In his address to the mortgage industry at MBA Annual this morning, MBA chairman David Stevens recapped recent victories the association has had influencing policy in D.C. But he also issued a warning: lasting change the industry can count on will only come through legislation.

The safety the industry now feels could be quickly undone, Stevens said, depending on the leaders the Trump administration chooses to lead the Federal Housing Finance Agency and the Consumer Financial Protection Bureau. Both Mel Watt, head of FHFA, and Richard Cordray, director of the CFPB, are due to leave when their terms expire (or sooner) and the hard-won gains of the last several years could be on the line.

“What happens if the president nominates a new director who thinks the government role in mortgage finance is too large and wants to scale it back?” Stevens asked. “The answer is that it could affect everything from g-fees to loan limits. Credit policy could change which would impact the QM patch and confidence in the rule as it works today. Even the level playing field in pricing and credit terms could change as there is nothing – locked in.

"We are risking our respective business models under a change in director unless we can permanently lock these reforms in. And that can only be done with legislation."

Stevens noted that Treasury Secretary Steven Mnuchin said publicly that the administration will deal with GSE reform in President Trump's first term. 

"The power of the FHFA director under HERA are extraordinary. If we allow regime change to take place, any of you using GSEs, which is everyone in the room, are going to be at risk."

Stevens pointed out that HUD Secretary Ben Carson will be evaluating everything from its broad role in housing to more targeted issues like reps and warrants, loan limits, MIPs, and credit and counter party policies. And the Treasury and the National Economic Council in the White House will be grappling with everything from tax policies to the role of the federal government in housing finance.

Stevens also pressed the need for legislation on tax reform.

“We must use our voice to ensure a pro-growth tax code keeping incentives that encourages families and businesses to invest in real estate," Stevens said.

Stevens outlined the successes the MBA has had in influencing policy under the Trump administration, including:

  • Bringing a group of non-bank lender CEOs to meet with senior Treasury officials on the regulatory relief executive order. The final document from Treasury, released in early June, reflected MBA's input.
  • Bringing a group of regional and community bankers to meet with the OCC, FDIC, the Federal Reserve, and Treasury to talk about the impact of BASEL III on smaller and regional banks and their ability to retain mortgaging services rights, leading to the suspension of the implementation of that aspect of the rule.
  • Meeting with senior leaders from the White House and Treasury on the administration’s plans for tax reform.
  • Being one of only three witnesses invited by the Senate Banking Committee for its first hearing.

As further evidence of the MBA's influence, Stevens cited Carson's congressional testimony in October, when he was peppered with questions about how HUD and the DOJ were using the False Claims Act to go after FHA lenders. In that testimony one congressman read out Stevens' HousingWire opinion piece from July "word for word." 

"When it comes to policy, the policymakers in Washington come to us. They rely on our data, our research, our thoughtfulness, and our perspective," Stevens said.