[Please Note: These are prepared remarks of Chris George, who was sworn in as chairman of the Mortgage Bankers Association, during its 2018 Annual Convention and Expo in Washington, D.C., which ended on Wednesday. He is the president and CEO of CMG Financial.]

 It is fitting that I step into the role as your 2019 chairman at this city, given how much I enjoy history and how fortunate I have been to have stumbled into this industry. Like a lot of you here, I am an accidental mortgage professional. Started in this business when I was 19 and haven't done anything else since. What I love about our jobs is what we get to do every day; we get to make homeownership attainable in a responsible sustainable way.

I am fortunate in my day job as the President of CMG to travel around the country and meet 1,000s of mortgage professionals. I continue to keep coming back to one word that describes the 100, 000 of folks who call this industry their career.

When you think about your home, it really serves as the back drop to almost every major event in yours and your families' lives.  Some folks feel such a connection to their home that it actually becomes part of their family and is handed down from one generation to another. We get to step into our customer worlds while they contemplate making one of the most important decisions of their life. It is what has drawn me to serve within the California MBA and the National MBA. Giving back to an industry that I so deeply love.

Recognizing the good fortune, I have had to trip into a business that has allowed me to sit at that kitchen table and map a path to home ownership and the beginnings of personal wealth for a young couple just starting out. I am fortunate to be able to be surrounded by a group of some of the most talented, dedicated and passionate employees a mortgage company president could ask for. … Additionally, I am fortunate and truly looking forward to continue working with Chair-Elect Brian Stoffers and excited to welcome Vice Chairman Susan Stewart on the leadership ladder. Our third woman leader, ever, of the MBA.

I am in awe of the great work that gets done within our Board of Directors, the State Boards, RESBOG, and COMBOG. Thank you all for your generous service. Last, about a year and half ago when Dave Stevens came to us and said he was retiring, I have to admit it worried me a lot. I was naturally happy for Dave and blown away by the job he and his team had done remaking the MBA.  Still, I knew his last day on the job would be my first, and while I don't ever run away from the challenge, I was nonetheless concerned.

I wasn't worried about finding a replacement, I was worried about finding the right replacement. And boy have we found the right person in Bob Broeksmit. Brilliant, observant, organized, humble and most importantly, a really great sense of humor. One of the first times I met him he asked me, "Chris if money doesn't grow on trees, why do banks have branches?"  Did I mention he is brilliant?

And the MBA is stronger today than it has ever been. As I have been on the MBA leadership ladder, I have spoken to a whole bunch of industry folks who constantly ask me, how can we help? What do you need?  Call me and I will answer. Well, we have work to do, and I most certainly do need your help. I make a joke that it seems like we have been talking about GSE reform since the late 1800s. Things take a lot longer here Inside the Beltway then outside in the business world, so what.

We aren't giving up nor are we going away. We are going to talk and work through the system until we get our agencies out of conservatorship. When I say our, I mean it. These are American institutions owned by the American taxpayer, and as such unless we become obsessed with getting them back on solid footing, we will be in limbo for another 10 years. Make no mistake, if we don't control the narrative surrounding GSE reform, administrative or otherwise, our customers will suffer.

When has lack of choice ever been good for the consumer?  Yes, we have to protect the taxpayer and have made many changes that have done just that over the last 10 years.  We have to see this though however, for the sake of the next generation of homeowners. Our children, our grandchildren. Your job?  Help me when we call.  Support MORPAC or sign up a few folks to the Mortgage Action Alliance when we ask. This is crunch time. Action time. We have already started the process of creating coalitions with almost every other trade association in our industry.  From the realtors to the builders to the community bankers. We will ONLY get this done if we have a united front to the legislators and regulators.

Let's talk about innovation, or should I say forgotten innovation?  First, and rightfully so, we have been very focused on defending and re-assembling our industry after the housing crisis.  We had to be in a defensive mode.  Of course, we still have work to do refining the rules of our industry, things like L/O comp and QM upgrades. We will continue to do that, however, we have to stop exclusively looking in the rearview mirror and to start looking out the windshield as to the innovation our industry is in dire need of.

