2024.
Last year also saw other policy advocacy successes, like FHA providing more flexibility for loan assumptions and partial claims, like Ginnie Mae increasing flexibility for servicers with regard to loan pools, and FICO ending sweetheart pricing deals for a select group of 50 lenders.
The year 2025 offers new challenges. Analysts have raised the odds that Fannie Mae and Freddie Mac will exit conservatorship during the incoming Trump Administration. There are a lot of moving parts to this — but CHLA has chosen to focus specifically on making sure smaller IMBs are protected. This means explicit requirements for G Fee parity, a robust cash window with competitive pricing for all seller-servicers, and stopping Congress from granting new GSE charters to Wall Street banks.
But CHLA’s IMB Report is not just about advocacy, it is also about educating Congress and federal agency lawmakers about IMBs. The report extensively explains how IMBs operate, why mortgage loans made by IMBs have much greater consumer protections than loans made by banks, and busts the myths about IMBs being risky, either financially or systemically.
To those in Washington that make public policy, we urge you to take the time to read this report and factor the information presented in it into the decisions you make. Don’t just take our word for it – carefully read our report and challenge our assertions. We believe that a full debate only helps the IMB cause.
Finally, to those IMBs that are not CHLA members, we urge you to join our cause and help CHLA fight for policies that strengthen IMBs’ strong access to mortgage credit track records. CHLA is a different kind of trade group in that it is democratically run and member driven — with individual members making a difference in establishing our advocacy agenda. CHLA turns advocacy into action.
Scott Olson is the executive director of CHLA.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: zeb@hwmedia.com.
