Advocacy Update: Federal Government Shuts Down Following Congressional Stalemate on FY 2026 Appropriations; Read MBA’s Shutdown Member Guide
Federal Government Shuts Down Following Congressional Stalemate on FY 2026 Appropriations; Read MBA’s Shutdown Member Guide
On Wednesday, the federal government shut down after Congress failed to come to an agreement on Fiscal Year (FY) 2026 funding before Tuesday’s 11:59 p.m. ET deadline.
• Read MBA’s member guide that outlines the potential impacts to single-family and multifamily government lending programs.
Why it matters: Details on impacts remain fluid, but the shutdown has necessitated the furloughs of certain federal employees as well as significant curtailment of certain operations requiring agency staff intervention or action at the Department of Housing and Urban Development, Veterans Affairs, and the Department of Agriculture.
• National Flood Insurance Program (NFIP) authorities have also expired, a disruptive development that impacts real estate transactions in flood-prone areas where insurance is required. MBA is advocating for an immediate extension of NFIP’s authority – including a separate/targeted authorization measure – to avoid long-term disruptions to the housing and flood insurance markets. Read the recent trade groups/coalition letters to congressional leadership here and here. Congressional hearings on flood insurance (and other housing-related issues) are being planned for both the Senate and House in the coming weeks.
Go deeper: On September 19, Republicans in the House of Representatives passed a short-term Continuing Resolution (CR) that extends Fiscal Year (FY) 2024-2025 funding levels through November 21, 2025. However, in the Senate, where 60 votes are needed, several attempts to advance the House-passed measure (and a competing Democratic alternative) have all failed in recent days. Democratic leaders continue to insist that certain health-care related priorities must be added to any government funding package. Further funding-related votes are expected later today – and throughout the weekend – as negotiations continue.
What’s next: MBA is engaged with lawmakers in both chambers of Congress – and affected regulators – and encourages members to contact us directly with any real-time impacts your firms are experiencing. A shutdown lasting a few days slightly inconveniences single-family and multifamily mortgage markets. A longer delay – especially if it leads to widespread layoffs at federal agencies important to the industry – will have severe and disruptive impacts to members and the consumers, end users, and customers they serve.
For more information, please contact Bill Killmer at (202) 557-2736 or Pete Mills at (202) 557-2858.
FICO Announces New Direct Licensing Program for Resellers
On Wednesday, FICO announced a new program and pricing framework that allows tri-merge resellers to calculate and distribute FICO scores directly to lenders. The FICO Mortgage Direct License Program eliminates reliance on the three nationwide credit bureaus to add credit scores to their reports and is aimed to drive price transparency and immediate cost savings to mortgage lenders, mortgage brokers, and other industry participants. This program is optional, and resellers that prefer working through the credit bureaus can continue to do so.
The two newly introduced alternate pricing models are intended to expand choice and optionality for the industry.
• Under the new “performance model,” the royalty fee for the FICO Score will be $4.95 per score, which represents a 50% reduction in average per score fee by eliminating credit bureau mark-ups. A funded loan fee of $33 per borrower per score will apply when a FICO-scored loan is closed.
• Alternatively, lenders may opt to continue using the current per score only pricing model, which maintains the $10 per score fee currently charged by credit bureaus to resellers for the FICO Score. This model is designed to represent no increase in per score fees for lenders.
What they’re saying: MBA President and CEO Bob Broeksmit, CMB, in a press statement said, “MBA has led the industry in calling for fixes to the anticompetitive market and increasing costs that lenders and consumers pay for required tri-merge credit reports and other credit reporting products. FICO’s new program – which enhances transparency and provides more options to lenders – is a step in the right direction. While it remains to be seen if this will result in materially lower costs, MBA will monitor the implementation of this new program while continuing to call for reforms that support a better credit reporting system that promotes more competition, efficiency, and lower costs for consumers.”
What’s next: MBA encourages members to provide any feedback on these options as the resellers implement the new program. MBA will also continue its calls for reforms and price transparency in the credit reporting system.
