GSEs & Hot-Button Proposals with Ryan Black

Val Buresch:

Hello and welcome to CMBConnect. I'm your host, Val Buresch.And with me in the studio is Ryan Black. Ryan went from congressional stafferon Capitol Hill to becoming a partner at Black, Mann and Graham, a Texas firmthat's been quietly keeping hundreds of lenders out of hot water since 2000with bulletproof mortgage documentation and document preparation and compliancesupport.

Val Buresch:

Ryan, welcome. It's great to have you on CMBConnect.

Ryan Black, CMB:

Well, it's an honor to be here. Thank you, Val, for havingme.

Val Buresch:

And before we get into the GSE topic that I really want toget into and discuss with you today, I want you to give everybody the quickversion. How did you end up at BMG from a congressional staffer?

Ryan Black, CMB:

Well, it's a long story, it started with my father wasactually in mortgage and he worked for some wholesale lenders despite having alegal background for decades until he and Calvin Mann and Gregory Grahamstarted the firm Black Man and Graham back in 2000. So growing up I...

Ryan Black, CMB:

I didn't really know what I wanted to do. I just didn't wantto do mortgage because I was, I was around it so much. And, the one thing thatI, I kind of connected with was politics. So after right after law school, Igot a job on Capitol Hill. And, of course, the, one of the first topics thatcomes across my desk is a mortgage related topic. And, here we are. I gotsucked right back into it, even though I tried to run.

Val Buresch:

And here we are in the CMB society. How did the CMBdesignation get on your radar?

Ryan Black, CMB:

Here we are.

Ryan Black, CMB:

I guess, it's a similar story. I remember my dad beingreally involved with MBA throughout his career. And one of the earliestmemories was when he was teaching one of the school of mortgage banking classesout in Alabama when I was probably 10 years old. And I went out to that and gotto hear him do his spiel on what?

Ryan Black, CMB:

Fannie and Freddie are all about. And so I was one of thefew 10 year olds that even heard of Fannie and Freddie, I suppose, at that age.But yeah, the CMB really got ramped up for me, even though I knew about it forforever. Right after I did Future Leaders program with MBA, that was a really acareer defining program for me to go through. I learned so much.

Ryan Black, CMB:

developed so many fantastic relationships. It was a greatexperience. number of my classmates went right in to take the CMB exam or studyfor the CMB exam right after future leaders. I was wisely counseled intofinishing SOMB first, two and three. once I wrapped that up, I started on myCMB journey with my sponsor, Alan Fowler. And I guess we're just...

Ryan Black, CMB:

We're just now in early November, about a year away fromwhen that really started and intensified the study.

Val Buresch:

love this connection with the family, both from how youstarted in mortgage and also the impact of your father on your orientation anddecision to search for more, to get more designations and involvement with theMBA.

Ryan Black, CMB:

Yeah, yeah, it's, it's always been instilled, not justthrough him, but through, through, the mentors like Calvin man that I've, I'vehad in my, my professional life to give back to the industry. And when you dothat, you'll, you'll grow so much. and, I, I see CMB, the CMB society alignwith that perfectly. You see the passion. mean, geez.

Ryan Black, CMB:

The first session I go to, the outgoing president showseverybody his CMB tattoo. That was indicative of the passion of this group andI love it. And so I'm eager to get more immersed in the society and help andtry and give back to an industry that's given me so much.

Val Buresch:

That's wonderful. Well, let's immerse ourselves today intothe headline stuff that we heard recently, both on X, but also in thenewspapers. And let's start with the conservatorship. Are we actually leavingthis time? The FHFA director Pulte keeps talking about the partial IPO, 5 % bythe year end. And I wanted to get your gut check, Ryan.

Val Buresch:

What's your read on whether this partial IPO would actuallyhappen this year? And are Fannie and Freddie getting out of conservatorship? Isthere any chance for them of getting out of conservatorship in 2026?

Ryan Black, CMB:

You know, I, I think it would be difficult, again, it beingearly November to, to reach that goal of, of doing this by the end of 2025.especially with, with the changes we've seen it at Fannie Mae recently. it'sinteresting. I just got back from the Texas housing summit that the Texas MBAput on. was a wonderful symposium that they organized at the LBJ library at theUniversity of Texas. And a number of the speakers there hit on this topicexactly. And the one thing I noticed that is a bit confusing, I think, to most,especially those inside the Beltway in DC, is that I think traditionally thefate of Fannie and Freddie rested in the Department of Treasury, the TreasurySecretary. And since Pulte has been appointed at FHFA, we've seen a strongeropinion from that role as to how it should happen, when it should happen, thatkind of thing. And so that's been a dynamic that I don't know wasreally...anticipated. Treasury and FHFA seemingly not being on the same page. Ithink the way this administration's run in the past and certainly this year,they have a bit of that internal struggle. And then eventually some kind ofproposal comes out of that.

