On Wednesday, the Five Star Institute presented the Government Forum 2021: a virtual event, bringing together mortgage service industry leaders and government officials for a day filled with impactful conversations on the industry’s most pressing issues.
Ed Delgado, Global President of Five Star, kicked off the day and welcomed attendees to the virtual event and introduced Representative Steve Bartlett, Senior Treliant Advisory Board Member; President and CEO of the Roundtable on Financial Services from 1999 to 2012; and representative to the United States Congress from 1991 to 1993. While in Congress, Bartlett was a member of the House Banking Committee, where he successfully led the campaign to let the market fix interest rates on mortgages. government insured. He has served as deputy whip and sponsor or co-sponsor of nearly 20 major pieces of legislation, including the Enhanced Secondary Mortgage Market Act, the Fair Labor Standards Act reforms, the FHA deregulation, and the Americans with Disabilities Act. .
Among the discussion topics Delgado brought up was the fact that the industry is heading towards a “housing crisis 2.0”.
“There are too many similarities to what the industry went through in 2008,” Delgado said of the current state of the market. “This crisis was not born out of subprime loans or irresponsible credit, but rather the long-term and ultimate effects of a prolonged forbearance plan.”
Bartlett noted some concerns the industry must address to avoid a potential housing crisis.
“We have issues that the industry is facing,” Bartlett said. “This is nothing like the mess we found ourselves in during the last crisis. The industry is strong, and I have never seen such a good and solid use of technology in any industry that I can remember. They are increasing the use of AI to serve all types of customers. Second, the industry is first and foremost about serving its customers… finding a mortgage that works and people can pay off.
The Mortgage Bankers Association (MBA) recently reported that about 2.1 million homeowners are at some stage of forbearance, and that according to Bartlett this is a challenge.
“With the clients we work with at Treliant, the last thing we want to do is seize someone, except in the extreme circumstances where someone has given up ownership,” Bartlett said. “The last thing a designer or a repairman should do is foreclosure because, as we say in Texas, ‘hell is going to break loose’ if we start doing it! It’s a different mindset than we’ve had historically with mortgages, but it’s the mindset we need to embrace now.
The “Economic Precipice” panel discussion followed, in which moderator Stanley C. Middleman, Founder and CEO of Freedom Mortgage Corporation led a discussion on the fallout from the pandemic and took a closer look at when the economy America will rebound accordingly.
Panelists who joined Middleman included Edward Golding of the MIT Golub Center for Finance and Policy and head of the FHA from 2015 to 2017; Tobias Peter, research director for the Housing Center at the American Enterprise Institute, and Jesse Roth, executive vice president of business development for Auction.com.
“We are emerging from a pandemic, which I have absolutely no previous experience in managing,” Middleman said. “We have seen significant events in our lives – hurricanes, earthquakes, disasters – but certainly nothing of this magnitude. We have seen a major response from the government, ordering private companies to go and do the work of supporting people in this country. From my perspective, we have done an incredible job protecting people and their homes, helping them to continue with such close to normal lives. “
As Middleman noted, the government and the maintenance industry have worked in unison to keep more Americans in their homes as the country grapples with the pandemic crisis over the past year.
“I think it’s important that we take on this social responsibility of taking care of the owners… I call it ‘Capitalism with a conscience’, but it’s better when the private meets the public,” Middleman said. “When the government can do the right thing to help homeownership, I think that’s a really positive thing. “
Goulding noted a number of steps the government can take to not only ease the volume of abstentions, but also to level the playing field and make affordability a possibility for everyone.
“We know a lot of groups have been left behind,” Gouding said. “We need a way, and homeownership, along with education, is a way to build wealth in communities that didn’t have access to wealth.”
And as the presidential regime made the transition in January, it made a number of new appointments to key housing industry regulators. With new leadership within the US Department of Housing and Urban Development (HUD), the Consumer Financial Protection Bureau (CFPB) and the Federal Housing Finance Agency (FHFA), the “Setting the Priorities” panel reviewed the direction of these new leaders and what they can do to facilitate a smooth transition for those coming out of forbearance.
Led by Moderator Alex McGillis, Senior Director, Product Development, The Answer for Quicken Loans, the Priority Setting panel included Leslie Meaux Pordzik, Senior Vice President of Issuer Office and Portfolio Management at Ginnie Mae; Chad Mosley, President of Mortgage Contracting Services (MCS); Prasant Sar, Surveillance Policy Analyst for the FHFA; and John Vella, Chief Revenue Officer of Altisource.
