WASHINGTON – With the start of a new year, the Mortgage Bankers Association last week held its State of Real Estate Finance Industry press briefing and shared its long-term economic outlook as well as its 2006 Advocacy Agenda. Presenting during the webinar from the MBA were: Regina Lowrie, CMB, chairman and president of Gateway Funding Diversified Mortgage Services; Jonathan Kempner, president/CEO; Doug Duncan, PhD, chief economist and senior vice president; and Kurt Pfotenhauer, senior vice president of government affairs. With the passage of the Terrorism Risk Insurance Act (TRIA), bankruptcy reform and class action reform, Pfotenhauer said 2005 was an "outstanding" year for the mortgage industry. "But challenges remain," he said. MBA has three policy priorities for 2006: * mortgage fraud – the MBA will seek $6.25 million in dedicated funding for 30 new FBI field investigators, two new dedicated prosecutors at the Department of Justice to coordinate prosecution efforts with the U.S. Attorney's offices, and $750,000 to support the operations of FBI Interagency Task Forces in the areas with the 15 highest concentrations of mortgage fraud. The increased and dedicated resources, said Pfotenhauer, will help the FBI more effectively pursue and prosecute mortgage fraud. He told the audience that the FBI caseload of mortgage fraud has increased over 160% since 2003, however the FBI has insufficient resources exclusively dedicated to combating mortgage fraud, despite their own reports of the "staggering" increase in incidence. * GSE reform – the association will continue its support for the creation of a "strong, independent, well-funded and effective regulator" who will assure the housing Government Sponsored Enterprises' activities don't "improperly" expand into the primary market, set appropriate affordable housing goals and activities and ensure a strong and competitive secondary market. In its 2006 Advocacy Agenda, the MBA further stated that, "In the unlikely event that a GSE were to become financially distressed, the regulator should have appropriate authority to intervene to protect the operation and liquidity of the secondary mortgage market, particularly the mortgage-backed securities market." * tax reform: MBA will advocate for the preservation of tax incentives that increase homeownership and create more opportunities to build affordable rental housing, such as the mortgage interest deduction. On the economic side, the MBA projects continued strong economic growth of 3.5% for 2006, with moderate, below-trend growth of 3.3% in 2007. In addition, it predicts total residential mortgage production this year will be $2.24 trillion – the fifth biggest year on record but still 19.5% lower than 2005. Despite the decline, Duncan said housing "will remain robust historically, and home price appreciation rates will moderate compared to recent years." Duncan also stated that the MBA expects the Fed will lower the Fed funds rate in late 2007. -

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