When Bob Broeksmit took the reins of the Mortgage Bankers Association five months ago, he knew it was a pivotal time for the industry. Facing diverse – and sometimes entrenched – views in Washington and in board rooms, Broeksmit has worked to coalesce the cacophony into a unified voice.
Talking with Mortgage Media’s SA Ibrahim at the MBA’s Independent Mortgage Bankers conference in San Francisco last week, Broeksmit came across as confident that solutions are being found with compromise.
“Our diversity is our strength. When we come to a policy position, we have a strong voice, because everyone knows that that means our diverse coalition has come to an agreement on a point,” Broeksmit said. “We’ve got a lot of clout in Washington, but we have even more clout when we come together with the realtors and the builders and the bankers and other housing-finance-related trades, and come with a unified voice both on Capitol Hill and within the Administration.”
‘A Pretty Clear End-State’ for GSE Reform
Broeksmit points to progress on GSE reform, and the work already completed during the conservatorship to bring the debate to “a pretty clear end-state.” Last year’s bipartisan bill presented by Jeb Hensarling (R-Texas, the retired chairman of the House Financial Services Committee) and John Delaney (D-Maryland) didn’t go anywhere in the last congress, but just the fact that the bill included an explicit government guarantee was a big step.
“We have the single securitization, the uniform MBS going live this spring. We already have the common securitization platform. We already have reforms that were made in conservatorship, which we caution are not etched in stone, but still reforms that have been made in terms of level playing fields for participants of all business types and sizes,” Broeksmit said, adding that it bodes well for permanent action after more than ten years of the GSEs under direct government control. However …
“One could take that same set of facts and say it bodes well for inaction because the current process is working reasonably well. And, as you know, it often takes a crisis to move legislation on Capitol Hill. Now that we have a divided government, one could argue that it will be even harder, but I see lanes where people could come together for compromise.”
Ibrahim observed that if GSE reform takes place, some measure of government guarantee will likely be preserved in order to ensure liquidity for the industry, in good times and bad. Broeksmit agreed, pointing out that congress effectively agreed on that with the Hensarling-Delaney bill. “You have an Administration that acknowledges it’s an important part of the solution, and that legislation is required to get it. So that’s why I see lanes where this could happen, and the end state is much more agreed on than it has been over the past few years.”
Role of IMBs
As Broeksmit and Ibrahim spoke, attendees of the Independent Mortgage Bankers conference stopped to listen – especially as the conversation turned to the IMBs.
The view of Broeksmit – and of the MBA – is that IMBs have been misrepresented in the press. “We very vigorously defend the IMBs.”
As an example, he pointed out the False Claims Act, where the Department of Housing and Urban Development and the Justice Department “are using a very heavy-handed approach to go after lenders who make what I would consider foot faults, or very small errors in their FHA originations.”
According to Broeksmit, that has really caused a lot of the depositories, especially the largest depositories, to do significantly less FHA lending.
“We don’t think that’s good for the consumer. We don’t think that’s good for the industry. And certainly independent mortgage bankers have also been the victims of False Claims Act enforcement,” Broeksmit said. “We are making great progress with the Administration, and we certainly have a sympathetic ear in the Administration to make changes to that, so that the big banks can come back in. Which actually helps the IMBs as well, because it’s a more liquid market for the mortgage servicing rights.”
He illustrated his point by referencing the presence of Ginnie Mae’s Acting President Maren Kasper at the IMB, who flew to San Francisco for the conference, even though she had just presided over the first day of resumed operations at Ginnie after the shutdown.
“We are really enthusiastic about the diversity of players in the mortgage business, and we advocate for each of them so that there are solutions that benefit the entire ecosystem.”
Working to Create a Future
Ibrahim pointed out that with the conference being held in San Francisco, it was fitting, because it’s “a city that represents change in the future, and it’s always very dissatisfied with the past and working to create a future.” Referring to the conference’s panel of FinTech leaders, Ibrahim noted that the conference was featuring “great change agents” involved in the process.
“I think that the marriage of technology and new social engineering with the old ways of doing business is what we need,” Ibrahim said, asking Broeksmit where he saw technology’s role.
“There are ways in which we can bring to bear that technology and innovation with the expertise embodied by the people who run the IMBs, as well as all the other mortgage banks that make loans to consumers,” Broeksmit said. “Working together in partnership I do think, as you rightly point out, is the way we’re going to do that.”
They pointed out Tim Mayopoulos, the former Fannie Mae head, has recently moved to one of those companies.
Broeksmit said that MBA members were figuring out how to take advantage of the innovation and technology without necessarily doing it themselves. “To bring that strength from the outside to bear on our operational and customer expertise, I think it could be a really powerful combination.”
MBA or ‘Bob Broeksmit’
Broeksmit’s new role as President and CEO puts him at the head of an organization with a 140-person staff and 2,200 members. He said he loves the “rich variety” of responsibilities, including meeting with policy-makers, the media, and other trade association executives.
“I get home some nights and Susan, my wife, will say, ‘How was your day?’ And I’ll say, ‘I don’t remember. It was kind of all a blur because there’s so packed in,’ but it’s really gratifying,” he said. “The way I have been received on the Hill and within the Administration and among other trade association executives has been really great. I’m not naive enough to think that it’s ‘Bob Broeksmit’ – it’s the head of the MBA. The MBA has got a lot of clout, and is a really influential player in Washington. And they are eager to work with us.”