Prepared Remarks of MBA President and CEO Bob Broeksmit, CMB, at the 2022 Annual Convention & Expo

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Bob Broeksmit, CMB, MBA President and CEO, delivered the following remarks at MBA's 2022 Annual 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.]

INTRO

Good morning!

It’s great to see you and to be together.

Thank you for making time, in these difficult times, to join us. It shows how much you value being part of the MBA family.

The thing about family is that you always have each other’s backs.

And I want you to know: The Mortgage Bankers Association has your back-- now more than ever!

I wish we were gathered under different circumstances. I wish that, like last year, we were celebrating new records, instead of confronting a new crisis.

It’s hard to fathom how fast things have changed. We went from the highest of highs to some of the lowest lows in recent memory.

This time last year, we were celebrating our second $4 trillion year in a row. Now refis have fallen 85%, and purchase loans are down 15%. We’re looking at the lowest volume of new loan applications in 22 years.

It’s tough to watch. It’s even tougher to deal with every day. As someone who served as the president of a good-sized mortgage company during the Great Recession, I know all too well the difficult decisions you’re facing.

They aren’t easy. They never are. But they are necessary. The tough calls you’re making today will help you emerge stronger tomorrow.

Our industry is resilient.

And make no mistake: We will emerge stronger, together.

We all know what’s driving the current disheartening trends. You can sum it up in a single word-- inflation.

Twelve months ago, inflation was just starting to get on people’s radars. Then, seemingly out of nowhere, it hit records we haven’t seen in more than 40 years.

Now America is in full damage control mode.

The Federal Reserve will continue taking aggressive steps to combat inflation. That means more rate hikes, at the very least. We expect it to be painful. But the short-term struggles will be far preferable to the long-term damage that endless inflation would do.

There are many factors behind the economic mess we’re in.

They range from record COVID-related government spending to a worker shortage, to supply chain issues, to a massive war halfway around the world-- take your pick.

But people can’t point the finger at the mortgage industry.

That’s worth dwelling on. Our current situation is the exact opposite of the Great Recession. Back then, policymakers pinned a lot of the blame on lenders and servicers.

Now, you and your companies are a huge part of the solution. America is counting on us to lift up families in a down economy. And that’s exactly what we will do!

The MBA is fully committed to supporting and strengthening you. I wish we could wave a magic wand and make these economic troubles disappear, but we can’t. That said, there are many things we can do-- and are doing-- to give you relief.

We have a slew of resources that will bolster your bottom line.

When your business is hurting, our goal is to provide the maximum business value to you.

A good example is MISMO, which is doing more than ever to help you save-- and make-- money. It’s breaking down data barriers and eliminating friction, industry-wide. MISMO’s work is more important than ever before.

Consider just one recent innovation-- MISMO’s latest Smart Doc.

Now, bear with for a second --

The Smart Doc is designed to minimize, and ultimately eliminate, the pervasive phenomenon of reconciling data and documents and re-verifying and validating information throughout the mortgage lifecycle.

The technical term for this activity is “checkers checking the checkers.”

The SMART Doc creates a “trusted package,” in which data and documents travel together. We’re working to apply this innovation to the documents you use every day. The more you rely on it, the more financial benefits you’ll find.

MISMO has also released new standards to improve transparency and efficiency in the secondary market so you can get better prices. And we’re doing more and more in the Commercial and Multifamily space, including creating a new appraisal dataset standard and green borrower questionnaire.

You can expect more standards in the near future designed to make your companies more efficient. Believe me when I say that MISMO feels a sense of urgency to come through for you, consistently and quickly. It’s already delivering-- and it’s just getting started.

Speaking of data, it’s good you’re here at Annual. This conference is a great convener-- not only of lenders but also of service providers.

Many have tech products and platforms that can help you lower your costs and increase your margins. Please make the most of your time here by checking out the expo hall and the Innovation Stage.

Across the board, MBA is doubling down on the resources you need. You’ve told us you want us to expand our education and training programs. You’ve also told us you want even more strategic insights, including market intelligence and landscape analysis.

Well, we heard you, so we’re expanding our education and research capabilities.

Our goal is simple: Make sure your teams have the knowledge and know-how to find and seize the best opportunities.

