Remarks by David H. Stevens, CMB, President and CEO, During MBA's Annual Convention & Expo

CONTACT
Rob Van Raaphorst
rvanraaphorst@mba.org
(202) 557- 2799

W BOSTON, MA (October 24, 2016) - David H. Stevens, CMB, President and CEO of the Mortgage Bankers Association (MBA), today delivered the following remarks at the association's Annual Convention and Expo in Boston, MA.

[Please Note:  These are prepared remarks.  Mr. Stevens may add to or subtract from these remarks during the course of his presentation.  Portions of the text may be omitted during the speech.]

You know, everyone in the housing industry, including those of us in housing finance, have at some point talked about what makes a house a home.

Of course, there is not one right answer to that.  But, for many, the difference is simply that "home" is where family gathers.  I say simply, but in truth, that is a profound and meaningful idea. As far as I'm concerned, anyway.

Because for me, this industry, where I have spent over three decades, and the MBA are home. Our Annual Meeting is home for our industry.  And we gather as family. That's always true. And it's even more true today.

So while we have some important business to cover, let me begin by saying to all of you, my extended family and on behalf of my immediate family, especially my wife Mary who is here today, thank you. As many of you know, and now all of you will, I have been battling an aggressive, but treatable, cancer.

Throughout my career I have been overly competitive and focused on trying to be the best, be number one, be the winner and create the winning team.

From my early days as a loan officer in Colorado, through my years in branch, regional, divisional, and national management role. 

Whether in the primary or secondary markets, COO of a large company or a federal regulator, or when I came to MBA.  I felt like I could always win with the right team and the right focus.

Today's challenge is personal to Mary, me and our family - but I am attacking this the same way I do everything else. And this evil disease has a tough challenge ahead, as we intend to win this battle.

So, thank you for all of your work to make this industry united and great, but also for your words of encouragement and support.

I am so glad to be here with you. And I'm glad to be here in the great, historic city of Boston.

In fact, for a while, some people considered that maybe instead of that video we opened with.  They'd dress me as Paul Revere, and I would ride a horse through the city, then right on to the stage, yelling, "The bankers are coming! The bankers are coming!"

The team thought better of it. They were probably afraid I'd fall off the horse.

But still, I'd be happy to declare for all to hear that we're here. Because we are proud of our industry and what we do every day.

And I'm proud that, because of you, and as the theme of this year's conference suggests, we are moving forward.

Proud that mortgage lending is safer and more sustainable than ever,  and proud of the work we're doing to make homeownership even more accessible and attainable.

Proud that the American Dream isn't something abstract; rather, it is something that comes with a front door and a dinner table. It's at the heart of every community. It's the place, as I mentioned earlier, that families call home.

We share this common purpose. Because the fact remains: housing doesn't only comprise about 18 percent of the gross domestic product, or about one-fifth of the U.S. economy.  It isn't only a steady source of hundreds of thousands of jobs. 

It is critical to the economic success of every single American.

Housing is directly connected as Franklin Roosevelt said, to "the peace and contentment of the individual and of his family." Or as Ronald Reagan said, it is "fundamental to our way of life."

And compared to where we were just a few years ago, and to quote another great American, Bruce Springsteen, "These are better days."

But understanding how important our industry is also means understanding that, yes, helping families is noble work. But a high calling has to be accompanied by high standards.

For the last 8 years, our national housing policy has been shaped not just by a crisis but a collapse of the domestic housing market.

Considering the circumstances, it was not unexpected for policymakers to act as they did.

They had little choice but to protect families in distress, defend consumers, making them the priority, and fix a system, really, the only way they could -- by taking more control, by using enforcement as an instrument to hold accountable those who were perceived to have been at fault.

We know that neither policy makers nor our industry were perfect, and we're still not. But we've made progress. A lot of it. And now, we can and we must move forward. Because there is still work to do.

In fact, with the election just a couple of weeks away, there is no better time. Change offers an opportunity to reset. to partner with a new Administration and a new Congress, to work with renewed interest and with fresh energy.  And that is what MBA must do.

Specifically, there are four areas - four strategies -- where we have the most credible voice. Where we can lead.

First, MBA has a voice when it comes removing barriers to the expansion of credit to both owner-occupied and rental finance.

Today, you are being discouraged from lending to some first-time homebuyers. Why? Because the fear of a mistake, even if irrelevant to the credit decision, exposes each of you to unacceptable risk. Because of overly aggressive and sometimes inappropriate enforcement actions by  some key government agencies.  Because the regulatory framework is too often redundant -- state regulations piled on top of federal regulations, piled on top of international rules, often conflicting with each other.  No wonder you have no choice but the most conservative lending posture in order to meet the lowest common regulatory denominator. 

I don't have to tell you that the progress we've made doesn't always correspond to the trust we earn. But if compliance doesn't lead to confidence, then maybe we need to do something about the morass of conflicting, and sometimes competing, bureaucracy we face.

So let's work to find the right balance between necessary enforcement, appropriate regulation, consumer protection, and lender risk. Rules should be clear. Accountability should be rational. Credit, including private capital, must be accessible.

Second, MBA has a voice when it comes to creating and promoting affordable housing through incentives, like the mortgage interest deduction, down payment savings and matching plans, as well as other means. And we must also encourage the financing and building of affordable rental units near places of work and transit.

