BLOG VIEW: It was ironic that the Mortgage Bankers Association (MBA) held its National Secondary Market Conference at New York's Marriott Marquis Hotel. After all, the venue's Broadway location in the heart of Times Square was an appropriate place to debut mortgage banking's latest star: David H. Stevens, the former Federal Housing Administration commissioner and the new president and CEO for the beleaguered trade group.
However, Stevens' debut as the voice of the industry was more than a little peculiar. Some of his comments gave the impression that his tenure at the helm of the MBA will get off to a very slow start. Even more puzzling was his decision not to address the proverbial 800-pound gorilla that dominated much of the conference: the increasingly fragile state of the mortgage banking industry.
To his credit, Stevens acknowledged a fact that the MBA refused to consider for the past three years: A great deal of the current problem was the result of self-destructive behavior.
‘We must hold ourselves accountable for the role we played,’ he said. ‘Without dismissing the roles that others played, we must admit that some within the industry gave loans to borrowers that should have, and ignored or excused the presence of unethical people and misplaced incentives.’
Well said, sir! This is a far cry from statements made by Stevens' predecessor, John Courson, who sourly blamed the robo-signing controversy on a ‘media feeding frenzy.’
But when the time came for Stevens to offer a road map of his MBA leadership, he appeared to be pointing in strange directions. One of his priorities is a public relations campaign to improve mortgage banking's image.
‘The public no longer seems to understand what we do, or why it is important,’ he continued. ‘In fact, for many first-time home buyers, we may have scared them a bit, so they are sitting on the sidelines wondering if homeownership is the right decision for them.’
Hold the phone – people are not buying homes because they are scared of mortgage bankers. Uh, hello? Where in the world did that idea come from?
‘It is my goal to launch an extensive grassroots awareness campaign to highlight how we support homeownership and lower costs for home buyers, through direct financing and through the secondary market,’ he said.
Admittedly, a focused public relations outreach will be better for the MBA than Courson's well-documented fumbles with the media, which resulted in the organization becoming the butt of Jon Stewart's jokes. But is this really a priority for the industry?
And as for lower costs for home buyers – in what country? Every originator I know rues the new environment where excess regulatory burdens are resulting in higher costs for borrowers. And don't get me started on the ‘secondary market’ – also known as a pair of bankrupt entities seized by the federal government in September 2008 and propped up with billions of dollars from U.S. taxpayers.
More bothersome, however, was Stevens' bizarre slam at smaller mortgage banking coalitions that have emerged in recent years as lobbying and data resources.
‘Our industry is becoming splintered,’ he warned. ‘A parade of small representatives of our industry is not fundamentally positive for the direction where we are going.’
Stevens did not identify any of these ‘small representatives,’ nor is it clear how these groups have damaged the cause of mortgage banking. Considering that some of these groups are led by individuals who are highly respected in Washington and throughout the industry, Stevens' turf battle cry was out of place.
Stevens also stated to the conference audience that ‘being defensive about intervention into our industry is not productive.’ Considering that Stevens came to the MBA from the Obama administration, I am worried that he has no qualms about the level of ‘intervention’ being dumped on the industry.
As for the aforementioned 800-pound gorilla, Stevens did not bother to point out the genuine problems facing today's industry: the federal government's inertia in regard to the question of the government-sponsored enterprises, the inability to reanimate the private-label market, the problems surrounding the issue of Qualified Residential Mortgages, the lingering uncertainty created by incomplete Dodd-Frank Act-related regulations, the lethargy in starting a covered-bond market, the continuing problems facing non-agency product, the unprecedented level of power being put in the Consumer Financial Protection Bureau and the increasing worry of a double-dip recession in the housing market.
Nonetheless, the new MBA leader believes there are better times ahead. ‘I'm bullish about the future of housing,’ said Stevens.
I am glad that Stevens believes – to borrow a lyric from a Broadway classic – the sun will come out tomorrow. But in view of the current crises, it would have been nice for him to give the 800-pound gorilla an umbrella to withstand today's stormy marketplace.
– Phil Hall, editor, Secondary Marketing Executive
(Please address all comments regarding this opinion column to hallp@sme-online.com.)
