The president of Fannie Mae used an international real estate conference here as a forum to challenge American mortgage bankers to look abroad for new growth.
"The foreign markets are too big to be left as untouched as they have been," Lawrence M. Small told the Mortgage Bankers Association of America conference.
Mr. Small said the world's population is growing by about 80 million a year and the nations with the greatest growth potential-in Africa, Latin America, and Asia-are often the ones with the most need for mortgage banking expertise.
"You can choose to be either a spectator or a player," Mr. Small said.
About 200 mortgage bankers attended, including representatives of large U.S. lenders.
John A. Nash, president of Irwin Financial, the parent of Inland Mortgage, said he wanted to broaden his knowledge of foreign mortgage markets, particularly those in Latin America. Mr. Nash, who is also chairman of Columbus, Ind.-based Inland, said it already has a modest mortgage banking business in Mexico and is looking to expand it.
Robert W. Berta Jr., senior vice president-public relations at the nation's second-largest mortgage originator, Countrywide Credit Industries, Calabasas, Calif., said he too wanted to explore international lending.
For many U.S. retailers and consumer products companies, doing business in foreign countries offers the greatest potential for profit growth. Mr. Small said it was "totally conceivable" that some U.S. mortgage banks would follow the example of companies like Wal-Mart and Coca-Cola and go truly global.
But it was clear that U.S. mortgage bankers are still struggling to formulate plans for tackling international markets. When Mr. Small asked how many members had operations in more than five countries, only a few raised their hands.
Mr. Small has extensive international banking experience, having worked at Citicorp for 27 years before joining Fannie Mae in 1991. He said lenders must be aware of the unique characteristics of each foreign market. Even the industrialized nations have vastly different mortgage markets from that in the United States, he noted.
Mr. Small said, for example, that Denmark is the only nation other than the United States with a housing finance system that emphasizes 30-year, fixed-rate mortgages and loan-to-value ratios higher than 75%.