By Tory Barringer
Given that the toast “may you live in interesting times” is as much a curse as a well wish, anyone working in the mortgage industry today would likely describe the mortgage crisis and the last decade or so as an “interesting time.” Those of us who have been around a bit longer would know that the “savings and loan crisis” was yet another “interesting time.” But not many can claim to have been involved both times helping with the recovery as Ken Markison can.
“There was so much happening that was ground breaking following both crises,” Markison said in a phone call with Mortgage Compliance Magazine. “These were truly crises, and crises bring responses.” While at the Mortgage Bankers Association (MBA), Markison guided the industry with insights gained in both to help shape a more workable path forward.
In early August, the MBA announced that after 13 years, Markison would be leaving to start his own consulting practice, opening a new chapter in a life of service and advocacy on behalf of the mortgage industry and homeownership. As he moves on to the next phase, he still carries with him the knowledge he gained from a long and eventful career in government and at the MBA.
The Early Years
Unlike many in that stage of life, Markison entered the workforce post-law school with a clear direction in mind: he wanted to put his skills to work in the public sector and preferably in work related to the housing industry. His motivation came from his family.
“My dad was a contractor,” he explained. “Building and housing were things we heard about at mealtime. When I grew up, I wanted to be a lawyer and represent the government, but I also wanted to work on issues related to housing development. So, HUD was a natural place for me to think about.”
As it happened, HUD had some extra funds and hoped to expand its legal staff at the same time Markison came out of George Washington University Law School. He spent his early years at HUD working on public housing and then administrative law.
Then, in the late-‘80s, things changed for the housing finance system and for him.
The First Crisis
Thanks to rising inflation and interest rates, as well as the birth of money market funds, throughout the ‘70s and ‘80s, savings and loan institutions nationwide faced a double whammy: the loss of their customer base and a decline in the value of legacy long-term, fixed-rate loans. Deregulatory efforts designed to help the S&Ls only made the problems worse. They allowed S&L institutions to continue operating past insolvency and to make riskier investments. The result was a taxpayer bailout estimated at around $124 billion—and the establishment of several new regulatory bodies, including the Office of Thrift Supervision and the Resolution Trust Corporation (RTC) that was to sunset when the crisis was over.
“HUD’s General Counsel asked if I’d like to join the rescue operation, and when I agreed he detailed me to the Oversight Board for the RTC,” he said.
In two years as a staffer for the Board, which included the Secretary of Treasury, the Chairman of the Federal Reserve and HUD Secretary, Jack Kemp, Markison mastered some of the recently amended banking laws and developed an affordable housing program to provide low and moderate income families a first right of refusal on real estate owned by the RTC. When he returned to HUD, he was appointed as Assistant General Counsel in charge of several functions that were new to him including Government Sponsored Enterprise law and the Real Estate Settlement Procedures Act (RESPA).
In the 1990’s, HUD, through his office, addressed several pending RESPA issues, including sham business arrangements and marketing services agreements. It also worked on fair lending and housing goal issues in relation to the GSEs.
At the end of the Clinton administration, deep concern developed in the administration and Congress that there were abuses in the market particularly affecting subprime borrowers and the information provided to consumers was not sufficiently transparent. Mr. Markison’s and others’ efforts in these areas led to the production of the HUD/Federal Reserve Report on Reform of TILA and RESPA as well as the HUD/Treasury Report on Curbing Predatory Lending. These reports were to become important building blocks for what was to come later, including rulemaking after the next crisis from the CFPB.
Later, under the Bush administration, in addition to addressing several key issues, including the legality of mortgage broker fees, HUD proposed a complete overhaul of the RESPA disclosure process, a project in which Markison played an instrumental role. However, certain provisions of the rule, particularly to facilitate the packaging of services, proved unpopular and the departure of then-Secretary, Mel Martinez, took away a key champion.
It was around that time that the MBA, impressed by his work, offered Markison an attractive opportunity, prompting him to depart from HUD after a 32-year tenure. At the time, the market was strong and relatively quiet and for this reason he considered it to be a “retirement job” with a significant opportunity to continue his advocacy of homeownership.
“I like to tell people that when I left HUD, the market was flourishing. It was sort of a quiet time,” he said. “And then the market fell apart.”
The Second Crisis
At the MBA, Ken worked on and represented the mortgage industry on a very wide range of legal and regulatory issues. These issues included virtually all matters under the Dodd-Frank Wall Street Reform and Consumer Protection Act, RESPA, Truth in Lending Act (TILA), Fair Housing Act, Home Mortgage Disclosure Act (HMDA), S.A.F.E. Mortgage Licensing Act, and nearly every other law regulating the mortgage industry.
When the mortgage crisis hit, Markison developed the MBA’s comments and views to help legislators and policymakers forge workable ways forward in the wake of the crisis including, work on the Ability to Repay, Loan Officer Compensation, and TRID initiatives, to name a few. Not only were these challenges considerable, but he was representing a different constituency.
“In representing the government, your constituency includes top-level officials. They and you also are reacting to industry groups, consumer groups, other groups in the government,” he explained. “When you represent an association such as the MBA, your constituents are your members, and you seek to represent what their views are.”
In his MBA work his previous experience helped tremendously.
“If you know the issue from the government side, you can better explain how the government might approach a problem and how other groups might as well. That helps you make judgments about what might be the most workable approach for the industry,” he said. “It may make people happy to always advocate exactly what they want, but a better approach is to shape what might actually work.”
He found that the MBA members shared this view.
The Next Chapter
Having survived two economic disasters and their aftermaths but still having greatly enjoyed both careers, Markison is ready for new challenges. He does not intend to rest on his laurels. Following his departure from the MBA, he set up Ken Markison Advisors, LLC, where he will continue to advise and educate when it comes to regulatory concerns. He wants to continue writing, speaking, and advocating homeownership. He says he is also looking forward to spending more time with his wife, his daughters, sons-in-law and grandkids. It can’t be work 24/7, after all.
As he moves forward, Markison says he will continue with the same mission he’s worked on throughout his career.
“At the end of the day, you want a market that gives people the credit for home ownership they want and need on a fair and responsible basis,” he said. “I believe that my work helped, and I’m looking forward to helping more.”