The economy is improving but housing -- in direct contrast to past recoveries -- is lagging. Why?

And what accounts for first-time homeowners lagging as a share of total homeowners - about 25 percent below what's considered normal, 31% vs the "normal" 40%? Are current rules like the QM, at least as it is written, too narrow? Is it too blunt of an instrument, actually discouraging the homebuyer of today and tomorrow?

Perhaps nothing illustrates the need for new incentives more than the "millennial gap" -- the delay in qualified millennials buying a home.  Homeownership rates among Americans between 18 and 35 are only 34 percent, or just over half the national rate.  But it's more than the fact that they're not buying.  It's that they're not renting either. One in three 18 to 34-year-olds still live with their parents.  According to Pew Research, this marks the first time since 1880 -- since 1880  -- more people in this age group live with Mom and Dad than in other living arrangements. 

It's not all about the sharing economy. Or that their parents' basement is a good place to hang a Bernie Sanders poster.

Whether the reason for this delay is tight credit, student loan debt, the lack of affordable housing stock, average wages for young people, or just that millennials are taking their time before making big decisions like getting married or buying a home, it is causing an unusual and unsustainable rise in rental costs, particularly in urban areas. 

And that has consequences, too. According to the Institute for Research on Poverty and the University of Wisconsin-Madison, over the last twenty years, the percentage of Americans dedicating at least half of their income to housing has risen from 42 percent to 52 percent. Over a million families dedicate over 70 percent of their income to pay rent and keep the lights on.

We must think about credit engines and new ways to document borrowers so that more sustainable prospective homeowners have a chance. We must use Low-Income Housing Tax credits and other programs to encourage the building and financing of more affordable rental and owned housing.

And once we do, we must also find ways to communicate that.

Think of the ways the Obama Administration "pitched" Obamacare. This isn't a commentary on the policy itself -- but rather how they positioned it... how they used different platforms, aimed directly at young Americans, to sell the program.  Certainly, we can do more to "advertise" the benefits of homeownership to the millennial generation.

And that brings me to the third place we have an important voice. MBA has a powerful voice when it comes to, well, housings' voice. We must start a dialogue that acknowledges the changes the industry has made, a dialogue that recognizes the unprecedented safety of the housing market, and, ultimately, a dialogue that promotes confidence in the housing market.

This January, we will be unveiling a new marketing campaign to highlight the benefits of housing and the good we are doing, and we will arm you with the content you need to get the message across.


Fourth, and finally, MBA has a voice when it comes to advocating for perhaps the one thing that will ensure that all of these issues stay front and center.

The creation of a National Housing Policy Director by our new President. Someone who works in the White House. Someone with the authority of a direct report to the new President. Someone empowered to call meetings, drive results, and measure progress.  Someone who has not just the title, but also the teeth.

The issues are complex, so we need a clearly articulated policy.  There is a large inter-regulatory aspect of the challenge, so we need to encourage coordination across the spectrum of federal and state regulators.  We have to work across private and public sectors to encourage lending to qualified borrowers, so we need a powerful presence to help drive housing's role in the economy beyond just HUD.  This is a multi-regulator, multi-agency effort that can only be successful with a key position working under the authority of the President.

That's what we need. And that's what we're calling for - expanding credit, more affordable housing, a new dialogue, a Housing Policy Director with authority.

This is not just a dream, it's the only option. It's the only way to untangle the confusion and imbalances. It's the only way to avoid the housing crisis to come.

The bottom line is this: MBA is the most effective voice in housing finance, and we will use that voice.  As you know, we are not your average trade association. We have the size and scale, the expertise and resources, and we have the members to really make an impact. It's the power of our scope and unity that gives us the force behind our voice.

And I'd like to finish with that idea of working together and just how important that is.

I began by joking about Paul Revere.  As some of you might know, the history buffs, anyway, the poem we read in elementary school didn't get it exactly right.  Paul Revere didn't ride alone.  He started with two other riders that night -- William Dawes and Samuel Prescott. And by the end of that evening, it is now believed that there were as many as 40 other patriots on horseback, riding through Boston and the surrounding county, spreading the word.

Rarely do you accomplish something meaningful by yourself.  You don't overcome great challenges alone.  That certainly has special meaning to me now.  I won't beat cancer alone. But mark my words -- with my doctors and nurses,  with my friends and family, with your support, Cancer doesn't stand a chance.

The MBA exists because, as an industry, we are better when we work together -- when we have a common voice and a common purpose.  We're your partner. We amplify your voice.

And MBA has never been stronger to carry this voice and with each of you joining in we can make the voice louder - so loud it will echo through the hallways of 1600 Pennsylvania and the chambers of Congress. They will hear it in the states and in communities across the country.

I began by quoting Franklin Roosevelt. In his second fireside chat, he said the purpose we share, affordable housing "is worthy of our best efforts."  You will have the best efforts of the entire MBA.


A house is just something you go look at with your realtor. To make home happen -- - whether rented or owned -- you need more.  It takes an industry that is strong, unified, confident, positive, trained, supported, and dedicated.  It takes family. It takes you.

And with the MBA stronger than ever - we couldn't be more ready to move forward.