Why Are We Still Listening to the MBA?
January 26, 2009
With many predicting millions of foreclosures still to come, many are embracing the access to bankruptcy courts to modify failing mortgages as a significant solution to the current crisis. Yet, the Mortgage Bankers Association (MBA) recently announced its opposition to this solution, claiming it will have a “destabilizing effect” on the mortgage market. Then again, these are the same people who for years claimed that subprime lending was sound and that there was no foreclosure crisis coming. Can we still afford to listen to their advice and let them lobby against common sense solutions?
Below are some examples of public statements by the Mortgage Bankers Association concerning subprime mortgage lending and its likely impact on the economy:
MBA in 2008: Congress Has Already Done Enough to Address the Foreclosure Crisis
MBA in 2007: Subprime Foreclosures Will Have No spillover Into the US Economy
“We don’t believe it will spill over into the prime market or theU.S.economy.” (Laura Armstrong, VP Public Affairs, MBA, March 28, 2007).
MBA in 2006: Subprime Lending Is Sound
“Our simple message is that the mortgage market works and the data demonstrate that fact.” Id.
“MBA expects modest increases in delinquency and foreclosure rates in the quarters ahead.” Id.
2004: Consumer Debt Won’t Cause A Recession
“We don't expect the current level of consumer debt to cause a recession nor to slow the recovery. In fact, consumers seem quite healthy from a financial perspective to us, having just restructured their balance sheets through a massive volume of mortgage refinance activity.” (Doug Duncan, MBA Chief Economist, Jan. 27, 2004).[iv]
[i] Statement of David G. Kittle, CMB Chairman-elect, MBA, before the House Judiciary Committee, Subcommittee on Commercial and Administrative Affairs Hearing on “Growing Foreclosure Crisis: Identifying Solutions and Dispelling Myths” (Jan. 29, 2008) at 12.
[ii] Statement of John M. Robbins, CMB, Chairman, Mortgage Bankers Association at the National Press Club's Newsmakers Lunch –Washington,DC (May 22, 2007).
[iii] Statement of Robert D. Broeksmit, CMB Chairman, Residential Board of Governors Mortgage Bankers Association Before a Joint Hearing of the Subcommittee on Housing and Transportation and the Subcommittee on Economic Policy U.S. Senate Committee on Banking, Housing and Urban Affairs “Calculated Risk: Assessing Non-Traditional Mortgage Products” September 20, 2006.
[iv] Commentary: The death of the consumer is greatly exaggerated by Doug Duncan, senior staff vice president/chief economist at the Mortgage Bankers Association of America, for Bankrate.com, January 27, 2004.
More straight answers: subprime mortgage |