CREF Policy Update July 1, 2021

Commercial and multifamily developments and activities from MBA relevant to your business and our industry.

1. FHFA Director Calabria Replaced Following Supreme Court Decision    

Last Wednesday, the Biden administration replaced Federal Housing Finance Agency (FHFA) Director Mark Calabria with Sandra L. Thompson, naming her Acting Director effective immediately.

Since 2013, Thompson has served as Deputy Director of the Division of Housing Mission and Goals, overseeing FHFA’s housing and regulatory policy, capital policy, financial analysis, fair lending and all mission activities for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. The leadership change followed the Supreme Court’s decision on Wednesday in Collins v. Yellen, a 7-2 decision that held that the FHFA’s structure, with a single director removable only for cause, violates the Constitution’s separation of powers scheme. A president can thus remove the FHFA Director before the end of his or her statutory five-year term. Read MBA President and CEO Bob Broeksmit’s, CMB, press statement following the Supreme Court decision, and his press statement in support of FHFA Acting Director Thompson.  

  • Why it matters: FHFA plays a critical role regulating entities that ensure liquid markets for single-family and multifamily mortgages, and Wednesday’s Supreme Court decision will have a significant impact on both the direction and market share of the GSEs. The court also denied claims for relief on the shareholders’ statutory claims and remanded the case to the lower court to determine whether the unconstitutional removal provision inflicted compensable harm. A summary of the decision can be found here
  • What’s next: MBA looks forward to working collaboratively with the administration, FHFA, and other stakeholders to ensure the single-family and multifamily markets function well for lenders and the American consumers and businesses they serve.

For more information, contact Bruce Oliver at (202) 557-2840 or Sharon Walker at (202) 2747.

2. CDC Extends National Residential Eviction Moratorium for the Final Time to July 31, 2021  

The Centers for Disease Control and Prevention (CDC) last week announced it is extending its nationwide residential eviction moratorium by one month, to July 31, 2021. The CDC stated that this is intended to be the final extension of the moratorium, which was originally implemented in September 2020 and set to expire on June 30, 2021. Also, the U.S. Department of the Treasury released updated frequently asked questions (FAQs) and a fact sheet with details on further steps of its goal of getting rental assistance into the hands of those who need it the most. 

  • Why it matters: In June, MBA and a broad real estate coalition sent a letter to President Biden urging the administration to sunset the federal moratorium on evictions on June 30, 2021.
  • What’s next: MBA will continue to follow state and federal developments regarding eviction moratoriums and rental assistance.

For more information, contact Grant Carlson at (202) 557-2765.

3. DOJ Urges State and Local Court’s to Consider Eviction Diversion Strategies

Last Thursday, U.S. Department of Justice (DOJ) Associate Attorney General Vanita Gupta sent a letter to the nation’s chief justices and state court administrators highlighting eviction diversion strategies. In the letter, DOJ urged state and local courts “to consider eviction diversion strategies that can help families avoid the disruption and damage that evictions cause and point to federal resources that can help courts navigate this crisis.”

  • Why it matters: Eviction diversion strategies could reduce the number of evictions that may occur after the CDC nationwide eviction moratorium expires after July 31, 2021. 
  • What’s next: MBA will follow how state and local courts implement eviction diversion practices. 

For more information, contact Grant Carlson at (202) 557-2765.

4. Los Angeles Extends Eviction Moratorium; California Lawmakers Debate Extension

California lawmakers are debating a state budget that may include an extension of the state’s eviction moratorium, which is set to expire on June 30, 2021. Also, Los Angeles announced yesterday that its county residential and commercial eviction moratorium would last until September 30, 2021.   

  • Why It matters: The Los Angeles County moratorium is currently set to be the last existing moratorium to expire. 
  • What’s next: MBA will work with the California MBA to follow budget negotiations in Sacramento and any potential provisions affecting MBA members. 

For more information, please contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.

5. President Biden Nominates Julia Gordon to Lead FHA 

Last Thursday, President Biden announced that he intends to nominate Julia Gordon, currently President of the National Community Stabilization Trust, to be the next Commissioner of the Federal Housing Administration (FHA) at the U.S. Department of Housing and Urban Development (HUD). 

