The head of the Mortgage Bankers Association on Wednesday called for the creation of a national housing-policy director who could serve as an advisor to the White House and detangle pervasive “regulatory knots.”
Bob Broeksmit, CEO of the MBA, said an “alphabet soup” of federal agencies currently introduce and pass “contradictory and unworkable policies.”
The only solution he sees is to have a dedicated housing expert who would have the ear of the president and could help both sort through the influx of such policies and judge their merit, an idea previously floated by the late Dave Stevens and by some lawmakers during the subprime crisis.
“This position would bring order to the chaos,” said Broeksmit, speaking at a Exchequer Club luncheon. “The director would oversee every policy that affects housing, no matter which agency it comes from. The official, and his or her team, would have a deep knowledge of existing laws and regulations, enabling them to spot contradictory rules from a mile away.”
“The White House has some staff who deal with housing, but there’s no senior- or even cabinet-level official who has cross-agency authority on housing,” MBA’s CEO added. “This can’t just be part of someone’s job. It needs to be their full-time job—twenty-four-seven, with a dedicated team to boot.”
There would be a number of issues for this hypothetical person to tackle. Specifically, Broeksmit laid out a three that highlight “ignorance” of the federal government about the industries it regulates.
As has been the case in other speeches, Broeksmit first took a dig at the Consumer Financial Protection Bureau and its move to target junk fees, which could specifically impact the home closing process.
“These fees they are targeting? By the White House’s own definition, none of them are junk fees. What’s more, many of them are for services required by other federal agencies,” he said.
The MBA’s head added homeowners know early in the homebuying process that they’ll have to cover things like appraisals, credit reports, and flood certifications “because of CFPB regulations, on forms designed by the CFPB itself.”
Broeksmit said the real junk fees are charged by the Department of Housing and Urban Development when lenders want to originate multifamily loans. The trade group’s CEO pointed to “22 fees that are duplicative, unnecessary, or downright expensive compared to private sector options.”
“These fees help explain why HUD has produced 75% fewer multifamily loans over the past two years,” he said. “It’s the most expensive and least efficient place to originate a multifamily loan.”
The CFPB declined to comment and HUD did not immediately respond to a request for comment.
Next, the CEO of the largest mortgage trade group highlighted the pitfalls of the Basel III endgame, noting the proposed rule will lead to higher prices on fewer mortgages.
“By increasing the amount of capital that banks must hold against their warehouse lines, Basel III would make it much more expensive for IMBs to get credit from other banks, which is key to the IMB business model,” he said. “That’s a disaster for Americans, especially first-time and low-income homebuyers.”
Having someone in the White House to represent the best interests of the housing industry “is a basic matter of good government.”
The industry needs “streamlined, collaborative, and commonsense leadership when it comes to regulating the most important facets of our economy. The current approach is clearly failing,” he added.
