MBA-CREF Convention (Day 2): Three Perspectives; Wish List Points to a Slow 2010
One take-away for me from the second day of the convention is this: while the three different perspectives (below) point to 2010 being a better or different year than 2009, it will be far from “normal” (when compared to 1994-2004).
The Mortgage Banker: relieved
The general sense or mood of the mortgage bankers is that 2010 will be much, much, better than the train wreck of 2009 – a year of almost no new financings closed. Finally, some mortgage production. And a sense that “we made it.” And thankful for the possibility of having some meaningful work.
The Life Company Lender: guarded
On the other hand, the message from the life company lenders is that since corporate spreads are so low (when compared to the spreads of a year ago), they will be lending this year. Their target, however, is the best borrowers and on the best property (with great DSC, LTV, etc.). And they admit that some percentage of their 2010 loan origination will be devoted to refinancing (extending) loans currently in their portfolio.
The MBA Staffer: focused on the Hill
The MBA is focused on better serving its members, as evidenced by a reorganization of its committees into various “councils” centered on its membership. But more importantly, it is focused on the US Congress and the Obama Administration.
It seems that the discussion in almost every panel returns to public policy, or financial reform.
Take a look at the MBA’s 2010 public policy priorities:
- Financial crisis responsibility fee
- Risk retention (“CMBS 2.0”)
- REMIC rule reform (“CMBS 2.0”)
- Rating agency reform (“CMBS 2.0”)
- Risk-based capital for CMBS under FAS 166 & 167 ("CMBS 2.0")
- TALF CMBS extension
- FDIC legacy loan program
- GSE restructuring (the “new” Freddie & Fannie Mae)
- FHA modernization
- FHA multi-family loan limits
- Low Income Housing Tax Credit
- Funding for rental assistance
- Life Insurance Company risk-based capital
- Covered Bonds
- Carried interest
NOT a short list!
The “real” focus on the MBA is as it should be – on the Hill. Unfortunately, the mid-term Congressional elections effectively will inhibit the passage of new legislation starting this August. So, the window for addressing these priorities is quickly closing.
The next time you hear the phrase “financial reform,” think of this long list – and the August finish line.
My Bottom Line: low expectations
No doubt, a lasting recovery for the credit market will hinge on jobs and consumer confidence.
However, just looking at the long, long, long list of public policy priorities tells me that we are a couple of years away from returning to the new “normal” – effectuating changes like this will take time. My prediction is that only a few items on this list will be realized in 2010.
Seriously, does that look like a “quick fix” list to you?
If you have any questions or comments, or your own perspective, please post a comment.
