NEW YORK–In his first address as president and CEO of the Mortgage Bankers Association, David Stevens outlined a vision in which a recovering mortgage lending industry takes the lead in rebuilding confidence and trust with consumers.
Speaking here at MBA’s National Secondary Market Conference, Stevens said he takes over MBA during a transformative period in the marketplace, one that offers great opportunities.
“We may face many challenges, but with the correct attitude and involvement, it is possible to not only write our own destiny, but also the nation’s,” Stevens said. “After all, the American dream has been made from housing, and this will always be true.”
Stevens assumed the president/CEO position on May 1, replacing John Courson. He came to MBA after serving more than two years as HUD assistant secretary/federal housing commissioner, a period which saw the real estate finance and housing industries struggle amid recession and fallout from the subprime housing boom of the mid-2000s.
“Our industry has faced so many issues over the past few years. I know, first hand, that it has not been easy on anyone,” Stevens said. “The mortgage finance industry has received a black eye–in some ways, of our own making. While there is enough blame to go around, at the end of the day, we must hold ourselves accountable for what happens within our own industry. We helped create this situation; we must help clean it up. And we will clean it up.”
Stevens emphasized the principle that housing is a basic human need, “one which a good and just society works to enable, and so I am a strong believer in this industry and ready to see it achieve greatness. While we are an industry in flux, with several bad years under our belt and some challenges ahead, our overall long-term prospects are excellent.”
Stevens outlined two principles for the real estate finance industry to move forward; first, accountability.
“Without dismissing the roles that others played, we must admit that some within the industry gave loans to borrowers that shouldn’t have and ignored or excused the presence of unethical people and misplaced incentives,” Stevens said. “Acknowledging these mistakes is the first step in rebuilding trust. Without trust, our industry is nothing; and by trust, I mean the ability of both those from within and outside our industry to have faith in our products and our actions. From borrowers to regulators to legislators, we must prove that we are an industry that instills confidence. Therefore, I plan to work tirelessly to ensure we are taking a leadership position to rebuild trust and confidence in mortgage lending.”
Secondly, Stevens said the industry must do a better job of articulating its reason for being. “The public no longer seems to understand what we do, or why it is important,” he said. “For many first-time homebuyers, we may have scared them a bit, so they are sitting on the sidelines wondering if homeownership is the right decision for them. It is time for us to return to our core business and ethics.”
To that end, Stevens said one of his goals will be to launch an extensive grassroots awareness campaign to highlight how the industry supports homeownership and lower costs for homebuyers, through direct financing and through the secondary market. “Reminding the public that all this is an investment in the future, and the present; that having people feel connected to their homes helps reduce crime, strengthen schools and stabilize communities; and creates that community in the first place,” he said.
Having come to MBA after two years in the Obama administration, Stevens said passage of the Dodd-Frank Act and a renewed emphasis on regulations and rules have shifted the center of the financial world to Washington, D.C.
“The fact is, many policy makers in Washington and in states across the country have intervened in an effort to control and protect against dangers that they feel were not addressed by industry leaders,” Stevens said. “We must ensure that rational policymaking balances market and consumer protection with the recognition that a functioning distributed mortgage finance market is one of the things that made the United States so great. We need to reach out and make sure our message is understood. Our housing system and its large, liquid finance system that includes private sector participants combined with a right-sized guaranteed securities market are essential to American families.”
Stevens said on Capitol Hill, members of Congress, regulators and the Administration will be receptive to a “single, strong voice” as the only way to command an important role in decisions that are made. He said MBA, with its institutional knowledge of the industry, the financial system and how potential policy changes can shape policy, offers a greater base and strategic advantage.
“Small, niche trade organizations are important, but they do not have the reach or breadth to represent the entire industry–and it is the entire industry that is under attack,” Stevens said. “Now is not the time to fight turf wars or splinter our power. And, we must strengthen our bond with other large trade groups…and consumer advocacy groups, all who also represent important segments of this industry to ensure the issues we are facing and the solutions we are proposing are heard with one very loud industry voice.”
Stevens expressed optimism that the industry’s best years are ahead. He cited demographic data about Generation Y (“echo boomers”), who, at 80 million strong, represent the largest single demographic cohort in U.S. history.
“With this generation now coming of homeownership age there is a huge potential market for new home purchases,” Stevens said. “This means that with the right effort and outreach, we will soon be faced with burgeoning demand for new mortgages and new financing. If we can put our own house in order, we will be ready to put their houses in order. After all, one of the greatest recent lessons is of sustainable housing: of owning a home because it is appropriate and makes sense. Previously, too many jumped into homeownership when they either should not have at all, or should not have on such a grand scale. So the Echo Boom generation is an opportunity where we can ‘make things right’ in terms of sustainable housing, and, most importantly, an opportunity that we cannot afford to squander.”
Stevens asked lenders to be flexible and open-minded and ready to take action. “Simply put: we cannot accept the status quo or be unprepared for doing business in a dynamic new marketplace,” he said. “The present might appear stable, but if we sit back, we will allow our industry to be shaped without us. We must participate, and do so as one, to ensure we are in control of our industry’s destiny. If we want to not only survive into the future, but also thrive, we must look ahead.”
“Our industry has been through many ups and downs,” Stevens continued. “We have played a critical role in America’s progress over the last century. We have much to be proud of, and a great legacy to reclaim.”