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TH E M R EP O RT | 61 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT Fannie, Freddie, HUD Leaders Discuss 2020 Challenges, Trends Government leaders addressed questions about pandemic response, affordable housing, and the broader economic future. R epresentatives from organizations including FHFA, FHA, GSEs, and HUD all spoke during a virtual event hosted by the Mortgage Bankers Association (MBA). The facilitator of the event said, during a GSE panel, that "collec- tive action is going to be what moves us forward." That was the general theme as high-level executives from Fannie Mae and Freddie Mac addressed ques- tions about pandemic responses, affordable housing, systemic racial inequity in homeowner- ship, and the broader economic future. Later, HUD Secretary Dr. Benjamin Carson and Deputy Secretary Brian Montgomery also emphasized the importance of "coming together in a nonpartisan, bipartisan way." As Freddie Mac CEO David Brickman put it, "there will ultimately be a bill to pay, to COVID-19." Still, both he and Fannie Mae's CEO Hugh Frater spoke optimistically about both the GSEs' new practices, including a new, controversial refinance fee, which Frater called "appropriate and prudent," and the future in general. During the GSE panel, MBA Chairman-elect Kristy Fercho queried the two execs about how successful they believe were their respective approaches to the COVID-19 pandemic. "Excellent," Brickman said. "I'm proud of the work we've done. We fulfilled our mission and played the counter-cyclical role the GSEs are called on to play in times of crisis." He cited the recently implemented payment deferral option, which both GSEs under their regulating agency, the FHFA, have employed. This COVID-19 Payment Deferral solution returns a home- owner's monthly mortgage pay- ment to its pre-COVID-19 amount by adding up to 12 months of missed payments to the end of their mortgage term without ac- cruing any additional interest or late fees. The option also protects borrowers from any negative impact on their credit. Says Frater, regarding his GSE's actions, "Fannie Mae has taken a people-first approach. I've urged our team to put themselves in borrowers' and lenders' shoes ... to remember the human element. We can't fix all problems, but we can provide options," he said. He points to a new comprehen- sive web tool, Knowyouroptions. com, which he says millions have visited and used over the past months. "Quickly adapting new servic- ing tools paid off," Frater said. "And competencies developed during crisis will help us help people when it's over." The most impassioned por- tions of the sessions related to homeownership and the pains of foreclosure or losing a home. This was especially true when the GSE execs answered questions about racial equality in homeownership. Brickman said, and Frater agreed that for the enterprises they lead, "This summer was a gut-wrenching wake-up call" insofar as inequality and systemic racism is concerned. Frater added that "as GSEs, our policies and guidelines ad- dress these issues … the larger point is we need to change our mindset when it comes to policy. We have to always look for new ways to achieve affordability. That also means looking at historical practices that "have long tails" and still cause systemic racial inequi- ties today, he said. Brickman said that at Freddie, some of the change begins inter- nally. "We have got to change our organization to be more reflective of the communities we serve." To that end, he says, Freddie has partnered with the Thurgood Marshall Scholarship Fund and the Hispanic Scholarship Fund, among other things. "It's not enough," he added. "We must be engaged in the mentoring and development of employees." He points to the company's internal Business Resource Groups, which fosters an inclusive workforce and which, he says, is "a function we want to be deeply embedded in every business we do." The men also pointed to programs such as the Supplier Diversity program and the Home Possible program for lower-income borrowers with FHFA loans. HUD's Montgomery reiter- ated a sentiment he shared in his recent DS News article: "As the coronavirus pandemic arrived in America, it revealed many of our country's great strengths, most no- tably the resilience and determina- tion of our people to overcome adversity. " All the guests at MBA's event acknowledged their roles as leaders charged with setting an example for the entire industry. "We have got to change our organization to be more reflective of the communities we serve." —David Brickman, CEO, Freddie Mac