Having just returned from MBA National's 101^st annual convention, I wanted to share my takeaways. 

Access to credit was easily the main talking point.  Our association has attained a position of respect in Washington and it's imperative that we continue to build upon the conduits for input with regard to policy making. Bill Cosgrove, Chairman, and David Stevens, President, both stressed the importance of advocacy and being a unison voice in Washington.  David made the point that we need to keep our squabbles amongst ourselves and have a unison, powerful voice in Washington to makes sure that the message of the greater good is heard.  We're now safe for consumers and we need to move from crisis response, and a dialogue of distrust, to a dialogue of confidence to get the market moving forward. 

Bill also stressed the importance of advocacy as he challenged CEOs to promote involvement within their companies. He quoted a Chinese proverb: "Tell me, and I'll forget.  Show me, and I may remember.  INVOLVE me, and I'll understand."

Involvement is critical given the trends we're seeing as an unintended consequence of past policy and over-regulation.

HUD Secretary Julian Castro agreed that access to credit is a problem and supports improvement. However the efforts for this improvement seemed to focus on revisions to the defect/penalty relationship and improvement in guideline communication and understanding.

Given that the percentage of first time buyers is down to 29% compared to 40% historically and FHA's percentage of the market has fallen 18.5% in the last 12 months, are these statistics due to lenders and investors fearing buybacks and instituting overlays, or other affordability factors?

Bill Cosgrove said that one possible cause is rising student debt.  Student debt has increased from 12.9% in 2005 to a staggering 36.8% today.  This has had a profound downward effect on homeownership.

The concern over the cost of MIP was brought up by MBA, but this issue was not really addressed by the HUD officials.

Mel Watt, Director of FHFA, shared the efforts that Fannie and Freddie (the enterprises) are taking to improve lender and investor confidence regarding ambiguity in reps and warrants.  Referencing changes that occurred in May of 2014, Revising the payment history requirement allowing up to two 30-day delinquencies within the first 36 months after acquisition. Providing loan level confirmations when loans meet the 36 month benchmark or quality control review and eliminating automatic repurchase when the loans PMI is rescinded. For loans that have already reached a point of repurchase relief, only life of loan exclusions can trigger repurchase under reps and warrants.

Specifically he mentioned  the six categories that would constitute life of loan exclusions and trigger buyback requests:

1. Misrepresentations, misstatements and omissions
2. Data inaccuracies
3. Charter compliance issues
4. 1^st lien priority and title matters
5. Legal compliance violations
6. Unacceptable mortgage products

He further clarified numbers one and two above by stating that misrepresentations or inaccuracies are triggered in situations when there is a pattern of these issues rather than a mistake on a single loan.  In addition, there is a significance requirement to these categories as well.  The misrepresentation or inaccuracy must be material in the loan being considered eligible as indicated by the AUS system.

He also said that the enterprises will continue to be able to conduct quality control reviews at any time and continue to engage in transactions to sell a certain portion of the credit risk of mortgage purchases to the private market.   To do this they are developing a Common Securitization Platform (CSP) which will work to reduce the variants between the enterprises. Director Watt also mentioned the initiative to increase LTV maximums to 97%. There seems to be an abundance of support and initiatives surrounding the easing of the "penalty phase".

David Stevens reminded us that the CFPB is here to stay and we need to make sure that we let them know that enforcement should be the exception to the rule, rather than the rule itself. 

So what can we do?

I've heard this question quite a few times from our members wondering what we can do that will have an impact in Washington.

Mortgage Action Alliance is a grass roots effort that we can all participate in that only involves registering on the MBA website.  When a call to action is emailed to you, simply take action to increase the scope of our voice in Washington.

Remember to serve the common good of the industry get involved in any way that you can and encourage others to as well.  We all have the responsibility to keep the momentum growing and create good policy which will improve opportunities in the future of real estate finance.

Remember, we get what we give! 

Gulf Coast MBA 

MBA of Central Florida 

MBA of Jacksonville 

MBA of Tallahassee 

MBA of Tampa Bay 

MBA of South Florida 

MBA of SW Florida 

Online Calendar of Chapter Events