Prepared Remarks of MBA President and CEO Bob Broeksmit, CMB, at the 2020 Commercial Real Estate Finance/Multifamily Housing Convention & Expo
WASHINGTON, D.C. (February 10, 2019) - SAN DIEGO (February 10, 2020) - Bob Broeksmit, CMB, MBA President and CEO, delivered the following remarks here today at MBA's 2020 Commercial Real Estate Finance/Multifamily Housing Convention & 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.]
On behalf of the Mortgage Bankers Association, welcome to our Signature event-- The 2020 CREF Convention and Expo!
As most of you know, this is my second year here. I promised last year that, "the MBA is working for you." I promised that we would listen to your priorities and pursue them relentlessly. And, I always keep my promises. MBA really delivered, across the board.
And we had a little help from my new boss. Just as soon as I'm done talking, you're going to hear from the man, the myth, and the CREF/Multifamily legend -- Brian Stoffers!
Brian is our MBA Chairman this year. He's your Chairman. He's been attending this conference for 30-plus years. He's made more deals here than I can count-- and I tried.
Frankly, I think he knows more about this conference and this industry than anyone else. And now he's putting that experience to work for you.
You'll hear from Brian shortly, which I guess makes me the warm-up act. He'll give you the global perspective. What's happening in the industry, and how the MBA can help you thrive in these changing times.
For my part, I'll give you the D.C. perspective.
We've never done more for you in our nation's capital. And we're delivering more results than ever before.
Before I dive into what we're doing, let me say a few words about why we're doing it.
We advocate tirelessly for Commercial and Multifamily because what you do matters. This conference unites capital sources from across the spectrum. From bank portfolios to debt funds, from Fannie, Freddie, and FHA loans to CMBS and life insurance firms, you cover every side of the financial world.
And while your specialties differ, your impact is the same. You finance America's future. Your companies are responsible for the storefronts on every Main Street in the country. You help build the health-care facilities that millions of people rely on, every day.
When a company needs office or warehouse space, you make it happen. And when American families are looking for affordable rental housing, or a hotel room, they find it because of you.
We designed this conference to help you do what you do best.
It may be February, but your year starts right here, in these halls. The relationships you forge this week pay dividends for decades. The deals you make in the next few days shape the economy and the country.
What you do here moves America forward. And so, on behalf of the Mortgage Bankers Association, thank you for your leadership!
We know that networking is the best part of this conference. Aside from the speeches, of course.
But we don't want the networking to end when the conference does. We're ensuring that it continues year-round.
Over the past 12 months, the MBA held and participated in a record number of networking events. There were roundtables for Senior Life Company executives, Senior Bank executives, FHA and MAP lenders, and Future Leaders Alumni, to name a few. We also co-hosted a transitional lending event in New York City and participated in the Dutch Treat Meeting and the Midwestern Servicing Forum.
Through CREF Connects, we held multiple receptions that brought together key regional industry leaders, and for multifamily lenders, we held multiple working groups. And of course, we hosted the largest Commercial/Multifamily Servicing and Technology Conference in the nation, with more than 850 attendees.
We're also connecting a new generation of professionals with your companies. Last year, the MBA grew our young professional network, known as mPact, to more than 1,400 participants.
Through CREF Careers, we're letting rising leaders know about opportunities in the industry. We hosted multiple receptions and events that reached a record number of college students. In fact, we have a group of students from the Burnham-Moores Center for Real Estate at the University of San Diego School of Business here with us today. They'll get a little taste of what CREF and the real estate business is all about.
Our philosophy on networking can be summed up in a simple phrase: Network early, network often.
These are only a few of the dozens of peer-to-peer events we held. Many, if not most, of you attended at least one of them. We designed these MBA events to help your businesses succeed.
You should be proud of your contributions to America. And at the MBA, we are proud to represent you in Washington, D.C. When it comes to serving you, we forge relationships with the policymakers who matter. We work with leaders on both sides of the aisle in Congress. We work with the White House, no matter who sits in the Oval Office. And we talk weekly, if not daily, with key regulators in every agency.
When policymakers have a question, they call US. And when we call THEM, they pick up.
Our message in D.C. is simple. Our members need a liquid market and a stable market. We approach every issue from this angle.
And as the past year has shown, the MBA gets results.
Just look at what we accomplished in December. For six years, we worked with lawmakers and regulators to fix the broken High Volatility Commercial Real Estate Rule. The initial regulation was enacted in 2013. It was unclear and failed to reflect the reality of acquisition, development, and construction lending. This meant fewer loans and less liquidity in a crucial sector of the market.
