As the new president and CEO of the Mortgage Bankers Association (MBA), former FHA Commissioner David Stevens opened the organization's "National Secondary Market Conference" by expressing confidence in the housing market. Believing that housing is a basic human need, he said that this creates the opportunity for the industry to achieve greatness.
Acknowledging that there are still challenges ahead, Stevens noted some key metrics that support positive trends. Delinquencies and foreclosures, although still high, are trending downward. Total delinquencies have now settled back to pre-recession levels from their peak in 2009. A majority of states, 39, have foreclosure rates that are below the national average, and even the worst hit states, California and Florida are seeing slight decreases in their share of loans in foreclosure.
Stating that the current environment has created the opportunity for the industry to create its own destiny, it also brings with it certain responsibilities. First, he said that the industry must hold itself accountable for the role played in the housing market crisis and acknowledge mistakes made in lending practices.
Second, the MBA must do a better job of expressing their reason for being to the pubic. To this end, Stevens calls for the launch of a grassroots awareness campaign to communicate how the group supports homeownership and lower costs for homebuyers through direct financing and the secondary market. Additionally, the message must express that not everyone is ready to be a homeowner, and accordingly, a amble supply of rental housing should be maintained.
The campaign should extend into Washington to help policy makers determine the best course of legislation and regulation to balance a healthy market with consumer protection. The goal of the organization should be to foster a system that includes private sector participants combine with the right amount of guaranteed securities. To this end, Stevens called on other large trade groups, including the Realtors and Homebuilders, along with consumer advocacy groups to work together to increase their influence in shaping the policy debate.
Third, Stevens challenged the industry to look beyond the current market. Low interest rates have driven refinance activity, at 66 percent of the mortgage market in 2010 and 37 percent so far in in 2011, but that is unsustainable. Raising interest rates, expected in the next twelve months are expected to drop that share to 26 percent in 2012. This will give rise to substantial opportunity in the purchase market, fueled by the "Echo Boom" generation now reaching the home buying age.
"Simply put: we cannot accept the status quo or be unprepared for doing business in a dynamic new marketplace," Stevens told the conference attendees. "The present might appear stable, but if we sit back, we will allow our industry to be shaped without us. We must participate, and do so as one, to ensure we are in control of our industry’s destiny. If we want to not only survive into the future, but also thrive, we must look ahead."