Posts

MBA President And CEO Calls For GSE Reform

David H. Stevens, CMB, President and CEO of the Mortgage Bankers Association (MBA), testified before the U.S. Senate Committee on Banking, Housing, and Urban Affairs at a hearing entitled, “Principles of Housing Finance Reform.” His full written testimony is available here. Below is Stevens’ oral testimony, as prepared for delivery:

Chairman Crapo, Ranking Member Brown, and members of the Committee, thank you for the opportunity to testify today.

Featured Sponsors:

 

 
It has been nearly nine years since the GSEs entered conservatorship, and yet their long-term status remains unresolved. The financial crisis exposed the structural conflicts and misaligned incentives in the GSE business model, as well as weaknesses in the regulatory framework that was in place at the time.

Extended conservatorship is economically and politically unsustainable and an unacceptable long-term outcome. Without comprehensive reform, borrowers, taxpayers, and lenders will all face increased risk and uncertainty about the future.

Featured Sponsors:

 
Because MBA represents over 2,300 member firms of all sizes, both single-family and commercial/multifamily, including nearly 650 small, community-based mortgage lenders, we firmly believe that housing finance reform must foster a competitive primary market that is served by a diverse cross section of lending institutions.

A year ago, MBA convened a Task Force for a Future Secondary Mortgage Market. The Task Force reflected the composition of MBA’s membership, residential and multifamily, from integrated financial institutions to the smallest community lenders. Our Task Force truly represented the full depth and breadth of the entire real estate finance industry rather than the narrow interest of any one specific market segment.

Featured Sponsors:

 
Our proposal seeks to ensure equitable access for smaller lenders to the secondary market: prohibiting special pricing and underwriting based on loan volume as occurred prior to conservatorship, preserving cash window and small pool execution options, and preventing vertical integration by the largest market participants.

I have submitted our proposal as part of my written testimony.

Our proposal recognizes the need for any comprehensive GSE reform plan to balance three major priorities: taxpayer protection, investor returns, and consumer cost and access to credit.

To achieve these policy objectives, MBA’s plan recommends recasting the GSEs’ current charters and allowing a multiple-Guarantor model that features at least two entities and preferably more.

Guarantors would be monoline, regulated utilities owned by private shareholders, operating in the single-family and multifamily markets. The core justification for utility-style regulation rests with the premise that privately-owned utilities attract patient capital and derive much of their existence and powers from the state.

The Guarantors would be subject to rigorous capital requirements that would provide financial stability without unduly raising the cost of credit for borrowers. These requirements could be satisfied through a combination of their own captial and proven means of credit risk transfer.

The implied government guarantee of Fannie Mae and Freddie Mac would be replaced with an explicit guarantee at the mortage-backed security level only. This guarantee would be supported by a federal insurance fund with appropriately-priced premiums paid by the Guarantors, much like banks pay for FDIC insurance.

Our plan explicitly calls for deeper first-loss risk sharing that is transparent, scalable to all lenders, and capable of limiting taxpayer exposure to nothing more than catastrophic risk.

The Task Force also developed recommendations in two areas that have vexed past reform efforts: the appropriate transition to a new system and the role of the secondary market in advancing a national affordable-housing strategy.

Our proposal specifically notes the importance of leveraging the assets, infrastructure, and regulatory framework of the current system wherever possible. We also believe that any workable transition must utilize a clear road map and be multi-year in nature.

We sought to develop an affordable-housing framework that appropriately focuses the scope of the federally-supported secondary market, covering both renters and homeowners of varying income levels.

Our plan suggests other improvements to better serve the full continuum of households, including updating credit-scoring models, better capturing nontraditional income, and providing enhanced liquidity for small-balance loans.

Our framework has outcomes that are transparent, well-defined, measurable and enforceable.

Only Congress can bring about the changes necessary to achieve the core principles outlined in our plan, which are necessary for a vibrant housing finance system.

FHFA has put in place a number of policies and procedures to improve access to the secondary mortgage market and reduce the risks to taxpayers. Now is the time for Congress to act to “lock in” these improvements.

After all, only Congress can alter the existing GSE charters, establish an explicit federal government guarantee, and create a regulatory mandate to maintain a level playing field.

And most importantly, only Congress can provide the legitimacy and public confidence necessary for long-term stability in both the primary and secondary mortgage markets.

