MBA Advocacy Update: MBA and Industry Trades Recommend Uniform Appraisal Review Standard

MBA and Industry Trades Recommend Uniform Appraisal Review Standard

On Wednesday, MBA and a coalition of housing and financial services trade associations sent a letter to the federal housing agencies outlining recommendations for implementing the Appraisal Modernization Act, enacted as part of the 21st Century ROAD to Housing Act.

• The coalition recommended that agencies align their reconsideration of value (ROV) requirements with existing Fannie Mae and Freddie Mac standards to establish a consistent process across mortgage programs. The letter also calls for standardized procedures, clearer borrower guidance, and coordination among agencies on any additional requirements.

Why it matters: Lenders currently operate under different appraisal requirements depending on the loan program. Aligning ROV standards across federal agencies would make it easier for lenders to manage compliance, limit duplicative requirements, and provide borrowers with a more consistent process for requesting an appraisal review.

What’s next: MBA will continue to engage with FHA, FHFA, VA, USDA, and the GSEs as they implement related provisions contained within the 21st Century ROAD to Housing Act.

For more information, please contact Darnell Peterson at (202) 557-2922

FHA Releases Updated Policy to Allow Alternative Credit Score Models

Last week, FHA released Mortgagee Letter (ML) 2026-11, adding VantageScore 4.0 and FICO Score 10T as acceptable credit score models alongside Classic FICO. Effective for FHA case numbers assigned on or after January 1, 2027, the ML establishes requirements for determining the Minimum Decision Credit Score (MDCS) when multiple credit score models are submitted.

• FHA has also released implementation resources, including a preparedness guide and technical specifications, and will host “virtual office hours” in November and January to assist lenders with the transition.

Why it matters: The addition of alternative credit score models is an important step toward modernizing FHA’s underwriting process. Both new models score more borrowers, which could help expand access to mortgage credit for borrowers who may not be scorable using the traditional model. However, lenders will need to coordinate with credit reporting agencies, technology vendors, and other partners to ensure their systems and processes are prepared prior to the Jan. 1, 2027, implementation deadline.

What’s next: MBA will continue engaging with FHA and the other government housing agencies as implementation moves forward, focusing on lender readiness, operational challenges, and alignment with the GSEs’ broader credit score modernization efforts. MBA encourages members to review FHA’s implementation resources and participate in the upcoming “office hours” exercise to raise questions or concerns ahead of the effective date.

For more information, please contact Sasha Hewlett at (202) 557-2805.

Colorado Issues Interim Draft Proposed Rules on the Colorado ADMT Act

On Tuesday, the Colorado Attorney General Office Department of Law (the Department) issued revised proposed regulations on the Colorado Automated Decision-Making Technology Act (ADMT Act).

Go deeper: This interim draft was issued after the Department considered comments received on the original proposed rules issued in August. The Colorado Mortgage Lenders Association (CMLA) and MBA submitted joint comments to the Department on the original proposal and will be submitting additional comments and recommendations on this revised Oct. 6 version.

• The state’s law defines an ADMT and establishes new requirements for both developers and deployers of ADMTs that are used to materially influence a consequential decision. It also gives consumers the right to request and correct inaccurate personal data used by ADMT as well as request human review of a decision.

Why it matters: To protect consumers effectively, the final rules should be clear, practical, and capable of consistent implementation without duplicating existing federal compliance obligations. Without that clarity, the ADMT Act risks creating unnecessary compliance burdens for lenders while increasing financing costs for the consumers the ADMT Act is intended to protect.

• Following consultation with MBA residential committee members, the associations requested clarifying guidance and regulations to resolve industry concerns, like duplication of adverse action disclosures, sector specific examples, and further clarification of any potential human review process.
• While the revised regulations address some of the industry’s concerns and remove or modify certain problematic provisions, including requirements related to independent third-party review of appeals, significant questions and operational challenges remain.
• The revised proposed rules therefore still fall short of providing the clarity and practical guidance the industry needs to implement the requirements effectively.

What’s next: MBA will continue working closely with CMLA to conduct a deeper analysis of the Oct. 6 revised proposed rules and prepare for the Oct. 26 hearing in Denver, Colorado. MBA has scheduled a member call on Thursday Oct. 15 from 1:30-2:30pm ET to discuss the revised proposed rules and gather member feedback ahead of the hearing.

For more information, or to be added to the October 15^th member feedback call, please contact Liz Facemire, CMB (202) 557-2870 or Gabriel Acosta (202) 557-2811.

Please visit the MBA resource center mba.org/stateai for additional information on state AI activities.

MBA Testifies at Nevada Regulatory Review Hearing

Last Monday, MBA submitted comments and testified at the Nevada Division of Mortgage Lending’s (the Division) hearing regarding Governor Joe Lombardo’s Executive Order 2026-003 that requires all state agencies to perform a review to streamline, clarify or remove regulations.

Go deeper: The hearing provided a forum for industry stakeholders to make requests for the Division to consider, all to lower regulatory burdens and related costs. MBA expressed the need for the Division to consider removing the duplicative data fields found within the Monthly Activity Report and instead rely on the Nationwide Mortgage Licensing System & Registry’s Mortgage Call Report.

Additionally, the MBA requested the Division reconsider their current interpretation of state licensing law that requires wholesale lender Account Executives to be licensed as Mortgage Loan Originators.

• MBA offered to support legislative action should the Division believe these changes would require statutory amendments. MBA also requested further legislative consideration to remove in-state branch requirements, remove duplicative state-specific fee disclosures, and streamline future Attorney General legal fee assessments.

Why it matters: This hearing provides an opportunity for MBA to express concerns with regulations, and the existing underlying statutes, on public record. While the larger concerns (such as the removal of in-state branch requirements) will require legislative action, this hearing was an important touchpoint as our Nevada members and MBA staff work toward the 2027 legislative session.

What’s next: The Division is not expected to take action on these comments until after the 2027 legislative session. As such, MBA is preparing to aide in the development of legislation to address all state licensing and mortgage lending law concerns – an effort funded by MBA’s State Advocacy Fund Committee (SAF Committee) members.

• MBA asks all members operating in the state, or considering entering the state to do business, to be prepared to help advance these efforts during the session to come. MBA will share expected progress updates through the State Legislative & Regulatory Committee (SLRC) channel.

For more information on this effort or the SAF Committee, please contact William Kooper (202) 557-2737 or Liz Facemire CMB, at (202) 557- 2870.

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:

• Rethinking Bridge Loans in Your Product Mix – Oct. 19
• Accounting for Mortgage Servicing Rights (MSR) – Recapture: FASB’s Proposed Accounting Standards Update – Oct. 20
• UAD 3.6 Office Hours Part V – Oct. 26
• AI in Residential Lending: Intelligent Document Processing (IDP) – Beyond OCR – Nov. 2
• The Low-Rate Mortgage Effect: How Homeowners Are Navigating a Changing Housing Market – Nov. 17

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.