Powell, keynote speaker at the convention's opening general session, recalled when his two immigrant parents first purchased a home, saying it was a rewarding and a “remarkable achievement.”

“They were so proud of the fact that they had their own home,” Powell said.

Powell purchased his own first home with $20 down and a VA loan. After new MBA Chairman Regina Lowrie, CMB, spoke about MBA’s commitment to the future, Powell said he was pleased to hear about that commitment, not just for all borrowers but for especially for first time borrowers. He said the importance of reaching out to diverse populations who have been denied in the past. “We do it because it is the right thing to do and we create new and better worlds.”

Powell told the story of Portuguese children who mistakenly did not have enough money to pay the full amount for a check at a restaurant. The manager said they would not charge them for the meal because he was just happy to have them in the U.S. and enjoying themselves in this country. “We are generous, open, welcoming people,” Powell said. “We are a nation of nations…as long as we convey that impression to the rest of the world, we beat the terrorists.”

On an international scale, Powell emphasized the power of a strong economy and included China and other parts of Asia as one of the top three economies in the world, along with the U.S. and European Union with other parts of North America and Europe, respectively.

At the State Department, Powell said, he realized the benefits from information technology. In 2001, the State Department still had long-outdated Wang computers. When he left, there were 44,251 computers with access to the Internet.

“IT is fundamentally changing the world as we know it,” Powell said.
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Chris Bentledge, who works at P/R Mortgage & Investment Corp., Carmen, Ind., a 28-year-old, 300-pound, former football player, was in a motorcycle accident this summer that left him paralyzed from the waist down. At the time, Bentledge was preparing for his Certified Mortgage Banker (CMB) designation from MBA.

“After one of the hospital visits we've all made, some of my folks said, ‘Chris doesn't want to miss the deadline on his underwriting class, can he get an extension?’ Petrie recalled. “When they walked in and told me his request, I couldn't believe it. I was dumbfounded. What character! He will be successful, because he's trying.” 

In his address, Petrie touched on the successes over the past year—MBA membership at a record 3,000 in an era of consolidation; creation of a strategic plan; record registration at MBA conventions and conferences (although Hurricane Wilma took a bite out of attendance here this year); a record election cycle for MORPAC, MBA’s political action committee, which raised more than $1 million in 2003-2004; and growth of the Mortgage Action Alliance, MBA’s grassroots advocacy group, which grew to more than 7,000 members.

“I don't care what kind of organization you have, if you have that kind of participation, you're going to be successful,” Petrie said. “And if it's also a passionate participation, you're going to do great things.”

Petrie also discussed challenges facing the industry. “Clearly, the face of American homeownership is changing,” he said. “Despite recent progress, there is still a homeownership gap, and we must address it. That's one reason why MBA launched the Path to Diversity, which encourages the recruitment of minorities into our profession. It simply makes good business sense.”

Petrie earned kudos for his tenure as MBA chairman from Sen. Evan Bayh, D-Ind., from his home state of Indiana. In a letter, Bayh praised Petrie’s leadership skills and his accomplishments as chairman.

“During the past year, under Mike Petrie’s leadership, the Mortgage Bankers Association has grown in membership, coverage and involvement, ensuring its success in today’s fast-paced, global economy,” Bayh wrote. “Thanks to his work, MBA today is better prepared for the future, with more members taking part in the Mortgage Action Alliance, more opportunities available in rural housing issues and more of a voice to be used in shaping the policies that impact its business and the people it serves. This kind of growth should come as no surprise to anyone who knows Mike.”

Bayh, a member of the Senate Banking Committee, had several opportunities to introduce Petrie when testifying on Capitol Hill. “This kind of leadership is what it takes to get things done, and as a result of his efforts, Mike will leave the MBA stronger than before when he steps down,” Bayh said. “He understands that at the end of the day, his job is about building communities and strengthening families. Whether serving as the head of MBA or running his company in Indiana, he has never lost sight of that goal.  I applaud Mike’s work nationally as chairman of the Mortgage Bankers Association and look forward to his continued work in Indiana.”