We cannot go back to a housing finance system that provides private gains when markets are strong yet relies on support from taxpayers when losses occur.

Calls to simply recapitalize the GSEs and allow them to operate without further structural changes are misguided. Under such plans, the post-crisis reforms already achieved could be reversed at the discretion of future FHFA directors.

The American people rely on a housing finance system that enables them to rent a quality, affordable apartment, buy their first home, or build a nest egg to pass on to their children. We owe it to them to proceed with the hard work of reform without delay.

Thank you again for the opportunity to testify. And I want to reiterate MBA’s long-standing commitment to working with the Committee on all elements of GSE reform. I look forward to your questions.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Kudos To The MBA

The National Association of Hispanic Real Estate Professionals (NAHREP) congratulates the Mortgage Bankers Association (MBA) and Rodrigo Lopez for his appointment as their 2017 chairman. As the first Latino in the MBA’s 100-year history to hold this prestigious position, Mr. Lopez will lead an organization which represents over 2,200 member companies throughout the real estate finance industry. Lopez has been an active member of the MBA for the last three decades and has served on numerous boards, advisory boards and committees focused on creating a positive and competitive business environment for the real estate finance industry. Sworn in on Sunday during the MBA Annual Convention and Expo opening ceremony in Boston, Lopez pledged to uphold the MBA’s mission to promote fair, responsible, and sustainable mortgage practices through both education and advocacy, for the benefit of industry professionals and the families whom they represent.

Featured Sponsors:

 

 
As the most recent chairman of MBA’s Diversity and Inclusion Committee, Lopez worked to advocate for underrepresented facets of the population in order to foster inclusiveness, creativity, and economic growth within the industry.

Featured Sponsors:

 
“Rodrigo Lopez represents the best of both our industry and the Hispanic community in the United States,” said Gary Acosta, CEO and Co-Founder of NAHREP. “NAHREP supports the MBA and Rodrigo Lopez in their efforts to improve and diversify the real estate finance industry and is committed to assisting in every way possible.”

Featured Sponsors:

 
This historic milestone comes at a pivotal time for the Latino community, as Hispanic homeownership has been growing while homeownership among the general population continues a twelve-year decline. According to NAHREP’s 2015 State of Hispanic Homeownership Report (SHHR), Hispanic families represent 52 percent of new households over the last 15 years. However, access to affordable mortgage credit remains a primary barrier to Hispanic homeownership growth. These numbers are especially important considering that Hispanics are poised to add as many as 5.7 million additional homeowners over the next decade.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

MISMO Changes Its Structure To Encourage Participation

MISMO, the Mortgage Industry Standards Maintenance Organization, announced today that it is simplifying its membership structure to encourage broader participation in the creation and use of standards across the mortgage industry lifecycle. Starting next year, there will be a single membership level for all corporate members.

Effective January 1, 2017, MISMO will be consolidating its existing membership tiers into a single membership level. All MISMO members will have the same annual membership fee and receive the same membership benefits, and all memberships will convert to a calendar year term (Jan 1-Dec 31). Annual membership dues will be $2,500. This is the same amount as the existing Silver Level Membership, which is the minimum current fee for most corporate members. For individuals who do not belong to corporations or government agencies (e.g. sole proprietor), MISMO will retain its existing individual contributor membership for an annual rate of $500.

In addition to the new membership structure, MISMO plans to continue to enhance the benefits for all members which include creating new products, tools and services and making them available to members at no charge. MISMO will continue to make versions of its standards freely available to the public.

Featured Sponsors:

 

“We expect that the simplified membership structure, along with increasing membership benefits, will encourage greater participation in the organization” said Bill Beckmann, MISMO Board Chairman and CEO of MERSCORP Inc. “Increased participation will provide for a broader and deeper set of perspectives when standards are developed, which should continue to result in improved standards for all parts of the mortgage industry.”

A new program will be announced in the near future that will enable current Gold, Platinum and Diamond level members to retain the additional benefits that have been offered to them under the current plans. This new program will be distinct from the new Membership Plan.

MISMO was created in 1999 as a subsidiary of the Mortgage Bankers Association (MBA) to advance the development and adoption of standards for the mortgage finance industry. Today, those standards are accepted and deployed throughout the mortgage industry and are required by many industry regulators, housing agencies and by the government-sponsored enterprises (GSEs).

