MBA Future Leaders

I spend a lot of time speaking at events to real estate and mortgage professionals. Recently, I had the chance to address a group of mortgage finance professionals in the MBA's Future Leaders program. 

What struck me about this conversation with this group of young professionals that span all aspects of the mortgage finance industry were the questions they asked me. Rather than focusing just on the opportunities ahead in housing, inventory shortages, or how technology might change the future, the discussion was uniquely focused on the impediments to home ownership. We discussed the state of regulatory confusion in implmenting complex rules. We discussed the lack of trust amongst the participants in the financial services world related to bringing back a private label market, and someone raised the question about "regulation by enforcement".

I came home that night reflecting on when I was a young professional rising through the ranks of a community bank early in my career. Thirty years ago, a group of "Future Leaders" would have likely not raised any of these questions. The focus would have been about new opportunities ahead vs impediments.

The fact is that our nation has experienced an unprecedented event that will remain not just in our rear view mirror but in the forefront of our thinking for years to come. The good part about this is that our young professionals are more aware of what responsibility is all about when providing consumers the opportunity to own a home. The Qualified mortgage rule enacted by the CFPB under the Dodd Frank act, new laws requiring testing and licensing for many loan officers, new consumer disclosures, limits on how loan officers receive compensation and more, have been for the most part improvements to protect against the events of the last decade from ever re-appearing again. The impact of the past resonate still today across the country and all one has to do is listen to any of the Presidential candidates talk about "Wall Street" and the banking industry to get a perspective about the work still to be done to completely rebuild confidence to the levels that existed prior to the recession.

My message to these "Future Leaders" was about the opportunity ahead in a nation that now operates with the safest and soundest mortgage finance industry in the world. This new highly regulated environment has elevated the professionalism of an industry and these young people are more prepared for the future as a result. But the opportunity that we now need to begin shifting our sights to are the demographics that will drive housing demand for the next decade. We are facing the reality of the millennial generation that is the largest generation in US history. This 80 million strong cohort of young people will drive housing demand for 12-14 million new households over the next decade. This will create a need for far more entry level housing stock, a need to constantly look at credit policies to make certain that sustainable lending is viewed with an eye to access and affordability, and thinking about how to make the new rules even better with some modification based on seeing them applied in the real world. This new generation will be very different than the baby boom generation that I started my career supporting. It will not be driven by white, non-Hispanic buyers. Hispanic, African American, and Asian homebuyers will drive more than 2/3'rds of all demand for housing in the decade ahead. Demand and diversity will be our collective opportunity to support.

The opportunity ahead in housing is enormous. I say this simply based on demographic reality, not speculation. The research is everywhere on this household formation variable that will spike demand for both rental and owned housing. And what leaves me feeling confident about my industry is that groups like the MBA's Future Leaders group I spoke with yesterday are better trained, more focused on compliance and risk, and thinking about real issues that can affect the future.

Opportunity is my one word response when I think about the mortgage and Real Estate market today - and this opportunity is built on a platform of protections, confidence, and skill sets that exist to make sure we build a positive future for America's next homeowners under the umbrella of the safest system in the world. It's a good time to think about housing, and a great time to join this industry that needs a whole generation of Future Leaders.