DR. BEN CARSON
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
AT THE NATIONAL BANKERS ASSOCIATION CONVENTION
OCTOBER 6, 2017
As prepared for delivery. The speaker may add or subtract comments during his presentation.
Thank you. I am honored to join you today. I especially want to thank President Michael Grant and Board Chair Preston Pinkett for their kind invitation. Since 1927, the National Bankers Association (NBA) has been a leader in the industry. You have made a profound impact for minority customers and investors. For ninety years, America has relied on your knowledge, wisdom, and credibility. When R.R. Wright founded the NBA, he had a vision, that minority bankers together could contribute greatly to the American economy, and help lift customers to wealth creation and financial security. You are more than an organization. In many ways, the National Bankers Association is a movement, a vision, with powerful results.
That is why I came here today. America-and all its citizens-will be better off with more minority homeowners who are ready for the financial commitment. We need other organizations to join in your efforts. Minority homeownership should increase, in a sustainable, long-term way.
Currently, the American housing market has largely recovered from the crisis and is strong. We are all thankful for that. National and foreign investment is flowing into the market, providing liquidity for homebuyers. Property values have increased, even though inflation is low. Equity is rising. This is a good time to own a home, if you can afford one and if mortgage rates remain affordable.
And, as a result, the American economy is doing well. The housing market is a foundation of the American economy. Personal wealth is growing for many people ... record numbers. The stock market is at record highs. Unemployment is low. Tax relief seems to be in the works in Congress. The future looks promising, despite the challenges faced by Texas, Florida and Puerto Rico. I know we will recover stronger than ever from them.
Our national homeownership rate is 63.7 percent. This appears to be stabilizing after steady declines following the financial and mortgage crisis. But the rate among black Americans is 20 percentage points lower than the national average. Twenty percentage points.
This is especially unfortunate, because we know that the American Dream is a vision for all people, of every background.
We don't want there to be two Americas: one with homeownership and financial stability, and the other with permanent rent and an uncertain future. Some may prefer to rent, but those who are creditworthy and ready for the responsibility of homeownership should get the opportunity to own a home they can afford.
We want one America. One with the same opportunities for everyone.
That is the challenge we face. And, I know, this is a challenge that you fight to overcome every day, an effort for which NBA should be proud.
The Great Recession caused a loss of confidence in a lot of things. Not enough transparency, accountability, or responsibility. Large numbers of foreclosures, homes underwater, bailouts, failed banks. The ripple effects went around the world. We are finally on sounder footing.
We have learned a lot since then. Reforms have been forthcoming. And the banking system is more fundamentally sound, with stronger capital and better practices. Risk has narrowed. Banks are back, stronger, better, even more fiscally prepared for the future. You are proof of that.
We have also learned that our efforts to supply mortgages to moderate income Americans and minority groups cannot be based on imprudent lending standards or unprepared home buyers.
We want borrowers to achieve permanent homes-not permanent debts.
The poor lending practices-and some ill-considered federal policies-of the past should not be penalizing prospective minority homeowners. Instead, we should work together to find more avenues for minority citizen homeownership.
I am here today to ask for you to continue to step forward and to help create more first-time homebuyers, business owners, and more people fulfilling the American Dream.
Attitudes and perceptions must change. We need a group effort to persuade our countrymen that the American Dream is available for those who qualify for a mortgage, that the fears of a decade ago should now give way to a steady, justified optimism that must accompany the good news in the economy. We can help our countrymen by working together to dispel some myths that may be holding good borrowers back.
For example, you don't need 20% or even 10% to buy a home. We can bring more borrowers into the process through education and counseling, without making inappropriate, risky, or poor investments. Small banks, community banks, gave us a great example of good management in the last decade, making good loans and avoiding the risky practices that prevailed in much of the market.
We can also make progress by working together to address housing finance reform. Our administration has signaled its interest in addressing reform, perhaps the last major piece of unfinished business from the housing crisis.
We are going on a decade now of GSE's in conservatorship, which should be addressed. Freddie Mac and Fannie Mae currently have over $5.0 trillion in mortgage backed securities. This is out of $10.3 trillion in outstanding single-family mortgage debt. We would like to see more private capital involved and, importantly, we must ensure that institutions of all sizes can access mortgage capital to serve their customers. Small and minority owned banks must continue to be able to serve their local markets well.
Second, the Federal Housing Administration (FHA) is an important component of minority access. Over the last few years, FHA market share has receded, moving closer toward FHAs traditional role of helping low and moderate income and first-time homebuyers that need FHA financing to access the market. FHA's market share for FY 2016 was 13.2 percent, based on dollar volume, using HUD data. That market share can increase or decrease, depending on the needs of the market. FHA can calibrate to the needs of the market by expanding or contracting, acting as a stabilizer.
I mention FHA because it can be part of the solution. Recently, we issued regulations to make condo ownership easier for first-time buyers. These new regulations ease the hurdles for first-time ownership of a condominium, which is often the initial step on the homeownership ladder. This change could be beneficial for prospective, credit-worthy homeowners, especially millennial borrowers looking to get their foot in the door of homeownership.
Third, I have many times advocated for more public-private partnerships to help meet our housing needs. These can be innovative and beneficial to the taxpayers. As you know, rising costs in urban areas have often priced-out the very people who make the city work...teachers, firemen, cab drivers, health care workers, and others. But, we can turn that issue to advantage. At the SW Waterfront, near my HUD office, you can see an amazing transformation, where blight has been renovated into a great place to live. HUD owned much of the property. Developers wanted it. So, we leveraged it to include affordable housing and low-income housing. At no cost to the federal taxpayer.
Fourth, under this administration, HUD and many other agencies are already removing burdensome regulations from Americans and their businesses. We want to make it easier to build a house, lend money, manufacture siding, all those things-not harder. We want it to be easier to employ our neighbors and help them to support their families-not harder.
It's not the job of Washington to pick winners and losers in the market. We have to craft regulations that enable large and small to compete, while ensuring the proper safeguards are in place. We want to unleash the potential of every institution. Especially those who operate in our towns, with people they know and trust. Washington can learn from them.
Finally, through all this, we must fully enforce the Fair Housing Act. Any form or pattern of discrimination must be addressed with vigor. The very existence of the Act prevents some practices. We must make certain that the spirit and letter of the Act are an inherent part of the housing landscape. I have repeatedly stated that this is a top priority for my department.
We can do all of this, and more. Today, I am asking for your help in making the American dream a reality for everyone. I ask that you engage with HUD to help us find solutions and share with us what we can do to help.
I started by talking about one of your founders, R.R. Wright. He was also an advocate for a "National Freedom Day." He wanted that day to become "a beacon of freedom to oppressed people everywhere."
All these years later, we can make it happen. With this economy, we must act. If not now, when? The work of the NBA is that beacon. This is your moment. You must seize it. You must become the beacon for other organizations. And, I am asking that you illuminate the way for others. We can measure the results with more minority homeowners who succeed, who achieve permanent homeownership and build wealth for future generations. We can expand opportunity by lifting up our fellow Americans, and by responsibly empowering minority homeownership, business, and all the ventures which will give this country its hopeful, entrepreneurial spirit for many years to come.