Mortgage Bankers Association President and CEO Bob Broeksmit opened the 2023 edition of his organization’s Annual Convention & Expo will a full-throttle assault against the federal government for policies that he decried as having a destructive impact on the housing market and the livelihood of mortgage bankers.
“While you’re fighting to survive, and while we’re fighting for you, Washington, D.C. is fighting against you,” Broeksmit declared in his speech opening the convention. “At a time when you and your customers need relief, you’re at risk of being hit with the most extreme overregulation. At a time when you desperately need stability, your own government is sowing the seeds of profound instability. Honestly, Washington is pushing you and our economy in the wrong direction. And no one will suffer more than American families – especially minority, low-income, and first-time homebuyers. This madness must stop before it’s too late.”
Broeksmit pointed to the 30-year fixed-rate mortgage’s elevation to nearly 8% while mortgage applications have dropped to level not seen since the Clinton administration era. He called out the Federal Reserve by demanding “no more interest rate hikes [and] no selling MBS holdings until spreads have normalized and the market has stabilized,” and he also warned a greater threat was on the near horizon.
“The so-called Basel III end-game proposal is dangerous too,” he said. “The Federal Reserve, the FDIC, and the OCC are trying to implement massive bank capital increases. They think it will make our economy stronger and more resilient. In fact, their Basel III rules are a dagger aimed at the heart of the housing market. We all know the threat. Washington wants banks to significantly hike the capital they hold against mortgage assets. Not just mortgages, but servicing. And warehouse lines. If this goes through, banks will pull back even further from mortgage lending and servicing, leaving consumers with less access to credit. Meanwhile, the credit that consumers will have access to will cost significantly more.”
“And make no mistake,” he added. “Weakening demand for mortgage servicing raises mortgage rates for all borrowers, whether they choose IMBs or banks. It’s almost like Washington wants fewer people buying homes.”
Broeksmit also targeted the Financial Stability Oversight Council for “threatening to designate non-banks as systemically important, and therefore subjecting them to even greater regulatory scrutiny. Put another way, they want to strangle IMBs with endless red tape. Once again, the result will be fewer businesses lending to fewer borrowers, leading to less homeownership for those who need it. A policy of this magnitude deserves the strongest possible justification. Yet FSOC provided precisely none – it gave no proof that nonbanks are systemically important. It just says so, as if the assertion is proof enough. It’s not. Not even close.”
On top of that, he continued, he noted that the FSOC “is proposing to eliminate cost-benefit analysis as part of the designation framework process for nonbanks. That’s astounding. If you’re going to subject nonbanks to an avalanche of new regulations, you better know the damage it will do.”
Broeksmit pledged to devote the MBA’s resources to pushing back at the forces and proposals that he viewed as deleterious to the mortgage industry. He cited partnerships between the MBA and the NAACP and Urban League to highlight the Basel proposal’s potential for wrecking the ability to expand homeownership to nonwhite borrowers, and he urged mortgage bankers to join the Mortgage Action Alliance to become proactive voices in the industry’s lobbying efforts.
“We love nothing more than taking on the biggest fights and getting results,” he said. “We proved it in the pandemic when we delivered for you in countless ways. We proved it again over the last year, by defeating the Adverse Market Refinance Fee and DTI-based Loan Level Price Adjustments. And while this fight is even bigger, we’re shifting into overdrive.”
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To bad NAR doesn’t have the same opinion. Bunch of old dudes who think that this admin is doing the right thing, otherwise they’d be telling people the same thing you are! the news won’t tell anybody the truth
Richard L. Howe, with all due respect you are incorrect. You need to check your facts.
Hi Mary, Richard is correct. The Federal Reserve Reserve is using policies that worked decades ago. They are raising rates to control inflation and economic activity. By raising rates they are adding another extra large cost to consumers and business owners, etc etc thus inflation will only get worse because eventually these extra finance costs will be passed on to the consumer. Inflation is high because a) Gas prices have tripled due to political situations b) shutting down the Alaska pipeline contributed to high gas prices c) The China trade situation is contributing because most of the consumers goods are still made in China. They are doing it backwards: We need to bring manufacturing back to the USA and for that our businesses need Capital so that we transition. This is a National Security Issue, we can not keep depending on other nations to keep manufacturing key items for the USA. The only policy that works is: Supply and Demand. We need lower rates to start producing more goods thus increasing supply and thus reducing prices. We need more available homes for sale. We need to create more housing out of big Cities to reduce traffic, for this we need to create more business centers out of big cities. The Federal Reserve Chief and the whole group are manipulating the market, this is not free trade, these is not free markets, this will not work. Consumers are resilient because we need to bring food to our tables, we need to keep working, we need to keep driving cars and trucks to survive. Agree with Richard, the Federal Reserve is working against the USA and we need our leaders in Washington to wake up. Stop the policies of decades ago. Live in the new er
The Federal Reserve Reserve is using policies that worked decades ago. They are raising rated to control inflation and economic activity. By raising rates they are adding another extra large cost to consumers and business owners, etc etc thus inflation will only get worse because eventually these extra finance costs will be passed on to the consumer. Inflation is high because a) Gas prices have tripled due to political situations b) shutting down the Alaska pipeline contributed to high gas prices c) The China trade situation is contributing because most of the consumers goods are still made in China. They are doing it backwards: We need to bring manufacturing back to the USA and for that our businesses need Capital so that we transition. This is a National Security Issue, we can not keep depending on other nations to keep manufacturing key items for the USA. The only policy that works is: Supply and Demand. We need lower rates to start producing more goods thus increasing supply and thus reducing prices. We need more available homes for sale. We need to create more housing out of big Cities to reduce traffic, for this we need to create more business centers out of big cities. The Federal Reserve Chief and the whole group are manipulating the market, this is not free trade, these is not free markets, this will not work. Consumers are resilient because we need to bring food to our tables, we need to keep working, we need to keep driving cars and trucks to survive. Agree with Richard, the Federal Reserve is working against the USA and we need our leaders in Washington to wake up. Stop the policies of decades ago. Live in the new era.