Edition #10: Jerry Levy and Gaps in Perspective
June 14, 2020|Fair Lending, Mortgage Industry
Jerry Levy’s passing
As many of my readers know, my uncle, Gerald (Jerry) J. Levy, passed away June 6, 2020, at age 88 after a brief battle with cancer. Jerry was my father’s brother who, after a stint in the Air Force JAG Corps at Chanute, AFB in Rantoul, Illinois, dropped his law license and took a career as a banker in his father-in-law’s family run, single office, mutual Savings & Loan business in Milwaukee. Jerry grew that thrift into a regional bank with, at one time, 175 offices and a national mortgage banking operation with 3 separate mortgage lending subsidiaries.
In addition to being Chairman of Guaranty Bank, Jerry was a banking industry and business titan, serving in such positions as Chairman of the thrift industry’s US League of Savings Institutions (later merged with the American Bankers Association), Federal Home Loan Bank Board member, Chairman and founding member of RESPRO, and as a Director of several public and private companies. His vision to adopt mortgage banking in lieu of portfolio lending made him a banking pioneer in the early 1980’s, but opened a path to great success for Guaranty Bank. Jerry also was a leader in embracing and fostering community lending initiatives in Milwaukee when that was something that banks mostly did only because CRA required it. Many of the eloquent eulogies at Jerry’s Zoom memorial reminded us of Jerry’s unwavering commitment and leadership in enhancing equality and inclusion in housing and society as a whole.
I joined Jerry and my cousins in Milwaukee at the bank in 1994 as General Counsel after 5 years at a big Chicago law firm. Jerry was the kind of leader you watched and learned from as a mentor. He was a schmoozer with substance. Jerry knew all about great wines and pop culture, but could also explain technical mortgage banking matters such as mark-to-market accounting and mortgage servicing rights to his idiot nephew who now writes this mortgage blog. He could talk sports, politics (Jerry was to the left of his college buddy, Bob Novak), television, movies, restaurants, or the intricacies of the secondary market, FHLB and the GSEs with equal enthusiasm, sharp wit and keen observation. His granddaughter Michelle noted at his memorial that he was better than Google. Jerry was kind, engaging and could relate to anyone.
I continually admired and chuckled at his stories and analogies and I will be forever grateful for the doors he opened for me in the mortgage and banking worlds. At virtually every banker meeting I ever attended I met someone who said, “Wait, you’re Jerry Levy’s nephew?!!” and then they put their arm around my shoulder offering to buy me a drink (that was Pre-COVID-19 when humans touched each other to communicate endearment). Jerry treated everyone with dignity and respect and earned friendships wherever he went. Jerry was also famously a little impatient at times and probably would have stopped reading this a while back since he got the gist.
The FDIC and OCC’s action in closing Guaranty in 2017, however, was stunning, sad and unforgiveable, especially in light of new capital that was poised to invest and how the bank’s staff had spent over 8 years tirelessly working through its loan portfolio dating back to the meltdown to where it seemed the bank had turned the corner. The decision to close the bank was unnecessary, unjust and frankly, heartbreaking. He was a great man and I will fondly miss him.
Freedom vs. Justice
Meanwhile, the killings by police, protests and anger of the past few weeks have caused me to reflect often on what it means to live in a just and free society. I know Jerry Levy would have been similarly moved. In the tensions between freedom and justice, I tend to prefer freedom because I control my freedom, but someone else decides what justice looks like. That is, justice is always in the eye of the beholder and I generally don’t trust what others think justice looks like to be consistent with my own view.
If you want to get into the weeds of these tensions, read philosophers like Hayek and Rawls or, just marvel at the wisdom of the US Constitution, coupled with its inexcusable failure to live up to its own promise of equality (consider the Constitution’s treatment of slavery and women’s rights). Unless you live as a hermit, however, freedom alone is never sufficient without justice. And, at a minimum, justice demands everyone the right to experience the same freedoms.
We experience freedom differently
My Black and Brown friends, neighbors, colleagues, and fellow citizens, do not experience freedom as I do as a white male. We’ve come a long way from slavery and Jim Crow, but this article from conservative writer, David French and this brilliant first person account from a black veteran both illustrate how far we still have to go. Likewise, the fear one of my Black friends recently confided in me about his son just walking (or driving) in our suburban neighborhood brought home how, even though we are socio-economically similar, our perspectives were still quite different; just because of the color of our skin. Our boys are the same age (now 20) and grew up pals across the street from each other, yet I have no similar fears for my own son.
How does this all relate to mortgage lending?
I’ll probably have more to say about the mortgage industry, race, fair lending and justice in future Musings, but I saw a statistic recently that left me (for the moment) speechless. Despite nearly 50 years of efforts by housing advocates, like Jerry Levy, as well as zealous enforcement of fair lending laws, the Urban Institute reported in a February 22, 2020 blog post that the gap between black and white homeownership (using 2017 data) has increased to the highest level in 50 years (30.1%). Urban Institute further claimed this gap is wider than even when race-based discrimination in housing was legal (pre-Fair Housing Act-1968)!
I don’t know if racism is the cause of this disparity, but clearly, there is a huge disconnect for Black people generally in the realization of the housing part of the American Dream and we need to better understand that perspective to be able to act on it.