(#MBAServicing23) Jones: More Challenges Ahead for Servicers

(MBA Chairman-Elect Mark Jones opens #MBAServicing23 Wednesday in Orlando.)

ORLANDO–Mortgage Bankers Association Chairman-Elect Mark Jones kicked off the MBA Servicing Solutions Conference & Expo here with a thank-you to the mortgage servicing industry’s “heroic” work during the coronavirus epidemic, now in its third full year.

“It astounds me to think about all you did to help borrowers come through the pandemic, and even emerge stronger,” Jones said. “All told, since COVID first hit, you’ve helped nearly seven million families enter – and then exit – forbearance. And not only that, you helped millions more homeowners unlock their equity and make the most of a difficult time.”

Jones, founder and CEO of Amerifirst Home Mortgage, Kalamazoo, Mich., praised servicers for showing creativity and commitment every step of the way. “And you did it at a time when policymakers had unfair expectations and conflicting demands and rules,” he said. “They asked you to move mountains – and somehow, you moved heaven and earth. I still don’t think you got the credit you deserve.”

But Jones cautioned that servicers will be called upon for even more creativity and commitment in the years ahead.

“The pandemic is over, but another crisis may be looming,” Jones said. “MBA predicts a recession will start before the year is out. It probably won’t be as deep or as long as some previous downturns, but it won’t be easy, either. And when times get hard, you get called into action. The truth is, you’re going to have to help a lot more borrowers in the days ahead. There will be some long hours and late nights, no question. But I’m confident you’ll work harder than ever to keep families in their homes.”

Jones also predicted servicers will do even better than they did during COVID. “If I’ve learned anything over the past 40 years, it’s that our industry is constantly getting more effective at helping those in tough situations,” he said. “You learned a lot of new ways to empower families during the Great Recession. You learned even more during the pandemic. And in the days ahead, you’re going to use that knowledge to benefit borrowers.”

Jones said MBA will continue to work on servicers’ behalf. “We’re as focused as ever on aligning requirements across the alphabet soup of federal agencies,” he said. “I don’t have to tell you that FHA has different rules than Ginnie Mae, which has different rules from Fannie and Freddie, which have different rules from the VA. It’s maddening, isn’t it? And it hurts borrowers. We’re making this clear to the powers that be. Our message to them is simple. If they align their requirements across the board, we’ll be able to help more borrowers, more quickly, and more affordably, too. Alignment is a no-brainer, and we’ll keep fighting to make it a reality.”

MBA is also focused on capital standards and requirements for banks and non-banks who service mortgage loans. “The current requirements are far too high – and going even higher,” Jones said. “At the rate they’re going, they threaten to drive banks and non-banks alike out of the servicing business. That would be an unmitigated disaster. Who would do your essential work? Who would fulfill the high responsibility of helping people keep their homes? The answer is no one – and the MBA is letting lawmakers know it. We’re talking with FHFA, Ginnie Mae, bank regulators, you name it. And across the board, we’re telling them: Right-size capital standards – and stop this wrong before it’s too late.”

Another current focus is fixing loan assumption fees. “Demand for assumptions is skyrocketing in this time of high-interest rates, understandably so,” Jones said. “Yet the current situation is financially unsustainable, and your companies are losing huge amounts on each transaction. Fortunately, there’s a simple fix. The VA, FHA, Fannie and Freddie should increase their allowable fees, and index them to inflation, too. The MBA has formally made this request, and conversations with regulators are ongoing. It’s the only way to ensure we can keep helping so many borrowers – and we won’t rest until you get relief.”

And on loss mitigation, Jones said, “we’re talking all the time with FHA, the USDA, the VA, and FHFA. We’ve asked the VA to create a permanent partial claim program, and when it comes to the GSEs, we support expanding borrower access to Payment Deferral and Flex Modification. The pandemic proved that these programs work – and with a recession on the horizon, borrowers need them to keep working.”

There’s no better proof of MBA advocacy, Jones said, than flood insurance. “Since 2017, the MBA has strongly urged HUD to update its mandatory requirements, and after five years of endless advocacy, we succeeded. Just four months ago: HUD announced that FHA lenders can finally accept private flood insurance policies,” he said. “That’s good for your companies and the borrowers you serve – and we’ll keep fighting to make this policy even better.”

“Thank you for being such a pivotal part of the MBA family,” Jones said. “Thank you for stepping up, every day, with compassion and commitment. And thank you again for your heroic work on behalf of homeowners – past, present and future.”