In the wake of the financial crisis, the Mortgage Bankers Association found itself surrounded by an industry rebuilding itself midflight.
And that hasn’t changed, but the trade group today is closer to seeing what the future mortgage finance market will look like – and this sense of seeing some light at the end of tunnel can be heard in the voice of the trade group’s CEO David Stevens.
When Stevens arrived in 2011, he took the MBA’s reigns at a time of great uncertainty as the regulatory environment around lending shapeshifted and servicing remained a mess. At that time, the Consumer Financial Protection Bureau was still up in the air with no established qualified mortgage or servicing rules, and Dodd-Frank legislation had lenders holding back in fear.
But today, Stevens and his colleagues see progress, and progress is a good thing – even if it means regulators are backing some housing reform proposals that still need tweaks from the MBA’s perspective.
HousingWire caught up with Stevens this week after rumors surfaced, suggesting regulators would scrap a 20% downpayment requirement for any financial institutions that wants to avoid retaining a 5% stake in mortgage securitizations sold off onto the secondary market.
In other words, the qualified-residential mortgage rule may be re-proposed without a strict downpayment requirement to allow more firms to avoid risk-retention, the Wall Street Journal first reported.
"Assuming this is true, it is the right move for consumers and homebuyers," Stevens told HousingWire. "The qualified mortgage rule, which has already been released by the CFPB, clearly defines what is a safe and sound mortgage, and the qualified mortgage rule gets rids of all unsafe products that caused so many problems for the country."
Without some tweaks to the original QRM proposal, the requirements would only "tighten credit in an already tightened market," Stevens noted.
Stevens also is generally positive about all the housing-related legislation moving slowly, but diligently, through the House and Senate.
"There is a lot of momentum to do something legislatively … to get a solution to determine the government’s role in housing finance. All of that is very positive," Stevens said.
He admits all of the bills still need diligent tweaking, but he’s focused on the end-goal of watching some type of final proposal come into fruition.
"Getting overly agitated about any one of the bills is less productive than really getting into the debate and insuring that the core aspects of the bills are the most effective," he explained.
As for the to-be-announced market, Stevens reiterated his long-term push for the preservation of some type of government guarantee. This is one of the areas where he questions part of House Financial Services Chairman Jeb Hensarling's GSE reform legislation.
"When looking at the first-time homebuyer, the ability of the borrower to lock in a rate under theFannie Mae and Freddie Mac system could be at risk without some form of guarantee in the market."
He added, "We believe there are good components of the Chairman’s bill, but we are committed to ensuring there is a form of government guarantee for a segment of the market."
From here on out, Stevens said the trade group will work with policymakers to address some of these goals.
But with the MBA now watching the House and Senate propose comprehensive mortgage finance legislation — it's clear the housing finance system is finally moving forward, albeit with many adjustments still to come.