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Industry and agencies lay out competing proposals to shore up IMB liquidity
Summary
Panelists outlined market-based and policy options—expanded PTAP-style backstops, acknowledgment-agreement expansion, securitization/commercial-paper designs, and a proposed White House coordinator—to reduce liquidity stress on independent mortgage banks and preserve borrower protections.
Industry leaders, Ginnie Mae officials and federal regulators used a solutions panel to map a range of possible fixes for the liquidity strains facing independent mortgage banks.
Scott Olson of the Community Home Lenders of America described an expanded standby liquidity facility as a "win-win-win," saying it would reduce Ginnie Mae’s tail risk, reassure warehouse lenders and preserve a broad base of IMB issuers that boost competition. He emphasized that members were not seeking a bailout: "We're not asking for a bailout... we're asking for a liquidity back-stop that creates confidence among warehouse lenders."
Panelists discussed three broad design approaches:
1) Expand PTAP or a standing facility: Ginnie Mae’s pass-through-assistance program (PTAP) was cited as a market stabilizer during COVID, but Ginnie Mae officials noted PTAP has no authority to advance funds before a default; it covers guaranteed shortfalls after they occur. Several speakers proposed converting the concept into a pre-funded standby facility or a properly structured guarantee that markets could rely on in stress. Leslie Pordzik said PTAP provided market confidence but also highlighted charter and legal limits on lending authority.
2) Market instruments and securitization: Proposals ranged from a commercial-paper-like liquidity conduit to securitizing advances or MSRs in ways that produce a marketable asset for bank and investor balance sheets. Market participants said bifurcating advances from MSRs and creating collateral structures that investors and principal financiers can perfect interest in would expand private-sector capacity, but they warned such markets can be fragile when high-yield or unsecured channels close.
3) Operational and regulatory fixes: Panelists urged loan-level data and operational modernization to increase fungibility of MSRs and make smaller transactions easier, and they recommended strengthened recovery-planning, enhanced supervisory coordination among Ginnie Mae, FHFA and state regulators, and exploring whether GSE balance sheets could be a contingent source in extreme episodes.
The idea of a White House-level housing policy coordinator drew support and skepticism. Bob Broeksmit and others said a coordinator could reduce conflicting regulatory moves (for example, capital or risk-weight changes) that unintentionally push institutions out of housing finance. Ed DeMarco and participants noted the National Economic Council already plays a coordination role; any new office would need clear remit to avoid politicizing technical supervisory work.
Ginnie Mae officials said the agency will deepen technical follow-up, using newly funded staffing to run pilots and model facility designs, and will engage market practitioners to test investor demand and legal constraints. Panelists recommended sequencing work: first resolve legal/charter constraints and marketability questions, then pilot market operations or seek congressional changes where required.
No single proposal commanded consensus at the summit; instead, panelists emphasized rapid, detailed analysis on funding mechanics, investor appetite, pricing, and statutory authority as the next steps.
