CREF Policy Update: MBA Responds Swiftly to Exclude Government Lending Programs from Federal Spending Freeze Memo
MBA Responds Swiftly to Exclude Government Lending Programs from Federal Spending Freeze Memo
Last Tuesday, MBA staff sprang to action following a Monday night memo from the Office of Management and Budget (OMB) to federal agencies that ordered a pause to grants and loans disbursed by the federal government.
By late Tuesday, the key housing agencies had issued bulletins clarifying that their programs would not be impacted by the freeze. Later that evening, in response to a challenge from other impacted groups, a federal judge temporarily halted the order for one week, and the White House on Wednesday night ultimately said the OMB memo was rescinded.
MBA working for you: Key staff learned of the memo early Tuesday morning and reached out immediately to OMB and the federal housing agencies – and our congressional allies – requesting clear assurance that the directive did not apply to the single family and multifamily loan guarantee programs at the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), and the Rural Housing Service (RHS) at the Department of Agriculture (USDA).
A press statement from MBA President and CEO Bob Broeksmit, CMB, echoed the staff’s urgent calls for clarity and exclusion.
• As a result of MBA’s urgent requests, FHA, the VA, and Ginnie Mae released memos clarifying that OMB’s directive did not apply to single-family federal grants, loans, insurance, and loan guarantees. MBA staff continued to push FHA to extend its bulletin to the multifamily program and for USDA to issue similar clarity for RHS loans up until the matter was resolved following Wednesday night’s recission.
What’s next: MBA is monitoring for any updated guidance from the Trump administration on this matter and will continue to urge them to avoid making any moves that disrupt the flow of lending to the single-family and multifamily housing markets.
For more information, please contact Megan Booth at (202) 557- 2740 or Bill Killmer at (202) 557- 2736.
MBA Holds Briefing on Potential for GSE Next Steps
Last week, MBA held a briefing at the U.S. Capitol Visitors Center for House and Senate staffers to discuss the potential for next steps by Congress and the Trump administration on key secondary mortgage market policies – including the potential for a release from conservatorship for the Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac.
Go deeper: The briefing offered MBA’s policy experts the opportunity to address (and field questions from) a cross-section of congressional staffers on the topic – many of whom were not directly engaged on GSE issues in 2008 (or since). MBA’s presentation deck for the briefing session can be found here.
Why it matters: As President Donald Trump’s Director-designate for the Federal Housing Finance Agency (FHFA), Bill Pulte, if confirmed, would become the next conservator of the GSEs, and, as regulator, be charged with maintaining the safety and soundness of all three housing-related GSEs (including the Federal Home Loan Bank System) for the benefit of American renters and homeowners alike. He could also potentially be tasked with working with the Trump Treasury Department and Congress to chart a path to an exit from conservatorship for Fannie and Freddie.
What’s next: MBA will continue to advocate aggressively that any release of the GSEs avoid market disruption by focusing critical core principles developed by MBA’s Board Task Force, including an explicit, “fully-paid-for” government guarantee on the GSE’s mortgage-backed securities and regulatory mandates for FHFA to maintain a level playing for all lenders regardless of size or business model.
For more information, please contact Bill Killmer at (202) 557-2736, Mike Fratantoni at (202) 557-2935, or Sasha Hewlett at (202) 557-2805.
MBA Backs FHFA Nominee Bill Pulte
Last Monday, Bill Pulte, President’s Trump’s nominee to lead the Federal Housing Finance Agency (FHFA), picked up MBA’s endorsement in a letter sent to Senate Banking Committee leaders.
“We believe he brings a wealth of real world, private sector experience to this role at a critical time for the housing Government Sponsored Enterprises (GSEs),” wrote MBA’s Broeksmit and current MBA Chair Laura Escobar to Senate Banking Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA).
The committee’s other individual members – on both sides of the political aisle – were also carbon copied.
Go deeper: The letter from Escobar and Broeksmit also pointed to Pulte’s experience as CEO of the housing-focused investment firm Pulte Capital Partners and his service on the board of directors of Pulte Homes.
“Mr. Pulte has also shown a deep dedication to community development by founding the non-profit Blight Authority,” they added, saying the group had been “instrumental” in clearing blighted homes in Detroit, Pontiac (MI) and St. Louis.
