MBA Advocacy Update: MBA Opposes FHA’s Partial Claim Mortgagee Letter
MBA Opposes FHA’s Partial Claim Mortgagee Letter
Last Friday, MBA responded to the Federal Housing Administration’s (FHA) draft Mortgagee Letter (ML), the Partial Claim Document Recording and Payoff Statements.
• More than one million FHA borrowers have completed a partial claim in recent years. Through better tracking, the Department of Housing of Urban Development (HUD) is seeking to prevent challenges to the subordinate lien ahead of a potential increase in refinances and home sales.
Why it matters: According to its press release, HUD “is seeking to ensure that borrowers, closing agents, attorneys, and title agents are aware of the partial claim subordinate lien owed by ensuring the partial claim payoff is provided to the party requesting the payoff statement for the FHA-insured first mortgage.”
While MBA supports the objective, it opposes FHA’s proposal establishing a new procedure that would require servicers to obtain a partial claim payoff statement from HUD’s SMART Integrated Portal (SIP) and provide it to borrowers when they receive a payoff request on an existing FHA-insured mortgage.
MBA’s letter states that “considering servicers are not obligated to provide payoff statements for Partial Claims today, we respectfully request that HUD reconsider its proposed policy and republish an alternative proposal once technology changes are complete.”
• FHA’s proposal would transfer significant operational and regulatory risk to servicers and create borrower confusion.
• MBA encouraged FHA to explore alternative solutions that would improve existing notification requirements to HUD’s Loan Servicing Contractor when a borrower requests an initial payoff of the FHA-insured mortgage.
What’s next: MBA will monitor and communicate developments to members through the Loan Administration Committee.
For more information, please contact Brendan Kelleher at (202) 557-2779.
FHA Releases FAQ on Reconsideration of Value Policy
Two weeks ago, FHA released a new FAQ for lenders and industry practitioners ahead of the required implementation date for its Reconsideration of Value (ROV) policy. This FAQ follows FHA’s August webinar, where many participant questions went unanswered
Go deeper: The release also comes after successful advocacy by MBA, which pushed to delay the implementation date due to concerns raised by members about the hurried timeline.
Why it matters: The ROV process is important because it ensures fair and accurate property valuations by allowing for a formal review of appraisals, which protects both borrowers and lenders, promotes transparency, and helps address concerns in fluctuating housing markets.
What’s next: FHA and the GSEs ROV policies will go into effect on October 31, 2024.
For more information, please contact Darnell Peterson at (202) 557-2922.
MBA Hosts Webinar on CFPB Non-Bank Registry; Recording Available
Last week, MBA held a member webinar to provide context and expert guidance on the Consumer Financial Protection Bureau’s (CFPB) new Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders.
• The webinar, featuring Haydn Richards, Partner at Bradley, and Derek Schultz, Director at Approved, consisted of a deep dive on the regulatory requirements as well as how members can provide the mandated information into CFPB’s new platform. MBA staff also participated and provided the advocacy history of this regulation, which both MBA and state mortgage regulators opposed. A Q&A followed.
Why it matters: The rule requires covered nonbanks that are subject to certain agency or court orders to register those orders with the CFPB, with a limited exception for orders available on the Nationwide Multistate Licensing System (NMLS). Additionally, covered nonbanks that are subject to CFPB supervision must submit annual statements describing the steps taken to ensure compliance with covered orders and whether there was any instance of noncompliance with those orders.
What’s next: MBA will continue to monitor CPPB’s implementation of the new regulation and will keep members informed of ongoing developments.
For more information, please contact William Kooper (202) 557-2737 or Alisha Sears (202) 557-2930.
MBA and California MBA Urge Opposition to Rent Control Ballot Initiative; Webinar Recording Available
Last week, MBA, the California MBA (CMBA), and the California Apartment Association (CAA) hosted a free webinar in support of the “No for Me on Prop 33” campaign that urges members to vote against California’s Proposition 33 (Prop 33) rent control initiative. A recording of the webinar is available here (passcode rb4KW8&X).
• California voters have rejected rent control at the ballot twice before and hopefully will do so again.
Why it matters: Prop 33 would repeal the state’s Costa-Hawkins Rental Housing Act and would allow local governments to set residential rental rates when a unit becomes vacant – actions which will harm the multifamily real estate market and housing affordability. Repealing Costa-Hawkins would create a patchwork of state and local price control laws that would undermine the supply of new housing and make multifamily lending more costly.
What’s next: MBA will continue to work with the CMBA, CAA, and other allied groups to oppose Prop 33 and will keep members updated on any new developments.
For more information, please review this issue brief and contact William Kooper (202) 557-2737 or Jamey Lynch (202) 557-2818.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – all complimentary to MBA members:
• Mastering MSR Valuations in a Shifting Marketplace – Nov. 13
• Manufactured Housing: An Emerging Multifamily Supply Solution – Nov. 13
• From Mortgage Eligibility to Affordability: Adapting Lending Strategies to Market Conditions – Nov. 19
• Transition Climate Risks: From Initial Assessment to Mitigation – Nov. 20
• Master the Art of Pricing and Rate Lock Strategies – Dec. 10
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.
