MBA Advocacy Update: FHA’s New Payment Supplement Program; MBA Amicus Brief in PHH Mortgage Corporation v. Guthrie; More
FY 2024 government funding update
The first deadline of the current two-tiered Continuing Resolution (CR) is Friday, March 1, 2024. MBA remains directly engaged in all the conversations around government funding and the NFIP and continues to stress to lawmakers that all the various government-supported segments of the mortgage market, including HUD (Ginnie Mae and FHA included), USDA, and the VA must continue to operate uninterrupted. We will keep you informed as negotiations continue.
Click here for MBA’s guide on impacts.
FHA Announces Final Payment Supplement Program; MBA Issues Statement in Support
Last Wednesday at MBA’s Servicing Solutions Conference & Expo, the Federal Housing Administration (FHA) announced its Payment Supplement program.
The new loss mitigation tool will allow servicers to help borrowers avoid foreclosure in a high-interest rate environment. Using partial claims funds held in a custodial account, a borrower can temporarily receive a reduced monthly payment for three years without completing a traditional loan modification.
Why it matters: The Payment Supplement is an entirely new approach of deploying partial claim funds to support servicers’ home retention and loss mitigation efforts. While FHA’s final policy remains resource-intensive, it simplifies much of the operational complexity that existed with FHA’s initial proposal and reflects much of the feedback MBA provided through two iterations of industry review.
What they’re saying: In a press statement, MBA President and CEO Bob Broeksmit, CMB, said “MBA supports this additional tool that will allow servicers to better help struggling borrowers avoid foreclosure in today’s high-interest rate environment and commends FHA for its transparency and engagement with industry stakeholders throughout the proposal process.”
Go deeper: Several highlights of the Payment Supplement include:
An increased incentive payment from $1,000 to $1,750
Providing model documents, including the Payment Supplement Agreement and the Annual and Final Disclosures
Allowing servicers to implement the Payment Supplement starting on May 1, 2024, and no later than January 1, 2025. The extended compliance date provides additional time for servicers to operationalize the program, as requested by MBA.
Extending the COVID-19 Recovery Loss Mitigation Waterfall for all borrowers until April 1, 2025.
What’s next: MBA will continue to review the details of the Payment Supplement and provide feedback to FHA through the Loan Administration Committee.
For more information, please contact Brendan Kelleher at (202) 557-2779.
MBA Files Amicus Brief Supporting Petition for Certiorari in PHH Mortgage Corporation v. Guthrie
Last Wednesday, MBA led a joint trades coalition in submitting an amicus brief in PHH Mortgage Corporation v. Guthrie to the U.S. Supreme Court, in support of PHH’s petition for certiorari regarding federal preemption of state-law claims premised on debt-collection efforts after a bankruptcy discharge.
Go deeper: The case centers on whether a debtor has the ability to go to state court to enforce supposed violations of a federal bankruptcy discharge petition. The Fourth Circuit has departed from the general consensus that violations of the discharge petition should be adjudicated in the court that issued the order (i.e., the federal bankruptcy court).
Why it matters: The brief explains that unless the Supreme Court intervenes, the Fourth Circuit’s holding will give rise to a number of harmful practical consequences. Creditors trying to collect debts will face the threat of onerous and unpredictable liability under state laws – even where those creditors operate not only in good faith but also in an objectively reasonable way. That heightened potential liability will, in turn, chill lawful debt-collection efforts, increase litigation surrounding dis-chargeability, and burden debt-related activities more generally.
What’s next: MBA will monitor new developments and will inform members of the Supreme Court’s decision.
For more information, please contact Justin Wiseman at (202) 557-2854 or Alisha Sears at (202) 557- 2930.
CFPB Revises Supervisory Appeals Process
The Consumer Financial Protection Bureau (CFPB or Bureau) earlier this month issued updates to its internal supervisory appeals process for institutions seeking to appeal a compliance rating or an adverse material finding. Changes to the supervisory appeals process last occurred in 2015. The revised rule changes the structure of the appeals committee and broadens the grounds for appeals.
Specifically, the revised supervisory appeals process:
Changes the composition of the appeals committee, allowing the Supervision Director to select any three CFPB managers to participate on a given appeals committee, so long as those managers did not participate in the underlying matter being appealed and have relevant experience on the issues raised by the appeal.
Expands the possible outcomes of a supervisory appeal by allowing Supervision staff the flexibility to issue “modified” findings, rather than being limited to either upholding or rescinding the finding.
Provides that supervised entities may appeal any CFPB compliance rating or underlying adverse finding, rather than only adverse, i.e., 3, 4 or 5, ratings and associated findings.
