MBA CREF Policy Update Nov. 10, 2022
Bill Killmer bkillmer@mba.org; Mike Flood mflood@mba.org
MBA Advocates for Expansion of FHLB Membership in Letter to FHFA
On Monday, MBA submitted comments to the Federal Housing Finance Agency’s (FHFA) ongoing comprehensive review of the Federal Home Loan Bank (FHLB) System. MBA reiterated its long-standing advocacy for the responsible expansion of FHLB membership to critical providers of mortgage origination, servicing, and investment activities – such as mortgage REITs and independent mortgage banks (IMBs) – to add diversity to the FHLB System and to provide stable liquidity sources for key players in the single-family and multifamily mortgage markets. MBA also stressed the need to manage risk and maintain safety and soundness in a manner that strikes an appropriate balance that allows for responsible modernization of the FHLB System.
- Why it matters: As the FHLB System approaches its 100-year anniversary, FHFA is undertaking this review process to ensure it is prepared to meet its current and future needs. MBA agrees that the current FHLB System should be evaluated, particularly with respect to FHLB membership and eligible collateral standards. IMBs are critical players in the housing finance system, currently originating more than 60% of single-family loans throughout the country and, depending on the year, approximately half of multifamily lending by dollar volume. Similarly, REITs have become important holders of single-family, multifamily, and community development loans and securities, all of which support the FHLB System’s mission.
- What’s next: FHFA has regional roundtables scheduled in various cities through the end of 2022. MBA will participate in the upcoming sessions and will continue to engage with FHFA throughout the review process.
For more information, contact Stephanie Milner at (202) 557-2747.
MBA to Host Call on November 9 on HMDA Loan Reporting Threshold
MBA will host a call on Wednesday, November 9, 2022, for commercial/multifamily members who may be newly subject to reporting under the Home Mortgage Disclosure Act (HMDA) because of the recent court ruling lowering the reporting threshold from 100 closed-end loans to 25 closed-end loans. The call will include an overview of the ruling and more information about HMDA reporting.
- Why it matters: Last month, the U.S. District Court for the District of Columbia ruled that the HMDA reporting threshold should be decreased from 100 closed-end loans to 25 closed-end loans. As a result of the court’s ruling, only institutions originating fewer than 25 closed-end mortgage loans in each of the two preceding calendar years are exempt from HMDA reporting. Effective immediately, institutions that were previously exempt from reporting with loan volume in a range of 25 loans to 99 loans in each of the preceding two calendar years are now subject to HMDA reporting. Banks, credit unions, and savings institutions with less than $50,000,000 in total assets remain exempt from HMDA reporting regardless of loan origination volume.
- What’s next: A detailed summary of the court ruling can be found here . MBA will continue to keep members informed on all relevant updates.
For more information and to join the call, contact Stephanie Milner at (202) 557-2747.
FHFA Releases 2021 Annual Housing Report
Last Friday, FHFA released its Annual Housing Report describing the affordable housing activities of Fannie Mae and Freddie Mac (the GSEs) for calendar year 2021. The report covers the performance of the GSEs against its housing goals and Duty to Serve requirements.
- Why it matters: The report describes FHFA’s final determination that both Fannie Mae and Freddie Mac met all multifamily housing goals for 2021, with each exceeding its unit targets for the Low-Income, Very-low income, and Small Multifamily Low-Income categories. The report also noted that each kept their multifamily loan purchases below the $70 billion cap and both exceeded the requirements that 50 percent of their business is mission-driven at 80 percent of area median income (AMI) or below, and that 20 percent is at 60 percent of AMI or below.
- What’s next: MBA will continue to monitor FHFA multifamily announcements and report all relevant information to our members.
For more information, contact Stephanie Milner at (202) 557-2747.
Federal Reserve Announces Fourth 0.75 Percentage Point Interest Rate Hike
The Federal Reserve in its ongoing efforts to slow inflation raised the federal funds rate by another 75 basis points to a target range of 3.75-4.00% on Wednesday.
- Why it matters: This short-term rate hike marks the fourth consecutive increase of 0.75% and the sixth overall increase since March. During his press conference, Federal Reserve Chair Jerome Powell indicated that more rate hikes are to come, although possibly in smaller increments but higher than previously anticipated.
- MBA’s SVP and Chief Economist Mike Fratantoni said, “The financial markets correctly anticipated that the Federal Reserve would increase the federal funds rate by another 75 basis points at its November meeting. With inflation still running far too high, and the job market remaining strong, MBA expects the Fed to increase rates by another 75 basis points before holding them steady throughout 2023.”
For more information, contact Mike Fratantoni at (202) 557-2935.
Treasury Holds Stakeholder Roundtable on Climate Change, Clean Energy, and the Inflation Reduction Act
On Monday, Treasury Secretary Janet Yellen participated in a roundtable to discuss how the private and public sectors can work together to “build a clean economy.”
- Why it matters: The roundtable is part of a series of discussions with stakeholders to solicit input to implement the Inflation Reduction Act’s clean energy incentives.
- What’s next: Over the next decade, $270 billion of the funding in the Inflation Reduction Act is allocated through tax incentives to address climate change.
For more information, contact Grant Carlson at (202) 557-2765.
Nov. 10: mPact “Cook Like a Pro” Fall Fundraiser
On Thursday, November 10, mPact: MBA’s network for young professionals, will host a virtual fall fundraiser with Chef Joe Sasto, a past finalist of Bravo TV’s Top Chef. “Cook Like a Pro” will provide attendees with the opportunity to prepare a tasty and delicious meal, Crispy Ricotta Gnocchi and Sage Brown Butter, in real-time with Chef Joe.
- Why it matters: mPact hosts a series of fundraisers every year with the goal of raising funds to support the MBA Opens Doors Foundation’s mission of providing mortgage and rental assistance grants to parents and guardians caring for a critically ill or injured child. Opens Doors has been selected as the charity of choice since 2018.
- What’s next: Help mPact support families in need while learning new skills in the kitchen. Please register here with a $30 donation. Unlimited raffle tickets are also available for $10 each.
For more information, contact Jacky Salazar at (202) 557-2746.
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:
- TRID Housekeeping & Latest Information – November 15
- Inflation, Interest Rate, Cap Rates & Values: What Do We Really Know? – November 30
- Ensuring HMDA Data Integrity and Common Reporting Issues – December 14
- Ten Things Your Company Must Do in 2023 – January 18
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.
