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| The mortgage industry has spent hundreds of millions of dollars during the past decade lobbying members of Congress. Some of the issues being lobbied could benefit multiple sectors of mortgage lending.
The Mortgage Bankers Association of America’s Kurt Pfotenhauer is brutally honest when asked why the mortgage industry trade group spent more than $2.7 million last year lobbying members of Congress. “Because that’s all we had,” Pfotenhauer, the association’s top lobbyist, told MortgageDaily.com. Pfotenhauer’s point is simple; organizations representing the mortgage industry muster all available resources to stay active in the halls of Congress and the offices of government regulators. “We’re a $3 trillion a year industry that is extremely complex and greatly affected by the federal government and increasingly state governments as well,” he said. “Our members engage their trade association in order to try to distill their individual views into a common policy position.” According to OpenSecrets.org, an online tracker of campaign contributions and lobbying expenditures for the Washington-based Center for Responsive Politics, a campaign finance watchdog organization, MBA spent $2.7 million lobbying last year. But that’s not even the largest sum by a mortgage industry related trade association. That distinction belongs to the Mortgage Insurance Companies of America, which spent a whopping $5.7 million on lobbying in 2006. The organization, which did not respond to a request for comment from MortgageDaily.com, has spent $2.1 million so far this year. Rounding out the top five of mortgage associations’ 2006 lobbying expenditures was the National Association of Mortgage Brokers, with $500,000 spent last year and $40,000 this year. The National Reverse Mortgage Lenders Association was next with $160,000 in 2006 expenditures and $40,000 so far this year. The now defunct National Home Equity Mortgage Association spent $60,000 last year — making it No. 5. None responded to requests for interviews, but the National Reverse Mortgage Lenders Association did e-mail information showing that the group lobbied lawmakers on for provisions of House Resolution 1852, a bill now winding its way through Congress that would make changes to the way FHA views and handles reverse mortgages. Pfotenhauer said many of the issues that concern MBA are also important to other mortgage trade associations, including: anti-predatory lending legislation; how to best deal with the increasing number of home foreclosures; reform of Government Service Enterprises, or GSEs, such as Fannie Mae and Freddie Mac; FHA reform; reauthorization of legislation dealing with flood and terrorism insurance. Between 1999 and last year, mortgage companies and their trade associations spent $187 million on lobbying, according to an analysis by Common Cause, a government watchdog organization that specializes in tracking campaign donations and lobbying spending. In that seven year span, MBA spent $11.8 million, followed by NAMB, $2.3 million, and NHEMA, $750,000. The spending was so high in many cases because the issues are complex and take a vast amount of research to understand, Pfotenhauer said. Much of the money is spent to help members of Congress grasp the issues. “Just getting people to pay attention to issues as complex as ours can be difficult and time consuming,” Pfotenhauer said, who then rattled off the complexities of an accounting law and how it impacts the ability of a loan servicer to modify an existing law. It is one of the laws that MBA has lobbied on in the past. “It’s a fairly complex question,” he said. “So part of that $2.7 million we spend on lobbying is to pay the salary of an accounting expert who can answer the questions members of Congress are going to have.” Common Cause says in a recent report that the industry flexes too much financial and political muscle, particularly in the area of the laws and regulations governing subprime mortgages. The meltdown in the industry and the high rate of foreclosures can be blamed, at least in part, by the intensive and expensive pressure the industry has put on Congress. “Despite warnings from consumer and low-income advocates as early as 2000, Congress turned a deaf ear to their requests for stronger federal regulation,” Common Cause said in its report. “Seven years later, policymakers are confronting a full-blown crisis spurred at least in part from their inaction.” MBA has flat out denied that its lobbying has helped fuel the subprime mortgage meltdown. The individual circumstances of borrowers and lenders and economic conditions, including unemployment or other cost pressures, are the root cause of the problems, the association has held. |
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Patrick Crowley is a feature journalist and blogger for MortgageDaily.com. He is also a reporter, blogger and columnist for The Cincinnati Enquirer. |
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