Mortgage Bankers Association 94th Annual Convention


Thank you, Chairman (Kieran) Quinn. Good morning, ladies and gentlemen.

I am pleased be here with Mayor (Douglas) Parker. Good to see you again.

And I want to express my appreciation to Bono. I admire your music and your advocacy. You give voice to the voiceless. Your song about Dr. Martin Luther King, Jr. ("Pride in the Name of Love.") is played often in my home. In fact, I play it so much that the neighbors comment. Well, I knew Dr. King...I marched with him...he would have proudly embraced you as a brother.

Dr. King often spoke about the "inescapable network of mutuality" in our world, and this is a lesson we have learned yet again in the subprime crisis. Fluctuations ...booms and the housing market ripple out worldwide. For the past several months we all have been caught in the gravitational pull of the subprime crisis. We have been drawn, pulled, and propelled against our will into a severe market correction.

But some people forget the real bottom line: homeownership and all that means. Yes, market fears and jobs and financial success and business confidence are important. We know that. Yet, as I read the newspapers and trade publications, I don't hear enough about what I consider to be the true bottom line, which is placing keys in the hands of new homeowners. It is part of the American Dream and the dream of billions of people around the world. A home represents empowerment, respect, pride, equity, financial security, and a stake in the community. It is where we live and grow up and grow old together.

So I want to applaud MBA for setting up the Foreclosure Prevention Resource Center to provide advice and outreach. This is an important addition to help homeowners.

I also thank the MBA for your work in forming the Hope Now Alliance. I joined Secretary (Henry) Paulson at the announcement last week. Your leadership was vital in bringing together industry representatives to work with housing counselors to avoid foreclosure.

Buying a house can be a daunting and confusing process. That's why housing counselors are so important. Consumers must be educated. Often homeowners don't carefully read their contracts; some don't read them at all. The key is to be able to read and understand the fine print, and also to know when to ask for help. At a summit I convened earlier this year, there was testimony that half of all homeowners facing foreclosure were afraid to contact their lender for help. We also learned that, while most people facing foreclosure are afraid of their banks, they are much more open to talking to a local non-profit counseling agency about their problems.

There are 2,300 HUD-approved housing counselors in the United States. The President has increased funding for housing counseling by 200 percent since assuming office, and earlier this month I announced more than $44 million in new housing counseling grants to over 400 state and local efforts. The President wants even more money for housing counseling, asking for some $50 million in his new budget.

I have also directed FHA to pro-actively do as much as possible to help homeowners. By working within our current regulatory authority, FHA has already provided refinancing options to tens of thousands of homeowners who were eligible and faced foreclosure under their current non-FHA-backed loan.

Let me give you an example. The Philadelphia Inquirer (August 26, 2007) recently wrote about a typical starter couple: he was a science teacher in a local high school; she was just starting a career. They were ready to graduate from a CD player to a condo, considering various loan options. The newspaper termed their options "exotic." I think we know what that means: bad, unaffordable subprime loans that looked good at first but with devastating resets later on. The couple received wise advice from both sets of parents: avoid exotic loans you can't afford. That was good advice - sometimes parents do know a thing or two, especially parents who remember the purpose and mission of FHA. The parents said: Go FHA. And the couple did.

We need to make FHA more available for qualifying families. The President this summer announced a new initiative that builds on our previous work. It is called "FHASecure." Under "FHASecure," borrowers who are otherwise creditworthy, but who have recently become delinquent on their mortgage, would now be able to get an FHA-backed loan. So, families with an otherwise strong credit history, but in default because of the reset in their mortgage rate, will get help.

The President's action is a positive step that we immediately implemented. Through "FHA Secure," we estimate we can help an additional 80,000 delinquent yet credit-worthy borrowers re-finance into a safer FHA loan. This is in addition to the 160,000 non-delinquent borrowers we already expect to help next year, as the sub-prime market continues to unwind. This would bring the total of new borrowers assisted through FHA's existing re-finance program and "FHA Secure" to 240,000 next year. These are not just statistics...these are people who would have lost their homes without efforts to provide affordable refinancing options.

But we need more than that. We have exhausted our own administrative actions...we need legislation to help even more people. So, the President has also pushed Congress for FHA Modernization. I have mentioned this in previous discussions with you...discussions going back years, long before the subprime mess.

The President wants FHA to return to its original role, which was to help bring stability to the real estate market. This will help break the cycle of foreclosure and price depreciation, and bring much-needed liquidity to a mortgage market that has quickly become constricted. With new legislation, refis and other FHA products, we will be able to help almost 800,000 people next year buy and keep their homes.

Each day of delay unnecessarily places thousands of families at risk of foreclosure. The House of Representatives has passed a version of the President's request twice (last year and this year). I am hopeful the Senate will take it up soon.

I know you agree. You have independently advocated this legislation. Thanks for your help.

As we work together to create stability and greater strength in the housing market, let us always remember the human side of homeownership.

I think that's something our next speaker would fervently agree with.

Thank you.

NOTE: To read the Press Release,visit


Content Archived: December 27, 2011