MBA Advocacy Update May 23, 2022

Bill Killmer bkillmer@mba.org; Pete Mills pmills@mba.org

On Wednesday, MBA Vice Chair Mark Jones testified before the House Veterans’ Affairs Subcommittee on Economic Opportunity in support of bicameral VA appraisal modernization legislation introduced by Rep. Mike Bost, R-Ill., and Sen. Dan Sullivan, R-Alaska.

Last Monday, the Biden administration released its Housing Supply Action Plan aimed at increasing affordable housing for prospective homeowners and renters. Also this week, the Senate Banking Committee held a hearing on the nomination of Michael Barr to be Vice Chair for Supervision of the Board of Governors of the Federal Reserve System.

Join the 260+ MBA member companies that have signed MBA’s Home for All Pledge, representing a commitment to promoting minority homeownership; affordable rental housing; and company diversity, equity, and inclusion. One senior executive (e.g., CEO, COO, President, Head of Mortgage, SVP) is encouraged to sign this online form on behalf of your organization.

2022 MBA Vice Chair Mark Jones Testifies on Capitol Hill 

On Wednesday, Mark Jones, MBA Vice Chair, and CEO and Co-Founder of Amerifirst Home Mortgage, testified before the House Veterans’ Affairs Subcommittee on Economic Opportunity in support of bicameral Department of Veterans Affairs (VA) appraisal modernization legislation introduced last week by Rep. Mike Bost (R-IL) and Sen. Dan Sullivan (R-AK). H.R. 7735, the Improving the VA Home Loan Benefit Act of 2022, would require the VA to review appraisal certification requirements, encourage hybrid appraisals and benefit from emerging technologies, and revisit policies on property inspection waivers, minimum property requirements, and comparable sales.

• Why it matters: Jones was able to address a bipartisan group of subcommittee members and highlight for them how modernizing VA appraisal procedures could improve the process of purchasing a home for our nation’s service members. He also reiterated MBA’s opposition to legislation that increases VA funding fees to offset costs associated with new expenditures. Jones also responded to questions regarding the use of appraisal waivers, the potential for the use of alternative credit scoring mechanisms to underwrite VA loans, and possible changes to expand the VA loan guaranty entitlement formula.
• What’s next: Details of the hearing can be found here and a video recording can be found here. Click here for Jones’ written statement.

For more information, please contact Borden Hoskins at (202) 557-2712 or Alden Knowlton at (202) 557-2741.

White House Releases Action Plan on Housing Supply Issues

On Monday, the Biden administration published an action plan with recommendations it believes will help close the housing supply gap over the next five years. These recommendations address: land use and zoning, new financing for housing production and preservation, improvements to existing financing, preservation of single-family homes for owner-occupants, and high material costs and low labor supply. MBA President and CEO Bob Broeksmit, CMB, released a statement in which he commended the Biden administration for its focus on housing supply issues.

• Why it matters: The persistent low supply of available housing throughout the country has led to rapid levels of home-price appreciation and intense competition among potential homebuyers – further adding to the challenges faced by first-time and low- to moderate-income homebuyers.
• What’s next: MBA is reviewing the action plan and identifying ways in which further collaboration between industry and government stakeholders can encourage meaningful housing construction, preservation, and rehabilitation.

For more information, please contact Dan Fichtler at (202) 557-2780.

Senate Banking Committee Holds Hearings on Climate and Fed Nominee

On Thursday, the Senate Banking, Housing and Urban Affairs Committee held a hearing on the nomination of Michael Barr to be Vice Chair for Supervision of the Board of Governors of the Federal Reserve System. The committee also held a hearing Tuesday titled, “Addressing Climate Change with Energy-Efficient and Resilient Housing.”

• Why it matters: Barr, if confirmed, will be the Federal Reserve’s top banking regulator and will play a significant role regarding proposed policies impacting the financial services industry, including revision to the Community Reinvestment Act. The climate change hearing highlighted shortcomings in the National Flood Insurance Program, and the need for effective federal weatherization programs and legislative proposals to invest in both single-family and multifamily housing. A summary of both hearings can be found here.
• What’s next: The Senate Banking Committee is expected to hold a vote on Barr’s nomination shortly (potentially before month’s end). Barr is the Biden administration’s final nominee to fill the Fed’s seven-person Board of Governors.

