Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit took the Biden administration to task for housing policies that he considered unwise and onerous.
In remarks delivered today before the MBA’s 2024 Commercial/Multifamily Convention and Expo, Broeksmit questioned how the administration was approaching the subject of affordable housing. He recalled how “last year, I argued against rent control in the White House, just outside the Oval Office. And I told senior White House staff that we’re ready to do more on affordable housing. We just need Washington to get out of the way.”
Although the White House has not made rent control part of its policy line-up, Broeksmit lamented that “government officials and agencies continue to face pressure to enact this foolish policy, under the guise of ‘tenants’ rights.’ Yet as any economist will tell you, no one will suffer more from rent control than tenants. The evidence is clear: rent control leads to lower-quality rental properties, and fewer properties, too.”
“By our estimates, if rent control were required by Fannie Mae and Freddie Mac, it would eliminate half of all multifamily financing in America – that’s right, half,” he continued. “It would be a disaster, especially for low-income families and young people just getting started in their careers.”
Broeksmit added the MBA advocated for zoning and permitting reform as solutions to fight rent increases, which is the solution that Washington does not eagerly embrace.
“The White House, Congress, federal agencies – they all say they want more affordable housing, and they want it now. But oftentimes, they’re the ones blocking you from delivering it.”
Broeksmit also called out how the Federal Housing Administration (FHA) is operating under the Biden administration.
“There is no good reason FHA should be one of the most expensive places to produce a loan – it should be one of the least expensive,” he said.
Broeksmit faulted the Department of Housing and Urban Development (HUD) for failing to increase the deductible on wind/named storm insurance from 1%.
“They announced they would change this policy at this very conference last year, but we still haven’t seen it,” he said. “It never should have taken this long, particularly as everyone acknowledges the widespread disruption caused by soaring insurance premiums and reduced availability of coverage.”
Pointing to Biden’s announced plans last October to crack down on “junk fees” to consumers, Broeksmit proposed that plan should be applied to the administration’s housing policies.
“For that matter, HUD needs to reduce or eliminate its own unnecessary and duplicative fees,” he said. “There are more than 20 fees at FHA alone. The administration should start by ending the junk fees at FHA.”
Another issue being held up for criticism was the Mortgage Insurance Premium.
“Our members tell us that $177 billion (with a B) of FHA multifamily loans originated from fiscal year 2011 through 2022 have paid FHA in excess of $3.8 billion (with a B) in premiums,” Broeksmit stated. “Among all those loans, only seven, with an original balance of $28 million (with an M), have led to filed claims. Clearly, the premium rate far outweighs the risk to the taxpayer.”
Broeksmit offered praise for the work of FHA Commissioner Julia Gordon and lamented that she deserved more support from the White House.
“FHA and HUD need the administration to take off the brakes, so we can finally move affordable housing into high gear,” he said.
