Prepared Remarks of MBA Chairman Dave Motley, CMB, at the 2017 MBA Annual Convention and Expo

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

DENVER, CO (October 23, 2017)- Dave Motley, CMB, MBA Chairman and President of Colonial Savings, F.A. ,delivered the following remarks at MBA's 2017 Annual Convention and Expo in Denver, Colorado.

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

Welcome to Colorado--the state known for great adventure sports and incredible skiing. This city gives rise to the Denver Bronco's Mile-High Stadium, the Colorado Rockies Baseball team, and lots, lots more.

For me, being in Colorado feels like a homecoming. You see, Colorado is where my mortgage banking career began, where I started out as an LO, and closed my first single-family home loan. And today, my career comes full-circle-- returning to my roots as I begin my year as your 2018 Chairman.

My time is limited this morning, so let's get down to business. When I started my career, or, really even when I first became involved with MBA, I never imagined I could be standing on this stage serving as MBA Chairman.


Although I had always been involved in advocacy, being engaged at this level was not something that had ever entered my mind. But the more involved I became in MBA, the more passionate I felt about representing my company, our people-- both our employees and the customers we serve.

Which is why I stand here today proudly representing Colonial Savings, a family-owned, federally-chartered thrift whose goal for the past 65 years has been to create lifelong relationships with our customers, and help them achieve and sustain the dream of homeownership.

Representing the people of Colonial, those who make it such a phenomenal company, is a great honor, and also very humbling. A bunch of them are right over here, and I want to thank you all for your hard work, and dedication to our company and the industry at large.

Just as my goals for Colonial are to grow and continue serving our customers and community, I want the same for our industry. Like many of you, my commitment and passion for this business has been driven by that desire to help people.

I truly believe that we can have a profound influence and change people's lives for the better. I've been an MBA member for more than two decades. Because we represent businesses of all sizes and from every sector of real estate finance, we have the best, and most unique, perspective to impact policies that affect our industry.

I have personally witnessed what we can accomplish for our companies and our customers by learning, listening and advocating for better laws, systems and access to credit for all consumers.

For example, working together with other industry stakeholders and consumer advocates, we improved the QM rule so it could protect consumers while still allowing lenders to use their knowledge and expertise to better serve ALL qualified borrowers, not just those with large down payments or superior credit scores.

Likewise, we shaped National Servicing Standards so that our customers can benefit from more uniform mortgage servicing processes and procedures, no matter where they live or who owns their loan.

And when the press and the government vilified our industry because of the actions of a few bad actors,

I took it personally and wanted to tell our story. Because for me, this business really is personal. It's about people.

It's about helping families achieve the benefits of homeownership. It's about building communities.

It's about helping entrepreneurs achieve their goals of running their own businesses. We mortgage bankers help people live their lives and build their dreams.

Here's my point-- I wanted to step up to tell our story and our customers' stories, to preserve what works in our system, and to shape the path forward. It was-- and still is-- the right thing to do. And that is how I find myself standing up here before you all. And I won't back down.

Today, housing markets across the country have largely recovered from the crisis in terms of value. However, our industry still faces daunting obstacles preventing us from doing what we do best-- serving the people and families of our communities.

So now, let's talk about the path forward; some of the obstacles we face, and what we can do to overcome them. So here is bit takeaway idea number one- Housing supply and consumer demands aren't matching up.

Today, demand for affordable housing greatly exceeds the supply, causing tight markets and high prices for both rental and owner-occupied properties.

In fact, there are fewer homes available for sale today than at any point in the last 18 years. Loan officers in our company have stacks of pre-qualified applications on their desk or stored in their cell phone, but those would-be buyers can't find a suitable house!

Our national housing stock is not growing fast enough. For the last nine years single family home starts have averaged less than half the normal equilibrium level of 1.2 million new homes per year.

At the upper end of the market, that means that not enough homes have been built to meet the demands of the move up buyer. And, as a result, homeowners are simply staying put, which limits supply andpushes up the prices of entry level housing stock.

So, if you can't buy, you rent, and thus rental rates are also climbing again as demand exceeds supply. Last year apartment occupancy rates were the highest they've been since the mid-1980s.

What can we, as mortgage bankers, do about the lack of safe, affordable housing? Well, my hammer is a little rusty. And, I think I'm a little too old to start climbing ladders to do framing. But there are other ways for us to take action.

Our role should be that of a thought leader on ways to prudently grow supply. We must engage with our sister trades-- the homebuilders, realtors, multifamily lenders and developers-- to find solutions to the problem at the national, state and local levels.

We all basically share the same goal-- a healthy, vibrant market that provides consumers with access to homes that best suit their families' wants and needs. We are aligned on this issue and can work together as a strong, unified coalition. We can also work with our friends in the settlement and title services businesses to improve transparency, so the home buying and closing processes work more smoothly.

By gaining better clarity of the rules and agreeing on "best practices" in TRID compliance, we can provide better service to our customers. Consumer advocacy organizations, other trade groups, and even the CFPB can be our ally in this, as we share the common view that the best consumer is an informed consumer.

MBA can create these coalitions, but it takes engagement by each of us to get the job done. This particularly includes working with state MBAs and helping them engage with local coalition partners to address barriers with state regulators and legislators.

This kind of collaboration is what we need to expand housing opportunities for the communities we serve. This brings me to big takeaway number two- Once we have that collaboration, let's work with policymakers to finally fix the regulatory and legislative burdens that are driving up costs to consumers and constraining our ability to serve our customers.

