MBA Advocacy Update: FHFA Gives Conditional Approval of Freddie Mac’s Proposal to Purchase Single-Family Closed-End Second Mortgages
FHFA Gives Conditional Approval of Freddie Mac’s Proposal to Purchase Single-Family Closed-End Second Mortgages
The Federal Housing Finance Agency (FHFA) Friday evening announced the conditional approval of a new product proposal that would allow Freddie Mac to purchase certain closed-end second mortgages.
What they’re saying: In a press statement, MBA President and CEO Bob Broeksmit, CMB, said, “MBA appreciates FHFA’s detailed responsiveness to the key questions we outlined in our comment letter regarding the program’s scope, mission, and secondary market implications. FHFA’s receptiveness to feedback through the New Products and Activities Final Rule has produced a pilot rollout that is limited in size and duration, mitigates the impact on the private-label securitization market for second liens, focuses on borrowers with lower loan balances, and will encourage participation by smaller lenders that do not have easy access to liquidity for closed-end seconds.”
Go deeper: MBA in its May 2024 letter to FHFA did not oppose nor support the proposal, instead stressing the need for additional information in the proposal necessary to effectively evaluate the new product’s impact, such as pricing details, information on expected volume or plans for volume caps, and any implications for the Uniform Mortgage Backed Securities (UMBS) prepayment speeds.
What’s next: MBA will remain engaged with FHFA and Freddie Mac to monitor the results of the pilot and ensure that it remains available to lenders of all sizes and business models and avoids disrupting the developing private-label securitization market for second liens.
For more information, please contact Sasha Hewlett at (202) 557-2805, George Rogers at (202) 557-2797 or Rachel Kelley at (202) 557 2816.
FHFA Issues 2023 Report to Congress
FHFA recently released its 2023 Report to Congress, which provides required information on the annual activities of Fannie Mae and Freddie Mac (the GSEs) and the Federal Home Loan Banks (FHLBs).
• The report includes updates on various items including but not limited to the financial condition of the regulated entities, mission-related activities, new products and activities, regulatory activities, and the FHLB at 100 initiative.
• This year’s report also contained legislative recommendations from prior years, including the need for Congress to complete the task of housing finance reform, advancing the GSEs towards a responsible end to conservatorship, and the request that FHFA be granted examination authority over third-party service providers to the GSEs (MBA has registered strong opposition to direct examination powers over GSE sellers).
Go deeper: Notably, the report includes details on Enterprise New Products. Between April 28, 2023, and April 28, 2024, FHFA completed its review of 10 new activities and, based on the requirements in the final rule, determined that three should be treated as new products that merit pubic notice and comment about whether they are in the public interest.
• So far, only the Freddie Mac closed end second lien product has been released for public comment. It is also not clear whether the other seven activities were permitted to move forward without public notice and comment or declined.
What’s next: MBA will continue to partner with FHFA and the GSEs on the critical housing finance issues included in the 2023 report.
For more information, please contact Sasha Hewlett at (202) 557-2805.
CSBS Holds Townhall on NMLS Fee Increase Proposal; Recording Available
Recently, the Conference of State Bank Supervisors (CSBS) held a townhall to discuss the Nationwide Multistate Licensing System (NMLS) license processing fee increase proposal. A full recording can be found here.
• CSBS staff and regulators provided a high-level overview of plans for the increase in fees, which involve improvements to the overall system and enhancing the State Examination System specifically.
• In 2025, NMLS users can expect to see a proposed increase for business-to-business and ad hoc reporting, and in 2026 CSBS will review fees for testing and education.
Why it matters: While this is the first request to increase fees since the NMLS system was established in 2008, MBA believes that the discussion and the proposal should provide more insight into what improvements to the system NMLS users can expect from higher fees. The request for comments is an opportunity for industry to weigh in on the proposal ahead of its adoption and planned March 2025 implementation.
What is next: MBA is working on a response to the proposal and will continue discussions with CSBS on industry’s needs in the system. Comments should be sent to comments@csbs.org by July 22nd.
For more information, please contact William Kooper at (202) 557-2727 or Liz Facemire at (202) 557-2870.
