Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), opened the MBA's 2023 Secondary and Capital Markets Conference in New York City on Monday by criticizing the government's response to current economic challenges in the mortgage industry.
Broeksmit spoke candidly about the difficulties the mortgage industry has faced in the current economic landscape, including higher interest rates, lower inventory levels, and declining or negative margins. He acknowledged the frustration of industry leaders with governmental responses, which he characterized as "more enforcement and stifling levels of red tape."
He pointed out the stark contrast between policymakers' present actions and their praise for the mortgage industry's leadership during the pandemic, stating, "What has changed in the intervening months? Well, I’ll tell you what hasn’t changed: Your leadership." He stressed the industry's continued commitment to customers despite the increasingly challenging environment.
Broeksmit highlighted the industry's concerns about over-regulation in the wake of bank failures earlier this year. He specifically referred to Silicon Valley Bank, Signature Bank, and First Republic Bank, noting that the failures resulted from unique business models, corporate mismanagement of interest rate risk, and lapses by regulators, rather than any systemic issue within the industry.
The MBA CEO expressed particular concern over regulatory proposals from the Consumer Financial Protection Bureau (CFPB) and the Financial Stability Oversight Council (FSOC), which could potentially subject nonbank financial companies to Federal Reserve supervision. He described these moves as a "power grab" that misdirects the blame for the banking crisis and risks further destabilizing the economy.
Broeksmit further criticized the CFPB and Department of Justice's efforts to make lenders liable for the actions of independent appraisers, calling it "patently absurd." He also raised the issue of Fannie Mae and Freddie Mac demanding loan repurchases, placing undue stress on lenders.
Despite these challenges, Broeksmit was adamant about MBA's commitment to advocating for the industry and its consumers. He pointed to recent successes, such as the MBA's successful pushback against a proposal by the Federal Housing Finance Agency (FHFA) to adjust the debt-to-income ratio, which could have significantly increased costs for borrowers.
The MBA leader concluded his remarks with a call to action. "There will be plenty more concerning policies coming down from on high, and across the board we’re responding with action," he said. He also affirmed the MBA's commitment to continue fighting for the industry's interests and assured that the association is being heard at the highest levels of government.
Broeksmit also underscored the importance of the mortgage industry to the economy and communities. "Your companies are the backbone of the economy, and the cornerstone of communities," he said.
He urged policymakers to focus on assisting the industry and the tens of millions of people it serves, rather than imposing further restrictions.
