MBA CREF Policy Update Sept. 15, 2022
Bill Killmer bkillmer@mba.org; Mike Flood mflood@mba.org
Last Wednesday, HUD published Mortgagee Letter 2022-16, which allows for more frequent distributions of surplus cash for properties without rental assistance. Last Thursday, the CFPB held a field hearing focused on nursing home debt collection practices.
Also last week, MBA released a new white paper titled, A Framework for Considering Office Demand in a Post-Pandemic World, which details the relative benefits and costs of remote and in-person work to employees and employers and analyzes the outlook for the office sector and potential impacts to commercial mortgage loan volume and property values.
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HUD Modifies Regulatory Agreement to Allow for More Frequent Surplus Cash Distributions
Last Wednesday, HUD published Mortgagee Letter 2022-16, which allows for more frequent distributions of surplus cash for properties without rental assistance. The change will only apply to new Federal Housing Administration (FHA) multifamily loans that are not subject to Section 8 rental assistance payment contracts or a HUD-held mortgage note.
- Why it matters: The guidance will only affect applications endorsed after the effective date of September 7, 2022, and seeks to harmonize FHA Multifamily income distribution rules with private industry and GSE policies. As noted in the Mortgagee Letter, the new policy retains and expands existing risk-management requirements.
- What’s next: MBA will continue to encourage HUD to explore new ways to improve the Multifamily Accelerated Processing program.
For more information, please contact Stephanie Milner at (202) 557-2747.
Senate Banking Committee Holds Hearing on Potential Insurance Risk
Last Thursday, the Senate Banking Committee held a hearing titled, “Current Issues in Insurance.” The witnesses included Kathleen Birrane, Insurance Commissioner for the state of Maryland, on behalf of the National Association of Insurance Commissioners, and Steven Seitz, the U.S. Treasury’s Director of the Federal Insurance Office.
During the hearing, Senators asked questions regarding the participation of insurance companies in Federal Home Loan Bank activities, reauthorization of the National Flood Insurance Program, capital standards for insurance companies, pandemic risk insurance, climate change and the rising role of private equity in managing pension funds. Opening statements provided during the hearing can be found here.
- Why it matters: Although regulation of insurance remains predominantly state-based, Congress may continue to explore the perceived need for federal legislation in the policy areas covered at the hearing – including items that could potentially impact MBA CREF members.
- What’s next: MBA staff will continue to monitor ongoing Treasury/congressional oversight of the insurance industry as these issues are further discussed.
For more information, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866.
CFPB Holds Field Hearing on Nursing Home Medical Debt Collection Practices
Last Thursday, the Consumer Financial Protection Bureau held a field hearing focused on nursing home debt collection practices.
- Why it matters: The event hosted by CFPB Director Rohit Chopra brought “advocates, service providers, community leaders, and members of the public to explore challenges around nursing home debt collection practices and the impact they can have on the financial wellbeing of caregivers, their families, and friends.”
- What’s next: MBA will follow developments closely and report all relevant information to members.
For more information, please contact Stephanie Milner at (202) 557-2747.
MBA White Paper: The Office Market Has Likely Changed Forever. Look to the Labor Market for Clues on How Big the Shift Will Be.
The ongoing tug of war between employers and employees on the return to the office versus remote work will accelerate as pandemic-related impacts fade, and labor market conditions will play a significant role in how much office space may be needed and how it will be used. This is according to a new white paper titled A Framework for Considering Office Demand in a Post-Pandemic World.
- Why it matters: MBA’s white paper, co-authored by MBA Senior Vice President and Chief Economist Mike Fratantoni and Jamie Woodwell, MBA Vice President of Commercial Real Estate Research, looks at the relative benefits and costs of remote and in-person work to employees and employers. It finds that in the near term, remote work can be just as, if not more, effective than office work in terms of “getting the job done,” while also providing a range of tangible short-term benefits. The findings also reveal, however, that companies and workers rely heavily on in-person interactions to develop workplace capital, helping them thrive over the long term. The pandemic has elevated the weight of the near-term benefits of remote work while reducing the pull of developing workplace capital. The white paper presents two scenarios – a base case where hybrid work trends remain, and an alternative case where a looser labor market and “a fear of missing out” lead to a greater return to in-office work – to analyze the outlook for the office sector and potential impacts to commercial mortgage loan volume and property values.
- According to Woodwell, “The more workers and employers ‘need’ to be in the office, the greater the overall demand – and the lesser the differentiation – there will likely be for space. The more we ‘get’ to be in the office with hybrid trends sticking, the more users will pay up for properties that maximize that time, while also deciding to shed space in properties that do not meet these preferences. Ultimately, in either scenario, it is unlikely that the office market will ever return to its pre-pandemic shape, size and dimensions.”
For more information, please contact Mike Fratantoni at (202) 557-2935 and Jamie Woodwell at (202) 557-2936.
State Trackers
For more information, contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.
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:
- CRE Mortgage Risk and What the Pandemic Taught Us – September 20
- State of Non-QM Lending & What You Need to Know Now – September 27
- Empowering Mortgage Servicers with Proactive KPIs – September 29
- Managing Liquidity and Operational Efficiency in a Fiercely Competitive Market – October 4
- Marijuana and Real Estate in 2022: What Every CRE Professional Should Know – October 19
MBA members can register for any of the above events and view recent webinar recordings.
For more information, contact David Upbin at (202) 557-2931.