We have a genuine opportunity with an administration and Congress that both profess to want to reduce burdensome regulations and create laws that make sense.  We can't let this opportunity slip by, not when real change is within our reach. Under MBA's leadership, we've come a long way in addressing some of the most onerous barriers to an efficient housing finance system, but not far enough.

There remain major impediments that are preventing us from solving the supply and affordability problems that are plaguing the market. We need to appeal to lawmakers and regulators to work with us to fix these burdens.

As an industry, we must support good regulation that protects consumers, supports a vibrant housing market, and prevents a repetition of past mistakes. But we also need regulation that articulates clear standards, establishes reasonable tolerances and proportional remedies, and encourages common sense lending.

As just one example, we still need final clarity on the Basel III accord's treatment of Mortgage Servicing Assets. Largely as the result of the efforts of MBA and its members, the three prudential regulators gave us a "pause" in the BASEL implementation timeline.

And, just recently, they put forth a "simplified" rule-- it's not that simple-- that would "loosen the noose" around the industry's neck that the original rule imposed. We applaud and are grateful for the pause. But, we won't back down.

The punitive treatment of mortgage servicing rights under this rule is bad for the entire industry, not just the banks that hold mortgage servicing. It has the effect of reducing demand for the servicing asset-- essentially removing a bank bid for it.


It distorts the market by creating an un-level playing field for community lenders-- both bank and non-bank. There are a number of other issues on which we need to be working with regulators if we are to restore balance to the housing market: refining QM and dealing with the GSE patch; TRID; default servicing alignment among the agencies; HMDA.

The list goes on and on. And, how about GSE reform? Look, I get it... we've been talking about this for nine years.

But, we're not talking anymore... we're doing. MBA has released the authoritative white paper on the topic. Congress and the White House are moving forward and MBA is right in the middle of it, briefing staff in the White House, on Capitol Hill, and in the agencies themselves.

Why? Because the status quo is simply not sustainable with the GSEs in their current form.

MBA's proposal preserves what works in the current system, ensuring that mortgage lenders of ALL sizes and business models enjoy equal access to, and execution in, the secondary market.
Our plan enhances the stability of the market and dramatically reduces taxpayer and government risk.

But, we as industry leaders, need to seize on the momentum that has been built and we need to do it together.

We can't back down.

Let's finish what we began. Let's close the deal! Now, I've talked about working with sister organizations toward a common goal of building a stronger, more balanced housing market. I've talked about working with policymakers to reduce burdens so we can provide even better service to our customers.

So now, what can we do for ourselves to help our own businesses and the market?

This brings me to big takeaway number three--We have got to transform how our companies work and look.

Here's the problem-- our industry is, to a great extent, is pale, male and stale. We are quickly becoming an industry that no longer reflects the people and communities we serve.

Over the next decade, there is potential for 16 million new households to be created and most of those will ultimately want to be homeowners.

The Millennial generation-- many now of home buying age-- has the largest share of immigrants of all age cohorts. Minorities will become the majority. In fact that has already occurred in California and Texas. Since 2010, Hispanics have seen a net gain of over 1.1 million homeowners, and they are the only ethnic group to show sustained homeownership growth in each of the last two years, although there are promising signs that Black homeownership rates may be starting to increase.

We know where the opportunities lie. We agree on and believe in the business case for diversity. Now let's really do something about it.

At Colonial, we created our own Diversity and Inclusion Committee led by a cross section of people from all over the company-- new employees and veterans; Senior VPs and clerical folks; and minorities representing people of different races, lifestyles and backgrounds.

Managers meet with their teams regularly to talk about our shortcomings from a diversity and inclusion perspective.

We encourage our folks to speak out on ways to knock down barriers and develop better ways to attract diverse talent and customers.

Whenever we recruit to fill existing or new positions, we seek out social media, publications and schools that are known to be active in multi-cultural communities.

We've hired a multicultural leader whose sole job is to work with our sales force to help them penetrate and grow our presence in those emerging multicultural communities.

Many of these ideas and programs can be applied to every business. With that in mind, here's what MBA is doing to help you on this front. MBA is providing more education on, and access to, services, tools and other resources to help its member companies advance their diversity efforts.

MBA is aggressively promoting jobs and careers in mortgage banking through CREF Careers, Mortgage Banking Bound and virtual career fairs to attract new, more diverse generations to our industry.

Going forward, I want MBA to enhance its partnerships with minority industry organizations such as NAHREP, AREAA, and NAREB, to name a few.

At the same time, we need to continue to engage with our own Consumer Affairs Advisory Council to utilize their expertise and perspective so we can adequately reflect the communities we serve.

Folks, this is the future. Companies that don't embrace diversity and inclusion are going to be left in the dust. It's just that simple.

When I began the journey that has brought me to this podium today, I made the choice to step up and become involved.

Along the way, I became willing to take on a leadership role, to tell our story and work for the betterment of all the people we touch.

And in the immortal words of the late, great Tom Petty, "I won't back down!"

I need you all to make that same choice. Join me in engaging with our industry partners-- builders, developers, realtors and consumer groups-- so we are all working together to find common solutions to solve the affordable housing crisis.

Join us in helping policymakers and regulators fix the rules that are holding back the market. Lend your voice to our efforts, bring your expertise and experiences to the table.

We need your voice with us to advocate as ONE to resolve these issues and better reflect the people we serve.

Everything we do touches people's lives.

What we do and how we serve our customers matters. It's about homes, businesses, communities. It's about doing the right thing for the right reasons.
We know where we're going. We know what we need to accomplish. We can only accomplish this as ONE industry, with ONE voice, ONE vision, and as ONE resource.

WE won't back down.

Thank you.