Incoming VP of Trade Group Puts Congress Atop His Agenda

RALEIGH, N.C. - Technology is the most competitive arena in the mortgage industry, said Marc Smith, president and chief executive of Crestar Mortgage, Richmond, Va. But he quickly added that it remains to be seen whether a computer-driven approach to mortgage banking can live up to its promise.

Mr. Smith addressed the opening session of the Eastern Secondary Mortgage Market Conference here. He will become vice president of the Mortgage Bankers Association of America next month, but he was already pinch-hitting for Joe Pickett, who will be departing as MBA president.

Despite the push toward automation, Mr. Smith said he still sees a place for a loan officer who can offer the advice and education most borrowers need and want before making what is likely to be the largest purchase of their lives.

Mr. Smith, bespectacled and soft-spoken, paused often during a conversation after his speech and chose his words carefully. From technology, he turned to what he thought his major tasks at the MBA would be.

"Our biggest agenda item over the next few years will be misguided legislation," he said, citing as an example that Congress is considering cutting back some Federal Housing Administration mortgage insurance coverage.

While Mr. Smith concedes that the FHA program is not perfect, he says it has a sound base.

The possible shrinking or elimination of the mortgage interest deduction is another congressional idea that has Mr. Smith worried. "The deduction is embedded in housing values," he said. "And if it is eliminated, housing values will decrease relative to other values."

What Mr. Smith referred to as a "doomsday scenario" is some combination of eliminating all or some of FHA-insured loans and the elimination of all or some of the interest-rate deductions.

"It is no accident that Americans are the best-housed people on earth," he said.

Mr. Smith said he would use his position in the MBA to continue lobbying and education efforts in Washington on behalf of mortgage bankers and homeowners.

Gregory T. Barmore, chairman and chief executive of Raleigh-based GE Capital Corp., spoke at the conference about credit scoring for mortgage applications.

Mr. Barmore said that an accurate credit scoring system, which he called "mortgage scoring," would help lenders create profitable pools for investors, and this in turn would ensure that customers have access to products that will help them buy a home.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER