Janneke, throughout my career I have sought out women leaders to touch base with and share lessons learned for the next generation. Your work in leading the Housing Finance Policy Center at Urban puts you front and center in a key role of significant importance to mortgage finance.
Few leaders enjoy the background you have that spans industry, the nonprofit sector, academic research and the federal government where you have focused on increasing access to financial systems that foster economic security and prosperity.
So I appreciate you making time for me and sitting down for our Women in Leadership interview series. What a remarkable story you have to share with the industry. Let’s get to it.
Faith Schwartz: Janneke, we have known each other for a long time and met around the great financial crisis of 2008. I have always admired your work in housing policy and tireless advocacy for the consumer. How did you get started in this area? Take us back to your decision and subsequent roles in housing finance.
Janneke Ratcliffe: Thank you, Faith. I have so admired your work in mobilizing such a massive response to save people’s homes during the foreclosure crisis. And then during the COVID-19 crisis, as a member of Urban Institute’s Mortgage Markets COVID Collaborative, your leadership and experience were invaluable and instructive. I loved the “Not OK? That’s OK” campaign. I hope you’ll add a link to Housing Finance Strategies’ announcement – thank you for setting such a great example how collaboration and leadership can make a real impact: https://housingfinancestrategies.com/women-in-leadership/women-in-leadership-meg-burns-executive-vice-president-housing-policy-council/.
For me, the work started in my early career when I was a rather unfledged leader of a tiny nonprofit helping small and minority-owned businesses access loans. I owe immense gratitude to all the clients I worked with, and I was lucky to have an amazing board. They taught me about resilience and determination. They helped me see how and for whom the systems of opportunity work – the American Dream stuff – and they began to open my eyes to my own privilege. That job clarified for me that the way I could be helpful was not by fixing people—they are already good—but by fixing systems and specifically systems of money and capital.
So I’ve spent the rest of my career trying to apply that lesson. I have worked on community development finance and consumer financial services, but mostly I’ve been focused on homeownership and mortgage finance. As you know, Faith, housing finance is a fascinating and complex space that few people understand, but that has so much impact on quality of life and opportunity in this country.
FS: So how did you get into housing finance and from there, to the University of North Carolina Center for Community Capital, leading “transformative research on how mortgage markets and financial services can better promote financial security and economic opportunity?”
JR: I got hooked on housing working at GE’s mortgage insurance company. There, I learned about the mortgage finance system, and risk capital in particular. That industry experience has been key to the contributions I have made whether in nonprofit, research, or government roles.
And because this is about women in leadership, I must say there were terrific women leaders there, and I learned a lot from them. Many of them had come up in the corporate world just half a generation before me, and they forged paths that I was able to walk with a lot less sacrifice.
I went on to Self-Help in 1998 to help start a secondary market program for affordable mortgages. Through a $50 million grant from the Ford Foundation and in partnership with Fannie Mae, we were able to finance close to 50,000 home loans for more than $4 billion. These were to lower-income households, most of whom put down less than 5% and had origination credit scores of 680 or less.
It was exciting to start up that program, and gratifying to see the kind of leverage and wealth $50 million in capital can generate many times over. And the wealth that was created would go on to compound and create more intergenerational and community wealth.
That experience led me to the UNC Center for Community Capital, then under the leadership of Dr. Michael Stegman (now one of our non-resident fellows at Urban’s Housing Finance Policy Center). I wanted to study the program and apply learnings to shape lending policies and practices at real scale. And then came the foreclosure crisis. And if you thought all these borrowers lost their homes, you would be wrong. Despite the predatory lending boom and ensuing foreclosure crisis, the Self-Help borrowers largely held on to homeownership (much more sustainably than comparable borrowers given loans with risky features) and managed to build home equity and realize a decent return on their original investment in homeownership. And this outcome is not an outlier. Other affordable housing and CRA-oriented programs that offered safe mortgages did not result in the kind of mass foreclosures we saw in the other segments of the market.
So we had to let policymakers and other stakeholders know what we’d found: that lending to low-income, low-wealth households can be done safely and sustainably. My shorthand for that is “homeownership done right.”
FS: How about the Center for America Progress?
