Whether Trump or Harris is in power, MBA says it ‘knows how to stop bad ideas’

It might be appropriate that Bob Broeksmit took a more conciliatory tone during his kick-off speech MBA annually then last year, when he said the mortgage trade association was “acting offensively” to “stop the madness.” After all, the general election is just over a week away and the MBA has hedged its bets.

“Republicans could sweep everything away. Democrats could sweep everything away. But we believe the most likely outcome is divided government,” Broeksmit, president and CEO of the MBA, said in the opening remarks for the Denver event. “Regardless of who wins the White House, they will likely have to deal with at least one chamber of Congress controlled by the other party. In other words, we are preparing for at least two years of stalemate.”

Broeksmit said it doesn’t matter whether it’s Donald Trump or Kamala Harris in the White House, the MBA expects the Fed to keep lowering interest rates. But this cycle will likely be shorter and less steep, he said.

“Our best estimate is that 30-year yields will hover between 6% and 6.5% for the rest of this year, before settling into the upper 5% range by the end of next year. However, we are looking at a different story when it comes to federal policy,” he said.

Broeksmit said a gridlocked Washington means housing legislation will be relatively rare. Anyone who ends up at 1600 Pennsylvania Avenue will have to rely heavily on regulations, with the help of the Federal Agency for Housing Financing (FHFA) and the Consumer Financial Protection Bureau (CFPB) to establish policy.

“Both agencies will continue to issue new regulations. This also applies to other agencies dealing with housing and loans. But while the flow of regulation will continue, the type of regulation depends on who wins,” he said. “Donald Trump and Kamala Harris have very different governing philosophies.”

Recent policy victories

“We know how to stop bad ideas, or at least improve them,” he told the crowd. “And we’re always ready to push for good policies that allow you to do more for Americans.”

Broeksmit praised the MBA’s recent victories, pointing out that they helped lead the FHFA to abandon its original Suspended Counterparty Program rule.

“When the proposal came down last year, almost no one paid attention,” Broeksmit said. “But the MBA paid close attention and we immediately saw the danger that entailed. That rule would ban companies that make minor mistakes from working with Fannie and Freddie. It wasn’t just overregulation. It was an overreaction. And we refused to let it stand.”

Basel III Endgame Rules, which Broeksmit called a “disaster in the making,” was another major policy victory for the trade association.

“It would have seriously harmed low-to-moderate income lending by increasing risk weights on specific types of mortgages, especially low-repayment loans,” he said. “That increase in the capital required would inevitably mean that fewer loans would be granted, and that the loans granted would be more expensive. The treatment of mortgage repayment rights would have exacerbated the problem and driven up costs for every borrower.”

Broeksmit said that too Congress is in the midst of considering the MBA’s proposed trigger lead reforms.

Opportunities ahead

Regardless of who wins the election, the next president will focus on housing, he said.

“For all their differences, both Donald Trump and Kamala Harris will focus on housing. Both have said that we need to get prices under control. They are also clearly aware that we need more affordable units for purchase and rental,” he said.

Broeksmit noted that many of the key provisions of the 2017 Tax Cuts and Jobs Act will expire at the end of 2025. As the tax debate heats up, “we will continue to tell lawmakers that Americans should keep more of their take-home pay. ” he said. “If we really want to help more Americans find affordable housing, the last thing we should be doing is raising their taxes.”

In an ode to his more spirited speeches from 2023, Broeksmit said that regulations have gotten out of hand.

“Someone has to bring order to this mess,” he said. “That is why MBA strongly advocates the creation of a national housing director. Under our proposal, a housing director would focus solely on housing and oversee every housing policy, regardless of which agency it comes from, and spot conflicting rules from a mile away.”

He ended his speech with a note of optimism for mortgage bankers.

“If the past year proves anything, it’s that we get results when others can’t,” he said. “And I know that together we can achieve even more for the benefit of all the American people.”