This week, MBA hosted our National Secondary Market Conference and Expo in New York City. It was an opportunity for us to both acknowledge the many challenges our industry has overcome since the financial crisis as well as take stock of unfinished business. Despite our successes, we have a lot of work yet to do to secure consumers’ ability to access to financing and ensure that real estate remains a vibrant part of the American economy.
For the past five years, we’ve been fighting the good fight to responsibly and sustainably provide access to credit and to help offer those opportunities for qualified borrowers. Working together, we’ve been successful because we have led with one voice that knows firsthand the challenges faced by borrowers today.
We fought for a safe harbor in the Ability to Repay/Qualified Mortgage rule. People told us that it would never happen. But we went in, armed with data, and emerged with a rule that is working today to protect borrowers while still allowing lenders to extend reasonable amounts of credit.
Imagine the impact on borrowers had we not succeeded in gaining rep and warrant relief with Fannie Mae, Freddie Mac. What if we had allowed Congress to divert guarantee fees so they could be used for transportation and other non-housing purposes? Instead we were able to secure rep and warrant relief, and the lending community has beat back g-fee legislation six times.
But our work isn’t finished yet. It’s our job to keep leading to refine the rules so qualified borrowers can have the opportunities they deserve.
We must modify some of the rules so that they work on their own. The QM rule needs to stand on its own two feet. Under the current rule, the GSEs can purchase good, sustainable loans that meet their underwriting standards but might not satisfy the QM standard of 43% DTI. This is because the QM “patch” provides a safe harbor exemption for loans that meet GSE underwriting requirements. But the patch is temporary, and the clock is ticking. We need to proactively re-write the rule now in a thoughtful way rather than wait until it is out of our hands.
Finally, federal housing policy must be coordinated at the most senior level to ensure regulators consider the implications of the confusion and conflict created by uncoordinated regulatory overlaps. We need to work with the leading candidates of both parties to make housing a priority in the next administration. America is facing a housing affordability crisis that is only getting worse.
Home prices are up, unemployment is down and we have reforms in place that make the market safer, as a whole, and more sustainable for consumers, the economy and our businesses. With low rates, safe and well-underwritten loan products and an improving job market and economy, borrowers who can qualify and want to buy a home should feel great making that decision, but they don’t. It’s going to take leadership from all of us to keep moving the market forward.