JR: Good research can lead to better practices and better policies, but only if people know about it. So CAP provided the perfect community and platform to transfer knowledge. For example, the Mortgage Finance Working Group, convened by CAP, was one of the original cross-sectoral convenings. We met weekly by phone to discuss GSE reform in the wake of 2008. And while we didn’t necessarily solve that, the collective expertise and evidence played a role in helping decision-makers understand the important public function of these entities.
FS: Most recently you held an important role at CFPB – how did that differ from your earlier nonprofit work?
JR: Oh, working for the federal government is unlike any other job. It is such an honor to work for, well, everyone. And I got to work with such dedicated colleagues – I profoundly respect our country’s public servants.
I worked in financial education for those seven years. It was my mission at CFPB to figure out: What kind of financial education makes a difference? How can it fit into people’s real lives and inform real decisions? We did a lot of research on youth and adult financial education. We learned that for adults, what sticks is more about relevance, skill, and self-efficacy than knowing a bunch of financial facts and terms. There are many proven ways to build practical financial skill – homeownership counseling is a great example. Likewise for youth it’s about meeting them where they are in their development and what’s relevant to them.
I can geek out on this, but I just think it’s a huge disservice to fail to give people the tools to navigate all these complex decisions. And by the way, those tools also include better access as well as consumer protections, so we need to recognize the right role, and limits of, financial education.
FS: I was pleased to see that the Urban Institute was able to recruit you to lead the Housing Finance Policy Center and Housing Finance Innovation Forum. Can you help us understand the work you are doing and how you envision those contributions to the housing finance marketplace?
JR: Thanks Faith, I was so pleased to be able to get back to housing finance and join this incredible team. I get to work with amazing women like Sarah Wartell, Urban’s President and a long-time houser. And of course, Laurie Goodman — you know she founded HFPC ten years ago? And I have to acknowledge HFPC non-resident fellow Ellen Seidman who helped found HFPC. She is beyond humble but so many of us in this industry that know exactly how big a role she has played in inspiring and supporting other women.
Here at HFPC, I am excited about how research can guide efforts to create more equitable opportunities for homeownership. So I am super excited about the work we’re doing with the National Fair Housing Alliance on Keys Unlock Dreams and Special Purpose Credit Programs; about the work we’re doing with the Black Homeownership Collaborative and UnidosUS; about our partnership with the Federal Home Loan Bank of San Francisco on ways mortgages can be designed and delivered to advance Black homeownership. These are just a few examples of promising research underway.
As I said, housing finance is pretty technical stuff – a lot of the work HFPC does gets into the weeds and knotty details of the housing finance system. But these knotty details matter so much to people’s lives. That’s what I love about this work, it is connecting those dots for people.
FS: The work out of the Urban institute has been extraordinary and a great support to the Administration as well as industry players. What are some of your most important recent findings as you look to find more equitable housing opportunities in the market?
JR: I am excited about the Administration’s urgency around racial equity. I have been in this work for four decades during which time the racial homeownership gap has gotten worse and the wealth gap keeps compounding. Looking ahead the population is changing and white homeowners will decline in number, so it’s high time to tend to this legacy. I touched on some of the work we’re doing above. Also we’ve been writing quite a bit about the GSE’s Equitable Housing Finance Plans, which represent a first (if overdue) step in a promising direction.
FS: You have been a champion for the consumer throughout your career. What has surprised you most? Are you seeing a difference on behalf of the consumer?
JR: Not sure “surprised” is the right word, but the way the government and industry and consumer groups came together to keep people from losing their homes during the COVID19 emergency was certainly inspiring. It was good to see the hard lessons learned from the 2008 financial crisis and from recent natural disasters put to work as quickly and smoothly as they were, in such a collective effort for the greater good.
FS: Tell us something fun about yourself!
JR: I love that you picked March to ask me these questions. My birthday is March 8. That is also International Women’s Day, and here we are in Women’s History Month.
There’s a lot to celebrate. I’m so excited about all the women leading in housing and housing finance right now.
Myself, at this birthday (62!) it’s really important to think about how to support others, whether the next generation of homeowners or the next generation of leaders. And, have fun doing it.
Postscript
At Housing Finance Strategies, we are leading change in all things housing. By interviewing key executives like Janneke Ratcliffe, our intent is to educate and encourage the industry to constantly grow and evolve. What a powerful interview!
Thanks so much to Janneke for taking the time. And as I like to say: Grow, lead and mentor your peers!