MBA CREF Policy Update April 27, 2023
This Week’s Top Legislative and Policy News
1. MBA Concludes 2023 National Advocacy Conference
2. Life Risk-Based Capital (E) Working Group Adopts MBA’s Proposed CM6 and CM7 Mortgage Revisions
3. Secretary Fudge Testifies Before House & Senate Appropriations Committees
4. HUD Removes Stress Test for Healthcare Properties
5. Senate Banking Committee Holds Nominations Hearing
6. FHFA Proposes Fair Housing and Fair Lending Rule
7. Commercial and Multifamily Mortgage Delinquency Rates Increased Slightly Through the First Quarter of 2023
8. [VIDEO] mPower Moments: On the Importance of Mentorship with MBA’s Amber Lawrence
9. Rent Control Map and State Trackers
10. Upcoming MBA Education Webinars on Critical Industry Issues
Join the 380+ 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.
MBA Concludes 2023 National Advocacy Conference
Last week, over 400 state/local leaders and rank-and-file MBA members assembled in Washington to meet elected officials and key congressional staffers on Capitol Hill. Thanks to the MBA advocacy team’s efforts, our members were able to hear directly on Tuesday from key thought leaders such as Congressman Warren Davidson (R-OH), who chairs the House Financial Services Subcommittee on Housing and Insurance and House Democratic Campaign Committee Chair (and key House Ways and Means Committee member) Suzan DelBene (D-WA).
Additionally, Senators Catherine Cortez Masto (D-NV) and Shelley Moore Capito (R-WV), were part of a spirited, bipartisan mPower panel. Attendees also met with more than 50 other lawmakers and senior congressional staffers at MBA’s Tuesday night reception at the Smithsonian’s National Museum of African American History and Culture.
• Why it matters: In addition to participating in individual House and Senate meetings with their state delegations, the tailored CREF track included interactive presentations by key House Ways and Means Committee member David Kustoff (R-TN) as well as important Senate tax and banking staff, Federal Housing Finance Agency (FHFA) regulatory staff members, and experts on the topic of corporate governance and related ESG rulemaking activities. CREF members were able to discuss a full range of key policy themes — e.g., tax policy; small-business loan reporting; Federal Housing Administration multifamily lending and HUD appropriations; climate-change risk and environmental, social and governance; Davis-Bacon wage rates; GSE multifamily lending; affordable housing and more — with these policymakers.
• What’s next: MBA staff will assimilate the member feedback received from these discussions and discreet NAC office visits and continue to advocate for the key policy priorities emphasized during the conference.
For more information, please contact Bill Killmer at (202) 557-2736.
Life Risk-Based Capital (E) Working Group Adopts MBA’s Proposed CM6 and CM7 Mortgage Revisions
The National Association of Insurance Commissioners Life Risk-Based Capital (E) Working Group adopted revisions to RBC factors for CM6 and CM7 mortgages. MBA and American Council of Life Insurers presented the revisions jointly to the working group last year and provided economic analysis requested by the working group that outlined the effects of the proposed changes. The revisions are applicable to year-end 2023.
• Why it matters: The revisions harmonize the RBC factors for CM6 and CM7 mortgages with the RBC factors for Schedule A and Schedule BA real estate investments, as recently adjusted. They also harmonize the formulas used to apply RBC factors to performing and non-performing mortgages by eliminating the adjustments for write-downs currently included in the non-performing mortgages formula.
• What’s next: MBA will continue to monitor the work of the Life Risk-Based Capital Working Group and communicate all relevant updates to members.
For more information, contact Stephanie Milner at (202) 557-2747.
Secretary Fudge Testifies before House & Senate Appropriations Committees
On Tuesday and Thursday, the House and Senate Appropriations Subcommittees on Transportation, Housing and Urban Development, and Related Agencies (T-HUD) held hearings to examine President Biden’s fiscal year 2024 budget. Both Senator Chris Van Hollen (D-VA) and Chairman Brian Schatz (D-HI) asked the Secretary to review delays and shortfalls in the management of the FHA Multifamily lending program. MBA submitted an FY 2024 appropriations request letter, which can be found here. A summary of the hearings can be found here.
• Why it matters: The hearings provided an opportunity for oversight of the FHA Multifamily programs as well as the need for regulatory reform on issues such as radon testing.
• What’s next: The House and Senate will need to each set the top line level of appropriations for FY 2024 so that the committees can allocate the specific funds requested by HUD. This decision will likely be deferred until after the debt ceiling is addressed. Absent any agreement, a continuing resolution is expected to fund the government into the next fiscal year.
For more information, please contact Ethan Saxon at (202) 557 2913 or Tallman Johnson at (202) 557 2866.
HUD Removes Stress Test for Healthcare Properties
Last Tuesday at MBA’s Spring FHA Roundtable, the Office of Residential Care Facilities (ORCF) announced that the cash-flow stress test would no longer be required for all properties. This change removes an onerous requirement left over from the COVID-19 pandemic.