Two years ago, we worked with Congress to pass a law that forced banking regulators to revise the rule.
The final HVCRE rule was released in December. It reflects your priorities and provides relief to your companies. For the first time in a long time, we have an HVCRE rule on the books that makes sense. And the MBA made it happen.
We also secured another major victory in December. Ever since I took this job, I've heard from you about the Terrorism Risk Insurance Act. It's a big deal for your business. With TRIA scheduled to expire at the end of 2021, you told me that you needed it reauthorized, fast.
The MBA took this message back to Washington. We talked to the right people in the right places. They listened. And they took action.
Normally, when there's a deadline, Congress waits until the last minute to do anything. Not this time. In December, with more than a year to go, the House and Senate reauthorized TRIA. Big bipartisan majorities came together to get it done. And while the last extension lasted for five years, this time, we convinced Congress to reauthorize it for SEVEN years. TRIA is up and running through 2027. And as a bonus, the same bill extended flood insurance through September 2020 to give us more time to finish long-term reform.
In all my years of watching D.C., I have rarely seen something done this fast, this early, and this well.
That's what you asked for. That's what we got. And that's the MBA difference!
Victories like TRIA will help Commercial and Multifamily lenders thrive this year and for many years to come.
There has never been a more exciting time to be in this industry. The MBA research team estimates that your companies closed a record $628 billion last year alone. We've never seen those kinds of numbers. Every originator we spoke with said they had a "strong" or "very strong" desire to make new loans. And that optimism is only growing in 2020.
The combination of our policy wins and a strong environment bodes well for your businesses. Low interest rates, rising property values, and other factors mean that an overwhelming majority of our members expect another good year.
Our team agrees. After crunching the numbers, we anticipate a 9% increase to a new record in originations. All told, we expect your companies to close $683 billion in loans this year. Congratulations in advance.
The MBA will do our part to make this year another one to remember. We have a few key priorities on the policy front.
We'll continue to urge the CFPB to finalize its proposed increase to the Home Mortgage Disclosure Act threshold that impacts multifamily lenders. The bureau previously indicated that it would raise the threshold from 25 to either 50 or 100 closed-end loans. We have pushed to make this happen before the 2019 window closes. Your companies need relief.
We'll also continue to work with the Bureau to fully exempt business-to-business multifamily loans from HMDA reporting. The Bureau indicated that we may have proposed regulations this summer. We're determined to ensure they reflect your needs.
The MBA is also active across the rest of D.C.'s alphabet soup. We're advocating to the IRS about the need for additional guidance on LIBOR-transition activities. The original guidance, released in October, is unclear in a few places that are important to commercial real estate finance. We're telling them that clarity for our industry is key.
We're also advocating with banking agencies about allowances on credit losses. During the CECL transition, we're calling on the agencies to serve as an early-warning system. We believe the banking agencies should be on the lookout for unintended consequences as the transition continues.
One of the biggest challenges facing the entire real estate industry is housing supply. Affordable housing is harder than ever to find. Not only does this affect your companies; it hurts our economy and American families.
Multifamily housing is a key part of the solution. Cities can't just keep building out; they need to build up, as well. More multifamily housing will bring down prices, helping millions of Americans make ends meet. More multifamily housing will also create more opportunities for commercial lenders. Every company represented here will benefit from a more vibrant and affordable housing market. MBA is working to make that vision a reality.
Addressing the affordable housing issue is a long-term effort, and it requires the collaboration of multiple stakeholders. Last year, we launched a historic new Affordable Housing Initiative. We have tapped a longtime MBA expert, Steve O'Connor, to lead this effort. He is working around-the-clock to make it a success.
Our goal is to develop stronger and more effective partnerships in the policy and business arenas. To that end, as part of the initiative, we have established two advisory councils, one focused on homeownership and the other on rental housing.
The rental housing council is stacked with leaders and experts in the field. People who know what needs to be done and why. Many of them are in this room, including the council's co-chairs, Christine Chandler from M&T Realty Capital and Tony Love, from Bellwether. Thank you to everyone who is participating in this critical effort.
On the policy front, we welcome the recent White House Executive Order establishing a White House Council, headed by HUD Secretary Carson, focused on removing barriers to affordable housing. The Council owes a report to the President by June 25.
We share the administration's belief that the public and private sectors must work together on solutions. I was pleased to participate in a roundtable discussion at the White House, led by Secretary Carson, and we recently submitted extensive suggestions for the Council's consideration.
