In the past month, Ron Phipps has held meetings with the leadership team of Fannie Mae and Federal Deposit Insurance Corp. chairman Sheila Bair. His calendar has him scheduled for at least four trips to Washington, D.C., before Christmas. On Tuesday afternoon, he conferred about foreclosures with a U.S. senator.
And today, he’s scheduled to attend the closing of a house he sold.
"Really, I have two full-time jobs," said Phipps. "I’ll tell you, I do get tired."
On Nov. 4, Phipps became the president of the National Association of Realtors, as the trade group looks to launch yet another year of trying to keep its industry from sliding further down the slippery slope of the recession and to gird for a potential assault on real estate’s beloved mortgage-interest deduction.
He’s also principal broker of his family’s Phipps Realty in Warwick, R.I., where he’s still earning a living selling houses, though the demands on his time can make that endeavor pretty complicated, he said.
"I’m unusual in that I’m an on-the-street Realtor," Phipps said. "I think that’s been an advantage when meeting with the banks or Fannie or Freddie or I’m testifying about foreclosures. I’m not talking about some member’s story — I’m talking first-hand about the challenges I’m having."
The dual roles, he said, are simultaneously exhilarating and exhausting, though he said he couldn’t complain that he didn’t see the workload coming, having been very much in the industry radar for the past year as NAR president-elect. He also has served as president of the Rhode Island Association of Realtors.
Respite, he says, comes from running and swimming, though not as often as he’d like and not as intensely as he once practiced the sports. He competed in the 2000 Boston Marathon, and that same year he completed the Florida Ironman, a grueling combination of swimming, bicycling and running.
"I am now old and slow," he said, laughing. "I still run and swim, and I get on the bike seasonally. I have running shoes and swimming gear in Chicago (NAR’s home office); in Washington, D.C.; Rhode Island; and Vermont (where he has a vacation home), so I don’t have any excuse for getting out there. Last year I ran on three continents."
One of the attractions of running and swimming, he said, is that they’re solitary pursuits.
"I have a public face, the extraverted part of my job," he said, "but I’m actually a loner. My creativity, my rejuvenation happens through exercise and that contemplative moment in swimming or running."
Still, he admitted, most of his daily contemplation these days has to do with Washington, he said.
Lobbying bankers for more relaxed mortgage standards and for improved turnaround times on short sales are top priorities for the trade group this year, Phipps said.
In addition to the recent Fannie Mae and FDIC meetings, he’s also talked with three of the nation’s top four lenders (the fourth meeting, with Citicorp officials, will come in January, he said). The pitch: Moving loan and short-sale processes along also will move the national economy along, he said.
Phipps said there’s been a learning curve in breaking through some jargon and asking deeper questions. The banking meetings have followed a certain pattern, he said: Each has opened with someone from the banking side commenting on the way too-liberal mortgage-lending standards got the country into its current bind.
"That’s universal," he said. "They always say that at the beginning. They will concede that some of the applications of the new risk-based credit-lending standards may have become too constrictive, but they’ll say that we needed to move from totally open to controlled."
Uppermost in their minds, he said, the lenders are determined to avoid future entanglements with "buybacks" — the defaulted loans that have come back to them. Thus, loan terms may continue to reside in very conservative territory, Phipps said.
"They also claim improvement in response time for short sales," he said. "Yes, they’re doing it more quickly, but they’ve gone from impossibly long to challengingly long."
On the short-sale front, "we do believe they’re trying to create efficiencies of scale, but we’re frustrated that their management directives aren’t evidencing themselves in the field quickly enough," he said.
And top-down directives don’t seem to be adequate because of the complexity of some situations, he said.
"One of the lessons we’ll take from this crisis is that the people who are interfacing with consumers need to be in a position to make decisions," he said.
He cited Bank of America’s booth on the trade-show floor at the NAR annual meeting in New Orleans, where bank reps, meeting with Realtors who presented frustrations over their clients’ individual foreclosure and short-sale cases, were able to resolve many of them on the spot.
His biggest concern, he said, is that tighter lending terms and automated mortgage approvals are having a chilling effect on consumer attitudes that will be difficult to undo, even in a better economic climate.
"We’re concerned that we’re running into ‘robo-originations,’ " he said. "It’s like college admissions, where if you didn’t have a minimum SAT score, you self-selected out, you didn’t get your application looked at.
"Our concern is, in the traditional lending environment, the originator, the processor and the approver all looked at the creditworthiness of the borrower in total.
"But as we further automate the origination process, this becomes a problem," he said. "We worry that there’s going to be a perception that good people who are worthy of credit are just going to step away" from homebuying.
What’s the likelihood that Congress will undo or further cap the mortgage-interest tax deduction?
"It is remote," Phipps said. "We are so committed to defending it, and we are ready to respond if there’s an attack on it."
Measuring his words, he said that any member of Congress who votes along those lines is likely to become aware of NAR’s disappointment the next time voters go to the polls.
"If they attack — to us, it’s a failing grade," Phipps said. "We look to communicate directly with the voters on that. It’s the single most important legislative issue on our horizon."
The membership ranks of the NAR haven’t declined significantly throughout the recession, to Phipps’ own surprise.
"We’re at over 1.1 million this year," he said. Membership peaked in 2007 at 1.35 million, according to NAR data.
"I know there have been significant reductions in the so-called ‘Sand States’ (of Arizona, Florida, Nevada and California), and that’s not surprising, given the nature of their real estate markets."
He said the trade group will, at the end of December, end its "Right Tools, Right Now" program, which was begun in 2009 to address members’ economic concerns by offering many NAR programs, courses, reports and other business tools at break-even costs or for free.
"We drew down some of our reserves to fund that project, and it cost … tens of millions of dollars," he said. "We will need to rein that program in."
But NAR is financially stable, he said, and he doesn’t foresee an increase in membership dues.
"We’re going to end the year with a slight deficit, but not anything we can’t handle," he said. "We’re not impacting our reserves."