What’s next: MBA’s letter urged the Senate Banking Committee to quickly schedule a hearing to examine Mr. Pulte’s credentials – and swiftly and favorably report his nomination to the full Senate for a confirmation floor vote. Chairman Scott is expected to schedule a nomination hearing for Pulte in the coming weeks. Should his nomination clear the Banking panel by majority vote, Pulte’s full Senate nomination vote would most likely not take place until the spring.
For more information, please contact Bill Killmer at (202) 557-2736 or Jamie Woodwell at (202) 557-2936.
Scott Bessent Confirmed as Treasury Secretary with Bipartisan Support
Last Monday, the Senate voted to confirm Scott Bessent as the 79th Treasury Secretary by a vote of 68-29. Secretary Bessent has said his top priority will be extending the 2017 Tax Cuts and Jobs Act (TCJA).
• Bessent formerly served as CEO and Chief Investment Officer of Key Square Capital Management, a global hedge fund focused on macro investing. Bessent also has taught economic history as an adjunct professor at Yale University. He is a long-time advocate, supporter, and mentor of financial literacy and education programs.
What they’re saying: In a press statement following his confirmation, MBA’s Broeksmit said, “MBA will work with Treasury and Congress to help pass legislation that extends key, expiring provisions of the Tax Cuts and Jobs Act, particularly those that impact consumers and support continued investment in housing and communities.”
He added, “MBA is also looking forward to engaging with Secretary Bessent and his staff, and with the Federal Housing Finance Agency and Congress, to develop a thoughtful plan to end the conservatorships of Fannie Mae and Freddie Mac (GSEs) in a way that avoids any market disruption or increased costs for borrowers. We look forward to hearing more from Secretary Bessent on his plans for the GSEs, and we stress that any release must include an explicit federal backstop of the GSEs’ mortgage-backed securities to protect both consumers and our housing finance system.”
Why it matters: Bessent will play a pivotal role on many of MBA’s key issues, including tax policy, utilizing Opportunity Zones and other tax incentives for affordable housing or office conversion, responsible release of the GSEs from conservatorship, capital rules, and other financial regulations, as well as chairing the interagency Financial Stability Oversight Council (FSOC).
Go deeper: As Treasury Secretary, Bessent will have to work with the Congress to get the debt limit extended. The Treasury Department under his predecessor Secretary Yellen had already begun using “extraordinary measures” to continue paying the nation’s bills.
• The capacity of the extraordinary measures (e.g., redeeming of a portion of the investments held by the Civil Service Retirement and Disability Fund – which subsequently will be made whole after the debt limit is extended) likely will run out before the summer.
Bessent also has discussed making a priority of issues such as maintaining a strong economy, financial regulatory reform, trade policies, protecting financial infrastructure, cryptocurrency, and economic competitiveness with China.
What’s next: MBA will begin to work with Secretary Bessent and his emerging agency team on issues important to tax policy and real estate finance.
For more information, please contact George Rogers at (202) 557-2797 or Ethan Saxon at (202) 557-2913.
Federal Reserve Keeps Rates Unchanged
The Federal Reserve held the federal funds rate at a target range of 4.25-4.50% on Wednesday.
Read more of Fratantoni’s commentary here.
For more information, please contact Mike Fratantoni at (202) 557-2935.
Delinquency Rates for Commercial Properties Increased in Fourth-Quarter 2024
Delinquency rates for mortgages backed by commercial properties increased during the fourth quarter of 2024, according to MBA’s latest commercial real estate finance (CREF) Loan Performance Survey, released last week.
What they are saying: “The delinquency rate for commercial mortgages increased during the final three months of 2024, with increases across most capital sources and property types,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “The challenges facing different sectors vary – with office properties perhaps facing the most challenging combination of weaker fundamentals and stubbornly high interest rates. However, despite the current conditions, other property types continue to benefit from a relatively strong economy.”
Go deeper: The share of loans that were delinquent increased for some property types, particularly office, lodging, retail, and multifamily. Delinquencies decreased for industrial properties.
For more information, please contact Mike Fratantoni at (202) 557-2935.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely commercial/multifamily and 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:
• CREF Career Conversations: Insights from Industry Leaders – Feb. 6
• Navigating and Ensuring Accurate Reporting with the MBA Commercial and Multifamily Inspection Form – Feb. 26
• The Evolving Role of Document Management in Commercial Real Estate Lending – March 13
• Understanding Parametric Insurance: A Lender’s Guide to Maximizing Protection and Efficiency – April 10
• Uncovering Fraud in Commercial/Multifamily Lender-Placed Insurance – April 15
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.
