1

August 13, 2013David H. Stevens

President & CEOMortgage Bankers

Association

2

Rates

3

Outlook for 2013 and 2014

Source: MBA July 2013 Forecast

4

Estimated Originations 1990 to 2014: SF Market

Source: MBA – July 2013 Mortgage Finance Forecast

5

Recovery in Household Growth Has Only Just Begun

5

Foreign Born

6

Minorities Will Drive Household Growth

Sources: JCHS 2010 Household Growth Projections and US Census Bureau, 2011 ACS

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ACS 2011

HispanicAsian / OtherBlack, Non HispanicWhite, Non Hispanic

0%

20%

40%

60%

80%

100%

JCHS Low Projection

Household Growth, 2010-20Households

7

Wahington View: Role Oversized & Outdated

1ST Loss Position

8

Piling On

Real Estate Finance System

Compliance

Rule Making

Coker-Warner

Hensarling

FHA Solvency

The Federal Reserve

QE3

Basel IIIGSE Reform

9

HMDA Data for 2011 Shows Net Exit From the Business

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20116,500

7,000

7,500

8,000

8,500

9,000

9,500

Number of Institutions Reporting HMDA Data

Source: FFIEC

10

Credit Expanding On High End – Shrinking On Low

Source: MBA MPMA

Jan-Jun 2013 versus 2012 Purchase Tranche Analysis2013 shares 2012 Shares YTD Change YoY 2013_2012

<=150K 35.9% 40.6% -1.7%>150K and<=300 37.0% 36.7% 12.1%>300K and<=417k 14.7% 13.2% 24.0%>417K and<=625k 6.7% 5.3% 40.2%>625K and <=729k 1.9% 1.4% 51.8%>729K 3.9% 2.8% 57.0%

100.0% 100.0% 11.4%

11

Retail Apps per Underwriter per Month

12

Broad Access to Credit

“The pendulum has swung too far the other way.”~Federal Reserve Chairman Bernanke, November 2012

“The average FICO score for denied applications in 2012 was 733 and the average LTV for denied applications was 81%.”

~Ellie Mae, January 2013

“Credit is achingly tight.” ~CFPB Director Richard Cordray, January 2013

Upon release of the Ability to Pay Rule

“Too many families with solid credit who want to buy a home are being rejected.”

~President ObamaState of the Union Address, January 2013

13

Seat at the Table

14

1. Privatize and Recapitalize•Shareholder Path

2. Receivership and Liquidation•Hensarling

3. Shut Down and Replace•Corker Warner•BPC•President•MBA

Options Being Discussed

15

16

MBA’s Key Steps to GSE Reform

17

Why Now – Control Our Destiny

• Legislation Will Overtake Us• G-Fee Tinkering

• Congress• FHFA

• Transparency• Competition• Appeals To ALL Outcomes• Proactive – Not Head In The Sand• No Legislation Required• Fills In The White Board

18

Lead – Follow – Get Out Of The Way

Let’s Choose To Lead

19

Control Our Destiny

20

Control Our Destiny