Diversity, Lobbying Efforts Mark Burke's Term as MBA Chair

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The Mortgage Bankers Association kept the ball rolling in a year that was very tough on its members that are single-family lenders.

Despite a seismic drop in originations, the MBA had strong attendance at its conferences and had a record year in terms of providing education and training to its members, according to its chairman, E.J. Burke.

"Our members look to us to help them navigate all the changes" that impact the mortgage banking industry, Burke said.

As his term as chairman comes to end, Burke pointed out that the MBA sponsored its first Diversity and Inclusion Conference in the summer and put its fledging foundation called "Opens Doors" on solid footing.

"I didn't want to be the chairman that allowed the momentum on a lot of these fronts to suffer. I feel like we kept that moving forward," Burke said in an interview.

During his term, the MBA was very active on the legislative front and put a lot of energy into supporting a housing finance reform bill sponsored by Sens. Tim Johnson, D-S.D., and Mike Crapo, R-Idaho. The bill would replace Fannie Mae and Freddie Mac with a new secondary market system. The Johnson-Crapo bill was approved by the Senate Banking Committee. But it did not win enough support in committee to propel the reform bill to the floor of the Senate for a vote.

"Between our staff and members, we put a ton of time and effort into the Johnson-Crapo bill. While we were disappointed that it didn't advance, it set the tone where housing reform ought to go," the chairman said.

The MBA chairman comes from the commercial real estate side of the mortgage banking business, which is enjoying strong demand for multifamily and CRE loans. During the Johnson-Crapo debate, he didn't appreciate the claims of some critics that the bill did not provide enough incentives to ensure adequate financing for affordable housing.

"I would argue there were plenty of incentives. That bill had a number of mechanisms that would have encouraged the formation of affordable housing."

While the CRE sector has prospered during the economic recovery, Burke understands the tough times single-family lenders are going through.

The MBA leaders and staff spent a lot of time with the regulators, Obama administration officials and legislators "trying to help them understand what is happening in the real world," Burke said.

Based on the MBA's estimates, single-family originations will total just $1 trillion by the end of this year, down from $1.75 trillion in 2013.

"It is still a tough environment because there is still a lot of uncertainty around repurchase demands and the future of housing reform. Enforcement risk remains high," he said. "As a result, the credit box is small."

Single-family originations are expected to stabilize in 2015 and rise slightly to $1.1 trillion. But that is not enough to make a real difference.

A lot of lenders are "hunkering down," Burke said. "In our industry when originations and revenues are down our natural reaction is to cut costs."

However, he is very concerned that some lenders will consider their MBA membership an expense they can cut.

"To me that is very short sighted," he stressed. "Think about what it would cost to have a lobbying staff. What would it cost to educate and keep up with all the changes in the industry," which MBA does for its members. "The dues we ask our companies to pay are a great investment."

Bill Cosgrove will become the new chairman at the MBA's annual convention in Las Vegas. The outgoing chairman noted that Cosgrove is dedicated to both Opens Doors and the MBA's diversity initiatives.

The MBA is trying to raise awareness and help its members understand the business case for diversity and inclusion in their workforce, Burke said. The MBA sponsored its first minority inclusion summit in June. "It was highly successful."

The Opens Doors Foundation provides mortgage assistance to families experiencing financial hardship due to the illness of a child. Parents often miss work due to the medical attention these kids need, which reduces their income.

The foundation, chaired by former MBA chairman Debra Still, works with the Children's National Health System, based in Washington, to identify grant recipients. So far this year, Opens Doors has given out almost $215,000 in grants to 140 families in need, according to the MBA. Meanwhile, the MBA is continuing to bring its members' concerns to the attention of the Consumer Financial Protection Bureau, Federal Housing Finance Agency and other regulators.

"I am not going to tell you it is going to get any easier," Burke said in the interview. But a lot of the Dodd-Frank Act rules will have their first anniversary next year. When the MBA can show a regulator that a rule has missed its mark, "we have found a willingness to re-evaluate or clarify a rule," Burke said.

Burke is native of Buffalo, N.Y. But he landed his first job in Oklahoma. He was recruited by former MBA chairman Ron McCord to go into the mortgage banking business. He spent eight years in Oklahoma where he met his wife.

He recently visited Oklahoma and attended a state MBA meeting in Tulsa. At the meeting he was given an Indian war bonnet. It was quite a surprise, he said.

In addition to his duties at the MBA, Burke also switched jobs at KeyBank, which is based in Cleveland.

In April, he moved out of the CRE group and moved over to the community banking side where he will be responsible for business lending and private banking, which is involved in single-family lending.

"It has been a challenge to assimilate into a new job" and serve as MBA's chairman. But MBA leaders and staff were able to accommodate the changes. Burke said he intends to stay active at the MBA along with other KeyBank executives. "I believe being involved in MBA is the best way to ensure that the industry moves in the right direction."

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