Chairman de la MBA
Buenos días and Good morning
It’s a pleasure to be here with you in Puerto Rico.
First, let me say that it is with great regret that MBA President and CEO Dave Stevens could not be here with you. As some of you may be aware,Dave has been battling cancer for the past year. He received unfortunate news earlier this week of unsatisfactory test results, and, therefore, had to remain home for more testing. I just was with Dave last week. He was in great spirits and healthy-looking Forward to retirement. So, this was a big “punch in the gut” for him. He has looked forward to this trip for so long and to have to cancel was extremely disappointing to him. Dave is in our thoughts and we wish him all the best as he continues to battle this beast.
For the past several years, I’ve heard from previous Chairmen of your gracious hospitality and well-organized event. Experiencing it for myself, those sentiments seem greatly understated. Although, I had hoped to join you under better circumstances. The devastation brought on by Hurricane Maria is nothing short of horrific. How I know a little about hurricanes: I grew upon the gulf coast of Texas. I’ve experienced hurricanes and seen firsthand the damage they can do. I’ve seen friends’ and families’ homes ripped away by the powerful winds. I’ve seen flood waters overtake homes, and when the water finally subsides, the mold and mud, and mildew quickly render them unlivable and subject to condemnation.
One experience sticks in my mind even after 57 years. I was just 7 years old, living in Baytown, Texas in 1961 about 2 miles from the nearest body of water-Cedar Bayou-when Hurricane Carla hit. Still today, it is the most powerful storm to ever make landfall on the continental United States.
The day before it hit, my family was trying to prepare for the storm by boarding up the windows of our house. We lived across the street from a lumber yard and the owner allowed us to take scrap pieces for the job. I was carrying a 3 foot by 3 foot piece back across the street when a gust of wind blew me over with the piece of wood flattening me to the ground. That night the storm hit. I thought that for sure the wind would rip the roof off our house. It was terrifying, and I’m sure many 7 year olds here in Puerto
Rico had the same experience. The water rose that night to within just a few feet of our house while many of our neighbors were flooded. I’ve had that memory with me for 57 years. The image never leaves. So, I can certainly relate somewhat to what your families and customers have experienced.
But I’ve never witnessed or experienced the kind of destruction Puerto Rico has suffered from Hurricane Maria. Reading the recent numbers on the devastation left in Maria’s wake is breathtaking.
• 250,000 homes with major damage, 70,000 of those destroyed
• An estimated range of 60,000 to 90,000 new building units are needed in the next five years.
• Rebuilding the country’s housing stock is estimated to cost $31 billion
And now the latest news of the miscalculated number of deaths from Maria was just another unconscionable problem the island didn’t need. Certainly, more than 46 deaths occurred, but now no one knows just how many lives were lost. For some families, I can only imagine reliving this heart wrenching news of losing a loved one. We all want to do more for the people of Puerto Rico. After all, we in this room work hard to help people find their homes. What often goes unsaid is the importance of helping those people stay in their home, especially when crises strike. Which is why, at my company Colonial Savings, we have coined a motto – “Families, not files.” Because we are supposed to be a source of information, expertise and help.
It’s not a file that needs help to avoid foreclosure … it’s a family. And it’s not a file that lost their home in a hurricane… it’s a family. And MBA and our members get it…these are families that need all the assistance they can get. Immediately at the onset of the hurricanes and flooding in Texas, Florida, the Southeast, and Puerto Rico, MBA deployed consumer and industry resources on its website- www.mba.org/disasterrecovery – to help families impacted by the devastating hurricanes… Basics like a checklist, along with tips for consumers on who to call, and links to disaster resources such as FEMA. MBA Released English and Spanish versions of Help for Homeowners and Renters Affected by Hurricanes.
We also released a new consumer-facing informational brochure called Disaster Recovery: A Resource for Homeowners. It’s available for cobranding with MBA member companies and, thanks to assistance from our colleagues at NAHREP, it will be available in Spanish very soon. This guide outlines homeowner disaster preparedness and steps to recovery including who to communicate with about your mortgage, how to navigate the insurance process, and what forms of aid and disaster loans are generally available. MBA also provided industry resources via the website as a one-stop shop for all mortgage investor, insurer and guarantor guidance related to disaster responsiveness. We provide specific resources for single-family lenders and servicers including FEMA, CFPB, GSE and FHA guidance. Commercial and multifamily lenders and servicers are also provided personalized resources. MBA provides members the resources we need because when we’re prepared, we can help our customers that much better. And many of us needed this guidance. Colonial alone serviced about 9,000 families who were impacted by hurricane Harvey in Texas and over 5,000 families who were impacted by lrma, in Florida.
