The Mortgage Bankers Association's Annual Convention and Expo has officially started, and there are plenty of issues on the table that need to be addressed.
The big ones: The Consumer Financial Protection Bureau’s TRID rules are now in effect, the Department of Housing and Urban Development’s recent rule clarifications are taking hold and first-time homebuyers and Millennials are ready to buy.
Conference sessions are tackling all of these issues, and all were touched on in some form during the industry welcome ceremony on Monday morning.
After a group of BMX bikers rallied to wake up a crowd that seemed a little on the tired side, Bill Cosgrove, 2015 MBA chairman and CEO of Union Home Mortgage, Bill Emerson, 2016 MBA chairman and CEO of Quicken Loans, David Stevens, CEO of the MBA, and Dan Gilbert, founder and chairman of Quicken Loans, all took the stage one by one to get to the heart of the conference: Lenders want to lend, so what can the industry do to maximize the opportunity?
Emerson touched on a lot of the main issues in his speech, including getting more CEOs involved in advocacy, helping the first-time homebuyer, serving the community, recognizing demographic trends and pushing for more technology in the industry.
However, it was Stevens who moved the crowd, saying what everyone was thinking.
“First, lenders want to lend,” Stevens said.
“There are some critics that believe that lenders are somehow holding borrowers and real estate market hostage. The enforcement risk today exceeds any lender’s ability to make sound common-sense business decisions in the interest of consumers. It’s as if we have one foot on the accelerator and one foot on the brake at all times,” he continued.
One big issue going around right now is HUD’s recent revision to its previously announced proposal to change the FHA loan level and lender certifications that each lender must adhere to.
Stevens expressed concerns over the proposed changes to the Federal Housing Administration’s rules, a concern that is becoming a quick reality.
“Lenders wonder how safe they are originating mortgages in the FHA program,” Stevens said in his opening remarks at the conference. The audience was quick to applaud his sentiment.
“We are lending defensively, practically out of fear,” Stevens said.
He explained that lenders are worried about protecting their franchise; the overlays come out of fear.
“Secretary Castro has declared that HUD is the department of opportunity. Administration officials are encouraging consumers to buy homes, and we’ve had some success in making credit available through MIP reductions and returning responsible 97% loan-to-value lending,” he continued.
“But then here come the brakes with the DOJ changing the game using the False Claims Act and treble damages. When lenders begin pulling out of the FHA market due to the enforcement environment, we are concerned about the future viability of the program and those that will be hurt the most are first-time and underserved buyers,” Stevens said.
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