National Association of Mortgage Brokers
April 2, 2001
Remarks prepared for delivery by
HUD Secretary Mel Martinez
Thank you Kay Kinney for your kind introduction and thank you for
inviting me to talk about the issues that are vital to the National
Association of Mortgage Brokers, to the housing industry, and to
the Department. I appreciate the opportunity to tell you where I'd
like to lead the Department in the coming years, and how we all
can do a better job for the American people.
As you may know, I'm new to Washington. My family and I moved here
from Florida in January. It's been a slightly ironic experience - for the past few months a good part of what I've been doing has been analyzing affordable housing and home ownership policies, talking
with groups like yours about home ownership and affordable housing
- and here I was - the new HUD Secretary - living in a tiny apartment
because my wife Kitty and I hadn't found a house we felt we could
While that's over - last week, we became the proud owners
of a home here in Virginia - I have a deeper understanding of the
problems faced by so many other families who try to match a monthly
paycheck with the cost of a safe and decent home.
I know you understand the problem, too. Today in America, mortgage
brokers play a key role in the homebuying/home lending industry,
originating over half of the mortgages made each year. You provide
an important service and you help make the dream of home-ownership
a reality for millions of American families.
Home-ownership is the core mission of the Department of Housing
and Urban Development. Home-ownership builds wealth, pride, and
prosperity for families and communities. It's the key to the American
Dream, and President Bush and I are committed to making that dream
an affordable reality for many, many more Americans.
The nation has seen ten years of economic growth, and the overall
home-ownership rate in this country is nearly 70 percent. However,
home-ownership rates for African Americans and Hispanics are under
50 percent, and that's not acceptable.
We can do a better job, and must work - and work hard - to close
That's one reason why President Bush has proposed the "American
Dream Down Payment Fund" as part of his budget. It helps 130,000
families clear the most significant hurdle to home-ownership - putting
together a down-payment.
It's been easy for people in the past to talk about making home-ownership
a reality, but make no mistake, President Bush is doing something
President Bush has also proposed his "Renewing the Dream Tax Credit."
This investor-based tax credit will encourage developers and non-profit
organizations to build new single-family affordable houses or rehabilitate
already existing ones.
It will help bridge the gap between development costs and market
prices and expand opportunities for low-income home-buyers. We estimate
that within 5 years, at least 100,000 homes will be built or rehabilitated
under this plan and be available for purchase by low-income households.
As I mentioned earlier, my wife Kitty and I are proud new homeowners.
But it's been a while since we last bought a house, so we were reminded
about the amount of paperwork that was involved in the process.
The process is simply too long. It involves too many forms. I would
like to see those few forms that are required under RESPA simplified
so that home-buyers can better understand the closing costs. You
should not have to be a lawyer and the Secretary of HUD to figure
out this process!
I am currently in the process of reviewing the report on mortgage
reform that HUD and the Federal Reserve released in 1998. I am also
eager to see what kind of consensus members of Congress reach regarding
I know that Congressmen Bob Barr and Bob Ney, two senior members
of the House Financial Services Committee, are speaking to you today
as well. I want to work with both of these men and others in Congress
to enact meaningful mortgage reform.
In the process of working on reform, I pledge to work with the
NAMB and other industry and consumer groups. . . .
Let me take a minute to talk about another aspect of the mortgage
process that is hurting some men and women who desperately want
to pay their bills and keep their homes. . . . I'm talking about
I realize that all of you are dedicated professionals who want
to help Americans achieve the dream of home-ownership. However,
there are a small number in the lending industry who choose to prey
on the most vulnerable in our society. They make loans- unaffordable
loans - with the terms stacked against the borrower. Tragically,
these loans may ultimately lead to foreclosure.
These dishonorable practices have a vicious effect on our society.
They deprive hard-working people of the most important possession
in their lives. . . . and dash their dreams. And they sap the wealth
out of communities and neighborhoods that are in desperate need
of stability, equity, and capital.
Let me assure you - I know that there is a legitimate role for
the sub-prime lender. Clearly there are Americans who have less-than-satisfactory
credit, but who nevertheless need access to credit to realize the
dream of home-ownership. For those individuals, the sub-prime market
is a necessity to open the doors of opportunity.
But sub-prime lending is not predatory lending. . . .
I am aware of the recommendations in last year's study on predatory
lending by HUD and the Treasury Department. I want to work with
HUD's partners on a comprehensive approach that strikes at the heart
of the problem of predatory lending.
For instance, I would like to see initiatives that focus on consumer
education so that citizens, particularly in distressed communities,
have the information that will allow them to avoid being victimized
by unscrupulous lenders.
Above all, I want to make sure that we do not put any additional
hurdles in the way of hard-working Americans who are striving mightily
to maintain their standing as homeowners and obtain much-needed
The President has shown great confidence in the Department of
Housing and Urban Development by increasing our budget by almost
7 percent this year. But with this comes the responsibility to manage
our money wisely. HUD must - and will - become a good steward of
its resources. As HUD Secretary, I have made improving the management
of this Department a top priority of my first year.
HUD must get its own house in order.
Candidly, HUD too often has suffered from mismanagement and a
loss of focus. It has experienced a "mission creep" over the past
decades that ballooned the number of programs from 50 to over 300!
Providing overlapping or redundant services does nothing more than
add another layer of bureaucracy. It does very little to solve the
problems faced by low- and moderate-income families and struggling
neighborhoods. This is a waste of taxpayer dollars, as well as a
waste of the time and energy of our employees.
Back when I was the County Executive of Orange County, Florida,
I was a consumer of HUD services. I know that mismanagement and
a lack of responsiveness prevented HUD from realizing its full potential
in helping more families in need. This needs to change.
For instance, if we are to do something about the crisis in affordable
housing, this Department needs to be more responsive to developers
seeking to build multi-family projects. We need to be quick with
an answer, instead of being quick to pile on more red tape. . .
Once we have put our house in order, we can more effectively implement
our agenda at HUD and make the Department a better partner to mortgage
brokers and other groups and organizations who share our mission.
While I'm here, let me also put in a plug for the President's tax
plan. Tax relief is simple common sense. It rewards hard work, instead
of punishing it. Tax relief will give the economy a much-needed
Under the President's plan, everyone who pays taxes is going to
receive a tax break.
The President's tax relief plan will allow American families to
keep more of their money to meet their priorities. That means that
the average American family will get to keep 1,600 dollars more
each year. This is money that can be put toward the down payment
on a new home.
We hear a lot about how tax relief will benefit the wealthy, but
let me tell you how this tax benefits working families. The current
tax code punishes those who are working hard and struggling to make
it into the middle class.
Under the President's plan, the bottom tax rate will be cut from
15 percent to 10 percent and the per-child tax credit will be doubled.
In effect this means that 6 million taxpaying families will be taken
off the tax rolls.
Now is the time for tax relief. The President firmly believes
that Americans need tax relief and Americans deserve tax relief.
And most Americans agree with him.
You know, it's only fair that we let families keep more of their
own money. After all, it was their hard work that created the budget
surplus in the first place.
Let me assure you that as Secretary I will be responsive to the
people this Department serves-whether they be home buyers or lenders,
tenants or developers. We will keep you updated and informed about
changes that affect your business.
I want to hear your ideas and work together with you and all of
the other organizations out there that are working to expand home-ownership
opportunities for American families.
I recognize and applaud the role that mortgage brokers play in
making the promise of the American Dream a reality for all Americans.
And in the coming years I hope to continue and strengthen our relationship
Content Archived: March 11, 2010