If you missed the Mortgage Bankers Association's (MBA) Annual Convention last week, then you missed a fascinating gathering. The vibe I picked up at the convention was a sense of resiliency and determination from an industry that is down but not out.
I was told that attendance was up this year, which is an encouraging sign, and a number of new vendors could be seen buzzing around with their products on display for all interested parties. Compared to last year's convention, where an unspoken sense of cold panic permeated the proceedings, this year's convention boasted a tougher yet honest attitude.
Affirming survival, however, is not the same thing as enjoying stability, and one aspect of the convention that deserves mention is the industry's acceptance – perhaps belatedly – that we will be sailing on rough waters for the foreseeable future. Any talk of turnaround in 2010 was hard to locate; Charles Halderman, Freddie Mac's CEO, was blunt when told the convention attendees that it ‘would be a real mistake to be too confident about a return to normalcy’ in the near future.
I also heard people speaking about 2011 and even 2012 as the time when we can finally tuck the current crisis into the history books for good. Look out for a bumpy 2010!
The convention also did not answer very specific questions regarding strategies to revive the evaporated private-label market. In fact, it was fairly obvious to all in attendance that that Uncle Sam will be the leading player in the industry for the next 12 months.
One major story that broke during the convention was the announcement that Freddie Mac formally announced a new pilot program designed to help the government-sponsored enterprise's seller/servicer affiliates obtain warehouse lines of credit with participating warehouse lenders. That is good news for the Freddie Mac affiliates, but it also confirms that hopeful talk of an industry-based solution is not feasible at this time – or any time in the foreseeable future.
Indeed, warehouse lending was the subject of a panel discussion that was centered on being able to encourage lenders who were having problems seeking out new warehouse lines. The advice that was provided wasn't entirely helpful: check back with former warehouse lenders to see if they returned to business or try to get community banks interested in offering such lines. If those two options didn't pan out, it appeared there was no further non-federal avenue to pursue.
There was also the acknowledgment that recovery for the industry is, in large part, out of our hands. MBA's chief economist, Jay Brinkman, stated that unlike previous recessions, our current crisis won't see a rapid recovery due to the high unemployment rate, stagnation in consumer spending and ballooning federal debt. Brinkman also noted that 3.8 million homeowners are in arrears in the payments, and further hiccups in the economy could easily see that number spike.
Nonetheless, I did not get a sense of pessimism – let alone defeatism – at the convention. Today's environment is unprecedented, but the vibe I picked up was that the industry is moving in the right direction, albeit in a slower-than-anticipated pace.
Recovery may be obtained later rather than sooner, but the sense I am getting is that the industry is moving in the right direction.
– Phil Hall, editor, [b][i]Secondary Marketing Executive[/i][/b]
[i] (Please address all comments regarding this opinion column to hallp@sme-online.com.)[/i]