Why it matters: It is unclear what impact broadening the grounds for appeals and the new appeals committee structure will have on supervised entities. However, with these new changes, supervised entities should be fully prepared and engaged during the supervisory examination process and aware of the new scope of appeals options.
What’s next: The revised supervisory appeals process will be effective immediately upon publication in the Federal Register. MBA will monitor the impact of the revised process.
For more information, please contact Alisha Sears at (202) 557- 2930.
MBA Expresses Concerns with Chapter 13 Bankruptcy Proposal
MBA recently submitted comments on the proposed changes to Bankruptcy Rule 3002.1 and its associated forms by the Judicial Conference of the United States (the Conference).
The letter highlighted the operational complexities and uncertainty that would be created by the proposed rule and suggested that the Conference should amend the rules to reduce redundancy, clarify the procedures and timing of determining whether a debt has been cured, and provide instructions for filling out certain required forms.
MBA also submitted comments with USFN that included similar recommendations.
Why it matters: Chapter 13 bankruptcy allows a borrower to restructure and cure their debt and is an option that is exercised after a borrower goes through loss mitigation.
For more information, please contact Brendan Kelleher at (202) 557-2779 or Gabriel Acosta at (202) 557 -2811.
REGISTER: MBA’s National Advocacy Conference on March 19-20; Great Speaker Lineup Confirmed!
Join us in Washington, D.C. to meet with key policymakers, network with colleagues across the industry, and hear from policy experts on the topline issues impacting the industry.
Confirmed speakers for the conference include: Senate Banking Committee members Jack Reed (D-RI) and Katie Britt (R-AL), House Chief Deputy Whip Guy Reschenthaler (R-PA), key House Financial Services Committee member Brittany Pettersen (D-CO), HUD Chief of Staff Julienne Joseph, and renowned political pundit Charlie Cook.
An exclusive reception will be held on Tuesday, March 19, at the National Museum of Women in the Arts. Lend your voice to our efforts and bring your expertise and experiences to the table.
Check out MBA’s group passes pricing.
Why it matters: Your participation at NAC ensures that members of the 118th Congress and the administration understand how proposed legislation affects your employees, your end users, and the communities you (and they) serve.
What’s next: MBA will continue to advocate for issues impacting the real estate finance industry.
For more information, please contact Jamey Lynch, AMP, at (202) 557-2818.
Mortgage Call Report Version 6 (MCRV6) Implementation Update
On Monday, February 26, the Conference of State Bank Supervisors (CSBS) will host its biweekly “Office Hours” on MCRV6 implementation. MBA urges members to participate in these office hours to ensure all issues are addressed prior to the April 2024 filing date. CSBS has continued to make updates to their FAQs document, provided a list of states who have agreed to use the State Specific Supplemental Form (SSSF) and updated the list states offering a grace period for Q1 2024 MCRV6 filings.
All updates can be found on the MCRV6 Resource page. Office hours will remain on Mondays at 1:00pm ET through zoom. To join the Zoom meeting (all sessions), use the following link and ID and Passcode:
Link: https://us02web.zoom.us/j/82102995323?pwd=dTV6WHdXWjZNUWVsQzVmVmpUdTR2UT09
Meeting ID: 821 0299 5323
Passcode: 102696
Why is this important: Licensees should already be collecting the appropriate MCR data for this new version.
What’s next: MBA and its state partners continue to collaborate in reaching out to state regulators to urge them to offer licensees a grace period or other flexibility for Q1 2024 MCR filings.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
REGISTER: MBA’s State and Local Workshop on March 18-19
Join us in Washington, D.C. the day before the National Advocacy Conference to collaborate with industry peers on shared challenges and priorities and receive actionable advice to grow your state or local association’s member base.
Why it matters: In today’s challenging market, it’s more important than ever that state and local associations are helping members not just survive, but grow.
What’s next: Take advantage of savings and maximize your impact when you register for both the State and Local Workshop and the National Advocacy Conference.
For more information, please contact Anthony Siller at (202) 557-2944.
Upcoming 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:
The Role of Public-Private Partnerships for Sustainable Affordable Housing and Community Development – March 5
Private Credit Finance 201: A Deep Dive into Debt Funds and Their Impact to Commercial Real Estate Lending – March 6
A Crisis of Identity in Lending – Best Practices for Securing the Borrower Experience – March 12
Increasing Your Overall Productivity Through Special Purpose Credit Programs (SPCP) – March 13
Who Are Today’s Borrowers? A Look at the Lending Preferences and Expectations of Today’s Consumers – March 14
Making Sense of Multifamily Finance – March 14
MBA members can register for any of the above events and view recent webinar recordings by clicking here.
For more information, please contact David Upbin or (202) 557-2931.
