CMC Engages Senate Banking Committee

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CMC Engages Senate Banking Committee

CMC’s President and CEO, Tom Millon, opened dialogue with a letter to two members of the Committee on Banking, Housing and Urban Affairs (below). Tom has been a strong advocate for lenders, working with the Mortgage Banking Association’s Task Force for a Future Secondary Mortgage Market to ensure the future of a robust system that serves all lenders.


July 18, 2017

Dear Chairman Crapo and Ranking Member Brown,

As the Senate Banking Committee continues to explore options to reform Fannie Mae and Freddie Mac (the GSEs), we are encouraged by the recognition of the benefits that are provided by smaller mortgage lenders.

I am writing to you on behalf of the Capital Markets Cooperative (“CMC”). CMC supplies products, services, and capital to small and mid-sized residential mortgage lenders, and is a significant player in the U.S. residential mortgage industry. The 421 lenders with which CMC works today comprise a large portion of the residential mortgage industry:

  • They originate residential mortgage loans in nearly every town and city in the U.S.
  • They collectively originate over $100 billion of residential mortgages each year, or approximately 10% of our nation’s annual mortgage origination volume.

Our lenders increase the diversity of mortgage products available to consumers, leading to a more vibrant and well-functioning market. We are also able to serve segments of the market that may be ignored by other types of lenders, which helps to ensure the widespread availability of mortgages for creditworthy borrowers throughout the country.

Of note, CMC was recently acquired by Computershare, Inc., a large multi-national firm that is a relatively new entrant to the U.S. residential mortgage industry. Opportunities in the U.S. mortgage industry have caught Computershare’s attention. It is investing hundreds of millions of dollars in the residential mortgage industry, via small and mid-sized lenders.

We believe that a central tenet of any GSE reform effort should be the creation of a level playing field that allows smaller lenders to compete with our larger counterparts. To achieve this objective, it will be necessary to both maintain the small lender protections currently in place and develop new protections that ensure fair access to the secondary market.

Fortunately, a plan put forth by the Mortgage Bankers Association (MBA) proposes actionable steps to bring about these small lender protections. I served on the MBA task force that was charged with developing this plan. The task force was comprised of members covering a broad cross-section of the real estate finance industry, including bank and nonbank lenders serving the single-family and multifamily markets and spanning a wide range of sizes and business models. The members of the task force spent more than a year considering potential approaches before issuing final recommendations for an improved secondary market.

The MBA plan, which features well-capitalized, privately-owned Guarantors performing many of the functions of the GSEs while subject to utility-style regulation, calls for a housing finance system that:

  • ensures small lenders have equitable, transparent, and direct access to the secondary market;
  • prohibits guarantee fee pricing or underwriting standards that are based on the loan volume of a given lender;
  • preserves the ability of lenders to deliver small quantities of loans to the secondary market through mechanisms such as a cash window;
  • maintains the “bright line” between the primary and secondary markets to keep Guarantors from competing with lenders;
  • prevents larger lenders from gaining a competitive advantage by owning or controlling a Guarantor; and
  • reduces the operational risks during a transition period by preserving certain elements of the current housing finance system.

While progress has been made towards some of these goals through administrative reforms put in place by the Federal Housing Finance Agency (FHFA), it is critical that we not take these reforms for granted. Comprehensive legislation is the final step that is needed to ensure these reforms are not weakened or reversed in future administrations. Until Congress acts, smaller lenders will continue to face uncertainty about the future and the prospect of a return to a highly concentrated mortgage market will remain.

To avoid this outcome, we encourage the Senate Banking Committee to continue its efforts towards legislative reform of the GSEs. By enacting comprehensive reforms, the Committee can ensure that the mortgage market remains competitive and that a diverse set of lending institutions are available to serve a wide range of creditworthy borrowers.

We thank you for your consideration of our views, and we look forward to working with you to achieve bipartisan, legislative GSE reform.


Tom R.S. Millon, CFA, CMB
President and CEO
Capital Markets Cooperative, a Computershare Company
Ponte Vedra Beach, Florida


CMC continues to be a strong voice in the industry and advocates on behalf of all lenders. To learn more about MBA’s recommended approach to GSE reform, please visit