HUD Prepared Remarks at MBA 100th Annual Conference
On October 28, the U.S. Department of Housing and Urban Development (HUD) released Remarks of Secretary Shaun Donovan at the Mortgage Bankers Association’s 100th Annual Conference in Washington, DC.
Remarks of Secretary Shaun Donovan at the Mortgage Bankers Association’s 100th Annual Conference
As prepared for delivery
Thank you, Dave (Stevens), for that very kind introduction and for your leadership.
In light of recent events here in Washington, I can’t imagine that you miss your time in government too much. But, we miss you at HUD and it’s great to see you today.
Please allow me to also thank all of you with the Mortgage Bankers Association.
You play a critically important role in our economy, our nation and our future.
And it’s truly an honor to be here with you this morning to kick off your Annual Conference, especially as you celebrate this milestone anniversary.
I know that the members of this organization have seen some extraordinary things over the past 100 years. But it’s hard to imagine any period quite like the last five.
Fighting Our Way Back
Back in the fall of 2008, we saw Lehman Brothers collapse. Every day, there was a new rumor that more trouble was on the way. It felt like the entire financial system was close to caving.
At the time, I was a Commissioner for Mayor Bloomberg in New York City. As many of you know, he has a bullpen setup, with no walls, so that his leadership team can easily interact and collaborate together.
As part of this setup, there is a giant TV screen, which has a ticker listing updates from across the city, like the number of complaints that have been answered and the number of potholes that have been filled.
And on the day the House of Representatives took its initial vote to rescue the financial industry, I vividly remember all of us gathering around the TV to watch. When it became clear that the measure had failed, Mayor Bloomberg uttered four words that I’ll never forget: “the world is ending.”
Indeed, the events of that time led to the worst economic crisis that most of us have ever seen. When President Obama took office in 2009, the housing market was in free-fall.
Home prices had fallen nearly 20 percent from the year before: the largest one-year drop ever measured. Roughly three million borrowers were seriously delinquent. Construction projects and plans came to a halt – causing the industry to lose 100,000 jobs a month.
Across the board, we saw dramatic declines. And of course, these drops represented more than shifting numbers on a spreadsheet. They represented people’s lives, savings and struggles.
So when the President and I took office, we set in place a number of priorities which still guide us today.
One, to provide immediate assistance to those in need. Two, to work with public and private sector partners to strengthen the housing market and help fuel an overall economic recovery. And three, to ensure a crisis of this magnitude never happens again.
Let me start with the first goal: providing immediate assistance to those in need. When I last spoke at your Annual Conference in 2011, I told you about a number of initiatives we undertook to help families and heal the market.
Although the crisis has eased, I’m proud to report we keep pushing for progress.
Back then, I told you that we had helped 5.1 million responsible families stay in their homes through mortgage modifications. Today, that number is over 7 million.
Back then, we had just launched HARP 2.0. In the time since, the number of homeowners who have refinanced through the effort has soared from 400,000 to 2.8 million as of July. I also mentioned our Neighborhood Stabilization Program, which addresses the foreclosed and abandoned properties that often hold back communities trying to rebuild.
Today, I’m proud to say that $7 billion has been allocated to neighborhoods in all 50 states to refurbish these properties, turning blight into progress. In fact, in more than 70% of these neighborhoods, vacancies are down and home prices are up compared to similar communities.
And during the most trying times, the Federal Housing Administration stepped up to keep capital flowing and stabilize the market. Of course, taking on such a big role carried costs, and FHA recently took a mandatory appropriation of $1.7 billion to close out Fiscal Year 2013.
To be clear: this doesn’t reflect the MMI Fund’s current health. This was an accounting transfer that has not yet caught up with reality. It’s based on the housing market more than a year ago, and doesn’t reflect policy changes we’ve made since then.
In fact, FHA has strengthened underwriting standards and its portfolio, resulting in dramatic improvements, even since this time last year.
A 15 percent drop in delinquency rates. A20 percent drop in foreclosures starts.
A 26 percent improvement on recoveries. And, more than a 90 percent improvement in Early Payment Defaults.
FHA has nearly $50 billion in liquid assets, including more than $17 billion added in the Fiscal Year that just ended. And it continues to provide a wide-variety of qualified buyers with the opportunity to become homeowners.
Through these efforts and more, we are sending a clear message: that even as the financial crisis becomes more distant in our nation’s rearview mirror, the Obama Administration’s commitment to our recovery will never waver.
And in the larger picture, these actions, combined with leadership like yours, has helped write quite a comeback story since 2008. Sales are up. Prices are up. Construction is up. Optimism is up. In short, so many critical trends are going in a positive direction.
I thank you for the role you played in this growth. You have had to be creative and resilient in the face of incredible challenges – and I’m sure will continue to be with those that lie ahead.
Through it all, you have more than earned the right to highlight your strength with your conference theme: 100 Years Strong.” And we are determined to work with you to ensure that the best years are ahead.
To view the remarks in their entirety, please click here.
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.