Banking brief: Mortgage finance reform cannot be limited to a revised economic framework

As 2015 opens with the promise of a resurgent mortgage market driven by lower rates and more accommodative policies, successful and sustainable solutions to how we fund housing in America must address three critical non-economic factors.

Cultural diversity

Accommodations must be made to the significant changes in the cultural dynamics of our country. This includes recognition of broader ethnic diversity and the priorities of both established and emerging sectors of our population. Mortgage products and the processes employed must be diverse and sufficiently flexible to be responsive to personal needs and interests driven by cultural preferences, geographic locations, and personal objectives.

Employment structures

We must recognize notable shifts in employer and employee behavior, most notably income variability, loyalty of employment, and the structure of financial and other benefits associated with employment. Key financial metrics must be fully aligned with the changes in workplace compensation structures, benefits programs, and employee/employer relationships that affect the commitment to long-term occupational stability.

Disciplined execution

Incorporation of a comprehensive program of self-regulation is key, supplemented by timely and thorough third party oversight throughout the mortgage financing process. Lenders and servicers must be held accountable for delivering mortgage finance solutions that address the varying needs of the population, while remaining highly disciplined. This discipline must stand the test of rigorous oversight by independent third parties equipped to drive consistency throughout the process

Home ownership remains a critical component of the American fabric, not only because of its economic contributions, but because of the cultural and occupational stability it influences. Focusing on the critical non-economic factors will enable a more sustainable solution that supports home ownership across our diverse nation.