We’re also giving you new membership benefits at no additional cost, like free access to all MBA Education webinars and 16 self-study courses.

Please take advantage of these new benefits. And I hope you’ll avail yourselves of our many longstanding offerings. In the current environment, they’re even more important and useful than normal.

Everything I’ve mentioned so far helps you focus inward, on staying in the black.

Yet the MBA is also focused outward, to create a broader environment that works in your favor.

One of the biggest examples is our round-the-clock and round-the-country advocacy.

We all know that when times are tough, bad policies have a habit of rearing their ugly head. We’re talking about laws and regulations that raise your costs instead of lowering them.

At the MBA, we refuse to let that happen, which is why we’re fighting on so many fronts.

For the past year and a half, we’ve held the line on harmful tax hikes in Washington, D.C.

When Congress was debating the “Build Back Better Act,” we worked with key lawmakers, on both sides of the aisle, to stop the worst proposals. It worked-- those tax hikes never saw the light of day.

In fact, when Congress passed the so-called Inflation Reduction Act in August, it reflected our work and your needs. The final legislation didn’t include a host of dangerous tax hikes. And it preserved the existing taxation regime for mortgage servicing rights.

The last thing you need is higher taxes. We’re proud to have stopped them, on your behalf!

We’re equally focused on stopping regulatory overreach.

The main threat we see is coming from the CFPB, where the single Director can act as judge, jury, and executioner, all in one.

When it comes to the Bureau, the bottom line is this: Americans need the CFPB to establish clear and consistent standards. That means providing the opportunity for notice and comment when enacting rules. And it never means circumventing the rulemaking process.

Market oversight works best when regulators provide consistent guidance to all market participants via notice and comment rulemaking, interpretive rules, and guidance that reflect stakeholder input, and applying them prospectively and providing the market appropriate runways for compliance.

That approach allows MBA to educate the Bureau on the potential impact of their rules, just as we did on their request for information on fees that mortgage originators and servicers charge their customers. It allowed us to tell the Bureau that these types of fees are clearly disclosed in advance, reasonable, and reflect services actually performed.

Unfortunately, the Bureau isn’t always abiding by this commonsense system. It’s sometimes announcing new legal obligations without formal process or deliberation. It’s also enforcing novel and untested legal theories, making it very difficult for firms to understand their legal obligations. The CFPB’s actions exact a high cost on markets and, ultimately, consumers.

Now is no time to make you hire more lawyers to try to understand what the Bureau is doing.

You need relief and you need certainty. That’s the path to lower costs-- and we’re making sure the CFPB knows it.

We will work with the Bureau and others to ensure they understand the need for clear rules and lower costs to consumers.

Washington isn’t the only place where dangerous policies are on the docket. The same is true in many states. Once again, the MBA is on the job, and our advocacy is getting results.

There’s no better proof than California. Everyone knows that what starts in the Golden State rarely stops there. It quickly spreads to like-minded states, and even to the federal government. That’s why we’ve fought so hard to stop harmful ideas from becoming reality.

This year alone, we’ve achieved two big California victories.

First, in partnership with the California MBA, we led the charge against a bill that would have created a costly and complex new foreclosure system. After months of hard work, and after mobilizing hundreds of MBA members to speak out, the sponsor withdrew the bill. It’s now dead for the foreseeable future.

The second victory is even more important. For much of the past year, the California legislature has been moving to impose CRA requirements on non-banks. But we made sure that won’t happen. I’m pleased to report that the bill has been amended-- and expanding the CRA is off the table.

These are the kind of wins you need right now, and not just in California. From coast to coast, we’re fighting dangerous policies, including CRA expansion, rent control, and many others. We’ll hold the line in state capitals, the same as we do in our nation’s capital!

Whatever issue we engage on, and wherever we engage on it, your partnership is essential. That’s why we give you so many opportunities for collaborative progress.

The best example is the Mortgage Action Alliance.

Our free grassroots lobbying group, MAA, has a proven track record of stopping bad policies-- and securing good ones-- during a crisis.

We proved it multiple times in the pandemic.

That’s why membership has grown three-fold, to 63,000 industry professionals, in the past 2 years.