“More than ever, the mortgage industry needs to adopt standards in order to reduce costs and improve data quality. MISMO is evolving to enable better collaboration between lenders, service providers, credit agencies, mortgage insurers, title insurers, investors, and government to improve the quality of information that is shared across the industry,” said Mike Fratantoni, MISMO President and Chief Economist and Senior Vice President, Research and Industry Technology at MBA. “These changes will enable MISMO to better serve its members and the industry by providing additional tools and resources to support collaboration and standards development efforts. “

MISMO members receive significant discounts on MISMO products and services, and get access to productivity enhancing tools and resources. Members also receive information about, and access to new standards before they are released publicly and the opportunity to network with industry peers and others such as GSE and agency personnel that actively participate in the group.

“MISMO’s standards are at the core of our day to day operations and really our entire industry. Lenders that maximize the full breadth of MISMO’s membership and resources position themselves ahead of the curve and are able to achieve higher profits, greater efficiency, better loan quality and lower loan costs,” said Josh Weinberg, MISMO Board Vice Chair and Senior Vice President, Compliance at First Choice Loan Services Inc. “As lenders continue to face increased investor requirements resulting largely from the frenetic pace of regulatory and compliance changes, there’s really been no better or more important time to get involved with all that MISMO has to offer.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

The MBA Is Using Technology To Give Back

The Mortgage Bankers Association Opens Doors Foundation (MBA Open Doors) today announced that it is accepting “Text-to-Give” donations. MBA President and CEO David H. Stevens, CMB, made the announcement during his opening remarks to the conference. MBA Opens Doors is a non-profit organization dedicated to providing assistance to families with a critically ill or injured child by making their mortgage or rent payment.

Featured Sponsors:

 

Any Opens Doors Foundation supporter with a cell phone can text “ODF” to the number “20222.” Once the donor confirms the return message a donation in the amount of $25.00 is made to the Foundation. A one-time $25.00 donation is charged to the donor’s wireless bill or prepaid balance.

“The attendees at MBA’s conventions have already been very generous. More than $20,000 has been raised at MBA’s meetings in 2016 alone, through small donations of individual members moved to give by the stories of families that Opens Doors has helped,” said Debra Still, Foundation Chairman and CEO of Pulte Mortgage. “By using ‘Text-to-Give’ we can streamline that process and make it much easier for individual members to give not only at our conferences and meetings but throughout the year.”

Opens Doors is currently able to pass on 100 percent of the donations it receives to families in need of assistance. Potential recipients of the grants are identified through the Foundation’s ongoing relationship with children’s hospitals in Washington D.C., Boston, Dallas-Fort Worth, Denver and Houston.

Opens Doors is a 501(c)(3) organization and all contributions are tax deductible. For more information about the Foundation or to make a donation, please go to www.mbaopensdoors.org.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

The Spirit Of Giving

The Mortgage Bankers Association Opens Doors Foundation (MBA Open Doors) announced that Arch Capital Group Ltd. (Arch Capital), has made a very generous contribution. MBA Opens Doors is a non-profit organization dedicated to providing assistance to families with a critically ill or injured child by making their mortgage or rent payment. Arch Capital’s generous donation has earned them recognition as an Opens Doors Foundation Guardian and is the largest single donation in Foundation history.

“We believe in helping families realize the dream of homeownership and we are pleased to support a foundation that aligns with Arch MI’s culture and its focus on the value of family. The Opens Doors Foundation and its mission to provide assistance to families with critically ill or injured children, allowing them to take unpaid leave from work and spend precious time together without jeopardizing their homes, represents the essence of our mission,” said Andrew Rippert, Chief Executive Officer of GlobalMortgage at Arch Capital Group, parent of Arch Mortgage Insurance.

Featured Sponsors:

[huge_it_gallery id=”2″]

“On behalf of everyone working with the MBA Opens Doors Foundation, I want to thank Arch Capital for this generous donation,” said Debra Still, CMB, Chairman of the MBA Opens Doors Foundation and President & CEO of PulteMortgage. “From reading the grant applications each month, I have seen how lives are touched by Opens Doors. Through the support of Arch Capital and others, our industry is making a profound impact on those who receive the grants, giving families with critically ill or injured children the gift of spending precious time together.”

