Transitioning Beyond MBA

This past week the Mortgage Bankers Association (MBA) announced that they had voted on my replacement as CEO and President. Robert (Bob) Broeksmit was an excellent choice to lead this association in the years ahead.

MBA is the powerhouse that our industry needs in order to effectively represent and influence the key policy issues affecting mortgage finance for both commercial and residential lending. While National Mortgage News did a great job in this article ( highlighting the success of these past 7 years, it also showed Bob’s strong background and thoughtful views and reflected the support from leaders he has coming into the job.

Leaving a job you love is hard for anyone, and these past years have been extremely rewarding. To watch this industry come together and align around some really critical issues where we supported good regulation but fought against creating even more confusion in policy making, where we worked closely with administrations on both sides of the aisle, and where we grew our membership and activities will be great memories to reflect on.

Together we fought for a level playing field for all lenders, created the Diversity and Inclusion Committee and its conference, we established the Opens Doors Foundation to provide mortgage and rental payments for families with critically ill children, grew our young professionals program (mPact), created mPower under Marcia Davies leadership, testified in front of congress multiple times, established a new brand for the association, brought us back to fiscal soundness where we are stronger than ever, and so much more. I have spent time with multiple Presidents including, members of congress, and key regulators from both sides of the aisle. Our brand has never been stronger.

The key to all of this success has been the incredible team of dedicated employees of this association that are experts in policy, finance, law, conferences, education, communication, politics, and more. This is the team that makes it happen and they will do the same going forward.

As I leave MBA and move into my future roles where I plan to consult and participate in other things that are less than full time in order for my wife Mary and I, along with our kids and grandchild, to focus on my cancer, health, and enjoy life, I leave excited for Bob.

Everyone is replaceable and all we can hope for is to leave our roles and organizations in better shape than when we arrived. I have known Bob for decades as have so many others in the industry. He will do a great job in this next chapter.

And, while we will likely see each other around Washington at various events and in congressional hallways, I will enjoy seeing MBA in it’s next chapter and will look forward to our industry maintaining its path focusing on responsible lending, rational legislation and rule making, and addressing the critical issues ahead.

My final message to the members of the MBA is this: stay united and committed to this institution. If you pull back due to short term business challenges, you will lesson the power of its collective voice. Your responsibility as a member of this industry is to join together to make sure we maintain our voice and our success through committed and broad participation from everyone.

Thanks for all of your support these past years. Bob starts in this seat on August 20, 2018 – please be there for him as I move into my new post MBA role.


MBA Launches mPower Moments

18649_mPower_Landing_Page_Web_HeaderThis week, MBA launched a new monthly video series, mPower Moments, featuring Marcia Davies, our COO and the founder of mPower, exploring issues important to women in the real estate finance industry.  For anyone who is unaware, mPower is MBA’s platform for women in our industry to strengthen their networks, to achieve professional growth and development, and to exchange ideas and information. Continue reading “MBA Launches mPower Moments”

Response to Recent News Stories about Racial Disparities in Lending

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For the past month, an activist group named The Center for Investigative Reporting (CIR), has been using a deeply flawed analysis of government lending data in order to prop up a story about racial disparities in mortgage lending that they have been peddling to news outlets.

Make no mistake, discrimination is unacceptable in any way, at any time.  Period.  End of Story.  And yes, members of minority communities are being denied mortgage loans at a greater rate than white borrowers.  But it is flat-out incorrect, defamatory and disgraceful to accuse the mortgage lending industry of denying loans to borrowers simply based on the color of their skin.

What this group is doing – not just relying on a study that fails to consider many of the key data-based variables that lenders rely on to make an individual loan decision, but also cherry-picking among loan types – is actually counterproductive to the important discussion we are having regarding access to credit challenges in our nation’s communities.

CIR’s conclusions come from a simple look at data collected from all lenders by the government under the Home Mortgage Disclosure Act (HMDA).  This despite the Federal Reserve itself warning that racial disparities in loan denial rates are driven by factors that are not included in the HMDA data:

differences in denial rates and in the incidence of higher-priced lending (the topic of the next subsection) among racial or ethnic groups stem, at least in part, from factors related to credit risk that are not available in the HMDA data, such as credit history (including credit score), ratio of total debt service payments to income (DTI), and LTV ratio.

The Federal Reserve goes on to say that when it is examining a bank’s fair lending performance, it does review these additional factors.

When examiners for the federal banking agencies evaluate an institution’s fair lending risk, they analyze HMDA price data and loan application outcomes in conjunction with other information and risk factors that can be drawn directly from loan files or electronic records maintained by lenders, as directed by the Interagency Fair Lending Examination Procedures.36 The availability of broader information allows the examiners to draw stronger conclusions about institution compliance with the fair lending laws.

As part of the HMDA reporting process, lenders can report their reasons for denying a loan.  As you can see from the chart below,  the two most frequently cited reason for denial are debt-to-income ratio (DTI) and credit history – two factors that CIR failed to control for in their analysis.

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Source of the quotes above and table:

Now, another major flaw in their reporting is CIR’s inexplicable decision to look at only conventional loans, and ignore government lending, particularly FHA.  There is no rational reason for failing to include FHA loans.  They are widely available, allow smaller downpayments, and in some ways are more flexible with respect to credit history than conventional programs

And, as you can see in the chart below, they are the predominant means of financing for black and Hispanic home buyers.

