Nonbank Mortgage Companies Pose Financial Stability Risks, FSOC Says
- Report says risks may amplify shocks, undermine stability
- FSOC releases first report on nonbank mortgage firms’ threats
Nonbank mortgage companies, which increasingly dominate the sector, pose unique risks and vulnerabilities that can weaken financial stability, according to a new Financial Stability Oversight Council report.
The FSOC on Friday released its first study of the threats introduced by nonbank mortgage firms, which have escaped the strong regulation reserved for traditional banks despite displacing them in the market. In 2022, nonbanks originated about two-thirds of mortgages and serviced most of them.