by Brian Brady
Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL
“Plus ça change, plus c’est la même chose“- Jean-Baptiste Alphonse Carr, 1849
Hat tip to Matt Graham and Adam Quinones of Mortgage News Daily
You gotta hand it to the powerful Mortgage Bankers Association of America (MBAA). What they lack in imagination, they make up for in chutzpah. The MBAA released its report “Recomendations for Future Government Role in the Core Secondary Mortgage Market“. This six page report (the other six pages are pictures and such) essentially suggests that the Federal Government charter “Mortgage Credit Guarantor Entities” (MCGE) with a mission to purchase whole loans from originators and issue securities for purchase by investors.
These MCGE’s will be different from the existing GSE’s inasmuch as they:
- require originators to retain 5% of the risk of the underlying loan values in the form of “set aside” capital
- will be subject to “strong and effective regulatory oversight”
- will only guarantee “core” mortgage products (30 and 15 year fixed rate loans)
- will issue securities with the “explicit” guarantee of the full faith and credit of the United States Treasury rather than the former “implicit” guarantee
The MBAA did recommend that the existing infrastructure of the “outdated” GSEs be used to establish new MCGEs. It recommends that initially, the number of MCGEs to be established should be…
two or three.
As I’ve said before, I criticize too much. As a taxpayer, I should be outraged but as a mortgage banker, I’m keeping my mouth shut;
I want to be President of Manny Fae before I retire.
PS: Read the whole report here. Pages 5-10 are the meat of the proposal with lots of pretty pictures and footnotes on the other pages.
PPS: Look for the more powerful National Association of REALTORs (NAR) to offer immediate support for and pledge lobbying efforts for the establishment of MCGEs
Genuine Chris Johnson says:
One of the biggest insults that I ever got when I was a licensed Realtor® was the notion that I would support all that they did because it benefited me personally . I didn’t like the forced membership, licensure, or any of the anti consumer bullshit that the NAR foisted upon us. I didn’t like the dues.
Stealing that benefits me is still stealing.
I did benefit from these things, but not as much as I was harmed by all of the other organizations that also took bites out of the pie.
It seems that you know that this is a bad thing, and have roughly the same attitude that I did.
September 2, 2009 — 8:27 am
Brian Brady says:
“It seems that you know that this is a bad thing, and have roughly the same attitude that I did.”
No comment; I’m thinking stock options. If these things go in 35-40 year cycles, I should be retiring at the height of Manny Fae’s success.
September 2, 2009 — 8:41 am
Matt Graham says:
Thanks B. For the record, I’m only the half of the brain that wrote about it this AM. AQ (Adam Quinones) deserves the true hat-tip.
September 2, 2009 — 8:44 am
Sean Purcell says:
MBAA – “In summary: with a little perfume and a liberal application of lipstick… we have a completely new and different pig.”
September 2, 2009 — 10:16 am
Al Lorenz says:
Things like this make me want to move into the woods and not be involved in any of these industries. That’s right, at least I know where I can get some great woods so there’s some benefit to being in this biz.
September 2, 2009 — 8:03 pm
Brian Brady says:
“Thanks B. For the record, I’m only the half of the brain that wrote about it”
What you and Adam Quinones are doing, over at MND, is remarkable. I enrolled as a Platinum member and contribute there because of the incredible information you’re providing for free.
Inman News should consider Mortgage News Daily’s MBS blog for Most Innovative Blog. The information that used to cost originators $50-99/month is now free because of Graham, Quinones, et al.
September 2, 2009 — 9:36 pm
Barry Cunningham says:
“Inman News should consider Mortgage News Daily’s MBS blog for Most Innovative Blog”
But that would mean that they actually do seek out innovative blogs…which by what I can tell is a very short bus..umm.. I mean list.
September 2, 2009 — 10:56 pm