Both customer focused and within the organizations that we work with. Both Fannie and Freddie are doing their part in modernizing and innovating ways that we can have more certainty in the income, assets and property valuations of our customers, while transferring risk away from the taxpayer. Working with the MBA we continue to have a healthy conversation about pilot programs to better support their business partners, our members, and ultimately, our collective customers, our borrowers.

The Department of Housing and Urban Development, however, isn't as far along, but they too are working hard on getting there. With industry veterans like Brian Montgomery, Adolfo Marzol and Pam Patenaude in the leadership roles, and the fresh attitude and intelligence of Dr. Ben Carson, we are going to jump forward 50 years in terms of computing power and data security in the not too distant future. The MBA is working closely with the agencies and HUD to see these projects come together correctly and timely. It is a healthy partnership.

As for the consumer facing innovation? Think of it this way.  The future homebuyers of today were teenagers when the housing market crashed. There is of course a natural hesitancy to homeownership perhaps different than any other generation before. Their expectation is not to have their grandparent's mortgage process. They expect us to be relevant like the rest of the technologies that they are using on a daily basis.

The good news is, thanks to many of the systemic changes our industry has made over the last decade, we have established an impressive track record to lure in private capital to meet the needs of these new homebuyers. The loans we are making today are better documented, better disclosed, better appraised, and better understood than any other time in the 36 years I have been in this industry.

However, we can't lose sight of our overall mission serving low to moderate and underserved markets.  It is time we deliver on the promise that we have been talking about for decades; technology will bring to our industry a lower cost to produce thereby making credit more affordable to everyone, regardless of the color of your skin or where you are looking to live.

Not reckless lending (without) regard to good credit standards.  No, thoughtful lending practices that are reflective of the diverse lending markets we serve. Innovation speaks of breaking through the status quo.  We need process innovation, systems innovation and most of all people innovation. Because it's the diversity of people that brings diversity of ideas. If we want to better serve a growing and more diverse customer base, then we need a more diverse employee base.

My Dad said to me once, "Seek out people that are better than you, different than you, and braver than you."  There is no such thing as accidental diversity. To be diverse is to be deliberately diverse. Intentionally inclusive. We have made progress here on the diversity side, yet there is more work to be done, especially on the inclusion side. MBA is providing resources that can help. D&I webinars that are free to members.  M- Pact that is bringing in a younger generation of mortgage professionals. Our industry's future. Marcia Davies and her team have redefined the power of women in our industry via M-Power, and had a standing room only event 2 days ago!

And in about a month we will have our 4th Diversity Summit on November 27-28 right here in DC. As you all know there is a big changing of the guard here in (Washington,) D.C. We have, or will soon have, new leadership at the CFPB, FHFA, Fannie Mae, Freddie Mac, maybe Congress, and even within the MBA. Change is in the air. This means one word: Opportunity. We are the practitioners. We are the ones sitting face to face with the ultimate consumer, our borrowers.

We are the experts. Education is key here.  Slow is smooth and smooth is fast and know before you owe is the way to go.  The MBA is the one resource for all the data and education that will be necessary to successfully navigate the upcoming market place.  We need to continue to discuss what makes for a healthy business and what stress tests should ALL companies undertake to be sound financial institutions. One thing I have seen firsthand is the respect and reputation the MBA has within the housing market participants.

Quite simply, we own the space. I mean when legislators, regulators, member companies or media reach out looking for solid factual advice and input, they call the MBA. Our reputation on the Hill and throughout this administration puts us in every room and every conversation that is related to housing finance.  From Senate Banking to House Financial Services, to the CFPB, FHFA and even the White House.  When Housing is discussed; the MBA is asked to be there.

This is not a spectator sport and real estate should never be political.  This is about educating those in the position to make change regardless of their political affiliation. For the most part, they don't understand what we do like we do. You job is to help us educate them on the correct changes that need to be done to serve our customers. Last, it is an honor to be standing in front of you all today. Humbling actually. After a third of a century of doing this business.

I quite frankly never thought this would be a stage I would be on. I will make this commitment to you. I will work my butt off for you, each and every one of you. Large or small banker or bank, credit union or mortgage insurance company. Vendor or business partner. Commercial, multifamily or residential.

