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Bank capital relief may not quickly shift mortgage market dynamics

Regulatory changes to how banks treat mortgage assets — anticipated this week by Federal Reserve Vice Chair Michelle Bowman — may have an impact on the mortgage market over time, analysts said.

“The near-term impact on the mortgage market is likely to be somewhat limited,” Keefe, Bruyette & Woods (KBW) analysts wrote in a report published Tuesday. “There are few large banks limiting their participation specifically due to the capital treatment of mortgages or MSRs.”

Bowman, speaking at the American Bankers Association (ABA)’s 2026 Conference for Community Bankers on Monday, said the Fed will details ⇒

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