MBA-Opposed Residential PACE Bill Sent to Governor DeSantis; MAA, Florida MBA Call for Veto
Last week, in response to the Florida Legislature’s transmission of harmful residential Property Assessed Clean Energy (PACE) legislation (SB-770) to Governor Ron DeSantis, the MBA of Florida (MBAF) and Florida Mortgage Action Alliance (MAA) members ramped up their campaign that calls for a veto.
• If enacted, the bill would significantly expand the number and types of projects eligible for financing by Florida’s PACE loan program without first subordinating residential PACE liens to mortgages.
• MBA has long opposed residential PACE programs because they create risk to lenders and consumers due to the priority status the PACE lien is granted ahead of previously recorded first-mortgages. PACE obligations also expose consumers to further risk because they are not yet covered by MBA-supported federal consumer protection regulations currently being contemplated by the Consumer Financial Protection Bureau (CFPB).
Why it matters: Expanding the PACE program would preclude borrowers from future refinancing of their first mortgages with a loan insured by the Federal Housing Administration (FHA) or the Department of Veterans Affairs, or with a loan sold to either Fannie Mae or Freddie Mac (GSEs). Similarly, buyers of homes with PACE liens will not be able to obtain federally backed financing unless the PACE lien is first paid off in its entirety.
What’s next: MBA will continue to support the MBAF in its efforts to stop this harmful legislation. If you are a resident of Florida and have not taken action on the current MAA alert yet, please click here to do so now. To read the MBAF letter to Governor DeSantis, click here.
For more information on the bill, please contact William Kooper at (202) 557-2727 or Liz Facemire at (202) 557-2870. For more information about MAA, please contact Jamey Lynch at (202) 557-2818.
Vermont Governor Vetoes Bill Package Containing The Vermont Data Privacy Act; Senate Upholds Veto
Recently, Vermont Governor Philip Scott vetoed a bill that included language to enact H121, The Vermont Data Privacy Act (VDPA).
• While the state House decisively voted to override the veto by a 128-17 vote earlier this week, the Senate ultimately sustained the veto after an hour-long debate on the merits of all sections of the bill and the level of urgency.
• In a veto statement, Governor Scott said the bill creates an “unnecessary and avoidable level of risk,” specifically the problematic private right of action (PRA) included and that the bill’s passage would create a hostile business environment and make Vermont a national outlier.
• In addition to the PRA issues, the VDPA did not align with MBA’s model exemption language, as it only exempted GLBA data and some convoluted activities-based exemptions.
Why it matters: VDPA would have added to a complex patchwork of state laws already in the works with 18 other states enacted with varying provisions.
What’s next: VDPA will return to the Vermont legislature next session, and MBA will support stakeholders in efforts to re-align the state with the majority of other state data privacy laws.
• Since 2018, broad data privacy legislation has continued to gain traction across the states. It is important for member companies and state and local association partners to continue to coordinate with MBA to help educate policymakers on the importance of the GLBA exemption to the industry.
For more information, please visit our State Data Protection Issues resource page or contact William Kooper (202) 557-2727 or Liz Facemire (202) 557-2870.
mPower Moments: On the Power of Collaboration with HomeFree-USA’s Marcia Griffin
mPower Founder Marcia M. Davies sits down with Marcia Griffin, CEO and Founder of HomeFree-USA, for an inspiring conversation on her career journey and her motivation to create HomeFree USA, an organization dedicated to closing the racial homeownership gap.
Go deeper: Griffin discusses the importance of collaboration and how strategic partnerships can benefit all facets of the real estate finance industry to serve aspiring homebuyers. She also provides helpful advice on how the industry can recruit diverse talent and how the industry can uplift young professionals through mentorship, encouragement, and guidance.
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 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:
• Fundamentals of Loss Mitigation for Residential Servicers – June 25
• What is the True ROI for Digital Closings? – June 25
• Loan Servicing Transfers that Deliver Results – July 11
• Adding Reverse Mortgages to Your Business Line: The Roadmap – July 23
• What Value Will AI Bring to the Mortgage Industry? – August 13
• Benchmarking & Performance Ratios Mortgage Bankers Must Know – August 20
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.