For more information, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866.

House Financial Services Committee Holds Legislative Markup 

On Tuesday and Wednesday, the House Financial Services Committee (HFSC) considered and “marked up” nine bills addressing a broad range of issues. Of note, included in the markup was H.R. 7022, the Strengthening Cybersecurity for the Financial Sector Act, introduced by Rep. Bill Foster (D-IL). The bill would reauthorize and make permanent the National Credit Union Administration’s (NCUA) authority over the third-party service providers of credit unions and would also provide the Federal Housing Finance Agency (FHFA) with similar authority over the third-party service providers of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs).

• Why it matters: MBA is concerned that the legislation (as written) could be interpreted to provide a much more broad-based expansion of FHFA authority over all elements of service provider operations – including direct authority to regulate mortgage servicers. MBA sent a letter to HFSC leadership and committee members ahead of the markup outlining our concerns with the legislation, and pushed for targeted amendments to limit FHFA’s expanded authority only to examinations of vendors, and to exclude the GSEs’ customers (i.e., seller/servicers) from the scope of the bill. 
• What’s next: H.R. 7022 was reported favorably to the House on a party line vote of 24-22. Timing on floor consideration of the measure is uncertain. A more detailed summary of the markup is here.

For more information, please contact Borden Hoskins at (202) 557-2712, or Alden Knowlton at (202) 557-2741.

CFPB’s May 2022 COVID-19 Mortgage Servicing Report 

On Monday, the Consumer Financial Protection Bureau (CFPB) released its May 2022 COVID-19 Mortgage Servicing Metrics Report. This report tracks data collected from 16 large servicers as part of CFPB’s ongoing COVID-19 compliance exams and covers call-center metrics, delinquency and forbearance data, as well as borrower profiles, from May 2021 through December 2021, a period that included a large volume of forbearance exits. The report is a follow-up to CFPB’s original COVID-19 mortgage servicing metrics report from August 2021. Several key findings include:

1) Over 330,000 borrowers remain delinquent after exiting their forbearance at the end of 2021 (274,000 were federally backed);

2) Some servicers showed spikes in call-center data with sharp increases to their Average Speed to Answer (ASA) and Abandonment Rates; and

3) Servicers’ tracking of language preference and borrower profiles was inconsistent.

• Why it matters: MBA’s more recent forbearance data released earlier this week in its April Loan Monitoring Survey show that the percentage of borrowers who were current on their mortgage payments increased to the highest level of 2022, and that the share of loans in forbearance is down to 0.94%. CFPB’s report is a reminder that it continues to monitor servicers’ delivery of loss mitigation solutions to consumers throughout COVID-19. The report highlights areas of supervisory focus and potential compliance risks that could presage both enforcement actions and additional rulemaking.
• What’s next: MBA will continue to help policymakers understand the significant progress servicers have made helping borrowers retain their homes as they exit forbearance.        

For more information, please contact Brendan Kelleher at (202) 557-2779 or Gabriel Acosta at (202) 557-2811.

MBA Responds to CFPB Considerations on AVM Quality Control Requirements 

Last week, MBA submitted its response to the proposals developed through a CFPB small-business advisory review panel regarding a forthcoming Automated Valuation Model (AVM) quality control rulemaking. MBA supported a principles-based approach that avoids the pitfalls of an overly prescriptive rule, which should promote continued development of AVM technology. MBA also advocated for sensible limits to the scope of any such rulemaking.

• Why it matters: Increased use of valuation modeling technologies and data analytics in the appraisal process holds the potential to combat appraiser bias as well as address appraiser shortages within the market. Any future rulemaking conducted by the CFPB and other regulators should weigh the importance and benefits of AVM usage against increased requirements or guidelines.
• What’s next: MBA will continue to monitor all regulatory action regarding appraisal modernization and will be prepared to comment on any future notice of proposed rulemaking on AVM quality control requirements from the CFPB and other regulators.

For more information, please contact Hanna Pitz at (202) 557-2796.

FHFA Announces Membership in NGFS 

Last Wednesday, FHFA announced that it will join the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) and reaffirmed the need for the enterprises to make climate change a priority concern. NGFS is an international group made up of central banks and financial supervisors that share best practices and promote further development of climate risk management in the financial sector.

