* Executives say they sympathize with protesters
* Industry "under siege," bankers say
* Industry coping with new regulations
By Joe Rauch
CHICAGO, Oct 11 U.S. mortgage bankers attending
an industry conference in Chicago this week received something
they did not originally bargain for -- a heavy dose of the
consumer anger against the financial system that has boiled
into protest rallies across the country.
The Mortgage Bankers Association's annual conference in
Chicago this week coincided with a protest march against
joblessness and income inequality that drew about 3,000
demonstrators to downtown Chicago on Monday evening.
And while many of the attendees of the MBA event, which
ends on Wednesday, say they sympathize with the protesters,
others think their industry is being used as a scapegoat for
deeper economic woes.
To some mortgage executives, the message is clear: the
industry is under siege. "I think anyone who thinks we aren't
under siege is kidding themselves," said one bank executive as
he watched anti-banker protests outside the conference on
Monday along with other participants who snapped pictures.
Four years after the U.S. housing bubble burst, mortgage
banking executives say their business is under attack from
angry homeowners and lawmakers who view the industry as the
culprit behind the 2007-2009 financial crisis and subsequent
Some mortgage bankers said the public criticism has begun
to intrude on their personal lives.
One former senior industry executive, who declined to be
named, said he was confronted at a recent charity event.
"A woman asked me how I could sleep at night, and (said)
she was glad that Lehman Brothers and Bear Stearns failed," the
executive said. When asked how often he is confronted, he said
it happens "all the time."
Others believe their industry has become a scapegoat, and
that they are being punished for loose lending practices that
that have long since been rectified.
"We're easy to blame," said Hank Cunningham, president of
Greensboro, North Carolina-based Cunningham & Co, a mortgage
Throughout the first two days of the conference, attendees
said they sympathized with the millions of U.S. borrowers who
face foreclosure and, in light of the protests, the MBA issued
a statement that amounted to a mea culpa.
"We all recognize that our industry faces a trust deficit
with policymakers and the public and that people in our
industry contributed to the events that led to the financial
crisis," it said.
Easy lending terms helped many Americans stretch to buy
homes and a plunge in home prices has left more than a quarter
of borrowers in homes worth less then their mortgages.
With the nation's unemployment rate stuck above 9 percent,
banks are coping with millions of delinquent home loans, and
the total number of foreclosed homes is also in the millions.
In August alone, there were 228,098 default notices,
scheduled auctions, or bank repossessions on U.S. properties,
according to RealtyTrac, a real estate research firm.
The sour housing market was the backdrop to the protest on
the conference's doorstep on Monday which drew a few hundred
participants pushing for foreclosure relief and calling for the
ouster Bank of America Corp CEO Brian Moynihan and
JPMorgan Chase & Co CEO Jamie Dimon, among others.
During an afternoon question-and-answer session, two
protesters who had managed to get into the conference asked
Wells Fargo & Co home loans president Michael Heid how
he could sleep at night. Heid said the adversarial questioning
reminded him of testifying before Congress.
MBA Chief Executive David Stevens said he understood the
protesters' frustrations, and he recalled that after graduating
from college he had participated in a protest against a nuclear
weapons production plant in Colorado and was arrested.
But he said the industry and its critics must work together
to fix the housing market. "You're not getting anywhere to
rebuild this economy simply by yelling outside, that's the
unfortunate reality," he said.
Indeed, in his opening remarks at the conference, Stevens
struck a tough tone, saying the trade group was "on the war
front fighting" against new industry rules, including those
included in the Dodd-Frank financial reform law put in place
last year in an effort to try to prevent future crises.