Petrie said it was a “great year for me. Travelling across the country, getting to meet so many of you has been a remarkable experience. I feel so good about the future of MBA. “[MBA Officers] Regina [Lowrie], John [Robbins Jr.] and Kieran [Quinn] can build on the successes we have had in the past year, with growing membership, increased political clout and greater public outreach.”
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“While three of four white households own a home, it’s only one in two for minorities. It’s an opportunity—and it hits us where we live,” said Morstadt, specialty lending manager with National City Mortgage Co., Bloomington, Ill., at the Mortgage Bankers Association’s State & Local Workshops here on Friday.

MBA Chairman-Elect Regina Lowrie, CMB, noted that forecasts call for creation of 13 million new households, of which nearly half will be minority-owned. “Our population growth and demand structure is going to require trillions in capital,” she said.

At the national level, MBA has established several programs aimed at increasing the minority homeownership rate, such as its Home Loan Learning Center (www.homeloanlearningcenter.org) and educational efforts to prevent mortgage fraud, in English, Spanish and Arabic (www.stopmortgagefraud.com).

At the state and local level, members of MBA have established innovative programs aimed at reaching emerging markets and, in some cases, untapped markets. Ron McCord, CMB, chairman of First Mortgage Co. LLC , Oklahoma City, Okla., and a former MBA chairman, described a program with the mission of targeting Native American tribes; First Mortgage has partnership agreements with 13 Native American tribes, including the Chickasaw, the Choctaw, the Pottawattamie and the Navaho.

“In the past four and a half years, we’ve done about $100 million in native American lending,” McCord said. “The Pottawattamie tribe in Oklahoma recently became the first native American tribe to own a bank. It’s allowed them to do construction lending and make bridge loans. We worked with them in helping them transition.”

Working with Native American tribes requires patience, McCord said, but the rewards can be gratifying. “The opportunity is there,” he said. “Part of the challenge is building trust and bridging cultural differences. For example, we reviewed some files that one of the tribes was working with and found that some predatory lending was taking place.”

Recently, First Mortgage signed and agreement with Navajo tribe, the largest Native American tribe in the U.S. “The Navajo have 180,000 people who say they want to own a home. They’re spread out over four states,” McCord said. “The challenge is in the infrastructure. They have people who are qualified for a home, ready to go, but the plumbing is not there, the roads are not there. It’s sometimes irritates me that we as Americans spend so many dollars on so many things, if we could just spend a little money in our backyard, it would make a huge difference.”

Because First Mortgage is a local servicer, it works with tribes in resolving delinquencies and foreclosures. “Because we were a local servicer we were able to sell ourselves; but we recognized that delinquencies were going to rise,” McCord said. “We made a pledge to work with them in keeping them in their homes. When delinquencies occur we let the tribe’s housing service know. We try to have a conference call or face-to-face with the delinquent borrower and the tribal housing service. It’s very important to the tribe that they know a borrower is having some problems. Very often, the well-financed tribe has funds available to help the borrower get caught up or work out a plan. It’s a servicing process that’s a challenge; it’s more costly in dealing with your investors to whom you sell these loans.”

E. Michael Rosser, CMB, AMP, vice president of national accounts with AIG United Guaranty, Englewood, Colo., also serves on the board of the Colorado Mortgage Lenders Association as well as the Colorado State Housing Authority. At the state level, he said, they are looking more closely at emerging markets.

“‘We’re from the government and we’re here to help you’ means something here,” Rosser said. “All of us on the board are concerned about addressing emerging markets, getting new homeowners in to homes and keeping them there.”