• Why it matters: FHFA recognizes that the enterprises play a significant role in addressing the threat that climate change presents to the U.S. housing finance system. The enterprises are tasked with properly managing climate-related risk, and it’s possible FHFA will continue to expand its supervision over climate-related issues.
• What’s next: MBA will continue to monitor and work with FHFA on climate-related requirements.

For more information, please contact Dan Fichtler at (202) 557-2780 or Stephanie Milner at (202) 557-2747.

MBA and Winnow Solutions LLC Enter Partnership to Help Members with Compliance Research and Costs   

Earlier this week, Winnow Solutions LLC and MBA announced a new partnership that will provide MBA members a 10% discount on a subscription to Winnow’s comprehensive database of state and federal mortgage regulations. Winnow is a powerful, comprehensive, and dynamic database of state and federal mortgage lending and servicing regulations. It enables users to generate surveys and searches tailored to their specific business type and licensing, the mortgage products offered, and where those products are offered. Results are customized based on that information, allowing users to create a survey of laws on a wide variety of topics and export the results to their chosen file format.

• Why it matters: The partnership is an extension of MBA’s Compliance Essentials program, which was built with the purpose of providing members with timely and concise information to comply with state and federal mortgage regulations while minimizing the overall cost of compliance.
• What’s next: MBA members interested in taking advantage of the 10% subscription discount can visit www.winnow.law/mba to schedule a demo. Winnow will also have a booth at the upcoming Legal Issues & Regulatory Conference in Miami.

For more information, please contact David Upbin at (202) 557-2931.

MBA’s Mike Fratantoni Pens Guest Column on eMortgages for The Journal of Structured Finance

Last week, The Journal of Structured Finance published a guest column from Mike Fratantoni, MBA’s SVP and Chief Economist, on the accelerating adoption of eMortgages during the COVID-19 pandemic, and what the future may hold for the mortgage industry. Read it here.

• Why it matters: Fratantoni’s article explores why the adoption of eMortgages lagged prior to the past few years despite increased spending on technology, and examines industry-level productivity trends that could lead to faster processing speeds and lower processing costs for lenders and borrowers.

For more information, please contact Mike Fratantoni at (202) 557-2935.

REGISTER: MBA Single-Family Research Showcase: June 22-23, 2022

On June 22-23, join MBA’s Research and Economics team for its annual, two-day online MBA Single-Family Research and Economics Showcase. Led by MBA SVP and Chief Economist Mike Fratantoni, analysts will detail the most current results and insights from their residential surveys, forecasts, and reports.

• Why it matters: Session topics include: A Keynote on the Economy and the Mortgage Market; Latest Performance Benchmarking Data for Production and Servicing; Industry Volume and Demand; Demographics, Market Profiles and Players; Forbearance and Delinquency; Technology and Innovation; Staffing Issues; and Views on the Future of the Mortgage Industry, as well as a Q&A with MBA’s analysts.
• What’s next: Register to attend. CPE credit is available. 

For more information, please contact Marina Walsh at (202) 557-2817 or Jenny Masoud at (202) 557-2879.

[WATCH]: On Becoming A CREF Leader with PGIM Real Estate’s Stephanie Wiggins

In this episode of mPower Moments, mPower Founder Marcia M. Davies sits down with Stephanie Wiggins, Managing Director and Head of Production for Agency Lending with PGIM Real Estate. During this insightful interview, Wiggins explains why her family’s background in commercial real estate led to it being a passion of hers from a very early age. She also shares insights on the power of confidence, the need to be an active listener, and what is needed to get more women of color in the C-suite.

• What’s next: To watch more mPower Moments, click here.

For more information, please contact Marcia Davies at (202) 557-2707.

Upcoming MBA Education Webinars on Critical Industry Issues

MBA Education continues to deliver timely programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming webinars – which are complimentary to MBA members:

• New Fannie Mae and Freddie Mac Condominium and Cooperative Guideline Changes – May 24
• What Trends will Shape the Lending Space in the Second Half of 2022 – June 2
• CFPB, UDAAP and the Focus on Junk Fees – June 9
• Serving Loan Applicants with Limited English Proficiency – June 14
• Leveling Up Your Social Media Strategy with Paid Advertising – June 28

MBA members can register for any of the above events and view recent webinar recordings. For more information, please contact David Upbin at (202) 557-2931.