Pub. 1 2013 Issue 3

summer 2013 5 J une is typically declared National Homeownership Month, a time to tout the benefits of homeownership and guide consumers to what many have always viewed as the ultimate goal – a place to call your own. But there’s irony in trying to celebrate homeownership today. The share of Americans who own their own homes dropped to 65 percent in the first quarter – the lowest level since 1995. That’s no doubt a reflection of economic condi- tions, as well as a realization by consum- ers that sometimes renting is better than buying. Facilitating homeownership – in the form of making mortgage loans – also has become harder, which puts a damper on the celebration. In fact, as the banking industry assesses new mortgage finance rules and proposed capital changes, many of you are challenged to see how staying in the mortgage business makes good business sense. At ABA, we are working to ensure that your bank has a place in the post-Dodd- Frank mortgage market, and that you can continue to help make homeownership a reality for creditworthy borrowers. It’s clear from the conversations I have had with bankers in Utah and across the country that one of your biggest challenges is the implementation of the Consumer Financial Protection Bureau’s ability-to-repay rule and the “qualified mortgage” standards. ABA is advocating changes to the rule that would help keep affordable mortgage credit flowing to deserving The Road Ahead for Housing By Frank Keating, President and CEO, American Bankers Association washington update borrowers. We’re also seeking more time for banks to comply with this and the many other Dodd-Frank-mandated mortgage reforms that were finalized in January. We also are offering a new guide – avail- able online in June – for bank CEOs and directors that will help banks strategical- ly examine the implications of the new mortgage lending environment. As the guide explains, the CFPB’s ability-to-repay standards “create a fundamentally new paradigm for residential mortgage lending” by establishing three kinds of loans with very different legal treatments and risk implications. Understanding these risk implications and developing a strategic response is central to the work of bank CEOs and their directors. The guide is the latest in a number of resources and webinars that we have developed to help banks like yours adapt to changes in mortgage finance. We’re also continuing to shape regulatory policy through our comment letters and requests for clarifications. You can keep up to date on all of our offerings by clicking on aba. com/mortgageresources. As for June, we can still celebrate the value of homeownership, but ABA will be broadening our consumer outreach to cover housing in general. After all, it’s important to highlight the issues and options regard- ing the most basic of needs – having a place to live – regardless of whether one rents or buys. Please join us, then, for “American Hous- ing Month.” Look for resources online at aba.com/housingmonth — including cus- tomizable news releases and a social media toolkit — that you can share with your customers to help them understand their housing and homeownership options. n © 2013 American Bankers Association. All rights reserved. Reprinted with permission. E-mail Frank Keating at keating@aba.com