We provided resources and information straight from our website for the families in need of help regarding their weather damaged homes. And I’m sure many of you provided this sort of assistance right here in Puerto Rico. However, in today’s technological world, getting assistance and information to people on an entire island without power is nearly impossible. Today, many families remain stuck somewhere between FEMA assistance and hazard or flood insurance payments; proceeds that they need to rebuild their homes. Flood insurance is important in any recovery aid to hurricane-impacted areas, but I understand there are complicating factors here in Puerto Rico. Findings from a new issue brief from the Wharton School for Risk Management found that less than 4% of Puerto Rican households have flood insurance. And while private insurance can provide much lower premiums than the National Flood Insurance Program – or NFIP, that doesn’t mean a family with a household income of $29,000 per year can afford it.
Because flood insurance is really the best option for recovery, ifs something MBA and our member companies usually encourage to possible flooding areas, even if the property isn’t in a flood zone. Currently, funding for the NFIP is set to expire July 31, 2018. Unfortunately, we are fearful that a long-term extension prior to that date is unlikely. MBA consistently pushes for a long-term extension of the NFIP program, because we never know when the NFIP will become a pawn in the debate while another flood occurs. Rest assured, though, that federal legislators are hearing our concerns loud and clear about the need for disaster assistance for Puerto Rico. I’ve read that many Puerto Rican families who lost their homes aren’t
eligible for federal assistance. At MBA, we are doing all we can to assist these families in Puerto Rico and on the Gulf Coast. FEMA individual assistance is not much, but we anticipate that Community Development Block Grant money should start funneling in soon. The Small Business Administration, FHA, USDA, and the GSEs all offer special grants for recovery and rebuilding. MBA has worked closely with federal agencies to help ease the burden on so many families.
After Maria struck Puerto Rico, Dave Stevens made MBA’s assistance a priority. He arranged an emergency conference call with the MBA of PR and HUD early on to discuss what could be done in the immediate aftermath. This led to HUD Secretary Ben Carson and Deputy Secretary Pam Patenaude meeting with key stakeholders in Puerto Rico to assess the long-term recovery needs and understand the scope of the housing rebuilding effort. HUD th4en awarded Puerto Rico almost $20 billion for long-term disaster recovery efforts. And just last week, Puerto Rico received a visit from HUD Assistant Secretary for Community Planning and Development Neal Rackleff who announced the award of nearly $20 million to homeless housing and service programs in Puerto Rico and the U.S. Virgin Islands. This was welcomed news among so many disheartening reports.
MBA also worked with FHA to amend the loss mitigation policies for disaster-affected borrowers. FHA added a new Disaster Standalone Partial Claim option for borrowers who were current or less than 30 days past due as of the date of the disaster declaration. FHA waived the requirement of Trial Payment Plans for Disaster Rate and Term Loan Modification and Disaster Standalone Partial Claim and reduced documentation requirements for all. MBA has also worked closely with consumer industry groups and federal agencies to stretch the limits of our assistance for Puerto Rico. We formed a Disaster Recovery industry working group with the Housing Policy Council, Urban Institute, American Bankers Association, and the Five Star Institute to develop and communicate disaster recovery priorities to the joint housing agencies to assist impacted families, but also families that were already in foreclosure prior to Maria. These efforts resulted in, among other things, obtaining an important new term extension modification option for USDA, VA, and GSE loans for borrowers who were current or less than 30 days delinquent at the time of the disaster.
This essentially allows payments missed during a disaster forbearance period to be tacked on to the end of the loan term, allowing the borrower to keep the same payment and interest rate they had before the disaster. But we, at MBA, wanted to do even more for Puerto Rico. We have made donations to two organizations that are active and mobilized in Puerto Rico, including:
• United for Puerto Rico, organized by the First Lady of Puerto Rico, Beatriz Rossello, is a collaboration of private sector sponsors organized to direct resources and aid including donations, volunteers, goods and services, to those affected by Hurricane Maria. And made donations to:
• Americares, which provides emergency medical supplies and medicine to disaster victims. Already $3 million in essential medicines – 7 tons of supplies including antibiotics, wound-care supplies, intravenous fluids, mental health medications and chronic disease treatments have been airlifted to Puerto Rico.
As I mentioned earlier, we are doing all we can to help the people of Puerto Rico and other hurricane impacted areas. Servicers with customers in disaster areas are working round the clock to provide families what they need to rebuild their homes and their lives. This is one of the hardest jobs for servicers and some of the most difficult times for families. We take each situation very personally because there is nothing more personal to someone than their home. And because these are families, not files. Working with families also takes an understanding of who they are, their lifestyles, and their housing needs. And I believe this is something the mainland should be doing much better, especially in relation to Puerto Rico. And I know Dave Stevens believes this too, which is why he always made MBA’s relationship with the MBA of Puerto Rico a priority. Although Dave is retiring from MBA very soon, our support for the MBA of Puerto Rico and the island will not retire with him. Dave’s passion and commitment to this industry will not end and we will continue his legacy of fighting and speaking out for what’s right for this industry and the consumers we serve. In every conversation MBA has in Washington, we keep the families our members serve at the forefront of our conversations.
We are closer to consumers than anyone and because of this, we have a unique perspective to advocate for the policies that affect our industry and impact consumers. Everything we do touches PEOPLE’S lives. What we do and how we serve our customers matters.
Because it’s about families, not files.