| Title: | MBA Testifies on Industry Actions in the Aftermath of Hurricane Katrina |
| Source: | MBA |
| Date: | 2/6/2007 |
WASHINGTON, DC (February 6, 2007) – Mortgage Bankers Association (MBA) Residential Board of Governors (RESBOG) member, Edgar Bright, III, CMB, President of Standard
Mortgage Corporation, headquartered in New Orleans, testified today before a hearing of the House Committee on Financial Services.
Bright’s testimony examined challenges encountered and lessons learned by the real estate finance industry in the aftermath
of Hurricane Katrina.
"The experience of this storm and its aftermath has given us a template for action in the event of another catastrophe,” Bright
said. “However, while the homeownership piece of this tragedy was better addressed than many other parts of the response
to the storm, there are significant lessons that can be learned.”
In his testimony, Bright provided a brief overview of the steps the mortgage industry took to assist those affected, including
forbearance (some of which continues to this day) for nearly 10,000 borrowers in Louisiana and 4,000 in Mississippi, contributions
of $600,000 from MBA alone to the Red Cross and Habitat for Humanity, and financial education summits to help affected homeowners
collect their funds to rebuild.
"The residential and multifamily mortgage industry responded to the myriad of challenges spun from the destruction of Katrina
and Rita, despite significant costs," Bright said. “We will do all we can to ensure that the Gulf Coast comes back and is
better than ever before. This is a national problem, and national solutions need to continue to be put into place to ensure
that the region returns better than it ever was. We urge Congress to consider our suggestions.”
Also during his testimony, Bright presented the following policy recommendations to the committee:
- HUD should accept conveyance of damaged properties and not adjust the claim for the cost of repair when there was no failure
on the part of the servicer to obtain hazard or flood insurance pursuant to federal law or if a borrower is eligible to apply
for CDBG grant funds, but fails to do so. In addition, to the extent that a property is not conveyable (i.e., condemned, demolished
by local, state, or federal government or deemed to be a Superfund site, etc), HUD should be permitted to pay the full claim
without taking conveyance of the property.
- Create a mechanism that would allow the President or another appropriate government entity to activate National Environmental
Policy Act (NEPA) exemptions and exclusions or otherwise waive NEPA for the purpose of rebuilding pre-existing housing after
a disaster.
- Create a better mechanism to “share” valuations and appraisal information among agencies.
- Congress should consider providing the Department of Veterans Affairs (VA) the authority to waive the statutory requirement
to declare no-bids. VA should also be permitted to take conveyance of a property and pay the total indebtedness and out-of-pocket
expenses in cases of federally declared disasters areas without having to abide by the no-bid calculation. Bright also suggested
allowing the VA to pay a claim even when conveyance does not occur due to unique circumstances, such as a declaration of hazardous
waste contamination on the property.
###
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry
that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the
association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand
homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and
fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety
of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies,
mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending
field. For additional information, visit MBA's Web site: www.mortgagebankers.org.