Prepared Remarks of MBA President and CEO Bob Broeksmit, CMB, at MBA's 2020 Servicing Solutions Conference and Expo
WASHINGTON, D.C. (February 24, 2020) - Bob Broeksmit, CMB, MBA President and CEO, delivered the following remarks here today at MBA's 2020 Servicing Solutions Conference and Expo.
[Please Note: These are prepared remarks. Mr. Broeksmit may add to or subtract from these remarks during the course of his presentation. Portions of the text may be omitted during the speech.]
Thank you! It's good to be back with all our great servicers at the Servicing Solutions Conference & Expo.
When I came here last year, I was working my way through all the MBA conferences. Some I was going to for the first time. Well now that I've been through all of them, I want you to know: THIS is one of my favorites. And YOU are some of the most important leaders in the entire mortgage industry.
I've always had a deep respect for the men and women of servicing. I oversaw Chevy Chase Bank's mortgage arm for nearly a decade and a half. We had a $20 billion servicing book. I saw firsthand the good and vital work that you do. You're on the front lines of the industry every single day.
When a borrower makes a payment, it goes through you.
When a family is falling behind on their mortgage, you work with them to make things right.
When, God forbid, foreclosure is imminent, you step in, you step up, and you try to avoid it. You help people in good times and bad.
In fact, I saw your work firsthand when things were really bad. It was the middle of the Great Recession.
What you do matters. On behalf of the entire Mortgage Bankers Association, and millions of Americans, let me say: Servicing is essential and irreplaceable. Thank you for everything you do.
So, you are there for Americans. Just as you're there for your customers, the Mortgage Bankers Association is here for you.
Stronger servicing starts here, with the MBA. In fact, stronger servicing starts in this very room.
We have re-invented this conference based on your feedback. We have renamed it - The Servicing Solutions Conference because that is our mission to provide you with Solutions. We have more interactive sessions and rooms arranged to facilitate discussion. We also have more peer interaction, including a full set of sessions on Tuesday afternoon. You'll see more focus on state issues, and the Litigation Forum is back in business. Finally, this conference is more about solutions more than ever before. We have even added tech product demos to the Discovery Stage in the HUB.
We've made these changes because you asked for them. And I hope you enjoy the new and improved Servicing Solutions Conference & Expo.
Beyond these halls, the Mortgage Bankers Association is your voice, your eyes, and your ears in the nation's capital. We know that the hard work of mortgage servicing is only getting more important. So we fight tirelessly to make sure you have the resources and support you need to do your job -- and do it well.
One thing's for sure. You're already doing an amazing job. We've come a long way since the Great Recession. Delinquencies and foreclosures are at multi-decade lows. This is a remarkable accomplishment. And much of the credit goes to you.
Your success makes this the perfect time to push forward on policy. I'm sure you've heard the saying, "work on the roof when the sun's out." That describes the situation today. Our industry is in a good place. Now let's get it to the best place.
Well, that's EXACTLY what the MBA is doing.
Over the past year, we delivered results for you, again and again.
For instance, we worked with Congress to end 2019 on a high note. Late last year, lawmakers retroactively extended the tax deductibility for mortgage insurance payments. We supported that move. But it also looked like servicers would have to reissue thousands of 1098 forms. It would've been a logistical nightmare. So the MBA stopped it from happening. We went to the IRS and got them to get you off the hook.
That was in December. I'm tempted to say that at least for some of you, the MBA saved Christmas.
We worked with Congress again to protect you from a bad robocall bill. When the Senate passed legislation on this issue, we talked to lawmakers about cutting some poorly crafted language. It would have prevented legitimate communication with your customers. Congress listened and cut that section from the final bill. We made sure that you can talk to borrowers when necessary.
Many of our priorities last year involved the FHA program. For instance, we helped fix one of FHA's biggest problems. For years, the system allowed frivolous False Claims Act lawsuits against lenders. This discouraged some of your companies from participating in FHA loans.
No more. We worked with HUD and DOJ to fix the system, protect your companies, and help consumers. Across the board, the FHA program is stronger and safer now than it was this time last year.
The same is true with technology at FHA. We're helping move the claims submission process from paper to the internet. And working with Congress, we successfully got $20 million in technology funding appropriated for FHA again this year. This money will spur upgrades over the next two years, and we'll continue to push for additional, and larger, tech budgets for future years. We're committed to help modernize FHA.
We also made progress on flood insurance. For the past few years, Congress has been unable to reauthorize the program for more than a few months at a time. Lawmakers kept kicking the can down the road, sometimes leaving servicers in the lurch.
We told Congress this couldn't continue -- and they agreed. Before the end of the year, the President signed a bill that reauthorized flood insurance for a full fiscal year. It's the longest reauthorization in a while. And now we're working for a truly long-term fix.
Starting with Hurricane Michael in October 2018, we worked with investors, insurers, and agencies to expand their disaster toolkits to help impacted borrowers. We eliminated or minimized customer documentation requirements and implemented additional options to provide greater payment reduction, such as with "Disaster Extension Modifications."
We also worked to ensure these options were available permanently, so that survivors of natural disasters wouldn't have to wait for new guidance to be issued after each event. I'm glad to announce that all agencies have now made their policies permanent. Thank you for working with us to get this done.
There are other victories I could name. But this speech is only supposed to last 15 minutes. So I'll turn my attention to the year ahead. There are many issues that demand our attention. And in every case, we're pushing for action.
One important project is MISMO's new servicing transfer initiative. You're all aware that servicing transfer data is NOT standardized across the industry. Different servicers use different systems. The consequences are higher costs, lost or missing data, limited liquidity, and unhappy customers. The cost of a servicing transfer alone can easily be in the low-to-mid six figures. It's a big problem, and it's time to solve it.