Mortgage applications drop 7.1 percent from one week earlier, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending October 12, 2018. This week's results didn't include adjustment for the Columbus Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 7.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7 percent compared with the previous week. The Refinance Index decreased 9 percent from the previous week. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 2 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 38.1 percent of total applications from 39.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.1 percent of total applications.

The FHA share of total applications decreased to 10.4 percent from 10.5 percent the week prior. The VA share of total applications increased to 10.4 percent from 10.0 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since February 2011, 5.10 percent, from 5.05 percent, with points increasing to 0.55 from 0.51 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) decreased to 4.98 percent from 4.99 percent, with points decreasing to 0.34 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since April 2011, 4.99 percent, from 4.98 percent, with points increasing to 0.69 from 0.63 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since February 2011, 4.50 percent, from 4.44 percent, with points decreasing to 0.54 from 0.58 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to its highest level since the series began in
2011, 4.34 percent, from 4.29 percent, with points decreasing to 0.35 from 0.52 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The Mortgage Industry Advisory Corp. has hired Dick Kazarian to serve as director of the borrower analytics group. MIAC provides pricing, risk management and accounting solutions to mortgage and financial services companies.

Kazarian has more than 20 years of experience in designing, developing, validating, and marketing quantitative models.  These include empirical behavioral models across a broad range of collateral types, pricing and risk management models, interest rate and mortgage rate propagation models, and value at risk and tail risk models. Also, Kazarian has extensive experience in model risk management, capital stress testing and regulatory relations.

Prior to joining MIAC, Kazarian held leadership positions at Citigroup, Lehman Brothers, Roosevelt Management, Shellpoint Partners and J.P. Morgan.

“He brings an exceptionally broad range of model development experience as well as an unparalleled depth of financial analytical expertise to MIAC and our clients,” said Paul Van Valkenburg, principal at MIAC. “Kazarian will lead the borrower analytics team and help clients address their asset valuation, capital and liquidity stress testing, and their CECL requirements."

Homeowners are realistic about the value of their homes.

For the second consecutive month, home value perceptions remained steady with owners barely overvaluing their home, at a national level.

In September, the average appraisal was only 0.29 percent less than what owners expected, according the Quicken Loans National Home Price Perception Index This result is consistent with August, when appraisals were 0.28 percent lower than estimated. This gap between the two opinions is much improved from the previous year, when appraiser opinions were an average of 1.14 percent lower.

Home value perceptions may be holding steady, but the growth of appraisal values slowed in September. The National Quicken Loans Home Value Index showed the average appraisal value rose 0.35 percent since the prior month, less than half of the growth rate from August. The annual increases in value are more consistent, with 5.69 percent year-over-year jump in September compared with a 5.79 percent increase in August.

Home Price Perception Index: Nationally, the home values estimate owners give at the beginning of the mortgage process is nearly even with the price opinions appraisers provide near the end of the financing process. In September, the average owner estimate was 0.29 percent lower than the value supplied by the appraiser, according to the Nationally HPPI. Not only that, but the number of metro areas where appraisals were more likely to be lower than expected dropped by 40 percent in the last year.

“A wide gap between the estimated home value and the appraised value can cause a mortgage to be reworked, or in some cases, scrapped altogether,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “All the more reason for homeowners to be realistic when their mortgage banker asks them what they think their home is worth when they start the financing process. Our hope is that the HPPI data on past neighbor transactions can help a homeowner better estimate the value of their home in order to set their financing up for success.”

Home Value Index: Home appraisal values rose 0.35 percent in September, according to the Quicken Loans HVI – the only measure of home value change based solely on appraisal data. Annually, home values posted healthy growth, increasing 5.69 percent year-over-year. The West was the only region to buck the trend of monthly gains, posting a 0.56 percent decline in value from August to September. All four regions analyzed show annual growth ranging from a 4.22 percent increase in the Northeast to a 7.06 percent jump in the South.

“Rapid price increases that have spanned more than half a decade have started to affect affordability as average wage increases struggle to keep up,” said Banfield. “While home values are still rising, especially with solid annual jumps, a slowdown in monthly growth is expected to allow the market balance with the more moderate inflation.”