The national chairman of the Mortgage Bankers Association is optimistic about this point in time for the industry, with new leadership on the public and private sides poised to work together to bring about true GSE reform; to address housing affordability; to promote competition to drive housing costs down.
“I think we’re really at a place right now to take another step in sort of the evolution of the mortgage industry,” said chairman Chris George during a discussion with Mortgage Media’s SA Ibrahim during the recent Independent Mortgage Bankers Conference.
And, George added, “the MBA will be right there at the table.”
George is the founder, president and CEO of the privately-held mortgage bank CMG Financial, headquartered in San Ramon, California. He was sworn in as MBA chair in October 2018. Earlier, he’d held a chairmanship on the statewide level in California.
As he talked with Ibrahim, the conference-goers were coming and going around the interview – and in many cases, stopping to listen to in.
The commitment with the MBA is heavy (as he expected), with frequent runs to Washington, or traveling to the various state MBAs. It has provided George a great opportunity to increase his knowledge, he said, and importantly, to network. To make important connections to help further the industry during this relatively tumultuous time in finance policy-making.
“I’m getting an opportunity to meet people who I otherwise would not meet, who are people that are just like me, but just happen to be in Kentucky or Albany, New York, or in Jacksonville, Florida. And I get an opportunity to talk about what’s been my industry for a third of a century,” he said.
It’s through this responsibility he said he’s gained a greater knowledge about GSE reform and Appendix Q and Qualified Mortgage … the acronym list could go on.
“I never knew them to the detail that I now know them,” he said. “And because I now understand things better — one, I make a joke: with the last name ‘George’, it’s almost incumbent upon me to be curious, right?”
His curiosity has paid off in great knowledge on the high-level topics that are so impactful to housing finance. “I like understanding what is going on in our industry. I think I can offer things as solutions, because I do think a little outside of the box.”
The MBA itself has great potential to continue to be a driving force in bringing about positive change in the industry, he said.
“Obviously, we have a diverse membership from banks large and small, credit unions, mortgage insurance companies, independent mortgage bankers large and small, brokerage firms, appraisals, title companies. What’s nice about that is that you can harness the power of that group, and I think that you can get something done,” he said.
“Sometimes groups, they’re so fragmented and not everybody’s on the same page and people are fighting. I like where we are today as an association. That we’re really trying to head down the path together to accomplish some really great things.”
What with all the transition in key leadership positions — the new Democratic majority in the House as well as new leaders either in place or soon to be at FHFA, FHA, CFPB, both Fannie Mae and Freddie Mac (not to mention recently at the MBA, with George as chair and Robert Broeksmit as president) — George admits to a degree of surprise at the pace of progress being made in real discussions of GSE reform. You wouldn’t necessarily expect that with the whole deck being shuffled, as it were.
“I’ve been the guy running around the country saying we have been talking about GSE reform since the late 1800s. And I’m really glad to see that there seems to be a renewed interest to legislatively get this done,” he said. “Not administratively, but to legitimately sit down and say, ‘OK, these two entities need to go back into a definable and attainable role that can be continued in a platform that doesn’t potentially put taxpayer dollars at risk; that doesn’t preclude the duopoly that they exist, and allows us to be able to put them on solid footing.”
It won’t happen overnight, obviously — it’s a process and will take years to truly come about, George predicted. “But it begins legislatively, not through some form of draconian administrative change.”
He said the dialogue has been positive. “There’s a lot of it going on right now — way more than I thought would happen.” He’s not sure much change will happen in 2019 but “I think we’re on the way again to getting things done.”
Ultimately, he noted, the US government must provide an explicit guarantee for the securities — with a single security (the single mortgage-backed security to be issued by both GSEs — which, after delays, is on target for this year) and additional participants involved. “There should be as much credit transfer removing the liability to the taxpayer — and some of these things are already underway, by the way.” He points to technological innovation through Fannie, collateral underwriting, and more.
“I think that with those kinds of things happening we’re getting closer and closer to actually saying, ‘All right now, let’s talk about how do we address affordable housing? How do we make sure that we don’t get rid of choices for the consumer?’ Those are the kind of dialogues that are happening right now,” he said. The change in the House is necessitating the dialogue and giving it fresh fuel, he said: Policymakers are really beginning to sit down with the stakeholders — with the MBA in a significant role — to talk about how to structure Fannie and Freddie and get them in a place that’s permanent and sustainable without the taxpayer burden.
It really is a new era, George noted — challenges abound, but the industry is much better poised to deal with them than in the dark period of the previous decade associated with the financial crisis. There is passion, and innovation, and just plain downright competence — and a commitment to excellence.
“One word I keep coming back to as I travel: ‘passion,” he said. “There is a deep passion for getting it right with the consumer … but even further, working well with one another and doing things correctly for the good of the industry.
“… We’re left holding the bag for the people who do it badly. Those people are all out of the industry now. The professionals are back in the industry, running the industry the right way, and I think that we’re really poised with what’s going on in D.C. and also what’s going on in the industry as it relates to innovation. I think we’re really at a place right now to take another step in sort of the evolution of the mortgage industry.”
He is also encouraged by the passion, knowledge, expertise and commitment on the part of the new House leadership, in particular House Speaker Nancy Pelosi and Committee on Financial Services chair Maxine Waters, on such topics as GSE reform and housing affordability.
“All of those things are consistent with what (MBA) membership is interested in — that long-term sustainability of our industry. Sometimes politics gets in the way of that a little bit and you kind of have to deal with all the noise around it. …
“But now I think we’re kind of cutting through that a little bit and we’re able to sit down and substantively talk about what do we need to do to finalize some of these things once and for all.”