Broeksmit: For Mortgage Industry, a Year of Results, Challenges

MBA President & CEO Robert Broeksmit, CMB.

AUSTIN, TEXAS–Mortgage Bankers Association President & CEO Robert Broeksmit, CMB, delivered opening remarks to attendees here at the MBA Annual Convention & Expo that focused on a number of MBA accomplishments over the past year, as well as a list of challenges still facing the real estate finance industry.

“The Mortgage Bankers Association hasn’t just worked for you–we’ve delivered for you, again and again–and the past year has been a record of results,” Broeksmit said.

Among these results:

–When the government shutdown halted the IRS tax return verification system, “we worked with the administration to get it up and running–fast,” Broeksmit said.

–When the IRS implemented the qualified business income deduction for pass-through entities, “we ensured that independent mortgage banks and community banks had access to it, saving even small lenders hundreds of thousands of dollars in taxes, every year,” he said.

–When the Consumer Financial Protection Bureau began working on a new innovation policy, “we made sure it gave you the legal protection and streamlined process you need to serve your customers,” he said.

–When Fannie and Freddie launched the new uniform mortgage-backed security, “it reflected MBA’s input, going back years,” Broeksmit said. “It’s already giving us a deeper and more liquid market for our members.”

–And when the White House released plans for housing finance reform, “it bore the unmistakable mark of the Mortgage Bankers Association,” he said. “An explicit guarantee on mortgage-backed securities, a pathway for new guarantors and a level playing field for lenders of all sizes that puts consumers first–ladies and gentlemen, it’s a huge step in the right direction.”

But Broeksmit noted 2019 has also been a year of preparing the way for what comes next. “You know better than anyone that new policies bring new challenges,” he said. “That’s why we’re getting ahead of those challenges. We’ve secured a seat at the table on every important issue.”

For example, Broeksmit said as the CFPB debates what to do with the QM Patch, MBA is there, telling them “we need a better system. It can’t rely on [debt-to-income] as standalone factor to determine QM status, and it needs to ensure creditworthy consumers have access to Qualified Mortgages with more options and better prices.”

Broeksmit said as the CFPB also moves forward with fixing the loan officer compensation rule, MBA has led the industry’s advocacy, showing CFPB that the current system” raises costs on American families and wraps your companies in pointless red tape.”

 And on housing finance reform, “we know that the recent plans are just the beginning of the debate. Details are still being worked out, and there are risks that must be addressed,” he said. “We’re talking with the White House. We’re talking with leaders from both parties in Congress. And we’re talking with every federal agency imaginable. Our goal isn’t ‘recap and release.’ We recognize the need to rebuild capital, but we will fight to ensure that before the GSEs are released from conservatorship, we will have reforms in place–by rule and by legislation–that meet our core principles and will remain in place after conservatorship ends..”

Broeksmit emphasized MBA has a seat at the table because of built relationships with people who matter. “Relationships are the foundation of your success, in your communities, and the same is true in Washington, D.C.,” he said. “We invest heavily in forging strong bonds. We bring data, we bring analysis and we bring market experience to the room where decisions get made. When policymakers have a question, they call us.

And when we call them, they pick up.”

And those relationships extend to MBA membership; Broeksmit said listening to members is his priority, noting he spent most of the past year on the road, visiting member companies.

“Everywhere I go, I get a better sense of what our members need–and how we can deliver,” Broeksmit said. “And what I’m hearing from you right now couldn’t be clearer. You’re telling us that you see storm clouds on the horizon. Uncertainty is growing, in the industry and the economy. Most of all, you’re telling us that you need stability. And stability is what we are fighting for.”

Housing finance reform is the best example,” Broeksmit said. “As the administration starts implementing its blueprint, we’re urging them to do it right. Leveling the playing field for private capital could mean a smaller GSE market share, which means it needs to be done with great care. It needs to ensure access to affordable credit–to preserve the mission of the GSEs to serve low-, moderate- and middle-income families–and to make sure there is liquidity nationwide through all market cycles. 

MBA also strongly believes HUD should keep uniform pricing for FHA loans. “Qualified homebuyers of all backgrounds are depending on it,” Broeksmit said. “The best way to reduce risk in the FHA insurance fund is to look at underwriting criteria to ensure long term sustainability, not to raise the cost of an FHA loan to those borrowers who can least afford it.” Collaboration is key to progress on these issues, Broeksmit said. “MBA is working closely with the realtors, the builders and the bankers’ associations to promote reform that strengthens the system, protects the taxpayer, and preserves the GSEs’ and FHA’s statutory purpose,” he said. “And we’re working together to tell Congress to avoid any action that could undermine the housing economy. The name of the game is action–and caution. The balance between them is where we’ll find the stability you need. Whether it’s housing finance reform, the QM Patch or any other issue, our message to legislators and regulators alike is the same: Be smart and be careful. Our members, and American consumers, need clear policies and clear timelines. Actions should be gradual and telegraphed–a dial, not a switch. We’re telling them, in no uncertain terms: do not disrupt the market.”