Broeksmit: MBA Working to Ensure Reform Done ‘Right’
(Bob Broeksmit, by Anneliese Mahoney)
NEW YORK–The Mortgage Bankers Association President and CEO Bob Broeksmit, CMB, took the stage at the association’s Secondary and Capital Markets Conference May 18, emphasizing the importance of affordability and reform.
“The secondary market is absolutely essential to the American Dream,” Broeksmit said. “You provide liquidity, stability, efficiency and certainty–all of which make the American housing market the envy of the world.”
Broeksmit noted he’s emphasized that message to congressional leaders and senior administration officials, as well as during testimony before Congress.
In terms of recent good news, Broeksmit touted a recent pair of executive orders issued by President Donald Trump to promote affordability in the housing market–related to federal agencies issuing new rules that lower costs and increase access to mortgage credit.
Those are wise areas on which to focus, Broeksmit said. “A lot of burdensome regulations need to change. Especially the ones that increase costs without providing much benefit or protection to Americans,” he stated. He cited the Loan Officer Compensation Rule as an example, along with the Qualified Mortgage Rule, which he said still needs “targeted changes.” Certain TRID requirements also fit the bill, he stated.
MBA is emphasizing the need to take any unnecessary burdens off all types of lenders, while retaining core consumer protections, Broeksmit said.
Basel III has also been top of mind, Broeksmit said, highlighting that the new proposal is far superior to the old one.
“It omits the most excessive and burdensome capital requirements, with a more balanced approach to risk mitigation,” he said. “That’s no accident. The MBA played a central role in getting rid of the worst mandates. Put simply, we have moved Basel III in a better direction.”
As an example of the developments, he pointed to mortgage servicing rights. The previous iteration raised the risk weights on MSRs from 100% to 250%, but the new proposal instead requests input from stakeholders on what the appropriate number should be. MBA will recommend the risk weight returns to 100%, Broeksmit said.
He also cited the treatment of warehouse lending, which he noted has also improved from the original proposal. But, there’s still more work to do, he said.
“We need a policy that recognizes and respects the role that banks play in providing vital liquidity to IMBs, who make the bulk of affordable loans to American families,” Broeksmit stated. “MBA will continue to fight for the best outcome. And at the end of the day, Basel III needs to foster a deeper and more liquid mortgage market–the kind of market that makes homebuying more affordable for all.”
Broeksmit also discussed the current housing legislation working its way through Congress–the 21st Century Road to Housing Act. MBA has flagged the Senate version’s ban on institutional investors, among other concerns. The House bill has amended that provision, and Broeksmit said he’s “optimistic” Congress will do what’s right.
Given the packed Congressional agenda, Broeksmit said he think it’s unlikely Congress takes up GSE reform before the end of the year, but MBA is “monitoring the situation closely,” and if GSE reform is done, it needs to be done the “right” way.
“These are busy times in Washington, D.C,” Broeksmit said. “But that’s what we like at the MBA. We exist to serve you, and the more we can do on your behalf, the more you can do in communities nationwide.”