For more information, please contact Sasha Hewlett at (202) 557-2805.
SEC Concept Release Seeks Input on Publicly Registered RMBS
Last week, the Securities and Exchange Commission published a concept release seeking public comments on how to improve current SEC rules governing residential mortgage-backed securities (RMBS) disclosures and certain aspects of asset-backed securities (ABS). The concept release notes there have been no publicly registered RMBS offerings since 2013 and seeks feedback from the public on whether there are SEC regulatory impediments contributing to the absence of public RMBS offerings, including whether certain disclosure requirements should be revised and how certain sensitive information about mortgage loans underlying the RMBS may be shared with investors in light of privacy and confidentiality concerns.
Why it matters: While the focus of the concept release is primarily on the single-family RMBS market, some of the broader concepts are applicable to, and could have impacts on, the broader ABS market, including CMBS, CRE CLOs, and other instruments. The release may also present an opportunity to stress other industry priorities to the SEC.
Go deeper: The development of a safe and sustainable private label securities (PLS) market has been a long-standing MBA priority as a more robust, sustainable private RMBS market would increase the diversity of housing finance capital sources, making the system more resilient and promoting greater liquidity, while also lowering costs and improving choices for borrowers. This has once again gained focus as part of discussions regarding housing finance reform and the future of the GSEs.
What’s next: Public comments in response to this concept release are due by December 1, 2025. MBA plans to submit comments and will engage with members, MISMO, and other trade associations to solicit feedback.
For more information, please contact Sasha Hewlett at (202) 557-2805
FHFA Proposes GSE Housing Goals for 2026-2028
On Thursday, the Federal Housing Finance Agency (FHFA) proposed new 2026 – 2028 housing goals for Fannie Mae and Freddie Mac (the GSEs). The goals, required by law, specify benchmark percentages of GSE purchases of single-family mortgages serving low- and very-low-income borrowers and other underserved populations, as well as benchmarks on the number of multifamily unit purchases for those same populations based on U.S. Census tracts.
Go deeper: The housing goals drive the GSEs’ efforts to achieve their mission of supporting liquidity for affordable homeownership and rental housing. The proposed single-family benchmarks are a a recalibration of goals set by the Biden Administration for 2025 – 2027 and generally lower, with the exception of the low-income refinance goal which remained flat. The proposed rule also combines the current low-income census tracts home purchase subgoal and the minority census tracts home purchase subgoal into a single low-income areas home purchase subgoal.
• Notably, in an effort to simplify the housing goals, the proposal removes the newly established measurement buffers which were intended to help account for uncertainty and time lags associated with forecasting the market years in advance and retroactively determining actual market levels. The proposal states that the buffers are unnecessary as the proposed benchmarks are below forecasted market levels.
What’s next: Public comments on the proposed rule must be submitted by November 3, 2025. MBA will review the proposed rule in the coming weeks and will continue to engage with FHFA on this and other critical housing issues.
For more information, please contact Sasha Hewlett at (202) 557-2805.
FHFA Withdraws Proposed Rules for the Enterprises and FHLBs
Last week, FHFA withdrew the following proposed rules for Fannie Mae and Freddie Mac (the GSEs) and the Federal Home Loan Banks (FHLBs).
• Enterprise Liquidity Requirements – A proposed rule from 2021 that would have established minimum liquidity requirements sufficient for the Enterprises (Fannie Mae and Freddie Mac) to continue meeting their financial obligations in periods of short term and long-term debt market stress.
• Federal Home Loan Bank System Boards of Directors and Executive Management- A proposed rule from 2024 that would have amended FHFA’s regulations on governance-related issues at the Federal Home Loan Banks and the Office of Finance.
• Federal Home Loan Bank Unsecured Credit Limits – A proposed rule from 2024 that would have amended the FHLB capital rules dealing with extensions of unsecured credit in their on- and off-balance sheet and derivative transactions.
