Herbert B. Tasker takes over this week as president of the Mortgage Bankers Association as polls indicate the election of a Democratic administration and of a Democratic Congress with a record number of new members. In an interview with The Mortgage Marketplace, Tasker says he anticipates the newcomers to press strongly for additional regulation over business, a move the MBA will oppose. Tasker is president of the All Pacific Mortgage Co. of Concord, Calif.
MMP: What are your priorities for your year in the MBA presidency?
Tasker: Well, my concern for the rest of '92 and '93 is Congress and what will probably be a new administration.
There will be up to 150 new members of the House and Senate, a new president and a new cabinet. I think among the new people are going to be a lot of 'reformers,' who will push for more regulations on business. They're also going to try to push more of the cost of government down into the private sector, We will resist it.
My goal, or methodology. for trying to keep the association and our membership from being regulated out of business is to try to increase the professionalism within our own companies. as well as seek out 500 new members for the MBA. We will push professionalism because I think this is an era of consumerism and we must be more effective in our business practices to avoid excessive regulation by a new Congress.
MMP: How will you produce that professionalism?
Tasker: The staff of MBA has gone through and developed a number of key steps to address professionalism. One of the things we are working on now is a total quality management program. It's designed to focus on customer service, on better communications within the association, as well as with our customers, our membership and in our lobbying effort. MBA's schools. seminars and periodicals are the best in the country. and this year we will seek greater attendance and participation from the staffs of our member firms. We are actively bridging the gap between state and local mortgage banker associations through a new affiliation program.
MMP: Are you going to make an effort with the mortgage brokers? You had a bit of a tiff with them earlier this year when they put out that study claiming they originate more mortgages than any other segment of the industry. I know there are some mortgage broker members of MBA. Do you see that industry as a large potential source of new membership for the MBA?
Tasker: We want to be the voice of real estate in Washington. Brokers are closely tied to mortgage bankers. We all do basically the same thing. We want to better represent their picture as well as represent our picture. You get people confused when you're on Capitol Hill and you're playing two different tunes. In the existing MBA. we have many brokers who are members. and we intend to extend that to more brokers by developing a wholesale committee. by being more responsive to their needs. Sure. there are going to be differences as we go through the years. but we want to overcome those differences and stress the advantages of working together. We have a very successful campaign going on right now. We intend to put more emphasis on it in terms of lowering dues and initiation fees and we're starting to get them more involved in MBA activities.
MMP: What is your total membership now?
Tasker: We're at right around 2,300 member firms. with about 177,000 employees. We've turned things around and are gaining more members than we're losing.
MMP: What do you expect from a Clinton administration on housing?
Tasker: I don't think I can say whether Bill Clinton is pro-housing or against housing. I would generalize that. with a Democratic administration. housing probably will have greater prominence than it has had in the last 12 years under Reagan and Bush. So we have hope that the Democrats will strengthen HUD and we'll be able to get some housing programs enacted. I think it can be positive
MMP: If President Bush signs the housing bill. we will get a new regulatory regime for Fannie Mac and Freddie Mac. What are MBA's priorities for the new regulator?
Tasker: I think everybody in our association is in favor of fiscal policy that does not place at risk the taxpayer or the government. We support capital adequacy. I think the thing we probably fear is the potential of going too far in the other direction, to where it's not capital adequacy, but overkill, and Fannie Mae and Freddie Mac become unable to offer programs because the regulator is so fearful of his or her own shadow. I feel Fannie and Freddie both have been moving toward capital adequacy and have enough reserves. I feel they're conservative in their programs, so there's minimal risk to the American taxpayer.
MMP: The banking and thrift industries complain that over-regulation is happening to them.
Tasker: One thing the MBA would ask Bill Clinton and Al Gore is to get the regulators off the banks before they sink the country. The regulators are so reactive that banks are now liquidating good properties just because the regulators are stepping in and exerting too much control. They have to stop that. Banks should be able to lend to creditworthy customers in order to get the economy started again. And now we see good builders faced with going under because they are forced to liquidate valuable properties at 20 cents on the dollar. This will drive down the real estate market even further. This disturbing trend must be reversed.
MMP: You had a pretty good year getting changes in the FHA programs you wanted. The mortgage insurers have traditionally taken a different position from you and the basic argument comes down to whether the safety of the insurance fund is threatened. Do you see that tension continuing or do you see in a Democratic administration that there will somehow be a resolution of that tension?
Tasker: Well, I don't see a total resolution of the tension. I think some of that is built into the system. In some ways it is healthy competition. But I think even mortgage insurance companies would admit that they went too far in influencing the administration on some of the cuts in HUD. The private mortgage insurance companies don't want to insure the inner city small loans. Private insurance companies pulled out of Houston. They pulled out of Alaska. The taxpayer is concerned about housing and doesn't want to see lenders able to pull out of markets when things get tough. That's when people need housing. HUD doesn't pull out of markets.
The challenge is to keep from making HUD the lender of last resort by limiting it to only the smaller, more difficult inner-city loans with the greater credit risk. In order to keep the Mutual Mortgage Insurance Fund viable. HUD needs a wider cross-section of loans. The higher loan amounts recently approved in the HUD appropriations bill will partially resolve this problem. This will help HUD continue to make mortgage credit available to first-time home buyers and lower-income families.
MMP: Some critics, even some low-income housing advocates, have said there has been too much easing of lending standards in some cases because borrowers couldn't carry the burden and inner cities were left with a lot of empty houses. What is your view?
Tasker: I think there is some relevance to that criticism. I think it does occur where people psychologically and economically are not ready for housing. I don't think you can put everybody in a house. Some people are just not capable of managing their finances to make payments on a regular basis. I think this is where the mortgage bankers and the banks and all lenders need to look at the housing process and inner city loan counseling so the low-income borrowers will be helped to manage money.
MMP: The Home Mortgage Disclosure Act figures will be out soon and they are expected to show a continuing pattern of racial and ethnic discrimination. Do you plan any monitoring to see if the actions the MBA has proposed. and have embarked upon, to eliminate discrimination are getting at the problem?
Tasker: We have had a HMDA task force for the last year. This task force has developed a HMDA educational seminar, which the MBA will conduct across the country early next year.
I think we need to be proactive. We need to go into our communities, and seek out the minorities and low-income borrowers and try and help them get housing. And with that in mind, we've established in my company a program to train our loan officers to seek out opportunities, to become proactive so we can try and bring more lower-income people into housing.