Mortgage bankers across America may or may not have a lasting recollection of just where they were and what they were doing on the morning of Wednesday, July 21, 2010, but it's also quite unlikely they will soon forget the date on which the ground shifted under their proverbial feet. * The epicenter of the business and financial earthquake was a brightly lit stage inside the Ronald Reagan Building and International Trade Center in Washington, D.C. That was the place where, during a public ceremony, President Barack Obama signed into law H.R. 4173--the Dodd-Frank Wall Street Reform and Consumer Protection Act. * With a stroke of a pen, President Obama affirmed the will of the 111th Congress to affect a seismic shift in the way business is done within the financial services sector and within mortgage firms. The aftershocks will come with the implementation and enforcement of hundreds of new regulations. * During his remarks before signing the 2,300-page law, Obama said, "With this law, we'll crack down on abusive practices in the mortgage industry. We'll make sure that contracts are simpler--putting an end to many hidden penalties and fees in complex mortgages--so folks know what they're signing." * He added, "Passing this bill was no easy task. To get there, we had to overcome the furious lobbying of an array of powerful interest groups and a partisan minority determined to block change." * However, one president's "powerful interest group" is another mortgage banker's coalition of like-minded constituents determined to be heard by their elected representatives as to how a lawmaker's vote would affect the livelihoods of key blocks of registered voters back home.
The need for all hands on deck
One such constituent coalition, the Mortgage Action Alliance Inc. [R] (MAA), demonstrated the power of grassroots advocacy during crafting of the Dodd-Frank bill earlier this year.
MAA marshaled thousands of its members to contact their individual lawmakers to explain how potentially misguided elements of the reform bill--including its risk-retention provisions--would harm consumers by severely curtailing residential and commercial lending, while also leading to shuttered businesses and numerous unemployed workers in their districts, explains Marsha L. Williams, attorney and Mortgage Action Alliance 2010 Steering Committee chair.
"If we ever had a year where we needed all hands on deck as far as the mortgage banking industry is concerned, it certainly was this year with the financial regulatory reform bill," says Williams.
Consequently, a bill that was potentially poised to cripple or even crush outright many mortgage banking firms was "tweaked" just enough to soften what would still be a devastating blow, making July 21 merely a bad day instead of the End of Days for the mortgage industry, explains Williams, a 30-year practicing mortgage industry attorney with law firm Middleberg Riddle & Gianna, Dallas.
"I think the risk retention [provision], as originally proposed, would have just killed the industry right here," says Williams. "It would have killed the independent and small mortgage banking companies."
Grassroots strength in numbers
Established in 2005 by the Mortgage Bankers Association (MBA), the Mortgage Action Alliance is a voluntary, nonpartisan and free nationwide grassroots lobbying network of real estate industry professionals with the stated mission of strengthening the industry's voice and lobbying power in Washington, D.C., and in state capitals across the United States.
As one of MAA's earliest members, Douglas McCree, CMB, president and chief executive officer of Tampa, Florida-based First Housing, says he saw the undeveloped potential of individual mortgage professionals flexing their advocacy muscles at the grassroots level and he jumped on board as soon as the alliance was proposed.
"The idea was to make sure that the various thousands of employees and related parties in the mortgage industry have their voices heard. …