By joining today, you’ll help deliver the policy solutions your companies need.

The same is true of MORPAC.

It’s now one of the top 10 most influential trade association PACs,

and we’ve raised more than $2.9 million for the midterm elections.

We’ve never raised so much in an election cycle-- and member contributions are essential for our success.

Let me be clear.

This isn’t a donation. It’s an investment.

Participating in MORPAC helps elect candidates who support the cornerstone of the American Dream. Visit the MBA booth to learn more.

Finally, I urge you to become even more active in your state MBAs.

They are essential partners in driving better policy and defeating harmful proposals in your area.

At the national level, we’re deepening our collaboration with these groups, and I hope you do, too. We don’t just want to make a difference in D.C. We want to make a difference in every state-- and with your support, we will succeed!

I’m confident our actions, on your behalf, will empower you in these difficult times.

But as I close, I want to move beyond the short-term challenges we face. They’re serious, no question, which is why our response is so strong. Yet we can’t lose sight of the long term.

We work in a business that’s full of ups and downs. We’re in a particularly bad time right now, and it may last longer than anyone wants. But the good times will come again, as they always do. And if our history proves anything, it’s that the overall trend isn’t down… it’s up, and we’ll again reach heights we never imagined.

I’ve often heard it said that if someone looked at the mortgage industry on a quarter-by-quarter basis, they’d never get into it. Many people just couldn’t stomach the volatility.

But you and I-- we know quarter-by-quarter isn’t the best viewpoint.

You have to take the long view. And you have to take stock of the extraordinary difference we make-- both for individual Americans, and for America as a whole.

It’s worth reminding ourselves what it is, exactly, that we do.

We help that newly married couple get their first home.

We help that young family establish a foundation on which they can build.

We anchor each community, not only by giving loans but also by giving back.

And day in and day out, we innovate, improve, and empower more people. They’re counting on us. We deliver for them. You deliver for them. And you always will.

I know it’s hard to remember this right now. It’s hard to recall our noble mission when our margins are disappearing. But that mission is the most important thing we have, and we must remember our guiding motivation so we can overcome the challenges we face.

The last time a crisis of this magnitude struck, I was president of a mortgage company in Maryland. Like so many of you, our business boomed in the early and mid-2000s. We figured the good times were here to stay. But then the music stopped, and the party ended.

But then we remembered why we got involved in real estate finance. It gave us the motivation to carry on and push forward. And when the Great Recession finally ended, we were still there. We were ready to rise and thrive. And we did.

My friends and fellow members of the MBA: Now is the time to dig deep, and look past the difficulties of the moment. Now is the time to remember the mission and passion that define who we are, and all we do.

If we do that-- if we lean on each other, and on this association-- I have faith we’ll persevere. And I know our best is yet to come.

Thank you. Welcome back to Annual. And thanks for being part of the MBA family.

Now, before I leave the stage, I want to acknowledge something that’s weighing on many of our hearts.

This summer, our industry lost a giant and a friend.

Dr. Frank Nothaft was one of the brightest and most influential minds in real estate. His research and insight were best-in-class, which is why he was an ever-present sight on stage at industry conferences and events, and a highly sought-after source by news outlets around the country.

Given all he did throughout his life, MBA is committed to keeping Frank’s legacy alive.

We’re proud to partner with CoreLogic to establish the Dr. Frank Nothaft Memorial Fellowship Fund at Columbia University, where Frank earned his Ph.D., taught, and conducted research.

Our goal is to raise $250,000 to create an endowed fund that will provide a fellowship to a graduate student in Economics each year in perpetuity. We’ve already raised almost $100,000, but we need your help to reach our goal.

On the screen behind me are instructions for how you can donate.

I hope you or your company will join us in this worthwhile cause and honor Dr. Frank Nothaft for all he did for our industry.

And now it’s my pleasure to thank the sponsor for this next session, Freedom Mortgage, and welcome to the stage Allen Middleman, Freedom’s Senior Vice President.

Before 2007, my team and I were experts at everything we liked most. Closing loans. Putting people in homes. Bringing in revenue. You name it. Yet by 2008, we’d become experts in the least likable parts of the job. Loss mitigation. Delinquency. Some days, we worried we wouldn’t make it.