Ryan Black, CMB:

I'm not sure what, what that'll look like. Certainly there'sa role that I think treasury needs to play given how most of conservatorshipsgovern through the PSPAs. I, you know, whether, whether, or when, when theywill come out of conservatorship is, is, is way beyond my understanding of allof this kind of stuff. I'm not.

Val Buresch:

Hmm.

Ryan Black, CMB:

I'm not even sure what treasuries that timeline would be onall of this. As you mentioned earlier, I was a congressional staffer. I workedon the Senate side. And during that time that I was there, the big GSE reformproposal came out of the Senate Banking Committee Chairman Johnson and rankingmember Crapo at the time.

It was a bipartisan solution. MBA had their fingerprints allover it. was an interesting and I think realistic take on how to get Fannie andFreddie out of conservatorship. Unfortunately, it obviously didn't pan out, butwhat I think is important that isn't being discussed is

the role I think Congress needs to play in all of this.know, of course, everybody left and right, I would say, or the vast majority ofpeople agree that conservatorship needs to end at some point.

Val Buresch:

Mm.

Ryan Black, CMB:

the sooner the better. Otherwise, Fannie and Freddie willcontinue to lose their characteristics that make them nimble, make them theprivate entities that they once were. But I suspect that the best thing thatcan be done for global investors of MBS is to have Congress say, this is howwe're going to treat the GSEs from now on. We'll provide an explicit backstop.And until we get to that point, I'm not sure that we'll have that certaintythat we need to release Fannie and Freddie and not...

totally disrupt markets, right? That's no matter whatadministration's in place, think politically it's not feasible to do unless youcan ensure that somewhat smooth transition. And until that time, I think thatthe best way for this to happen is through Congress. But seeing as how theycan't even agree to keep the doors open, I don't see how they're gonna get thatdone.

Val Buresch:

Right. I have not thought about the role of Congress in thisconversation, actually. So you open my eyes to something that is reallyimportant. When I think of conservatorship, I normally think of FHFA and theactual administration putting pressure on those conversations, the MBAlobbying. But I've never thought about the role of Congress. And that'ssomething that I will

Val Buresch:

take away from this conversation afterwards and think moreabout that.

Ryan Black, CMB:

Well, yeah, unfortunately they've given you reason not tothink about them because they've been very quiet. And my hope is that one daythey'll kind of wake up and start legislating again and they can...

really bring a lot of certainty to all of this, not just inthe explicit backing, but affordable housing mission. What goals should we besetting? How do we monitor them? How do we hit them? There's just so much tothis very complex deal. The last real...

Val Buresch:

Yes.

Ryan Black, CMB:

issue that hasn't been resolved since the great financialcrisis, you would think Congress would want to play a role in that. But again,it's been too long. And so I understand why any administration would want totry and wind this down. I don't think that doing so without Congress will upendthe apple cart, but if you don't do it right, it certainly could.

Val Buresch:

Mm-hmm.

Val Buresch:

more to come. I would love to continue this conversationwith you because this is fascinating. But let's move on in the interest of timeto the hot button proposals that we have seen being suggested, so to speak.Let's start with the sumable mortgages and even portable mortgages

what I have been wondering, if every Fannie and Freddie loanbecame assumable tomorrow, let's say, would that move the needle of thetransaction volume that we are seeing in the market, or would it just create aservicing nightmare somewhere down the road? What do you think?

Ryan Black, CMB:

You know, I think this is a little bit outside of my, mylevel of experience or expertise, but, yeah, I do think there would be a numberof issues, especially if, if you're doing it to, loans that have alreadyclosed, you know, if it were on a go forward basis and, that would, that wouldcreate a new product that could potentially, open, open things up, but, youknow, all these,

Val Buresch:

Right.

Ryan Black, CMB:

proposals to address affordability while they, I think, comefrom a good spot are a bit frustrating to me because we know what the issuesare when it comes to affordability and getting people, first time home buyersinto homes. And A, that's address inventory, right? And we got to continue tobuild.

I'm out here in Texas. We do a pretty good job of it. Everystate has its issues with local zoning ordinances or regulations that slowconstruction. But we're seeing how, at least in Texas, how

When you regulate it correctly and incentivize new builds,lenders will do that, especially here in Houston. There's actually, again, atthe Texas MBA Symposium, they talked about how Houston has been a model forlack of zoning regulation ultimately promotes new builds. And so I think that

not to get too far away from the assumable topic, but Ithink that the frustrating part is we know what issues are causing thisaffordability crisis in the housing market. And,

Val Buresch:

Mm-hmm.

