Stevens, who noted that attendance at the event is “incredible,” warned that the slightest change to the mortgage market can impact the overall economy.
The MBA chief said that many CEOs of mortgage firms have told him that uncertainty and risk are still the biggest factors holding back the market. Litigation risk and the potential for regulatory enforcements have made quality control, risk management and regulatory compliance bigger priorities than more originations.
The current environment has tipped the market in favor of mega-lenders that benefit from economies of scale.
“The marketplace is off balance,” Stevens said. “We must restore a competitive and efficient mortgage marketplace where all have the opportunity for growth. To do this, policymakers must be aware of the impact of the litany of rules and regulations causing confusion in our industry and the mortgage marketplace.”
Stevens cited how HUD’s disparate impact rule, which requires lender to ensure that no one segment of the population is favored over another, conflicts with the Consumer Financial Protection Bureau’s ability-to-pay qualified mortgage rules, which makes the credit box so tight that lenders will have no choice but to lend to borrowers with higher incomes.
He repeated the group’s calls for a “traffic cop” housing policy coordinator to break through the dysfunction of Washington, D.C., policymaking and ensure regulations compliment each other.
Also creating obstacles is the lack of transparency with policymaking at Fannie Mae and Freddie Mac. He says that the pair of government-controlled companies are no longer private entities, finance nearly two thirds of the residential market and “have the ability to rock our world with a single policy change.”
But despite all the obstacles facing small and mid-sized mortgage firms, there is light at the end of the tunnel.
“Our industry has the potential for a very bright future. We have record low rates, home prices are stabilizing, consumer sentiment is rising and the affordability index is near its peak,” Stevens stated. “In addition, an enormous opportunity lies ahead with the Echo Boom Generation, who are 80 million strong and just starting to turn 30, wanting to buy homes to raise their families.”