The new chairman of the Mortgage Bankers Association has called for an "industry-wide commitment to personal responsibility."

Taking over the reins of the MBA at the group's annual convention in Chicago earlier this week, John Robbins said the "industry must take a leadership role so our customers receive the best information possible, allowing them to make an educated decision on the mortgage program they have selected."

If the business chooses to abdicate that responsibility, Robbins warned in opening the three-day conference, "Then we deserve to be subjected to the unending stream of punitive legislation and regulation (that's) sure to follow."

The chairman of American Mortgage Network in San Diego said lenders should have the borrower's best interest at heart, not their own. The "simple litmus test" should be to "always make sure borrowers have what they need to make the right choice," he said.

The 34-year veteran on the mortgage business has established a special task force to develop recommendations for an industry-wide disclosure document, and the effort has drawn plaudits from both Fannie Mae and Freddie Mac. Freddie Mac Chairman Richard Syron told the meeting that he's "excited about John's ideas."

Michael Perry, chairman of Indymac Bank in Pasadena, Calif., one of the nation's top mortgage originators, favors some type of disclosure statement over government-imposed suitability tests for the various mortgage products.

"Suitability is different from underwriting," Perry said. "If we get into (determining) suitability, our costs are going to go up."

Unlike those who blame the media for the black-eye which lenders have received as a result of the negative publicity generated by news stories about predatory lenders, the new MBA leader said the real culprits are those wrote the loans. "They obviously put their personal compensation ahead of their borrowers' well being," he told the convention.

Robbins also said the MBA could lose it's well-earned credibility with new organizations, lawmakers and regulators if its members don't hold themselves to a higher standard.

There should be laws to punish the "few bad apples ... that will always exist in any group, no matter the profession." he said. But the motivation for setting the bar high should not be to avoid punishment but to "fulfill an ideal."

Robbins is an advocate of better disclosure of both the risks and rewards of the various loan products under consideration as a "more transparent and standardized" method of disclosing not just what's required by law but also what's important for borrowers to know. And he says it should be required early in the lending process, perhaps prior to underwriting.

It shouldn't be "just one more piece of paper to sign at closing," he said.

Published: October 25, 2006

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.