CREF21: Bob Broeksmit on ‘The MBA Difference’
Mortgage Bankers Association President & CEO Robert Broeksmit, CMB, opened the MBA CREF21 Convention & Expo by recapping the “unprecedented challenges” the real estate finance industry faced over the past year and a look at the uncharted waters ahead.
“When we met 12 months ago, the economy was booming,” Broeksmit told more than 1,700 participants yesterday during a virtual general session. “The commercial and multifamily markets were flying high. Then it all came to a screeching halt. One year later, our industry has faced unprecedented challenges. The situation has been worse than after the crash of 2008, in many respects. None of us have ever seen anything like it.”
But Broeksmit praised the resiliency of the real estate finance industry and noted MBA stepped up. “The Mortgage Bankers Association is made for tough times, and the past year proves it,” he said. “In fact, I think it’s fair to say that MBA has never accomplished so much for our members in such a short span – for all capital sources and all types of lending. From the moment the pandemic struck, we swung into action. And we haven’t slowed down since.”
Broeksmit cited two MBA victories in particular during 2020 that benefited MBA commercial and multifamily members. The first involved discussions among MBA, Treasury and Federal Reserve officials to announce unlimited purchase of mortgage-backed securities and multifamily mortgages. “Wins don’t get much bigger than that,” he said.
The second came at the end of the year,” when Congress passed another round of pandemic relief. “We spent the preceding months meeting with senior administration officials and congressional leaders,” Broeksmit said. “We put in countless hours of around-the-clock advocacy work. While the legislation was long in the making, we helped make the final version what it was.”
The final bill was a “major boon” to multifamily, Broeksmit said. “It contained more than $25 billion in rental assistance,” he said. “It also extended additional unemployment benefits of $300 a week and provided a $600 direct payment to the families who need it. These wins will keep millions of families current on rent payments and put your businesses on firmer footing.”
The bill was just as good for commercial finance, Broeksmit noted. “It contained a much-needed expansion of the Paycheck Protection Program,” he said. “The small businesses that are your clients now have an extra $166 billion in relief. Entertainment venues that have shut down received another $15 billion. In both cases, this money can help stabilize income for your borrowers. For our CMBS lenders, we secured the continuation of the Term Asset Backed Lending Facility, ensuring continued stability for our industry. And for all commercial real estate lenders, we secured cost savings through modifications to beneficial ownership reporting requirements.”
But the biggest win of all, Broeksmit said, was continuation of Troubled Debt Restructuring relief. “Thanks to our efforts, TDR is in effect through the rest of the year,” he said. “And the bill expanded relief to all financial institutions, including life insurance companies. This major victory is a direct result of MBA’s advocacy on your behalf.”
Broeksmit cited other key MBA wins during 2020:
–The CARES Act passed last spring secured temporary relief for troubled debt restructuring. MBA then secured an extension in December’s stimulus bill.
–MBA urged the National Association of Insurance Commissioners to provide new guidance on the treatment of loan modifications. “Thanks to our request, insurers are now able to make prudent loan modifications for borrowers,” Broeksmit said.
Additionally, MBA provided risk-based capital relief and force-placed flood insurance relief; it helped to secure modifications to the Volcker rule to allow for normal-course-of-business CMBS trades to be made safely and efficiently; it ensured that TDR relief also applied to non-banks and REITs; and for life insurance companies, MBA proposed more equitable capital treatment for equity investments. “We’re proud of our record on commercial issues over the past year,” Broeksmit said.
The year-end stimulus bill benefited the multifamily industry as well. “The pandemic has made clear that vulnerable Americans needed more help,” Broeksmit said. “We took up their cause by calling for a funding boost for Section 8 housing and community development block grants; it worked. Congress passed $42 billion in additional funding for HUD programs.”
“The end of the pandemic is now within sight, though not yet within reach,” Broeksmit said. “The days ahead will be full of many challenges, from solving the affordable housing crisis to how we recover from the pandemic. Rest assured, the MBA is working hard on every front.”
Broeksmit said members’ continued support is essential to MBA’s continued success. “And your continued leadership is essential for the future of the economy and the country,” he said. “Know that the Mortgage Bankers Association is fighting tirelessly for you in Washington, D.C. and beyond. We achieved great things on your behalf over the past year. We will accomplish even more in the year ahead, as your ally and your advocate. That’s what we do. That’s who we are. And that’s what we will always be, because nothing is more important to the MBA than you.”