  • Why it matters: If confirmed by the Senate, Gordon would oversee FHA’s single-family and multifamily mortgage market programs. In a press statement, MBA President and CEO Bob Broeksmit, CMB, applauded Gordon’s nomination and highlighted her unique perspective on the issues facing our nation’s housing and mortgage markets.
  • What’s next: The U.S. Senate Committee on Banking, Housing and Urban Affairs will schedule a confirmation hearing for Gordon prior to voting on her nomination – in advance of any eventual action by the full Senate. Timing for any movement on her nomination is still to be determined.

For more information, contact Tallman Johnson at (202) 557-2866 or Ethan Saxon at (202) 557-2913.

6. SEC Chairman Shares Views on Future Mandatory ESG and Climate Risk Disclosures

In prepared remarks at London City Week, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler provided additional information on future mandatory company disclosures regarding climate risk, human capital, and Environmental, Social, and Corporate Governance (ESG).

According to Chairman Gensler, the SEC is considering disclosures addressing climate risk with an emphasis on information related to governance, strategy, and risk management. Climate risk disclosures could require companies to provide information on specific metrics, such as greenhouse gas emissions, and provide updates on forward-looking climate commitments that were previously set to meet climate-related targets. Chairman Gensler also highlighted that the SEC is considering disclosures on human capital and ESG, examining how companies treat their employees and what factors might determine whether a fund can market itself as ESG. 

  • Why it matters: The SEC will be a key player in the development climate and ESG disclosures.
  • What’s next: MBA staff will continue to monitor the SEC and other policymakers for significant statements and other possible actions on climate and ESG disclosures.

For more information, contact Bruce Oliver at (202) 557-2840 or Adrian Ballinger at (202) 557-2774.

7. HUD Secretary Fudge Addresses Policy Change to Ensure Stable Housing for Returning Citizens    

Last Wednesday, HUD Secretary Marcia Fudge released a letter addressing policy changes needed to ensure that people returning to the community after leaving prisons and jails have access to stable homes to rebuild their lives.  

  • Why it matters: This shows HUD’s commitment to taking a comprehensive approach to addressing the housing needs of returning citizens and increasing public safety within communities.  
  • What’s next: In the coming weeks, HUD will provide additional tools to help communities assess the homelessness risk of people exiting prisons and jails, and create referral partnerships between Public Housing Authorities (PHAs), Continuim of Care (CoC) and corrections agencies for access to housing vouchers. 

For more information, contact Sharon Walker at (202) 557-2747.

8. HUD Secretary Fudge Makes First Appearance Before House Budget Committee    

Last week HUD Secretary Marcia Fudge appeared before the House Budget Committee to justify her agency’s FY 2022 budget requests. In her written testimony, Secretary Fudge noted that of the $68.7 billion requested, “Most of the budget authority funds programs to help vulnerable, low-income households – many elderly or disabled – pay their rent.” The Emergency Rental Assistance (ERA) program was a consistent theme throughout the hearing, with Republicans asking for more accountability and guardrails in the program, and Democrats making the case for additional funding.  

  • Why it matters: Secretary Fudge has made rental assistance and consumer protections a clear priority for the Biden administration.    
  • What’s next: Extensions or changes to the ERA programs are likely and will be intertwined with any developments regarding the eviction moratorium.   

For more information, contact Borden Hoskins at (202) 557-2712 or Alden Knowlton at (202) 557-2741.

9. Federal Reserve Chair Jerome Powell Testifies Before Special Panel on Coronavirus Crisis    

Last Wednesday, the House Select Subcommittee on the Coronavirus Crisis featured testimony by Federal Reserve Chair Jerome Powell. The hearing was intended to focus on the efficacy of the CARES Act’s newly created Main Street Lending Program and the Municipal Lending Facility. While members on both sides of the aisle were largely supportive of the Federal Reserve’s pandemic response efforts, Republicans advocated for discontinuance of enhanced unemployment benefits and cautioned against inflationary pressures. Democrats sought to highlight the need for continued federal support across multiple sectors of the economy.  

  • Why it matters: Under Section 13(3) of the Federal Reserve Act, the agency has immense authority and discretion in how to respond to economic emergencies.   
  • What’s next: Several factors will dictate how the Federal Reserve responds to the economy emerging from the pandemic, including congressional activity and a host of political pressures.     