Ryan Black, CMB:

We know how to address them and we're just, we just can'tbecause it's, it's, it's difficult. It's a fractured system. Each state andeach municipality kind of has their own rules of the road. So, number one,think that would be the best way to address it is for everybody to get on thesame page and encourage new construction and, in a safe manner. I don't thinkthat credit availability is, a major barrier to first time homebuyers.

Val Buresch:

Mm-hmm.

Ryan Black, CMB:

I think it's just this, well, it's mostly this inventoryissue. So if we're able to get folks in these starter homes, out of the starterhomes and into their next home, I understand why going after proposingsomething like an assumable mortgage to try and get them to come out makessense.

Val Buresch:

Mm.

Val Buresch:

Yeah.

Ryan Black, CMB:

I'm more in line with, you know, your Bob Broksmith talkabout raising the capital gains tax on treatment on the sale of a home. I thinkthat might clear up some more inventory than in a safer manner than, you know,creating these assumable products and causing everybody to, to your point, runaround in the servicing department. Not too happy about that.

Val Buresch:

Yeah, and we only have to look at the FHA and VA record. Ithasn't been the uptake hasn't been as big as we were hoping for the assumablemortgages.

Ryan Black, CMB:

I agree. I appreciate the solutions that people throw outthere, but I, again, I think that we know what the issues are and our energyshould be more focused on those.

Val Buresch:

Let's go over those proposals because it's interesting to atleast comment on them and consider them. The next one that I wanted to bring toour discussion is the 50 year fixed mortgage. 50 years, half a centurymortgage. This is something that the Trump administration is pushing hard for.just from our perspective, the perspectives of CMBs

Would a 50-year fixed mortgage open up a new borrower poolthat is good business or are we going to create a situation where we arecreating the factors that can bring default risk down the road?

Ryan Black, CMB:

Yeah, my mind goes right to default risk. also goes to,know, what's the benefit to the consumer on a 50 year product and how much areyou paying on interest over the life of that loan? Again, I'm so far removedfrom the Wall Street aspect of all of this, but

who wants to purchase that? mean, I guess if they getinterest that's twice the amount of the principal, that might be worthwhile,but how do you price that? How long does somebody stay in a 50 year mortgage? Idon't know. Exactly. Who knows? Who knows?

Val Buresch:

What's the prepayment risk on those? We don't know. Yeah.

Ryan Black, CMB:

Who's going to be in that for 50 years? Yeah, I question howmuch time and energy the administration will really put into putting that typeof product out there.

you know, as long as it's being discussed, I think we'reseeing it all over LinkedIn and social media. I don't think that industry isgoing to embrace it. And so that'll likely be an item that goes back to thedrawing board, I suppose.

Val Buresch:

Well, next one. Fannie Mae is dropping the minimum creditscore. There is no more 620 floor in the DU starting November 16th. Do youthink this is a growth opportunity for mortgage lenders or let's say portfoliogrenade?

Ryan Black, CMB:

You know, I think it's growth opportunity. think we talk alot about how Fannie and Freddie have taken away from the government portfolio,all the quality loans, right? And so I think that if there's room within Fannieand Freddie to take a little bit more risk on borrowers in that space,

Now, how much risk is always the question, right?

Val Buresch:

and also what I also think is that the story doesn't endwith the credit score. is equity in the home, the LTV, the CLTV, the ability torepay that loan.

Ryan Black, CMB:

Yeah, that's a good point is when we take into considerationall of the rules and regulations that lenders have to implement in order tojust originate this loan, I don't think that we're going back to 2006, 2007with lowering credit scores.

You know, we have safe products. We're very different marketthan we were back then. And I'd argue that portfolios are a lot more safe andsound compared to where they were back at that point in time. That doesn't meanwe should go run amok, but I don't think anybody's proposing that either.

Val Buresch:

Right. From my perspective, when I look at the numbers, Ilook at the data that describes the loans in the Fannie and Freddie pools. Butwhat we don't see from our perspective as data scientists is the documentation.This is something that you specialize in. And so even if a loan has a lowercredit score, but it has better risk metrics like the LTV, for example.

and solid, solid documentation, mitigates that. We alwaystalk about credit scores, but maybe it's not that important.

Ryan Black, CMB:

Mm-hmm.

Yeah. And we've seen it in the, in the non QM space a littlebit as well. There, there's good quality borrowers out there that might not fitthat tight box that we have as lenders to, you know, originate loans for thesepeople. And I, suppose that, this will help, you know, loosen that up a littlebit. and I don't, I don't foresee it being, being abused because of all the

Val Buresch:

Mm-hmm.

Ryan Black, CMB:

rules and regulations around originating laws right now.