Arch Capital Group Ltd., a Bermuda public limited liability company, writes insurance and reinsurance on a worldwide basis through operations in Bermuda, the United States, Canada, Europe, Australia and South Africa, with a focus on specialty lines.

Featured Sponsors:

[huge_it_gallery id=”3″]

For most families, the fear of losing a home is second only to the sense of panic that comes with the need to care for a child suffering from a major illness or injury. The MBA Opens Doors Foundation was developed as an industry association model to help individuals and families facing housing challenges associated with the significant cost of medical care for a seriously ill or injured child.

Opens Doors is currently able to pass 100 percent of the donations it receives on to families in need of assistance. The Foundation’s ongoing relationship with Washington, D.C.’s Children’s National Medical Center and more recently Children’s Hospital Colorado, provides partner organizations to help identify potential grant recipients.

Opens Doors is a 501(c)(3) organization and all contributions are tax deductible.  For more information about the Foundation or to make a donation, please go to www.mbaopensdoors.org.

About The Author

[author_bio]

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

The CFP-Who?

The folks at the Consumer Financial Protection Bureau (CFPB) are under the impression that they are saving the American people from the evils of the financial services industry. Unfortunately for the CFPB, it appears that the majority of Americans never heard of the agency.

Earlier this summer, Zogby Analytics and the U.S. Consumer Coalition conducted a poll to determine how Americans view the various federal regulatory agencies. Only 19 percent of those contacted for the poll admitted that they were familiar with the CFPB – which might be fairly depressing, especially when one considers that one-quarter of those polled were unfamiliar with the U.S. Department of the Treasury, roughly one-third were unfamiliar with the Federal Reserve and more than half were unfamiliar with the Securities and Exchange Commission. Perhaps the MBA should offer courses in geology, since a lot of people appear to be living under that proverbial rock.

Featured Sponsors:

[huge_it_gallery id=”2″]

In any event, those that were familiar with the CFPB had a favorable view of the agency (31 percent, compared with 14 percent indicating unfavorable views – everyone else had no opinion one way or the other). But it appeared that many people had no clue what the CFPB was doing. Let me share this information from the poll’s published results:

“More Americans are doubtful that the CFPB can ‘protect credit card information and personal data … from hackers’ than believe it has the capability,” the poll report stated. “One in three disagreed (34 percent) and only 29 percent agreed. Nor were they confident that the agency is ‘safeguarding credit card data… and will do everything possible to prevent it from getting it into the wrong hands. One in three agreed (35 percent) while 26 percent disagreed – but the remainder (40 percent) was either not familiar or not sure … Only 8 percent said that the CFPB’s data collection is better than NSA’s reviewing of domestic phone and text records, 12 percent said it is worse, and 43 percent said it is about the same.”

Featured Sponsors:

[huge_it_gallery id=”3″]

After all of these years, it is more than a little pathetic that so many people have no clue Richard Cordray and his mischief makers are actually doing. But that is not to say that they’ve been completely off the radar. Case in point: the CFPB’s Consumer Complaint Database, which is chock-a-block with endless ranting and raving from unhappy Americans that have a bone to pick with their lenders. There have been thousands of complaints posted in this online database, but there is a big problem: the vast majority of them are unsubstantiated.

All of the major financial services trade associations have complained about this thoroughly misleading attack on the integrity and reputations of private sector lenders. Steve O’Connor, the MBA’s senior vice president of public policy and industry relations, probably said it best in a recent letter to Cordray.

“In MBA’s view, because more than 80 percent of complaints do not require action beyond an explanation, posting these unsubstantiated complaint narratives will only mislead the consumers the CFPB is charged with protecting,” O’Connor wrote. “We therefore urge that complaints be verified before narratives are posted. At the very least, the CFPB should establish procedures to take down complaints not requiring action.”

To date, Cordray and his team have publicly ignored the complaints about their complaint database – much the way they ignore any complaints leveled against this agency (cost overruns on the new headquarters, racial and gender discrimination in personnel policies, refusing to extend a good faith period following the implementation of the TRID guidelines, etc.)

And while the American public is, mercifully, lucky that they never heard of this mismanaged agency, the financial services world has the misfortune has the misfortune to be stuck with this bunch and their bumbling.

