Thank you, Secretary Yellen. I thank the staff for their collaboration on the Nonbank Mortgage Servicing Report, which I am pleased to support.

The $12 trillion mortgage-backed securities market is important to everybody who owns a home or one day wishes to own a home.[1] It's also interconnected and integrated with our overall financial system — and we've seen in the past when problems in the mortgage markets have actually spilled out into our overall economy.

As we witnessed in the Great Financial Crisis of 2008, key failures in both the banking and non-bank sectors caused a collapse that started in the mortgage industry and ultimately destabilized the financial system. It devastated millions of American workers, businesses, and families nationwide.

Since the crisis, we've seen a shift in these markets. As the report details, non-bank mortgage companies have continued to expand their role in the market, increasing the share of residential real estate mortgages they originate and service.

The Council first mentioned the inherent risks of non-bank servicing in its 2014 annual report.[2] This Council should remain vigilant in monitoring the mortgage-backed securities market, including non-bank mortgage servicers and their associated risks — from liquidity risks to leverage risks and operational risks.

The report under consideration today highlights how these risks are particularly exacerbated in the non-bank servicing market, with recommendations to protect the wider financial system. There are many agencies around this table, starting with the Federal Housing Finance Agency, that play important roles in overseeing these matters. Here at the SEC, we’re tasked with overseeing the $12 trillion mortgage-backed securities market.

I support publishing the report, which provides important context, guidance, and legislative guideposts to Congress. I also support the FSOC’s consideration of further efforts within its authorities to enhance the resiliency of the financial system.

Thank you.