The Conference of State Bank Supervisors (CSBS) published the latest policy paper in its series examining the nonbank financial services industry and its supervision. In its press release, CSBS summarized the key findings from the September 16, 2019, policy paper, entitled, “Overview of Nonbank Mortgage.” The summary said:

• Since the financial crisis, outstanding U.S. residential mortgage debt has remained stable, hovering around $10 trillion, while home equity has swung back into positive territory at roughly $16 trillion.
• The current mortgage market relies almost exclusively on backing from the federal government, with funding and guarantees from federally supported entities (Fannie Mae, Freddie Mac and Ginnie Mae/FHA/VA) accountable for almost all new home loans.
• With roughly two-thirds market share, nonbank financial services companies are now the primary source of mortgage originations, a departure from prior eras in housing finance, and they represent a growing source of mortgage servicing as well.
• Compared to depositories, nonbanks present different kinds of risk to financial regulators, such as greater dependence on third parties for mortgage liquidity, lower operating capital, and lack of asset diversification.
• State financial regulators oversee the mortgage industry through their statutory powers to license and supervise mortgage companies and, where necessary, take enforcement actions against bad actors.

The policy paper is available here.