Mortgage bankers say regulations are hurting them more than their helping the economy and local communities, said Rodrigo Lopez, 2017 Mortgage Bankers Association (MBA) Chairman and Executive Chairman of NorthMarq Capital, at the MBA’s annual conference in San Diego this week.
For example, Lopez said, the core purpose of the Home Mortgage Disclosure Act — or HMDA — is to mandate reporting on consumer lending, rather than business-to-business lending on commercial and multifamily real estate. “The recently expanded HMDA rule, however,” he said, “imposes considerable reporting obligations on a wide range of institutions that provide capital for multifamily real estate assets.”
This regulatory expansion arguably presents significant concerns across the commercial/multifamily sector, without delivering a corresponding public policy benefit, Lopez said.
Other regulations present challenges because they are developed in isolation within bureaucratic silos that end up having unintended effects across markets, he said.
“Regulatory capital requirements, including those advanced by the Basel Committee on Banking Supervision, have led to uncertainty in balance sheet lending, as well as construction lending under the High Volatility Commercial Real Estate rules,” Lopez said. “Similarly, for some life insurance companies, additional federal regulations could be layered on top of the long established state regulations already in effect.”
Lopez urged government leaders not be to impose more and more regulation, but instead to strike the right balance that allows mortgage bankers to best serve customers and grow the global economy.
“With the Trump Administration's focus on the global economy, MBA will be leading one voice in driving the flow of capital,” Lopez said. “As I said, striking a regulatory balance will be key, and we must continue to strengthen all the capital sources and those who link us to our borrowers in the commercial/multifamily real estate marketplace.”