Comm mmunity Mortg y gage Ba Banking Proje g ect

December22,2011 ardDeMarco o Mr.Edwa ActingDi irector FederalH HousingFina anceAgency y 1700GS Street,NW,4 4thFloor Washington,DC20552 edward.d demarco@fh hfa.gov Submissionto:Servi icing_Comp_ _Public_Com mments@FH HFA.gov Re: Alternative eMortgageServicingCo ompensation nDiscussionPaper DearMr. .DeMarco: TheClearingHouseA Association,1theCommunityMortgageBanking gProject2,th heHousingP Policy 3 4 Council, theMortga ageBankersAssociation andtheSecuritiesIndu ustryandFin nancialMark kets

Establish hedin1853,Th heClearingHou useistheoldestbankingasso ociationandpaymentscomp panyintheUnited States.Itisownedbytheworldslarge estcommercialbanks,whichcollectivelyem mployover2m millionpeoplea and llU.S.deposits s.TheClearing gHouseAssociationL.L.C.isa anonpartisana advocacy holdmorethanhalfofal onrepresentingthroughre egulatorycomm mentletters,amicusbriefsan ndwhitepaperstheinteres stsof organizatio itsownerb banksonavarietyofsystemi icallyimportan ntbankingissues.Itsaffiliate e,TheClearingHousePayments CompanyL L.L.C.,provides spayment,clearing,andsett tlementservice estoitsmemb berbanksando otherfinancial institutions,clearingalmost$2trilliond dailyandrepre esentingnearly yhalfoftheau utomatedclearinghouse,fun nds gepaymentsm madeintheU.S S.SeeTheClea aringHousesw webpageat transfer,andcheckimag org. www.theclearinghouse.o
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TheCom mmunityMortg gageBankingProjectisapublicpolicyorgan nizationrepres sentingtheinte erestsof independe entmortgageb bankers.Forde ecades,thecommunitybase edmortgageba ankerhasdeliv veredvalueand choicetoc consumersbyl leveragingloca almarketexpe ertise,qualityservice,andlow wercostsforborrowers.The e CMBPsupp portsfinancialmarketreform msthatpromot teconsumeraccess,borrowe erandinvestortransparency y,local competitio onandchoice,andavaluead ddedmortgage echain.Formoreinformatio onvisitwww.co ommunitymb.c com.
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TheHousingPolicyCou uncilofTheFin nancialService esRoundtablec consistsofthir rtytwooftheleadingnational mortgagef financecompa anies.HPCmembersoriginat te,service,and dinsuremortg gages.WeestimatethatHPC C

Mr.EdwardDeMarco

December22,2011

Association5appreciatetheopportunitytocommentontheAlternativeMortgageServicing CompensationDiscussionPaper(theDiscussionPaper)oftheFederalHousingFinance Administration(theFHFA).Eachofourorganizationshassubmittedseparatecomment letterspresentingtheperspectivesofourrespectivemembers.However,wewouldliketotake thisopportunitytostresssomecommonthemesthatwehaveraised: First,foravarietyofreasonsthatareenumeratedinourindividualletters,webelievethata feeforserviceapproachwouldhavenegativeconsequencesfortheindustryandforthe customersthatweserve.Whilesomeofthedrawbacksaremoreapparentforexample, reducingtheincentivetoinvestinthenecessaryinfrastructureaswellastheservicersskin inthegameothersareinherentlyunknownforexample,theimpactonindustry structureandcompetition.Nevertheless,eachofourorganizationsbelievesthatthe potentialcostsofadoptingsuchanapproachfaroutweighthepotentialbenefits. Second,evenifonedisagreeswithourbasicassessment,adoptingsuchastructurewould inevitablyproducelargechangeswithuncertainconsequencesforlenders,servicers, investorsandborrowers.Inordertojustifysuchamove,theFHFAwouldhavetopresent strongandcompellingevidencethatafeeforservicestructurewouldbeinthelongterm interestsofthemortgagemarketandtheconsumersthatitserves.Inourview,FHFAhas yettodoso.Asaresult,weseenoreasonwhytheFHFAshouldcontinuetopursueafee forserviceapproach,which,bytheagencysownadmission,representsadramatic departurefromthecompensationstructurethatisnowinplace.

membercompaniesoriginateapproximately75%andservicetwothirdsofmortgagesintheUnitedStates.HPC's missionistopromotethemortgageandhousingmarketplaceinterestsofmembercompaniesinlegislative, regulatory,andjudicialforums. TheMortgageBankersAssociation(MBA)isthenationalassociationrepresentingtherealestatefinance industry,anindustrythatemploysmorethan280,000peopleinvirtuallyeverycommunityinthecountry. HeadquarteredinWashington,D.C.,theassociationworkstoensurethecontinuedstrengthofthenations residentialandcommercialrealestatemarkets;toexpandhomeownershipandextendaccesstoaffordable housingtoallAmericans.MBApromotesfairandethicallendingpracticesandfostersprofessionalexcellence amongrealestatefinanceemployeesthroughawiderangeofeducationalprogramsandavarietyofpublications. Itsmembershipofover2,200companiesincludesallelementsofrealestatefinance:mortgagecompanies, mortgagebrokers,commercialbanks,thrifts,WallStreetconduits,lifeinsurancecompaniesandothersinthe mortgagelendingfield.Foradditionalinformation,visitMBAsWebsite:www.mortgagebankers.org. SIFMAbringstogetherthesharedinterestsofhundredsofsecuritiesfirms,banksandassetmanagers.SIFMAs missionistosupportastrongfinancialindustry,investoropportunity,capitalformation,jobcreationand economicgrowth,whilebuildingtrustandconfidenceinthefinancialmarkets.SIFMA,withofficesinNewYork andWashington,D.C.,istheU.S.regionalmemberoftheGlobalFinancialMarketsAssociation.Formore information,visitwww.sifma.org.
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Mr.Edwa ardDeMarco o

December22,2011

Onceagain,w O wewanttot thankyoufo ortheopport tunitytocom mmentonth heDiscussio on Paperan ndwouldwelcometheo opportunityt todiscussitfurther.Ou urorganizatio onsare committe edtocreatin ngastablem mortgageservicingstruc ctureforthe efutureofre ealestate financea andapprecia atethework koftheFHFA A.Anyquestionsorcom mmentsshou uldbedirect ted totheind dividualslist tedbelow. Sincerely y, __________ ________ __________ ___________ _____ __________ ___________ ___ MarkZingale GlenCorso SeniorVi icePresidentand ManagingD Director Associate eGeneralCo ounsel Community yMortgageB BankingProj ject TheClearingHouseA Association ________ __________ ___________ _____ __________ __________ ___________ ___ PaulM.L Leonard StephenA.OConnor SeniorVi icePresident SeniorVicePresident, HousingPolicyCounc cil PublicPolicyandIndust tryRelations s MortgageB BankersAsso ociation ________ __________ ___________ _____ RichardA A.Dorfman ManagingDirector,H HeadofSecu uritization SecuritiesIndustryandFinancialMarketsAssociation