Representatives from organizations such as FHFA, FHA, GSEs and HUD all spoke during one virtual event this week by the Mortgage Bankers Association (MBA).
See notes from FHFAs Mark Calabria, here.
The host of a virtual event said during a GSE panel on Tuesday that “collective action will move us forward”. This was the general theme as senior executives from Fannie Mae and Freddie Mac asked questions about pandemic responses, affordable housing, systemic racial inequality in home ownership and the broader economic future. And later the HUD Deputy Secretary Brian Montgomery, along with Secretary Benjamin Carson, also stressed the importance of “coming together in an impartial and non-partisan manner.”
As David Brickman, CEO of Freddie Mac put it, “There will ultimately be a bill to be paid to COVID.” Still, both he and Fannie Maes CEO Hugh Frater were optimistic about the new practices of the GSEs, including a new, controversial refinancing feewho called Frater “reasonable and prudent,” and the future in general.
MBA chair-elected Kristy Fercho during the GSE panel asked the two executives how successful they think their respective approaches to the COVID-19 pandemic have been.
“Excellent,” said Brickman. “I am proud of the work we have done. We have accomplished our mission and played the counter-cyclical role that GSEs must play in times of crisis.”
He cited the recently introduced deferred payment option that both GSEs have deployed under their regulator, the FHFA.
This COVID-19 deferred payment solution resets a homeowner’s monthly mortgage payment to the pre-COVID-19 amount by adding up to 12 months of missed payments to the end of the mortgage term without incurring additional interest or late fees. The option also protects borrowers from any negative impact on their creditworthiness.
Frater on his GSE’s actions: “Fannie Mae has taken an approach that puts people first. I urged our team to put themselves in the shoes of borrowers and lenders … remember the human element. We can’t fix problems, but we can offer options, “he said.
He indicates a new comprehensive web tool, Knowyouroptions.com, which, he says, has been visited and used by millions in the past few months.
“Adapting new maintenance tools quickly has really paid off,” said Frater. “And skills developed during the crisis will help us help people when it is over.”
This is a feeling that HUD’s Brian Montgomery spoke about during the HUD afternoon session. He talked about the introduction of new technologies in the department. It was the subject of the article he wrote for the print edition of. composed DS news, available here.
Perhaps the most passionate part of the sessions was about home ownership and the pain of foreclosure or loss of a home. This was particularly true when the GSE managers answered questions about racial equality in home ownership.
Brickman said, and Frater agreed, that “this summer has been a heartbreaking wake-up call” for the companies they run when it comes to inequality and systemic racism.
Frater added, “As GSEs, our policies, and guidelines address these issues … the bigger point is that we need to change the way we think about politics. We must always look for new ways to achieve affordability on historical practices that “have long tails” and still cause racial systemic injustices today, he said.
Brickman said that at Freddie some of the changes start internally. “We need to change our organization to better reflect the communities we serve.” To this end, he says, Freddie worked with the Thurgood Marshall Scholarship Fund and the Hispanic Scholarship Fund, among others. “It’s not enough,” he added. “We have to get involved in the care and development of employees.” He points to the internal Corporate resource groupsthat promotes an inclusive workforce and that, as he says, “is a function that we want to anchor deeply in every business we operate.”
HUD’s Montgomery reiterated an opinion he shared in his recent DS News article: “When the coronavirus pandemic hit America, it showed many of our country’s great strengths, most above all to overcome the resilience and determination of our people Bad luck. ”
All of the above guests at the MBA event recognized their role as a leader charged with setting a good example for the entire industry.