One helpful resource is the Colorado Division of Housing, which has signed on to a Web site, www.socialserve.com, that provides resources for affordable housing and rental units. “You need to work with your local housing authorities—they can be good resources for loss mitigation programs and other support programs,” Rosser said. “In these refinance tsunamis, many of these programs have been overlooked.”
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MABC, Pittsburgh, Pa., selected the Canonsburg, Pa.–based TrueClose Loan Origination Platform as its LOS. The company chose TrueClose because it eliminates having to choose between a complete package for underwriting and customer service.

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Atlanta-based Street Resource Group Inc. (SRG), announced availability of its Warehouse Loan System software via an application service provider (ASP) platform. Commerce Bank and Trust, Worcester, Mass., became one of the first to leverage SRG’s warehouse lending platform.

Lenders who use the ASP product will pay an initial set-up fee. After set-up, SRG implements a “pay as you go” per loan pricing model combined with the per-month, per-workstation maintenance fee.

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Secured Funding, Costa Mesa, Calif., developed SelectQual, a loan engine built for home equity loans and home equity lines of credit. Built within the company’s wholesale Web site www.securedwholesale.com, brokers can enter borrower information and receive pre-qualification results.  The product and pricing are identified, as well as options for customizing the loan. Additionally, brokers can view loans that the borrower did not qualify for and the reasons why so they can make adjustments in the application to better fit the applicant.

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First Lenders Data Inc. (FLDI), Austin, Texas, and SouthCoast Title and Escrow Inc. (SCTEI), Swansea, Mass. formed a strategic marketing alliance to provide customers with mortgage closing products and services through FLDI’s FirstClose platform.

The alliance was formed in August and offers SouthCoast Title and Escrow’s services to FirstClose users. These services include loan closings, recordings, and full ALTA title insurance services on purchase money loans and refis. 
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PSC closed the loan concurrent with coordinating defeasance of the existing loan. Defeasance is a prepayment provision that is increasingly being used by commercial real estate lenders to substitute collateral and increase the predictability of payment streams, meaning that the lender can offer the borrower a lower interest rate.

“[Defeasance] is a form of loan prepayment that is becoming seen more and more in the commercial real estate financing world today,” said Michael Wenzlick, senior managing director at PSC.

The loan provided a 10-year fixed interest rate in the range of 5.3 percent for the borrower. The building is occupied by a single non-credit tenant. “The owner was able to negotiate a lease extension which allowed them to lock down today’s low interest rates and pull some equity out of the transaction,” Wenzlick said. “Even though the tenant was not investment grade we were able to provide long term non recourse financing for the borrower.”

PSC also announced it will provide program management services for a mixed use project in Las Vegas with construction costs estimated to be more than $1 billion. “Pacific Security Capital is seeing the demand for its third-party development services skyrocket,” said Mike Myatt, executive managing director at PSC.

With retail, gaming and condominium components, PSC will provide project management, entitlement consulting, fee development, construction management and capital markets services.
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He is serving his fourth term on MBA's Board of Directors and this is his third time to be elected to its Board of Governors. Robbins has chaired MBA’s President’s Committee and Legislative Committee, served on its Investment Committee and is currently serving his second term as chairman of MBA’s Membership and Dues Committee. He has served on Fannie Mae’s National Advisory Board and Western Regional Advisory Board, and is also a regular columnist of the Executive Suite series for Mortgage Banking magazine.
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Lowrie, who became MBA’s first female chairman this morning at its 92nd Annual Convention & Expo here, said lenders must take “proactive” steps with the knowledge it already possesses.

“Over the next two decades, there will be 30 million new Americans; 13 to 15 million new households that will require $6-7 trillion in capital from the international markets, while outstanding mortgage debt will grow from around $8 trillion to about $22 trillion dollars” said Lowrie, president and founder of Gateway Funding Diversified Mortgage Services, Horsham, Pa.