Innovation and adaptation of new technologies was a topic of the panel, as more and more in the service space use AI-based solutions to help borrowers through their forbearance plans. In turn, government agencies are also adapting these technology solutions as evidenced by Ginnie Mae’s recent announcement that their Office of Enterprise Risk (OER) has launched a series of machine learning and AI model pilots. An AI algorithm deployed by Ginnie Mae will reduce the likelihood of false negatives and false positives when identifying issuers that may pose increased risk, but may fall through the cracks of traditional risk identification methods.
“We are currently migrating our entire platform to the cloud,” said Pordzik. “In doing so, it will open a lot of doors for Ginnie Mae in terms of agility and speed to modernize our platform.”
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $ 2.2 trillion economic stimulus bill passed by Congress and enacted by the President last March in response to the economic fallout from the pandemic has had an impact on the maintenance industry. The Government Forum featured the ‘Caring for Homeowners’ panel which explored how this sweeping legislation has affected maintenance services. By Steve Meyer, AVP, High Risk and Investor Compliance for Safeguard Properties, panel members included Marissa M. Yaker, Managing Attorney of Foreclosure for the Padgett Law Group; Kristin Wong, financial analyst for CFPB; and Jack V. Konyk, executive director of government affairs for Weiner Brodsky Kider, PC.
“The industry has done a great job of identifying serious delinquent people and forcing them to abstain,” Wong said. “Among borrowers who became seriously delinquent due to COVID, only 2% of them did not take advantage of the forbearance. Ideally, this number should be 0%, but a real effort has been made by the industry to reach out and help these distressed borrowers. “
And as GSEs prepare for what has been determined as their “ultimate exit from trusteeship,” the “Planning for the Future of GSEs” session discussed the challenges that still exist for this plan, and whether the events of the year. last year slowed down the momentum of the GSEs.
Moderator Tim Rood, Industry Relations Manager for SitusAMC, led the GSE discussion which brought together panelists Marcel Bryar, Founder and CEO of Mortgage Policy Advisors, LLC; Ron Haynie, senior vice president of mortgage finance policy for Independent Community Bankers of America; and Edward J. Pinto, resident / director of the American Enterprise Institute Housing Center.
Fannie Mae SVP and Chief Economist Doug Duncan followed the GSE discussion by offering his expert perspective on housing finance, the mortgage sector and the broader US economy, providing insight into buyer attitudes and sellers with regard to homeownership in his presentation “Where Housing is Headed”.
“Our expectations for economic activity in 2021 are that we will see a continued decline in unemployment, down to something in the order of 5%,” Duncan said. “At the same time, we will see economic growth continue to accelerate and, for the year as a whole, reach around 6.8%, which will be the highest annual growth rate we have seen since. the very beginning of the 1980s. “
The government forum closed with the “Eye on the Horizon” session in which industry leaders discussed the day’s key takeaways and presented their perspectives on the future of the automotive market. housing.
Michael Waldron, general counsel and compliance officer at Community Loan Servicing, LLC led the discussion, with panelists John Bell III, deputy director of the US Department of Veterans Affairs; Maria Fernandez, Senior Associate Director, Office of Housing Policy and Regulation, FHFA; and Brian D. Montgomery, President and Founding Partner of Gate House Strategies, LLC and Former Assistant Secretary of HUD (2019-2021).
“During the pandemic, web and mobile technologies have really helped borrowers stay connected and engaged,” Fernandez said. “Frankly, it also helped maintain mortgage credit. “
And while the pandemic has touched every pocket across the country, Montgomery noted that the industry had braced for such a widespread crisis on a smaller scale as it battled events such as hurricanes and other natural disasters. .
“We had all had warm-ups for COVID-19, and we didn’t know it at the time, but we would have regional natural disasters, sometimes in large urban areas like Hurricane Harvey, but never had anything with the reach of COVID-19 where every city has been affected, ”Montgomery said. “Collaboration between government agencies was very important, we spoke almost every day, especially with the FHFA. We didn’t want companies to go in one direction. We looked at the situation from a homebuyer’s perspective and what would be the best situation to stay in their home. Communication was important not only with government agencies, but also to find the public. “
The Five Star Institute would like to thank the companies that have supported the Government Forum 2021 as sponsors, including Host Sponsor Auction.com; Co-Host Sponsor Altisource; and sponsor partners Insight One Solutions, Mortgage Contracting Services, Padgett Law Group and Safeguard Properties.
Coming in September, the Five Star Conference and Exhibit returns with an in-person event at the landmark Dallas Reunion Tower, Hyatt Regency Dallas, from September 19-21. Click here for more information or to register for this event.