Last month, the GSEs formally requested that MISMO bring the industry together to solve this problem. We've put together a plan to do just that. Stop by the MISMO Booth in the HUB or attend the Discovery Stage session this afternoon at 3pm, to learn more and get your teams involved. Standardization will help us all. And we're determined to make it happen -- soon.
We're also heavily involved in the debate around financial standards for IMBs that are GSE seller/servicers.
Last month, FHFA proposed updates to its net worth and liquidity requirements for IMBs. We understand the reasons behind this proposal. Of course it's important that all counterparties be well capitalized and maintain sufficient liquidity. There will, after all, be challenging times in the credit cycle. Servicers should have the resources to weather that storm.
But it's also true that any new requirements must strike the right balance and preserve your ability to serve your customers. We're talking with FHFA, the GSEs, Ginnie Mae, and state regulators to make sure that any new regulations are appropriate and fair.
Our message is your message. Now is not the time to force servicers to back away from the consumers you work with. Now is not the time to impair Ginnie Mae from servicing the FHA program, making it harder for low- and moderate-income families to get their first home.
We'll be submitting our recommendations to FHFA shortly, and believe me, we want to hear from you to make sure your input gets through to FHFA and all regulators across the nation. Thank you for standing with us to get out the word.
We're also engaged on affordable housing. The same day the FHFA proposal came out, we submitted our comments to HUD on what needs to be done to help expand access to homeownership.
HUD solicited our feedback as part of the White House Council on Eliminating Regulatory Barriers to Affordable Housing. I have also personally met with Secretary Carson to discuss this issue. We strongly support the White House's effort and share the administration's desire to find solutions and help Americans.
You could say that we already have a few ideas. In our official comment, we identified more than 30 concrete ways to expand access to affordable housing. We will continue to work with stakeholders at every level of government to address this issue, which is fast becoming a crisis. More affordable housing is good for our members. It's good for families. It's good for the economy. And more affordable housing is good for America.
We're working with HUD on a host of other issues. We have long held that the agency needs to prioritize servicing reforms. I'm pleased to report that HUD agrees.
In the very near future, HUD is expected to release updates to its Single-Family Housing Handbook. We expect it to reflect MBA input and contain helpful revisions to servicing policies. This includes changes to the loss mitigation waterfall and borrower documentation requirements. When the new handbook hits the shelves, I'm confident that you will be pleased.
When it comes to serving you, we're focused on the short AND long term. That's why, starting in 2017, we embarked on an unprecedented review of the state of servicing policy. Our goal was simple: Find where we can better align and standardize the rules that govern the industry.
To do so, we set up five workgroups of between 30 and 40 members. Each one focused on a specific area: Home Preservation Guidelines, Foreclosure Alternatives and Third-Party Programs, Standard Milestones and Processes, Property Preservation, and Disaster Recovery.
Across every area, the workgroups took stock of investors, guarantors, and federal housing regulators. They dug deep into Fannie, Freddie, Ginnie, HUD, FHA, VA, USDA, and CFPB requirements. Let me thank all the members here who participate in these groups. I'm pretty sure they now know more about D.C.'s alphabet soup than anyone alive.
Their hard work has borne fruit. The workgroups identified a large number of servicing-related problems. We've taken the most significant ones and put them into a White Paper.
It's an important and comprehensive document, and we want to make sure you get a copy. It's available on our website and on this conference's app. Or stop by the MBA booth in the HUB and we'll send an electronic copy to you.
As you'll see, the White Paper shows the path to a stronger, fairer, more efficient, and more affordable servicing system. It is our to-do list for the next several years. And we're already working to get this done, and done right.
In the coming months, we'll take this White Paper and turn it into products and resources that are tailored for different audiences. We'll get these resources into the hands of the White House, Congress, regulators, and every other important party. We're already saying the same thing to all of them: The current system benefits no one, consumers least of all. It's time to align servicing standards.
No one will be surprised to hear that the most consistent source of misalignment was with FHA servicing policies. FHA knows there are issues, as well. The staff over there is working behind the scenes to move things in the right direction.
Many FHA leaders are here with us today. To them, I say: The MBA and our members are grateful for your work. We believe in your mission and want to help you fulfill it. That's a promise that we'll continue to keep.
Everything I've mentioned today comes down to one word: Results. We delivered for you in 2019. We're already delivering for you in 2020. We go to work every day determined to make your businesses and your customers better off.
There are a couple of ways that you can help us as we help you. We can accomplish even more on your behalf if you get involved with some of our biggest initiatives.
The first is the Mortgage Action Alliance. It is the grassroots lobbying group for servicers. Signing up is free and participating is easy. When an issue comes up, you'll get an email and a chance to make your voice heard in the halls of government. By getting engaged, you will automatically make policy victories more likely and more frequent. You will be doing yourself, your companies, and your customers a favor.
You can also get involved with MORPAC. It's the industry's pre-eminent political action committee. It enables you to help elect leaders who care about affordable housing and helping more people achieve and keep the American Dream. All of us want to keep that dream alive. Through MORPAC, you can do exactly that.
So thank you again for being here. I'm excited to hear from as many of you as possible over the next couple days. I hope you'll continue to share your thoughts and needs with me and the MBA team long after this conference ends. We don't work for you just for a few days a year in Orlando, Florida. We're at your beck and call all year-round in Washington, D.C.
We have ONE VISION -- yours.
We have ONE VOICE -- yours.
And we are ONE RESOURCE -- at YOUR service.
At the Mortgage Bankers Association, we're proud to serve the servicing industry. And we will never stop striving to meet your needs and exceed your expectations. Every. Single. Day.
Thank you again for being here, and for everything you do. Let's have a great conference.