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Listen, MBA and its members have been working long and hard to find ways to responsibly expand the credit box in order to serve borrowers of all demographics, with different credit profiles and income levels.  With the coming of the Millennials — the largest, most diverse generation this country has ever seen — it is of paramount importance we solve this.

But false narratives constructed in an effort to generate scintillating headlines and tarnish an entire industry are not a productive means to have this important discussion.  This kind of faulty reporting is insulting and insensitive to the realities of credit access in the US housing market and only serves to distract from the real issues that are preventing minorities from being able to enjoy the benefits of homeownership.

Open Mind on GSE Reform

Capitol-SunriseLargeThe recent release of the draft discussion text from the Corker/Warner Senate team on GSE reform is a strong step forward in the effort towards legislation to resolve the conservatorship of Fannie Mae and Freddie Mac in a productive manner. I encourage all lenders and stakeholders to read the draft text and form your own opinions as a lot of misinformation is circulating about what the text actually says.

Continue reading “Open Mind on GSE Reform”

A Bipartisan Opportunity to Clarify Rules on Commercial Real Estate Lending

CREFpic1This week, the House of Representatives passed H.R. 2148, the Clarifying Commercial Real Estate Loans Act. The bipartisan bill, sponsored by Representatives Robert Pittenger (R-NC) and David Scott (D-GA), would make much-needed clarifications and modifications to the High Volatility Commercial Real Estate (HVCRE) rule. MBA has strongly supported the bill, including with a letter to House leadership and a statement upon passage. The bill now heads to the Senate, where MBA will work to help advance it to the President’s desk.

Continue reading “A Bipartisan Opportunity to Clarify Rules on Commercial Real Estate Lending”

Tax Reform and Real Estate Finance

Yesterday I testified before the House Financial Services Subcommittee on Housing and Insurance regarding GSE Reform. However, not surprisingly, the GOP tax legislation unveiled earlier that day ended up dominating a fair amount of discussion.

MBA has already created a summary (below) of key real estate provisions that the legislation impacts, but let me also share some initial thoughts on what this proposal means for our industry.

As I said in our press statement, we have serious concerns about some provisions that might negatively impact housing markets across the country. Specifically, we believe the cumulative impact of the proposed changes to the mortgage interest deduction, capping the deduction for state and local real estate taxes, and the phase out of the exemption for capital gains treatment when families sell their principal residence could have significant adverse impact on housing markets, particularly in high cost areas. Additionally, we are also concerned about the bill’s impact on affordable housing, due to the repeal of the tax exemption for private activity and mortgage revenue bonds.

That said, it’s important to keep the following things in mind as we move forward.

To begin, tax reform has the potential to spur job creation, wage improvement, and economic growth. This bill includes an increase in the standard deduction, lower rates for lower and middle income families, and other popular provisions that could benefit the economy. The bill also significantly reduces the U.S.’s high corporate tax rate. All this points to the prospect of growing economic strength in this country which would be very positive for the housing market and MBA members’ businesses.  But we will remain vigilant and vocal on the issues that matter most to our industry and our customers.

Also, some of the provisions in this tax legislation offer a very positive outlook for commercial and multifamily companies. The bill retains the deductibility of business interest for real estate, section 1031 like-kind exchanges for real property, and the low income housing tax credit that are important to maintaining strong housing and real estate markets and the production of affordable housing stock.

Lastly, it is important to remember that this is the initial offering from one key stakeholder in the tax reform process, the House leadership and its Ways and Means Committee. The likelihood that this exact text put forth would be signed into law is low, and the bill is almost certain to see some changes by the time the Senate gets its bite at the apple.   In fact, just this morning the Ways and Means Committee released a revised draft, though the changes appear to be only on the margins.

MBA has been approaching tax reform in a very deliberate and strategic manner.  Despite important disagreements with some provisions of the bill introduced this week, we will continue to look at the proposal as it evolves holistically while this critical process moves forward.

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Mortgage Action Alliance: Action Week


The Mortgage Action Alliance (MAA) is kicking off October with our 2017 Action Week. Our goal this year is to get 1,000 downloads of the new MAA App and surpass 20,000 MAA members. Last year we had about 60 companies participate in Action Week and signed up just over 2,400 new MAA members. We need to beat those numbers this year. We’ll be recognizing all participants at MBA’s Annual Convention and are spreading the word on social media.

Continue reading “Mortgage Action Alliance: Action Week”

Nine Years of Conservatorship

Washington DC: Monumental Autumn

Nine years ago this week, in the midst of the financial meltdown, regulators were forced to put Fannie Mae and Freddie Mac (the GSEs) in government conservatorship, or face the very real probability that two pillars of the housing finance system would fail. Government control of these entities was supposed to be a temporary, stop-gap solution. It was never intended to last nearly a decade. Yet here we are.

Continue reading “Nine Years of Conservatorship”

Bill Will Enhance Workforce Mobility for Mortgage Loan Officers

closing pic 1.jpgLast week, the SAFE Transitional License Act (S. 1753) was introduced in the Senate with the enthusiastic support of MBA and the mortgage industry. Similar bipartisan legislation (H.R. 2948) was introduced in late June in the U.S. House of Representatives. The SAFE Transitional License Act, could have a huge impact for the mortgage industry, as mortgage loan officers (MLOs) may soon be able to transition from a traditional bank to a nonbank and keep originating new mortgage loans without having to wait for a new license.

Continue reading “Bill Will Enhance Workforce Mobility for Mortgage Loan Officers”