The Mortgage Bankers Association must push Washington lawmakers for greater transparency and coordination of the myriad of lending rules coming from regulators, said MBA CEO and president David Stevens.
"We are calling on leadership in Washington — whichever administration is in the White House come January — to create a role for housing policy coordination, a traffic cop for all new rules," Stevens said Monday, speaking at the MBA's annual conference in Chicago. "This new liaison for policy would ensure that regulations compliment one another rather than conflict," he said.
The liaison the MBA envisions would coordinate rules coming from the U.S. Housing and Urban Development Department, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., the Office of the Comptroller of Currency, the government-sponsored enterprises and other federal housing agencies to make sure guidelines are not redundant or cumbersome on all lenders, especially smaller firms, Stevens said.
The ultimate risk, he said, is the exit of reliable and safe lenders resulting in less competition in the marketplace.
"It might not reduce the number of masters we serve — but it would at least make them talk to one another," Stevens said of the proposed liaison. The MBA CEO noted that a fundamental feeling of uncertainty remains in Washington over the role of mortgage lenders and he believes now is the time for the MBA to step up its interaction with lawmakers on how to lay out the future of housing.
As for what type of transparency is needed, Stevens said it's time for housing agencies, including the Federal Housing Finance Agency, to comply with public notice and comment rules before launching critical rules that impact the mortgage industry. Fannie Mae and Freddie Mac change policy without complying with notice and comment periods that other regulators follow, he said.
"Consider some of the recent major announcements of planned policy changes from the GSEs — all done without public review and comment," he said. "They include changes to the minimum net worth requirements, arbitrary G-fee changes, volume limits for some existing sellers, new servicing rules, a new framework for reps and warrants, and changes to their securitization platform."
With quantitative easing in effect, Stevens suggested the housing market already has the medicine it needs to fuel a recovery with excessively low mortgage rates. Yet, he says, the market is being choked by excessive rules and regulations.
"QE3 is being blunted by restrictive credit conditions when it should be fueling a booming recovery," Stevens said. "And this reflects our market conditions before the coming onslaught of new rules."