From Naderite to mortgage man

David Stevens has had his eye on Washington since shortly after graduating from college — but he never could have predicted he would end up in the nation’s capital as head of an industry trade group.

The current head of the Mortgage Bankers Association (MBA) started adulthood from a position about as far away from an industry trade group as possible: working for the Colorado branch of Ralph Nader’s Public Interest Research Group (PIRG).


What was supposed to be a brief turn in banking before going to law school and continuing political advocacy work has ended up taking Stevens up to the top of the housing industry food chain. Even Stevens is aware of his atypical spot as a dyed-in-the-wool Democrat representing the finance industry, a sector that has spent plenty of time battling the administration.

“I’m a weird dude,” Stevens told The Hill in a recent interview. “I’m a Democrat social activist in the mortgage finance business.”

But Stevens, who has headed the MBA since 2011, believes that weirdness can help him bridge the gap between often opposing interests, and potentially help push the needle on one of the most difficult policy debates in Congress: how to fix the housing market.

Lawmakers on both sides agree on the need to overhaul the housing market, even if they cannot agree on what shape it should take. That means Stevens will be playing a central role in one of the biggest policy debates in the coming years. As Washington searches for a way to redo housing in the wake of the bailout of Fannie Mae and Freddie Mac, Stevens’s job will be to represent mortgage bankers, ranging from the biggest names in finance to local banks and lenders.

Stevens, who got his start actually crafting mortgages for families in search of a home, brings a plainspoken demeanor to an often beleaguered industry, along with plenty of real-world experience.

Stevens points to his long history in the housing market, from originating mortgages as loan officer to tackling secondary market trades while working at Freddie Mac, as the type of boots-on-the-ground experience that comes in handy at the MBA. In an “eye-opening experience,” he realized that practical knowledge could be an asset even in the Obama administration.

“A Ph.D. can’t fix a car engine. You need a mechanic to do it,” he said. “Having that expertise down here was an advantage to help craft policy. … You could sit at the table with Cabinet secretaries, and you can say, ‘Nah, that’s not going to work.’ ”

He is not unaware of the beating mortgage bankers, like other bankers, have taken in the wake of the financial crisis, including from groups like Nader’s PIRG. Horror stories about loans improperly given out to homeowners with no hope of paying for them — whether at the direction of the bank or the client — continue to plague the industry, even as the housing market is finally showing signs of life.

“I don’t think the reputation has recovered. I worry about the industry remembering what happened,” he said.

Since taking over the MBA, Stevens has emphasized to the industry the need to give back, tapping into his early activist roots. He established a nonprofit arm, the Opens Doors Foundation, which covers the mortgage payments of families traveling for treatment for critically ill children.

And the MBA is also partnering with a financial literacy organization to help educate young adults.

“It’s a good thing to do. I want them to do it not because they’ll get some press advantage out of it, but because it’s the right thing to do,” he said.

As if being an activist Democrat were not enough to separate him from industry peers, Stevens came straight to the MBA from the Obama administration, where he oversaw the Federal Housing Administration (FHA) for nearly two years.

The FHA has come under fire recently for potentially requiring government assistance to recover from a multi-billion beating its portfolio has taken on bad home loans. The president’s budget proposal set aside nearly $1 billion to bolster the FHA’s reserve fund, and those struggles have driven calls from Republicans to overhaul the home lender. But Stevens is sanguine about the agency’s fate.

“FHA is far past their problems,” he said. He contended that the bulk of the FHA’s budget woes come from a bad series of loans made before the housing bubble burst (and before Steven’s tenure overseeing the agency), and the FHA has now beefed up its requirements to prevent such iffy loans from being made again.

And while lawmakers may bemoan the potential need for another bailout of a housing entity in the wake of Fannie and Freddie, Stevens points out that the FHA never actually collapsed, which is more than can be said about Fannie, Freddie, and some major Wall Street players as well — a testament to its solid finances.

But just because Stevens was once central to the administration’s housing policy does not mean he is shy to critique it either. He said the White House needs to be more explicit about what it wants in terms of housing reform, after laying out a series of options in a 2011 white paper that marks its biggest foray into the debate.

“The administration has to decide to take this on as an issue. Silence can be deafening,” he said.

While eager for action now, he defends the administration’s lack of housing action in Obama’s first term, arguing resources had to be spent stopping the bleeding from the recession before taking on such a major policy change.

Stevens carries a unique profile for a man in his position. But what he brings to the table may serve the organization well, just as it may have served Stevens in an alternate universe where he stuck with advocacy work.

“He’s able not to be offensive to people who don’t agree with him, and that’s a skill,” said Brian Chappelle, a business colleague at Potomac Partners who has known Stevens for more than a decade. “He would have made a good politician.”