Important NMMLA Information from Legislative Chairman Jack Thompson

Dear NMMLA members,

This year of 2020 has been one of the most transitional times in the mortgage industry I have witnessed
in my 39 years in mortgage lending. The Covid-19 pandemic has had a tremendous impact on housing
finance. The government announced the forbearance program in March which allowed anyone that
wanted too without qualification to stop making their mortgage payments. Currently, about 7.8% of all
mortgages are not paying. This represents about one trillion in mortgages. Mortgage servicers have been
strained and servicing costs have risen through the roof as a result. Forbearance has caused the credit
box to tighten to levels not seen since 2008 keeping many would-be homeowners out of the market
especially the lower-income families. Forbearance almost decimated the secondary market which
forced the Treasury to expand their purchase of Mortgage-Backed Securities. When the Treasury began
buying without notice, yields fell more than 100 basis points in a matter of hours. The result was that
every mortgage lender in the country lost millions of dollars in one day due to being artificially taken out
their hedge positions. Margin calls were placed on almost every lender.

Recently FHFA announced it was charging five and seven-point fees to a lender if a loan went into
forbearance before it was backed by a Federal agency. FHFA imposed a 50 bps fee on all refinance loans
and announced they would no longer purchase a loan that went into forbearance after closing and
before the agency purchased it. Fortunately, you took action. Over 80,000 MAA letters were sent to
Congress last week. The refinance fee was postponed until December 1st and the agencies will purchase
loans in forbearance through September 30th.

Being involved in your industry now is more important than ever. As you read above, changes can come
without warning that could be very harmful to our industry and your jobs. However, you can also see
that if we take action and stay involved we can shape policy and protect our companies and jobs.

We are facing a 60 days session this year in Santa Fe and we are already seeing bills being drafted that
could be very detrimental to mortgage lending in New Mexico. We need to have representation every
day in Santa Fe and that takes money. This leads me to asking and challenging you to step up and be
involved. Protect your industry, company, and your job.

I have given NMMLA $2500.00 for this effort and I will put in an additional $250.00 for every company
or person that also gives $2500.00 or more. If ten companies give $2500.00 we will reach $27,500.
However, any amount is needed. If you can give $100.00 it is most welcome and needed. Together we
can raise over $30,000. Everyone is having their very best year ever. All of you can give. Please step up
and help keep our voice relevant. Give back to an industry that has given so much to you.

Thank you,
Jack Thompson, CEO