Real Estate

Broeksmit Calls for Housing Czar to Untangle Regulatory Maze

MBA's Bob Broeksmit proposes a National Housing Policy Director to streamline complex U.S. housing regulations and boost market efficiency.

By Doug Elli

5/16, 13:13 EDT

Key Takeaway

  • MBA's Bob Broeksmit proposes a National Housing Policy Director in the White House to streamline housing regulations and address contradictions.
  • Criticizes rapid rollout of regulations and specific policies like CFPB's scrutiny on "junk fees" and Basel III rules impacting mortgage servicing rights.
  • Highlights the negative impact of current regulatory environment on lenders, affordability, especially for first-time and low-income homebuyers.

Unraveling the Regulatory Knots in Housing

In a bold move to streamline the United States' complex housing policy landscape, Mortgage Bankers Association (MBA) president and CEO Bob Broeksmit has proposed the creation of a National Housing Policy Director. This high-level position, situated directly within the White House and accountable to the President, aims to cut through the "regulatory knots" that currently hinder the housing sector's efficiency and economic contribution. Broeksmit's vision, shared during an Exchequer Club Speech, highlights the critical need for centralized oversight to navigate and rectify the conflicting regulations emanating from the myriad of agencies influencing housing policy.

A Call for Centralized Oversight

The proposed National Housing Policy Director would serve as the orchestrator of all housing-related policies, regardless of their agency origin. This role is envisioned to possess extensive knowledge of existing laws and regulations, enabling the identification and resolution of contradictory policies that exacerbate regulatory complexity. Broeksmit's critique extends to the current state of regulatory affairs, where agencies such as the Consumer Financial Protection Bureau (CFPB) and the Federal Housing Finance Agency (FHFA) operate with diminished independence, contributing to a disjointed regulatory environment. The MBA leader underscores the urgency of this initiative, citing examples of regulatory inefficiencies, such as the HUD's excessive and costly fee structure for multifamily loans and the CFPB's scrutiny of so-called "junk fees" that, according to Broeksmit, are not junk fees by the White House's own standards.

The Impact of Regulatory Disarray

The consequences of the existing fragmented regulatory framework are far-reaching, affecting not only industry stakeholders but also consumers, particularly first-time and low-income homebuyers. Broeksmit points to the Basel III Endgame rules as a case in point, where disproportionate risk weights on mortgage servicing rights and increased capital requirements for banks' warehouse lines could significantly elevate mortgage costs and restrict access to credit. This scenario underscores the broader implications of regulatory disarray, highlighting the potential for increased housing costs and reduced market accessibility for vulnerable buyer segments.

A Perspective on Regulatory Reform

The proposal for a National Housing Policy Director reflects a critical perspective on the need for comprehensive regulatory reform within the housing sector. By advocating for a centralized authority to oversee and harmonize housing policies, Broeksmit not only addresses the immediate challenges posed by conflicting regulations but also sets the stage for a more coherent and efficient regulatory framework. This approach, while ambitious, underscores the necessity of strategic oversight and coordination in navigating the complex interplay of policies affecting the housing market. It also highlights the potential for such a role to facilitate more informed, cohesive policy development and implementation, ultimately benefiting the broader economy and ensuring a more stable housing market.

Management Quotes

  • Bob Broeksmit, CEO of Mortgage Bankers Association:

    "This position would bring order to the chaos. 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. And the Director would be empowered to stop agencies from making regulatory knots worse, and better yet, start the long overdue process of unraveling them." "Not all the rules were bad"—a positive example is the qualified mortgage rules—but there is little coordination and attention to compliance and implementation burdens and costs. Ultimately new regulations have been “rolled out at a breakneck pace with little regard for how they affect each other, much less our industry and more importantly, the consumers.” "The CFPB is now collecting information presumably as a precursor to issuing regulation or guidance that could force lenders to absorb these costs... 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." "At the same time by increasing amount capital banks must hold against their warehouse lines Basel III would make it much more expensive for IMBs get credit from other banks which key IMB business model All told will lead higher prices fewer mortgages That's disaster Americans especially first-time low-income homebuyers."