About The Author

[author_bio]

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

Technology Slippage

The MBA’s Technology Conference just passed us by. Other than the special events, such as the awards ceremony presented by Progress in Lending, there was very little excitement building up to the meetings. Yes, the topic for the first general session was one that interested many people since disruptive technology has rapidly become a part of the technologist’s lexicon, but beside this, there didn’t seem to be a lot of new exciting advances to discuss. Unfortunately there really should be.

One of the largest gaps still existing in technology is the support that is needed by risk management, most specifically in the areas of regulatory compliance and quality control. These areas, which are now the focus of regulators, investors and consumers have had little, if any, technological breakthroughs in since the emergence of automated underwriting. While there are some companies that have developed internal calculations for such issues as high cost loans, the reality is that the result still have to input into another system for inclusion in the overall loan analysis.

Featured Sponsors:

[huge_it_gallery id=”2″]

Such issues as the “Ability to Repay” (ATR) and “Qualified Mortgages” (QM) are still primarily evaluated by individual underwriters who are subject to making mistakes no matter how hard they work at getting it right, or how many times it is checked. Another issue that has been with us for years, is HMDA data. Regardless of how many validity and quality checks built into the HMDA geo-coding programs, the fact of the matter is that numerous errors are still found in the HMDA data. These programs don’t check for such things as manufactured data or loans that are not included in the LAR. A recent study by the Mortgage True View’s HMDAnalysis program found that the total number of loans submitted on the LAR matched the number in the LOS system, but unfortunately few, if any, of the dates of origination and decision actually matched what was in the LOS or loan files. This analysis also showed that, on average, lenders approved loans with income of around $48,000 for every $100,000 loaned. However, some lenders required as much as $66,000 per $100,000 and one lender was as low as $17,000 income for each $100,,000 lent. Why do lenders not know this before they submit their LAR’s? Where is the technology to test this data before it is submitted? Is there any wonder we have to contend with all he accusations of unfair lending practices?

Featured Sponsors:

[huge_it_gallery id=”3″]

Of course, Quality Control programs are not any better. They still are basically an automated checklist that individuals must complete in order to conduct the loan file review. We continue to use paper documents to reverify the information included in the loan decision process and provide a subjective analysis of the results. Of course, agency requirements preclude many changes to this process, but surely there are some advancements in technology to not only speed the process but make it more objective. There are risk models in existence today that evaluate operational mistakes to the probability of default but are not being used because there is no technology to support them. There are sampling programs that are run independent of the QC process that exclude the possibility of providing management with information that tells them the issues found in the review are not just random mistakes, but real process issues that need to be addressed, which would allow them to focus on the things that will improve their operational efficiency instead of chasing random error issues.

Technology has proven to be a valuable part of the mortgage lending programs. However, if those involved in technology can’t come up with some advanced support for managing risk, it will become nothing more than window dressing and lenders will, out of necessity, look for that disruptive technology that can handle their problems.

About The Author

[author_bio]

Rebecca Walzak
rjbWalzak Consulting, Inc. was founded and is led by Rebecca Walzak, a leader in operational risk management programs in all areas of the consumer lending industry. In addition to consulting experience in mortgage banking, student lending and other types of consumer lending, she has hands on practical experience in these organizations as well as having held numerous positions from top to bottom of the consumer lending industry over the past 25 years.

MBA Supports Housing Reform Proposal

David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA) issued the following statement in response to the release of federal housing reform legislation by Representatives John K. Delaney, John Carney, and Jim Himes:

“This legislation is a constructive proposal that will help move the ongoing housing finance reform debate forward. MBA appreciates the chance to have been part of the stakeholder dialogue leading up to the bill’s introduction, and we are pleased that it furthers our primary objectives of ensuring liquidity for all forms of housing while reducing taxpayer risk.

Featured Sponsors:

[huge_it_gallery id=”2″]

“We particularly appreciate the bill’s approach regarding the appropriate level of private “first-loss” capital required, its mechanisms for the pricing of a federal guarantee, and its recognition of the unique attributes and importance of the multifamily finance market. We look forward to working with the bill’s authors to help them further assess the expanded role envisioned for Ginnie Mae in order to ensure a “level playing” field in both the residential market and the multifamily rental housing market.