Go deeper: The withdrawal of these proposals was expected as they were listed in the recently published fall regulatory agenda. FHFA stated that it no longer intends to issue final rules with respect to these proposals and should future regulatory action in any of these areas be pursued, new proposed rules or other issuances would be published.
What’s next: MBA will review the withdrawn proposals to determine industry impacts and will continue to engage with FHFA on this and other critically important housing issues.
For more information, please contact Sasha Hewlett at (202) 557-2805
VA Publishes Circular on the Collection of Partial Claim Funds
On Friday, the Department of Veterans Affairs (VA) published Circular 26-25-9, which provides guidance outlining its expectations for servicers regarding the collection of outstanding COVID-19 partial claims.
Why it matters: The Circular notifies servicers that VA Loan Technicians will be reviewing all VA-guaranteed loans that have been reported as paid-in-full that have a COVID partial claim. VA Loan Technicians will contact servicers to follow up on the submission of partial claim payment funds and determine if payoff funds were properly submitted to the VA contractor.
• The Circular notifies servicers that if either a “loan closed” (we believe they mean “paid off”) before the partial claim was recorded, or if the servicer fails to respond to VA’s request for information within 14 days, VA will initiate a Bill of Collection.
What’s next: MBA will continue to monitor the implementation of the Circular and track industry feedback and concerns.
For more information, please contact Kaitlin Hildner at (202) 557-2933.
California Privacy Protection Agency Finalizes Regulations on Cybersecurity, Automated Decision-making Technology, and More
Last month, the California Privacy Protection Agency announced that the California Office of Administrative Law approved the final regulations covering cybersecurity audits, risk assessments, automated decision-making technology (ADMT), insurance companies, and updates to existing California Consumer Privacy Act regulations.
• The announcement includes a tiered timeline for businesses to come into compliance. Most notably, the regulations will require businesses to comply with ADMT requirements by January 1, 2027.
• California MBA and MBA had submitted joint comments expressing concerns and will continue to engage through the implementation period.
Why it matters: The final rule regulates many systems commonly used in the mortgage industry depending on the level of human involvement and oversight. Additionally, lenders must offer consumers the opportunity to opt-out of consideration by these systems and implement a manual appeals process for denied borrowers. Importantly, these proposed rules ignore the fact that the California Consumer Privacy Act does not apply to data subject to the Gramm-Leach-Bliley Act or the Fair Credit Reporting Act.
What’s next: MBA and California MBA will continue to educate California legislators and regulators on the needs of the mortgage industry and concerns with overly restrictive regulations on technology. MBA will also continue engaging with the California legislature as they consider AI legislation that covers the same ADMT technology controlled by this regulation.
For more information, please visit the MBA resource center mba.org/stateai or contact Liz Facemire at (202) 557-2870 or Gabriel Acosta at (202) 557-2811.
[VIDEO]: mPower Moments: A Conversation with Marcia Davies
In this mPower Moments, Marcia M. Davies, MBA’s COO and Founder of mPower, sits down with Laura Hopkins, MBA’s new SVP of Meetings, Membership, and mPower, for a special conversation discussing Marcia’s retirement at the end of 2025 and her incomparable 40+ year career in the mortgage finance industry.
Go deeper: In this insightful conversation, Marcia shares with Laura why now is the perfect time to retire, her career highs and challenges, and reflects on the past 10 years of mPower, discussing how it has filled her cup. Marcia also shares her vision of mPower going forward as Laura ascends into the position of leading mPower.
What’s next: 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 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:
• Leveraging Rental Payment History – Part I: Current GSE Policy and Recent Enhancements – Nov. 6
• Leveraging Rental Payment History – Part II: Industry Practices and Consumer Experience Improvements – Nov. 13
• Using Quality Assurance, Control and Fraud Prevention to Strengthen Loan Operations – Nov. 17
• Breaking the 15-Minute Barrier: The First Machine-Only Income Decisioning in Mortgage – Nov. 19
• Non-Agency Training Series: Foreign National Loans – Nov. 19
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 at (202) 557-2931.
