In this series of interviews, we focus on the people who are shaping the state of housing at the top — the policy and regulation experts. The FHFA and the GSEs are essential to painting the picture of today’s housing market and industry trends. To help shed some light in this area, several of the 2022 HousingWire Vanguard honorees shared their insights on what’s happening at the federal level that’s going to affect housing this year and into 2023.
Katie Sweeney, CEO of Association of Independent Mortgage Experts
HousingWire: Which trends in housing regulation are you and your team most focused on as we move into 2023?
Katie Sweeney: We are looking at national as well as local trends to identify areas where we can help brokers and homebuyers make the most impact within their communities, specifically, the disparity in lending practices for underserved communities and equalizing the regulatory requirements for wholesale mortgage professionals. Representation for brokers and bringing the important issues of our community to Capitol Hill are at the forefront of our agenda for 2023.
HW: As a 2022 Vanguard honoree, what has been your proudest accomplishment?
KS: At its peak, independent mortgage brokers represented 60% of the mortgage market. Yet, in 2008, despite these impressive numbers, mortgage brokers lacked a voice and presence in Washington, D.C. Their absence from the important conversations in the aftermath of the 2008 crash resulted in an unfair share of the blame for the 2008 fallout. As unreasonable and unfavorable regulations subsequently rolled out, our market share shrunk to as little as 8%. We are working to ensure that independent mortgage brokers are never again in the same position they found themselves after 2008.
It is an ongoing process, and I am proud of the progress we have made. In June, we launched a remarkably successful grassroots advocacy network, the Broker Action Coalition (BAC), which has facilitated tens of thousands of actions in less than 90 days since its inception. In July, we also created the Broker Action Coalition Political Action Committee (BACPAC) of the Association of Independent Mortgage Experts, which raised over $300,000 within the first 24 hours.
Furthermore, we have strengthened AIME’s advocacy arm to protect, support and grow the broker channel through legislative actions, grassroots advocacy and various homeownership committees. This threefold approach enables AIME to make a real difference, which emboldens our community and paves the way for future leaders to continue making a difference when and where it matters most.
HW: What major changes in federal regulation and legislative policies should people be paying more attention to?
KS: We should all be paying more attention to regulation that creates disparities between origination channels, particularly when those create disadvantages for the consumer. One of the policies we are actively working to roll back right now includes the 15 BPS FHFA TPO Surcharge, which adds a 15 BPS charge on all third-party originated (TPO) mortgages that nationwide direct lenders and big banks do not have.
We are also working to expand the success of Maryland House Bill 809, which allows disabled veterans rated 100% P&T to get access to their property tax exemption before taking ownership of the home, impacting buying power and closing costs in nearly every state. At the time of this submission, we have had meetings with congressional leaders of over 28 states looking to introduce identical bills in their states.
HW: What are the biggest policy initiatives that AIME will go after in 2023?
KS: AIME’s 2023 advocacy plan prioritizes the top 10 topics identified by BACPAC contributors in 2022. The leading policy initiatives all surround discrepancies between brokers brokers and all other lending channels, starting with rolling back aspects of Dodd-Frank that created an unfair playing field between brokers and bankers. These regulations were instituted based on assumptions that have been proven inaccurate over the last decade. Licensing requirements vary widely between brokers and bankers, TPO channels have a massive lack of access to DPA programs, and even something as simple as APR intended to create clarity for the consumer is calculated differently.
The entire goal of APR is to serve as a universal number that consumers can immediately reference and determine which mortgage is less costly when shopping. Incongruency across information that is intended to assist the consumer undermines the very purpose of these regulations and results in misinformation. We have the solutions, and we’re working hard to ensure they are presented to the appropriate parties. Our objective is to work on meaningful legislation that allows consumers to have access to all lending options and the security of knowing their mortgage loan originator is educated and compliant, regardless of the channel they chose to work in.
HW: Why is it important to you to use AIME as a lobbying arm, and what impact do you hope to have in changing policies?
KS: Brokers now make up close to 25% of the market and, up until a year ago, had no presence in Washington, DC. A segment that large in an industry as important as housing should never be mute. While it is clear that we still have work to do, I’m proud to say that we now have a voice and we are using it to make change for the better by providing politicians and regulators a message delivered directly from the American consumer.
It is an important message, and it is our obligation to ensure that it is not only heard but respected and acted upon. AIME represents 65,000 independent mortgage brokers and the consumers that they serve. Our members are largely made up of small local businesses and their employees. Our members, and our leaders, are boots-on-the-ground originators who communicate directly with current and would-be American homeowners every single day. As such, we are uniquely positioned to take on numerous challenges that negatively impact homeowners across the country.
Brokers are the local mortgage experts in their communities. When they have a seat at the table, homebuyers and homeowners gain a voice that has the cultural competency and awareness to advocate for their community’s unique challenges.
This interview was originally published in the October/November issue of HousingWire Magazine. To view the full issue, click here.