Memories Of The Future

Written by Phil Hall
on May 25, 2010 No Comments
Categories : Blog View

[u]BLOG VIEW[/u][/i]: The first time I visited the New York Hilton was for my high school graduation.[/b] Along with the other 1,000 students in John F. Kennedy High School's Class of 1982 – yes, it was a rather large class – I was part of a youthful audience that felt a rough patch of our lives was over and the challenge of a different environment was waiting on the near horizon. Nearly three decades later, I am back at the New York Hilton. This time, I am attending the ongoing Mortgage Bankers Association's (MBA) Secondary Marketing Conference. And, strangely, there is a good deal of deja vu with my return to this location. Today's mortgage bankers, not unlike my high school class of yesteryear, are relieved that a tumultuous period is over while they look ahead to a new arena where the rules of the game will be somewhat different. In speaking with the conference attendees and listening to the various panel sessions, I can't help but hear the language of confidence – and it has been some time since I heard that at an MBA conference. The word ‘stabilizing’ kept popping up in discussions on the state of the industry, and the recent accomplishment by Redwood Trust in defrosting part of the private-label market was repeatedly mentioned with a degree of awe. Even John Courson, president and CEO of the MBA, seemed unusually self-assured in his opening remarks by noting the industry's lobbying power in Washington – no small feat, he insisted, considering that many people on Capitol Hill wrote off the industry's clout when the economy crashed. But while a great deal of hard work is behind the industry, there is still a sense that the road ahead won't be a proverbial walk in the park. For all of the talk of ‘stabilizing,’ no one was talking with confidence about recovery. There was also no hint of the next act to follow Redwood Trust's accomplishment – vague suggestions of securitization for whole loans and non-performing assets were floated, along with the briefest of mentions of the concept of a covered-bond market. And Courson, for all of his crowing, forgot to mention a significant lobbying loss: The industry failed to stop the inclusion of a new consumer financial protection entity in the still-gestating regulatory reform legislation in Congress. Even worse, David Stevens, commissioner of the Federal Housing Administration, was particularly blunt when he pointed out that the secondary market is almost wholly dependent on Washington. He called the current situation ‘a very sick system’ and noted the industry has ‘a lot of work ahead of us.’ Perhaps the industry is progressing a little too slowly, and perhaps there is the possibility that our progress will be halted or even reversed – the rising number of failed community banks and the problematic nature of many building and construction loans within the remaining banks was the major concern cited during the conference. Nonetheless, the conference is a welcome affirmation that the industry is still vibrant. The road ahead may have potholes, but it appears we're on the right road. – Phil Hall, editor, [b]Secondary Marketing Executive[/b] [i] (Please address all comments regarding this opinion column to hallp@sme-online.co

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