Meeting that housing demand, and the equivalent demand for mortgage debt, will be a “huge challenge,” Lowrie said. “The decisions we make today will have a tremendous impact on whether we in the housing industry can meet that demand: Whether we can have affordable housing for all; how much further we can take today's nearly 70 percent homeownership rate; and whether we can eliminate the gap between that overall rate and the rate among minority homeowners which now stands at 54 percent.”

Many families in emerging markets will be the first in their family to ever own a home, Lowrie said. That reality requires a greater vigilance against predatory lending.

“The need for a uniform national standard, rather than the patchwork quilt of state, and now even local laws, is more compelling than ever,” Lowrie said. “Many of these new laws have the unintended effect of locking out the very people they were designed to protect, reducing their choice…And I don't have to tell you what the effect of several sets of regulations can have on efficiency and costs within your own organizations.” 

Lowrie also called for a simpler mortgage process. “With so many new mortgage products available, tools to promote financial literacy, consumer education and a simpler mortgage process need to be available to everyone,” she said. “Our consumer outreach program, See a Lender First, recommends consumers visit a lending professional before shopping for a home.”

Lenders need to keep their issues at the forefront, Lowrie said. “After all, they are America's issues—homes; communities; providing our children and grandchildren a brighter future. That's why we must have a strong and clear voice in the creation of legislation and policy,” she said. “And for that we need your involvement in the Association.

“While we can't control fiscal policy, we can, and we must, have a voice in shaping policy at the grassroots level and with our advocates in Washington, D.C. So when we speak out for a strong GSE regulator, for RESPA reform that really protects consumers without limiting their choice, we are heard as a vital and ethical player, whose interests mirror the interests of our customers.”
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“The amount of regulatory and legislative proposals out there can crush a business like ours,” said Daniel, executive vice president of MRG Document Technologies, Sugar Land, Texas, and chairman of the Mortgage Bankers Association’s State and Local Advisory Council, speaking at the MBA’s State and Local Workshopshere.

Discussion among the nearly 100 representatives from 38 state mortgage lending affiliates of MBA, as well as a half-dozen local MBA affiliates, centered on the legislative and regulatory burdens facing lenders. Many state affiliates are turning to MBA to press for uniform national standards, on issues such as predatory lending, for relief against the patchwork of state and municipal regulations that lenders say make compliance burdensome.

Marsha Williams, an attorney with Middleberg, Riddle & Gianna, Dallas, who chaired MBA’s State and Local Legislative/Regulatory Council for the past two years, said the example of predatory lending legislation in the states and municipalities provided a taste of things to come on a variety of issues. In Williams’ view, the majority of legislative and regulatory issues facing lenders today stem from the 1999 predatory lending law passed by North Carolina.

“We realize that if North Carolina is going to pass a law that affects our industry, another state will, too,” Williams said. “If we look at all the issues—licensing, mortgage fraud, predatory lending, foreclosure laws—they all emanate from the predatory lending issue.”

Licensing of mortgage lenders and brokers, for example, “was a direct result from predatory lending—legislatures thinking that if they controlled the industry a little better,” Williams said. And after an initial wave of predatory lending laws in more than 30 states and a dozen municipalities, legislatures are now “readdressing predatory lending issues that they didn’t set the first time—and it’s also driven by regulators who are pointing out new issues,” she said.

Which is why, said Steve O’Connor, vice president of government affairs with MBA, a uniform standard for predatory lending legislation is needed more than ever.

“We were successful in getting H.R. 1295, a bipartisan bill to create a national standard for predatory lending, introduced this year by Reps. Bob Ney [R-Ohio] and Paul Kanjorski [D-Pa.],” O’Connor said. “The bill has 17 Republican cosponsors and 12 Democratic cosponsors. We’ve testified twice before the House Financial Services Committee. It’s a tough bill, but it has a host of provisions that are workable and supportive of consumers.”

Unfortunately, O’Connor said, Hurricanes Katrina and Rita threw a wrench into the legislative agenda of Congress, so passage of H.R. 1295—which does not have a companion bill in the Senate—is not likely this year.

