Experienced Washington operatives know if you want to kill an idea, while pretending to embrace it, turn responsibility for it over to a committee.
I suspect that’s why the Mortgage Bankers Association has called for “establishing a strong panel of industry representatives to guide the development” of a Common Securitization Platform for Fannie Mae and Freddie Mac that’s been designed for the single-family mortgage market.
The FHFA introduced the idea for the platform earlier this year, as a way to reduce costs to taxpayers because there is one platform, not two, to maintain. Also, efficiencies result from the creation of standards for the securitization process. Those are laudable goals, ones that few in the mortgage industry could argue against, and the FHFA and the GSEs have been working to develop the platform.
One of the few kill joys, however, is the MBA.
It has expressed concern that because the scope of the project has expanded, it may not fit the needs of the market. And because, reading between the lines, the MBA feels excluded from the process of developing the platform.
It complains that the FHFA and the GSEs have not communicated enough about the development of the platform. It’s been intermittent, at best, when what is required is complete transparency—a process that would enable FHFA, GSEs and shareholders to articulate their concerns.
And, the trade group has another point of contention.
The FHFA director wants the platform structured as a joint venture of the GSEs and led by an independent CEO. That structure seems reasonable, nonetheless, the MBA does not agree. It prefers that the platform is structured as an independent utility. The first step to attaining this “cooperative structure should begin now by giving the industry representatives on the advisory panel the authority to guide the platform’s early development” including its strategic and technical direction.
With those sort of philosophical issues with the initiative, it is difficult to see why the FHFA, Fannie Mae, and Freddie Mac, would want to participate in a committee with the MBA. Especially, because allowing their representatives to guide the development of the platform may be akin to killing the project.
These parties have very different perspectives, interests, and objectives. Forming a panel would likely be an exercise in gridlock, the result of fragmented, intractable opinions. The committee is an act of adroit political cynicism, it’s good politics, and creating one works every time—if the goal is to look like progress is being made without actually making any.
The game plan is predictable: Select a committee of extraordinary men and women, who will meet and meet again, behind closed doors. That creates mystery, but more importantly, observers assume the committee is cooking up something so good that it has to be discussed behind closed doors.
Members will meet to weigh options. Months will past. They will issue a few press releases, and eventually a report will be published to great fan fare. The problem, they will claim is fixed and the solution is in the report. Members will smile, receive congratulations, answer questions, pose for pictures, but none of their proposals will move forward. None.
That won’t work in the aftermath of the mortgage bubble.
All of which leads to one conclusion: The FHFA and the GSEs need to take the heat—stay the course. It’s the best way to ensure a single platform becomes a reality and the mortgage markets have a strong infrastructure that can support a vibrant, dynamic mortgage market.
Matt Strickberger is the managing partner of OnPoint PR and Consulting LLC, a public relations firm that represents lenders, servicers, technology companies and others. He was editor of Mortgage Technology magazine from 1997-2000. If you have comments or suggestions for future columns, email him at email@example.com.