Our team has an excellent relationship with HUD. We look forward to working with the administration to enact real and meaningful housing reforms. This includes working closely with the Department of Labor and HUD to address the way Davis-Bacon wage requirements are applied to FHA-insured projects.
For several years, HUD and the Department of Labor have assigned "split wage" rate determinations to FHA-insured multifamily projects. This makes projects far too costly and jeopardizes the construction of affordable rental units. Every day it continues, more people get hurt.
We've made your concerns known to the administration. We've held high-level meetings with the Department of Labor and shared case studies that illustrate impacts on our members. We've also highlighted this issue to HUD and the White House, most recently in our formal response outlining barriers to affordable housing that should be reflected in the Council's June 25 report. We must restore sanity to Davis-Bacon and build more affordable housing.
We're also focused on rent control at the state and local levels, which is an unproductive response to the shortage of affordable rental housing. This includes a dangerous bill in New York City. It would be the first law in the nation to impose rent control on non-residential commercial properties.
We are mobilizing to oppose this policy, and we are working closely with partner organizations who share our views.
No matter what form it takes or where it arises, we know that rent control is not the solution to the affordable housing crisis. It will only reduce the quantity and quality of rental housing, hurting the people it's meant to help. We will continue to speak for your companies and all consumers by advocating a simple message. We recognize that there is a shortage of affordable rental housing, but rent control is not the answer.
Whether it's affordable housing-- or any other issue-- the Mortgage Bankers Association will continue to serve your needs in Washington, D.C. Our advocacy, research, and education teams exist for one reason -- to help you.
We have created a Board-level task force to look at cybersecurity issues facing the industry because of the immense business and reputational risks that data breaches and malware attacks bring. And we are constantly adding new offerings for your benefit. Our forecasts, outlook surveys, industry benchmarks, and CREF Careers program keep getting better, all the time.
The MBA is also strengthening our team to serve you even better. We're bringing in new leaders who know the industry and know what you need to succeed.
Heading up this effort will be a new Senior Vice President. I'm pleased to announce the person who will fill this key role, and he's here with us today. Please join me in recognizing MBA's new Senior Vice President for Commercial/Multifamily, Mike Flood.
Mike has been in the industry for more than 22 years. He comes to us from CREFC, the CRE Finance Council, where he has been Deputy Executive Director and head of the Washington office.
I hope that all of you will talk to Mike and tell him what you need.
Seriously. Call him. That's what we're paying him for. See me after the speech and I'll give you his phone number and email address. He starts with MBA officially on February 24th.
And of course, I hope that all of you continue to talk to me, as often as you can. You have no bigger ally and advocate in D.C. than me.
I also encourage you to step up your involvement in MAA and MORPAC.
Brian will say more about them in a few minutes.
He has seen the difference they make. And he can describe it better than I ever could.
So thank you again for being here. This will be an exciting conference. I hope the next few days are fun and profitable for each of you. And I know the next year will be a record-breaker for us all.
I look forward to helping you reach and exceed your goals.
At the Mortgage Bankers Association, we have ONE VISION -- yours.
We have ONE VOICE -- yours.
And we are ONE RESOURCE -- at YOUR service.
On behalf of the entire MBA team, we look forward to serving you in 2020 and beyond. Thank you for your friendship, your partnership, and your leadership.
Now let's go lead our industry to new heights.
And now it is my great pleasure to introduce MBA's 2020 Chairman. He is a man many of you know well.
Brian Stoffers is the Global President of Debt and Structured Finance at CBRE, the world's largest commercial real estate services and investment firm. Brian has extensive experience in the origination, structuring, placement, closing and servicing of commercial real estate debt for life insurance companies, pension funds, banks, debt funds, Freddie Mac, Fannie Mae, FHA and Wall Street sources. He began his career with Coldwell Banker Commercial in 1981 and became a senior real estate finance officer just down the road in the firm's La Jolla, California, office.
Brian has served in several leadership positions within MBA. He was the 2019 Chairman of MBA's Diversity and Inclusion Committee. He also served as the Chairman of the Audit Committee. Brian has been a member of COMBOG, and is the former Chairman of both our Task Force on GSE Reform and the Capital Markets Committee.
He is an alumnus of San Diego State University, where he received an MBA in Finance, and Cal State Fullerton, where he got his BA in Accounting, with a Minor in Real Estate.
Ladies and Gentlemen, let's give a warm MBA welcome to your 2020 Chairman, Brian Stoffers, CMB.