• Why it matters: The cash-flow stress test – as it was being used – was not effective at evaluating a property’s ability to fund debt service.
• What’s next: The Department of Housing and Urban Development (HUD) will still require the lender narrative appendix. MBA will keep members updated on this issue, including when (or if) HUD publishes formal guidance removing the lender narrative requirement.
For more information, please contact Megan Booth at (202) 557-2740.
Senate Banking Committee Holds Nominations Hearing
On Tuesday, the Senate Banking Committee held a hearing to consider the following nominations: Dr. Jared Bernstein to be Chairman of the Council of Economic Advisers, Executive Office of the President; Dr. Ron Borzekowski to be Director of Financial Research, Department of the Treasury; Mr. Solomon Greene to be an Assistant Secretary of Housing and Urban Development (Policy, Development, and Research); and Mr. David Uejio, to be Assistant Secretary of Housing and Urban Development (Fair Housing and Equal Opportunity). A summary of the hearing can be found here.
• Why it matters: At the hearing there was a discussion on commercial real estate debt and the rise in delinquencies.
• What’s next: The Committee will seek to schedule a vote on the nominees in the coming weeks.
For more information, please contact Ethan Saxon at (202) 557 2913 or Tallman Johnson at (202) 557 2866.
FHFA Proposes Fair Housing and Fair Lending Rule
The Federal Housing Finance Agency recently announced that it is seeking comments on a proposed rule regarding fair housing and fair lending oversight of its regulated entities, Fannie Mae and Freddie Mac and the Federal Home Loan Banks.
The proposed rule would codify many of the Agency’s existing practices including fair lending oversight requirements for the Enterprises and the FHLBs, requirements to maintain the Equitable Housing Finance Plans, and existing requirements to collect, maintain, and report data on language preference, homeownership education, and housing counseling for applicants and borrowers through use of the Supplemental Consumer Information Form. The proposal would also expand some areas of fair lending compliance and oversight of the equitable housing finance plans.
• Why it matters: Notably the proposed rule would require the regulated entities to comply with Section 5 of the Federal Trade Commission Act which prohibits unfair or deceptive acts or practices (UDAP). This could expand FHFA’s oversight reach as it pertains to certain issues such as the Enterprises pricing framework or new products and activities, which have not traditionally been subject to this regulation.
• What’s next: MBA will continue to analyze the proposed rule and will connect with members to get feedback. Comments are due sixty days after publication in the federal register.
For more information, contact Sasha Hewlett at (202) 557-2805 or Brendan Kelleher at (202) 557-2779.
Commercial and Multifamily Mortgage Delinquency Rates Increased Slightly Through the First Quarter of 2023
Delinquency rates for mortgages backed by commercial and multifamily properties increased slightly through the first quarter of 2023, according to the Mortgage Bankers Association’s latest Commercial Real Estate Finance Loan Performance Survey, released last week.
• Jamie Woodwell, MBA’s Head of Commercial Real Estate Research, said, “Delinquency rates for commercial and multifamily mortgages increased for the second straight quarter. The rise was led by a 110-basis-point increase in the share of office loan balances that are 30 days or more past due. At the same time, pandemic-fueled delinquency rates for retail and hotel loans continued to tick down. Higher and volatile interest rates, coupled with uncertainty about property values and some property fundamentals, are suppressing sales transaction and mortgage origination volumes. Some loans maturing into these conditions are likely to face increased frictions, which is likely to push further on delinquency rates in coming quarters.”
• What’s next: To purchase the report, click here.
For more information, contact Jamie Woodwell at (202) 557-2936.
[VIDEO] mPower Moments: On the Importance of Mentorship with MBA’s Amber Lawrence
In this mPower Moments episode, mPower Founder Marcia M. Davies sits down with Amber Lawrence, MBA’s Associate Vice President of Diversity, Equity and Inclusion. During this inspiring chat, Lawrence discusses her journey and how mentors have helped shape her career at MBA. Lawrence also discusses the various DEI resources offered by MBA, including the Developing Leaders Mentoring Program, which is designed to help real estate professionals network with other professionals as well as identify new opportunities within the industry.
• What’s next: To watch more mPower Moments, click here.
For more information, contact Marcia Davies at (202) 557-2707.
Upcoming and Recent MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family and commercial/multifamily programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars, which are complimentary to MBA members:
• ROI Guide to Risk & QC Technology – April 25
• LIBOR and the Impact on Legacy ARMs – April 25
• Timeline and Updates for FHFA Credit Scoring Changes – May 1
• MSR Transfers: Balancing Risk, Customer Experience and Efficiency – May 11
• Explore Build-to-Rent Advantages, Trends & Opportunities – May 18
• What Trends will Shape the Lending Space in the Second Half of 2023 – June 1
MBA members can register for any of the above events and view recent webinar recordings by clicking here.
For any questions, please contact David Upbin at 202-557-2931.