“We’re hopeful that a bill can be introduced next year,” O’Connor said.

Tim Doyle, a director in MBA’s government affairs department, noted that licensing laws “have proliferated to the degree that MBA members approached us and said we need to be involved.

In some cases, Doyle said, licensing laws and regulations have become more costly than predatory lending laws. “And when there is little action or oversight at the federal level, states have been very aggressive in filling the void,” he said. “If enough states pass a law, it sort of becomes a federal regime. So we’re looking at this closely.

A year ago, MBA formed a State Licensing Task Force. The Task Force delivered to MBA’s Residential/Single-Family Board of Governors (RESBOG) a resolution stating that it does not support loan officer licensing at the state level unless there is a provision that recognizes the various levels of responsibilities in transactions. “The states need to be more specific and recognize the various levels of responsibilities,” Doyle said. “We developed a tier approach that in essence does not permit loan officers to be licensed.”

Other hot topics at the state and local level:

• Real Estate Settlement Procedures Act (RESPA) reform—HUD withdrew a proposal last year, but HUD Secretary Alphonso Jackson said it would be back. “To his credit, the process has been highly consultative; MBA Chairman-Elect [now chairman] Regina Lowrie participated in two of the seven HUD RESPA Roundtables,” O’Connor said. “The agenda has been pushed back because of Katrina. But we expect a proposed rule to come out in 2006. MBA has established a RESPA At-Ready Task Force, which has been gathering data and feedback.”

• Home Mortgage Disclosure Act data: “The concern among a lot of industry was that there would be disparities as to racial patterns. And there are disparities,” O’Connor said. “But the Federal Reserve also said when you take into account the data, you can explain much of the disparities. They have concerns about discretionary pricing and how it is applied. There will still be risk issues regarding HMDA, particularly on the litigation front. Further review is taking place.”

• The mortgage interest deduction. The President’s Advisory Panel on Tax Reform recently proposed capping the mortgage interest deduction at $350,000. “In places like California and New York it hits you right in the pocketbook,” Daniel said. “It makes a homeowner not want to borrow money. And that has an impact on all of us.”

Williams noted that many other issues are on the table—from real estate laws to recording to licensing. “The agenda is nothing but lengthening—not only for the lending that is here, but also for the future,” she said.

“I’ve been in this industry for 34 years and the past four years have been the best bar none,” Daniel said. “But the good years are always followed by some down ones, and it concerns me that as we move toward a down cycle, how it’s going to affect people and how they act.”
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“MBA and its members are excited to have the opportunity to invest in the Orlando community and make a difference,” said Mike Petrie, CMB, MBA past chairman and president of P/R Mortgage & Investment Corp., Carmel, Ind. “The Habitat build project is just another example of our ongoing efforts to make the American dream of homeownership a reality.”

MBA entered into a national partnership with Habitat for Humanity International in 1998. MBA and its members have built previous homes during past conventions in Toronto, Boston, San Diego and San Francisco. 

“Each year MBA builds a home with a future Habitat for Humanity homeowner partner family to leave as a gift to the community in which the annual MBA convention is held.  What a wonderful way together to symbolize our on-going efforts to provide opportunities for decent housing for all as essential to end poverty in the world!" said Tom Jones, vice president of Habitat for Humanity International.

The house will be 1,100 square feet, with three bedrooms and one bath, built in Washington Shores, an African-American community in Orlando. This low-income neighborhood consists of single-family homes, with a local school nearby. The new homeowners are Ashley Crenshaw, a single working mother, and her daughter Sholea. 

MBA Chairman Regina Lowrie, CMB, recognized the build’s corporate sponsors: Fidelity Information Services; First Horizon Home Loan Corp.; Gallagher Financial Systems; Ivanhoe Financial; Option One Mortgage/H&R Block Mortgage; Pinnacle Financial Corp.; and the PMI Foundation.
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