One year ago, the Community Mortgage Lenders Association merged with the Community Home Lenders of America, creating the Community Home Lenders of America.
What have we learned from the last year? First, there is a critical need for a national trade group that distinctly and vigorously advocates for the interests of small and mid-sized independent mortgage banks.
When Silicon Valley Bank imploded, certain parties in Washington re-doubled their efforts to engage in scaremongering Washington policy makers about the alleged significant taxpayer “risks” of IMBs. This allegation is unfounded – but these types of claims can have consequences, they can’t go unchallenged.
So, CHLA promptly released a report decisively rebutting the overhyped claims of IMB risk, documenting the “ubiquity” of both financial and consumer regulations on IMBs, and explaining how regulatory overreach could undermine the availability of affordable mortgages precisely at a time when homeownership challenges are rising because both mortgage rates and home prices are rising.
We have learned (or reaffirmed) that there is a critical need for an association that continues to educate Congress and federal agencies about the key role of IMBs in access to mortgage credit, leading the market in originating loans for minority, underserved, and first-time homebuyers.
Last October, CHLA continued the practice of releasing an annual “CHLA IMB Report.” This report explains what IMBs are, uses statistics to show the growing mortgage market dominance of IMBs (e.g., IMBs originate 90% of FHA and VA loans), and highlights the key issues for IMBs, along with practical policy recommendations.
We have learned that a larger organization means more resources, more member expertise, and a diversity of opinion that strengthens our advocacy efforts. CHLA and CMLA had represented slightly different arcs of the market for smaller lenders. The combined group gives us more breadth, ranging from the smallest IMBs to much larger mid-sized IMBs that securitize FHA, VA, and GSE loans
On behalf of small correspondent lenders, for example, CHLA has advocated for a Ginnie Mae cash window and a proposal to make aggregators more accountable to correspondent lenders in challenging GSE repurchase requests. Large mortgage lenders often have their own lobbyists in Washington or an outsize role in trade groups. So CHLA sees vigorous advocacy on behalf of smaller IMB lenders as an essential part of our mission.
We have learned that a larger organization translates into significantly greater policy successes. Key priorities that CHLA has been an acknowledged leader on came to fruition this last year – including an FHA premium cut, a number of much appreciated flexibility provisions related to Ginnie Mae pooling, and divestitures by ICE in response to CHLA criticism and FTC opposition to their purchase of Black Knight (although our push to fight abuses continues).
We learned (or reaffirmed) that having a bottom-up, member-centric trade group makes it easier to set priorities and take actions that reflect what matters most to community-based IMBs. Many initiatives CHLA pursued this last year were issues that Members suggested on our weekly calls. These resulted in CHLA proposals to reign in abusive trigger leads, to fight FICO’s 400% discriminatory fee hike and to develop proposals to recruit more minority and underserved loan originators (the best way to help IMBs do an even better job of serving those borrowers).
Finally, we have learned (or reaffirmed) that a trade group does not just have to reflexively advocate for special interest provisions for their members, but also has a vested interest in consumer protections.
Consumer confidence in the mortgage process is critical to the success of mortgage lenders and the right thing to focus on. So, CHLA recently released its “Consumer Bill of Mortgage Rights,” identifying seven critical gaps on mortgage consumer protections.
These include universal licensing of all loan originators, reigning in trigger leads, rolling back the FICO credit score hikes, consumer protections for dual compensation, and FHA ending their Life of Loan premium policy.
We can’t wait for the next year. And any IMB that likes what we are doing, give us a call, join our mission.