Featured Sponsors:

[huge_it_gallery id=”3″]

“Furthermore, MBA believes the proposal will complement ongoing efforts by the Federal Housing Finance Agency (FHFA) to strengthen the secondary mortgage market.  MBA is eager to continue engaging with the leadership of the House Financial Services Committee, the bill’s authors, and other key stakeholders, to advance legislative efforts to reform the government sponsored enterprises and further stabilize the housing finance system for consumers.”

About The Author

[author_bio]

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

MBA Announces Tech Promotion

David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA), announced the promotion of Rick Hill, a staff member in the Research and Industry Technology Group, to the position of Vice President of Industry Technology, effective January 1, 2015.

“Rick came to MBA with a breadth of technical knowledge few in the realm of real estate finance possess,” said Stevens. “He is responsible for working with our members toward industry solutions to improve the systems and processes our industry relies upon to efficiently originate and service loans in both the residential and commercial/multifamily spaces. His work in these areas is extremely valuable, not just to MBA and our members, but to the entire mortgage industry. I congratulate him on his well deserved promotion.”

Mr. Hill joined MBA in 2010 and is responsible for providing leadership to MBA and its membership relating to operational and technology topics faced by the industry, including through the Mortgage Industry Standards Maintenance Organization (MISMO), which he oversees. He is also responsible for developing the content for MBA’s Technology Conference and leading all of MBA’s technology forums and working groups – both residential and commercial/multifamily – as well as managing technology related content for MBA Education.

Prior to joining MBA, Hill was the Director of Data Strategy at Fannie Mae where he was responsible for data standards and best practices, data management including the company’s data warehouse, and managing the relationship with regulatory agencies relating to information requirements. Before his time at Fannie Mae, Hill was a senior auditor with Deloitte & Touche. Before being promoted, Mr. Hill was MBA’s Associate Vice President of Industry Technology. He holds a BBA in Accounting from the College of William and Mary and is also a Certified Public Accountant.

Progress In Lending
The Place For Thought Leaders And Visionaries

Using Technology In A Creative Way

Technology doesn’t have to be cookie cutter. It can solve a lot of unexpected pain points. For example, The Mortgage Bankers Association (MBA) will launch a new private exchange which will offer healthcare and other employee benefits for its member companies.  Addressing the challenges of maintaining a competitive employee benefit program, “MBA Health Link” will provide an easy solution for employers wanting to control costs while offering more benefit options to meet the varied needs of their employees.

The creation of MBA Health Link is being made possible through an exclusive partnership with Arthur J. Gallagher & Co. (Gallagher), a US-based global insurance brokerage and risk management services firm.

“MBA is pleased to partner with Gallagher to create MBA Health Link and thus offer healthcare and employee benefits that are exclusively for our diverse membership,” said MBA Senior Vice President, Residential Policy & Member Engagement, Pete Mills.

“Industry data show that our members face major challenges in getting control over certain costs, particularly in the healthcare and benefits arena.  Where MBA Health Link stands out as such an attractive option for our members is in its ability to create administrative and financial efficiency while delivering high quality benefits to their employees,” said Mills.

Cost control, predictability, and administrative and compliance responsibilities are the leading concerns for employers when evaluating healthcare options.  With the administrative support of the Employee Benefits Consulting and Brokerage operations team of Gallagher, MBA Health Link can more easily overcome these barriers.

MBA Health Link combines two key strategies: a defined contribution by the employer, and a private exchange for employees to spend the contribution in a healthcare and benefits market place.

“Employers have a lot of questions when it comes to navigating the ever-changing benefits landscape,” said Ethan Hendrickx, North Central Region Area Vice President for Gallagher’s Health & Welfare Consulting Practice.  “A private exchange provides both employer and employee with a flexible platform for navigating the uncertain times ahead with employee benefits.”

Companies that adopt MBA Health Link will utilize a defined contribution (DC) strategy.  Unlike the defined benefit approach, a DC strategy allows for transparency in total employee compensation and makes it possible for employers to link their long-term benefits budget with metrics relevant to their business.  A DC strategy works best in a private exchange environment, where employees have a choice on how to spend their benefits dollars.

JD Power & Associates reports that 47 percent of businesses intend to adopt a private exchange, while Accenture predicts 40 million people will obtain health insurance through private exchanges by 2018.

About The Author

[author_bio]

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.