Val Buresch:

Well, last of the proposals the vantage score. We know it'sfully live now and some I've read people say the adoption of vantage score isthrough the roof. And so I'm wondering if this is

this situation with the advantage score adopted, allowinglenders to say yes to more loans without getting burned or is it too early totell since we're just seeing all these things happening in real time right now.

Ryan Black, CMB:

Yeah, that's, that's interesting. I you know, I've, I'veheard anecdotally good things so far, which, leads me to think that we'll befine. And again, I think that the idea of, relying on, on one score is notnecessarily a safety and soundness issue.

Val Buresch:

Mm-hmm.

Ryan Black, CMB:

You know, we're not the only industry, we were the onlyindustry relying on the tri-merge, right? And I think that the ability to do,rely on one, the data is there, the variance isn't that significant as Iunderstand it. And so I suppose on the safety and soundness front we'll befine. And as long as we're...

again, able to reach borrowers that we might not havealready reached or address the affordability issue by lowering the cost ofclosing, of originating these loans for borrowers. That's all a plus. That'sall a good thing. And that's what I'm hearing out in the marketplace today.

Val Buresch:

very well said. So I'm wondering based on our discussiontoday, if you are walking in a room next week full of CMBs, what are you goingto tell them? What is the single move that they should make right now to stayahead of whatever happens with the GSEs? No matter where they are, whetherthey're...

loan originators, servicers, vendors, fintechs.

Ryan Black, CMB:

You know, the because of my background, really, I wasintroduced to MBA staff working in DC. My head goes right to advocacy. And so Iencourage everybody, whether you're a CMB or not.

Val Buresch:

Mm-hmm.

Ryan Black, CMB:

to get involved. know CMB Society has a very strong showingat things like the MBA National Advocacy Conference. There's also MAA mortgageaction Alliance, which is free to join. It alerts you to.

issues that are, that are popping up. And when we as anindustry need to reach out to our elected officials to say, Hey, we want you tosupport this bill that you're, you're going to be voting on next week. it,queues that email up for you and sends it out for you. Once you approve it, itmakes it, makes it so simple to be a member of MAA and, that's where you, youlearn about all of this stuff by, getting it.

Val Buresch:

Yes.

Ryan Black, CMB:

involved in the advocacy and you stay at the front of theissue when you hear people like Bob or Bill Kilmer or Pete Mills talking aboutwhat they're hearing in DC. really,

Ryan Black, CMB:

To me, that's one of the greatest values of MBA is theinsight that they have, the involvement that they have. And I know thatstaffers on Capitol Hill and in the administration, they go to MBA to get MBA'spulse on the topic. So that's...

always been front of mind. I'd be remiss to say I'm also thevice chair of the MORPAC committee. please consider considered a MORPACcontribution as well. But MAA is is a free and easy to use resource and thenNational Advocacy Conference, which is in April, I believe, seventh or eighthof this of 2026.

That's a phenomenal conference. It's relatively cheapcompared to other conferences in terms of its registration, but you learn somuch at these things and they get the elected officials and admin officials tocome to us, talk to us about what they're hearing and what they're seeing. Andthen we get to go to Capitol Hill and talk to our elected officials and theirstaff about these topics.

Val Buresch:

Mm-hmm.

Ryan Black, CMB:

It's my favorite two days of the year and I encourage allCMBs to do it whether they've attended before or not.

Val Buresch:

Yeah, it's a fantastic conference and I've been a couple oftimes to the Hill by participating. I live in DC, I work in DC. So for me, I'malways attached to Maryland or to Virginia, but nevertheless, it's quite anexperience.

Ryan Black, CMB:

It is. mean, it's an important thing to do, number one. Andyou get to experience the history and tradition of some of our most importantinstitutions. And so I think it's great experience. again, I encourageeverybody to attend at least once, if not annually.

Val Buresch:

Thanks, Ryan, for this advice and for keeping it real withus today. I really enjoyed the conversation.

Ryan Black, CMB:

Well, thank you for having me. Thank you for the warmwelcome into the CMB Society. I'm eager to be a part of it.

Val Buresch:

We are better because of you and people like you who arejoining the CMB society. That's what makes the society so vibrant, the newmembers.

Ryan Black, CMB:

Absolutely. And I think I went the whole session withoutthanking my sponsor, Alan Fowler. So let me do that too, before I get introuble. But Alan was super helpful throughout the whole process. And I'mgrateful for his many insights. He taught me pretty much everything we talkedabout today.

Val Buresch:

Fantastic, fantastic. And I know Alan very well and Itotally agree with you. He's a phenomenal individual and professional.

Val Buresch:

Thanks again, Ryan. And that's it for this episode ofCMBConnect. And If you're not already in the CMB Society, fix that. And we'llput links in the show notes below. Drop us a review, tell a friend, and we'llsee you next time.