Getting depositories back into the mortgage business has been a driving ambition of federal banking regulators currently considering revised capital requirements for U.S. banks.
But industry experts tell Scotsman Guide that lower capital requirements for mortgage-servicing assets (MSAs) under proposed Basel III Endgame reforms are unlikely to bring depository banks back to the mortgage business at the scale, speed or manner regulators advertise.
Basel III refers to a global banking framework developed after the 2008 financial crisis that established revised standards for bank capital requirements and other liquidity considerations. Over the past decade since those reforms were enacted, nonbank mortgage companies have gobbled up market share...