MBA President & CEO Bob Broeksmit: ‘We are Working for You’

WASHINGTON, D.C.–Mortgage Bankers Association President and CEO Robert Broeksmit, CMB, got right to the point.

“Mortgage market regulations are raising costs and limiting your ability to serve your customers,” Broeksmit said here this morning during the Opening General Session of the MBA Annual Convention & Expo. “I’ve gotten so much valuable input from members my first eight weeks on the job and that is the number one theme. And we’re going to fix it.”

Broeksmit, who assumed President and CEO duties at MBA in August, said the upcoming mid-term elections and leadership changes at a number of regulatory agencies provides MBA with “an opportunity to drive MBA’s agenda…your agenda…for the long-term success of our industry.”

Broeksmit cited changes in leadership taking place or pending at the Consumer Financial Protection Bureau, FHA, the Federal Housing Finance Agency, as well as other regulatory agencies. “You may have heard there’s an election coming up,” he said. “We’re going to elect a new Congress. And MBA will be working for you regardless of who wins and who loses.”

In meetings with HUD Secretary Ben Carson and FHA Commissioner Brian Montgomery, Broeksmit said MBA sought reforms to the FHA program to address the issues that are inhibiting lenders from working with many qualified low- and moderate-income families.

“Specifically, we’re addressing loan-level and annual certifications and the use of the False Claims Act to extract treble damages from lenders for what are often trivial loan defects that have no bearing on loan performance,” Broeksmit said. “We have also suggested amendments to existing FHA origination and servicing guidelines and other policies like technology funding and the defect taxonomy.”

MBA is also working with HUD and the Department of Labor to address disruptive and unwarranted Davis-Bacon split wage rates on FHA-financed multifamily projects; with Ginnie Mae to improve the liquidity of Ginnie securities and mortgage servicing rights; and with Treasury and the IRS to ensure that commercial and residential independent mortgage banks receive the full benefits of the tax reform legislation.

For example, MBA spearheaded a letter with 11 other industry groups and also organized a separate MBA member letter urging the Consumer Financial Protection Bureau to improve loan officer compensation rules.

“More than 100 companies signed,” Broeksmit said. “You told us this was your number one priority, and we’re on it. Rules should provide the appropriate guidance to help lenders comply with the law. So when the [Bureau] issued requests for information on several Dodd-Frank era rules, MBA responded. We offered detailed comments urging the [Bureau] to re-examine some of its regulations, including Loan Officer Comp, Ability to Repay and Qualified Mortgage, the Consumer Complaint Database, and HMDA. And on HMDA, by the way, we’re working to ensure its scope does not needlessly sweep in business-to-business lending on multifamily properties.”

GSE reform remains a major MBA priority, Broeksmit said. “We will continue educating officials on the impacts of GSE reform to our industry and to the whole market,” he said. “We recently passed the 10th anniversary of Fannie and Freddie’s conservatorship, and times have changed: the housing market has largely recovered. Home prices have broadly rebounded. The number of mortgage delinquencies and foreclosures are at 12-year lows. And the multifamily market has met the increased demand for rental housing.

The GSEs’ long-term ability to support the housing market greatly depends on permanently reforming some of the structural problems that contributed to the crisis, Broeksmit noted. “We will continue pushing for an explicit government guarantee on mortgage backed securities issued by the GSEs and equal access to the secondary market regardless of business model or size,” he said. “And, we will pave the way for the return of private capital to the secondary market.”

In 2017, MBA published a landmark white paper on GSE reform (https://www.mba.org/issues/gse-reform). “Our work on GSE reform is not finished,” Broeksmit said. “It is critical we continue to advocate for permanent reforms that will safeguard a diverse and robust market for lenders of all sizes and business models, and protect taxpayers’ interests. At the same time, we will continue supporting a strong and vibrant commercial real estate market, which includes appropriate capital standards.”

With mid-term elections are just around the corner, Broeksmit said 2019 will bring many newcomers to the Hill, with shifts in leadership in the House and possibly the Senate.

“But no matter who sits in those seats, housing is not a partisan issue,” Broeksmit said. “MBA is leading the way in fostering this bipartisan cooperation. Our job–MBA and our members–is to connect with and educate all regulators and legislators, regardless of party, to get the job done and ensure a vibrant real estate market.”

Broeksmit said he wants the public and policymakers to “understand the crucial role our industry plays in the life of every American household. And households are growing. The Millennial Generation is the largest and most diverse segment of consumers we have ever seen. They are also leaders in technology. This presents a world of opportunity for your businesses.”

More importantly, Broeksmit said he wants MBA members to determine the association’s next steps. “MBA is a member-driven organization, and we work for you,” he said. “I want to understand your concerns, and MBA is the best vehicle for amplifying those concerns and getting them addressed.”

As part of that effort, Broeksmit said he will spend the next several months vising member companies on a “listening tour.” “Member companies will host meetings that bring together a cross section of our members,” he said. “I’ll be listening and learning your priorities. I will bring those priorities home to MBA and we will establish the best strategy for success and execute on that strategy. But all of this works only if you stay engaged as well.”