For more information, contact Borden Hoskins at (202) 557-2712 or Alden Knowlton at (202) 557-2741.

10. Senate Panel Explores Housing Measures    

Last Thursday the Senate Banking, Housing and Urban Affairs Committee held a hearing entitled, “Examining Bipartisan Bills to Increase Access to Housing.” The hearing focused on nine pieces of housing legislation, including two bills supported by MBA: S. 1614, the Yes In My Backyard Act, and S. 2131, the Improving FHA Support for Small-Dollar Mortgages Act of 2021. Both bills were supported by all three witnesses during the hearing. A summary of the proceedings can be found here.

  • Why it matters: Congress is faced with a number of pieces of bipartisan legislation drafted to provide access to affordable housing, improve the safety conditions within current federally assisted housing, and target some of the nation’s existing housing resources to meet unaddressed needs of underserved markets.  
  • What’s next: While a Banking Committee markup of these items may be unlikely, legislators will seek to include these bipartisan supported bills in larger legislative efforts moving to the Senate floor in the coming months.    

For more information, contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866. 

11. MBA Endorses 7-Point Plan to Significantly Increase Black Homeownership by 2030     

MBA recently endorsed the “7-Point Plan” – a solutions-based initiative to increase Black homeownership by 3 million net new households by 2030. The plan was announced by the Black Homeownership Collaborative (BHC) – a group of organizations that are committed to addressing affordable housing challenges facing Black communities.

The announcement of the 7-Point Plan was made at a BHC-hosted event last week in Cleveland. The noteworthy list of guest speakers at the event included HUD Secretary Marcia Fudge, U.S. Senator Sherrod Brown (D-OH), Cleveland State University President Harlan Sands, MBA President and CEO Bob Broeksmit, CMB, and several other housing industry leaders.

  • Why it matters: The 7-Point Plan consists of the following components: homeownership counseling, down payment assistance, housing production, credit and lending, civil and consumer rights, homeownership sustainability, and marketing and outreach.  
  • What’s next: To learn more about the 7-Point Plan, click here .     

For more information, contact Steve O’Connor at (202) 557-2867.

12. State Trackers

State eviction moratorium and legislative activity tracker available here.

For more information, contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.

13. Webinar: Tax Advocacy Tuesdays at 2:30

MBA’s next biweekly update takes place Tuesday, July 6 at 2:30 PM ET. The discussion topic will cover the proposed investments in affordable housing. 

  • Why it matters: As the Biden administration and Congress negotiate on disclosed plans for trillions of dollars in new taxes and government spending, MBA is actively engaging policymakers on the proposals under consideration that would impact real estate finance. This next session of the biweekly webinar series will cover proposed investments in affordable housing through such programs as LIHTC and others.
  • What’s next: This biweekly series will be offered through fall 2021 as developments dictate. It is closed to press. You must register for each event individually. Register here.  

For more information, contact Andrew Foster at (202) 557-2740.

14. Are You a Diversity Champion? Apply for MBA’s DEI Leadership Awards

MBA’s Diversity, Equity and Inclusion (DEI) Leadership Awards are back! Now in its sixth year of recognizing MBA member companies, this awards program acknowledges the dedication and creativity that increase DEI efforts within a company’s leadership and employee base. If your organization is a champion of diversity, share how you are inspiring change and highlight your success by applying today.

  • What’s next: Applications are due August 13, 2021. Prior to getting started, please review helpful application tips to help you prepare your entry.

For more information, contact MBA’s DEI Team.

12. Upcoming and Recent MBA Education Webinars on Critical Industry Issues

MBA Education continues to deliver timely programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, a list of upcoming and recent webinars, which are complimentary to MBA members:

  • Fair Lending: Things You Might Not Be Thinking Of – June 22
  • Lending to the LGBTQ Community: Opportunities and Considerations – June 28
  • Benchmarking for Performance and the Performance Ratios Every Mortgage Banker Must Know – June 29
  • Transformation Impact of Blockchain in Mortgage Industry and Realized Economic Benefits – June 29
  • Today’s Cybersecurity Issues and How to Plan Your Response – June 30
  • A Strategy for Executing a Successful LIBOR Transition (Single-Family) – July 8

MBA members can register for any of the above events and view recent webinar recordings.

For more information, contact David Upbin at (202) 557-2890.