Obama Conference on Housing Finance, Serving Substance or Softballs?

Back in April 2010, the Treasury and HUD issued a myriad of questions for the public to comment on regarding the future of the housing finance system. They received over 300 responses from everyone from members of the public to specialized think tanks. Now they are taking action: On Tuesday morning, the Obama administration is staging the Conference on the Future of Housing Finance at the Treasury Department. A reasonably diverse list of panelists covering multiple sectors -- including bankers, economists, investors, mortgage insurers, market researchers and (reportedly) consumer advocates -- will converge in a forum-like setting to "broaden our perspectives on a number of key issues in a transparent way to make certain that all of the best ideas are on the table," according to Jeffrey A. Goldstein, undersecretary of the Treasury for Domestic Finance. The conference will be moderated by Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan.

Panelists include:
Barbara J. Desoer, president of Bank of America Home Loans, which serves nearly 20 percent of all mortgages in the U.S. Ingrid Gould Ellen, professor of Urban Planning and Public Policy at New York University's Wagner Graduate School of Public Service and Co-Director of the Furman Center for Real Estate and Urban Policy. Professor Ellen will likely represent the importance of continued credit and financial qualification availability for racially integrated neighborhoods. Bill Gross, co-founder and co-chief investment officer of PIMCO. Gross manages the worlds largest mutual fund: PIMCO, or the Pacific Investment Management Company. Any policy changes in the housing finance sector, and the bonds that fuel its function, is of great interest to PIMCO and Mr. Gross, who are true market movers due to their sheer size and buying power. Mike Heid, co-president of Wells Fargo Home Mortgage. Likely brought on to discuss the effectiveness of the Home Affordable Modification Program (HAMP), where Wells has modified over 240,000 mortgages in the first seven months of the year. S.A. Ibrahim, chief executive officer of Radian Group Inc. Radian is a global credit risk management company that 'connects lenders, homebuyers, investors and loan servicers using a suite of private mortgage insurance and related risk management products and services.' Formerly the CEO of GreenPoint Financial, one of the leading Alt-A lenders in the country during the housing boom, Ibrahim has also served as council to many Boards including Fannie Mae and the Mortgage Bankers Association. Marc H. Morial, president and chief executive officer of the National Urban League. Mr. Morial sees the losses due to the recent recession disproportionately tilted towards African Americans. As head of the National Urban League, Morial has been instrumental in efforts to 'outline plans to get African Americans back to work, insured, better educated and prepared to be major players in the industries that will fuel the economy and their future.' Alex Pollock, resident fellow at the American Enterprise Institute (AEI). AEI is an officially nonpartisan but a traditionally conservative think tank whose stated mission is to: 'defend the principles and improve the institutions of American freedom and democratic capitalism, limited government, private enterprise, individual liberty and responsibility, vigilant and effective defense and foreign policies, political accountability, and open debate.' Many AEI scholars are credited with shaping President George W. Bush's public policy. Lewis Ranieri, chairman of Ranieri and Company, Inc. Considered the godfather of mortgage finance, credited with creating what we know now as mortgage-backed securities. In 2004 Businessweek anointed Mr. Ranieri as one of the greatest innovators of the past 75 years. However, in 2008 he was labeled one of the "five goats who contributed to the financial crisis" by Nobel Prize laureate Robert Mundell. Ellen Seidman, executive vice president for Mission and Strategy, at ShoreBank Corporation, and Chair of the Board of Directors at the Center for Financial Services Innovation (CFSI). Next to Marc Morial, Ellen Seidman is the panelist that stands to most represent the Consumer at the Conference. From CFSI's mission statement- "to transform the U.S. financial services marketplace to help under-banked consumers achieve financial prosperity." The under-banked, according to CFSI, are those who "do not have access to the products and services that could put them on the road to prosperity." Michael A. Stegman, director of Policy and Housing for the Program on Human and Community Development of the John D. and Catherine T. MacArthur Foundation. Stegman has served as a consultant to Fannie Mae, HUD, the Treasury Department and the U.S. General Accounting Office. He has written extensively on housing and urban policy, community development, financial services for the poor, and asset development policies. Susan Wachter, Richard B. Worley professor of Financial Management, professor of Real Estate, Finance and City and Regional Planning at the University of Pennsylvania's Wharton School. Wachter is a real estate economist who has served leadership roles with HUD, the National Association of Homebuilders and the Blue Ribbon Committee on Housing Finance. She is also the author of: Rebuilding Urban Places After Disaster: Lessons from Hurricane Katrina. Mark Zandi, chief economist of Moody's Analytics. Moody's, among other rating agencies, has frequently been blamed for their role in the housing-markets implosion with their loose rating practices when it came to Mortgage Backed Securities (MBS). Investors bet on and bought what they thought were AAA-rated securities that turned out to be anything but.
The main discussion topics will include housing finance reform as it pertains to the broader financial markets and broader housing policy goals. A series Search Homes for Sale Browse through photos of millions of home listings or search foreclosure listings of smaller breakout sessions will identify key players going forward in both the private and government sectors, address credit access and affordability, different methods with which housing can be funded, private market incentives and how to manage the processes of proposed transitions. The pending reformation of Fannie Mae and Freddie Mac will surely will get addressed at some point on some level.
What will be interesting to see and hear under these moderated formats is the nature of the questions and responses. Is this all show for the press and public with little to no 'go'...or is real substance in regards to feedback truly being sought for objective consideration?
Personally this all feels a bit like a setup meant to advance prefabricated agendas rather than spur true innovation, evidenced by the fact many of the panelists are long-time Washington insiders. Gaither and Donovan likely will lob softballs for the panelists to knock out of the park since all of them represent powerful entities with deeply vested interests in the housing finance reform proposal that's due to be delivered to Congress in January 2011.
Forgive my cynicism but, again, most of these panelists were smack in the middle of the housing boom, enabling even perpetuating what became a bursting bubble. Are these the same people we want directing policy going forward? I see a real lack of new blood in this mix -- those with the intellect, spine and track record to spur real innovation and meaningful reform -- but that's just me. It's all conjecture until we tune in and find out. I'll be back post-conference with an in-depth analysis and hard opinion.


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