MBA Advocacy Update: Congress Passes Stopgap Funding Bill; NFIP Also Extended Until March
Congress Passes Three-Month, Stopgap Funding Bill; NFIP Also Extended Until March
The U.S. House and Senate on Friday night passed (House: 366-34; Senate: 85-11) an identical Continuing Resolution (CR) that averts a government shutdown and extends Fiscal Year (FY) 2024 funding levels through March 14, 2025.
The proposal provides $110 billion in disaster aid to hurricane-battered communities, a one-year farm bill extension, and, importantly, extends the National Flood Insurance Program (NFIP) also until March 14.
Why it matters: President Biden is expected to sign the bill into law this morning, ensuring that all the various government-supported segments of the mortgage market, including the Department of Housing and Urban Development, (Ginnie Mae and FHA included), Department of Agriculture, and the Department of Veterans Affairs continue to operate virtually uninterrupted.
• MBA advocated strongly for the flood insurance extension on both sides of the Hill and with both political parties – see yesterday’s joint trades letter – and will continue to call for reforms to, and a long-term reauthorization of, this critical program in 2025.
What’s next: Both the House and Senate are now on recess (technically) and are scheduled to re-convene in early January 2025 to formally kick off the 119th Congress. With Republicans having narrow majorities in both chambers, the three-month CR sets up showdown over a full spending package – and the debt limit – in the early months of President-elect Donald Trump’s new term.
• MBA will remain directly engaged in all relevant conversations regarding government funding, Treasury debt issuance, and the NFIP ahead of the March 14 CR deadline.
For more information, please contact Bill Killmer at (202) 557-2736 and Pete Mills at (202) 557-2858.
Senate Passes Trigger Leads Bill; House Fails to Bring Up Vote
On Tuesday, thanks to MBA’s congressional allies – Senators Jack Reed (D-RI) and Bill Hagerty (R-TN) – the Senate passed the bipartisan Homebuyers’ Privacy Protection Act (S. 3502) by unanimous consent. While there was serious discussion regarding placement of the bipartisan trigger leads bill on the House suspension calendar this week (reserved for non-controversial measures; requires a 2/3 majority vote for passage), the outgoing Chair of the HFS Committee Patrick McHenry and staff raised the same procedural/policy objections that scuttled the bill’s chances of being attached to other moving legislative vehicles prior to the end of the 118th Congress.
• Earlier this month, McHenry worked to remove the Hagerty/Reed trigger leads amendment from a finalized House/Senate conference report version of the Fiscal Year 2025 National Defense Authorization Act (NDAA).
What they’re saying: In his press statement after Senate passage, MBA President and CEO Bob Broeksmit, CMB, said, “MBA applauds the Senate for passing legislation we championed to stop the abusive use of mortgage trigger leads while preserving their use in appropriately limited circumstances during a real estate transaction. We commend Senators Jack Reed (D-RI) and Bill Hagerty (R-TN), as well as the bill’s 42 bipartisan cosponsors, for their leadership in introducing and passing this important bill…”.
What’s next: MBA will keep working with other coalition stakeholders and our congressional allies – including a bipartisan set of 93 House and 44 Senate cosponsors – to advance this needed change to mortgage credit trigger leads policy via renewed advocacy next year in the 119th Congress.
For more information, please contact Bill Killmer at (202) 557-2936, Ethan Saxon at (202) 557-2913, George Rogers at (202) 557-2797, and Madisyn Rhone at (202) 557-2741.
Federal Reserve Cuts Rates by 25 Basis Points; Third Rate Cut of 2024
Somewhat softer inflation data and higher unemployment gave the Federal Reserve enough evidence to cut short-term rates by another 25 basis points on Wednesday to a target range of 4.25% to 4.50%. This rate cut marks the third of 2024.
• The FOMC stated that it “will carefully assess incoming data, the evolving outlook, and the balance of risks,” and “will continue to monitor the implications of incoming information for the economic outlook.”
Read MBA SVP and Chief Economist Mike Fratantoni’s full commentary here.
For more information, please contact Mike Fratantoni at (202) 557-2935.
FHFA Finalizes GSE Housing Goals for 2025-2027
On Thursday, the Federal Housing Finance Agency (FHFA) published the final 2025–2027 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 help drive the GSEs’ efforts to achieve their mission of supporting liquidity for affordable homeownership. The final single-family benchmarks are slightly lower than those set for 2022 – 2024 which reflects the dynamics of the persistent affordability challenges seen in the housing market.
• The final rule also establishes a new process for evaluating compliance with the housing goals that considers the uncertainty and time lags associated with forecasting the market years in advance and retroactively determining actual market levels. These “measurement buffers,” previously referred to as “enforcement factors” in the proposed rule, will allow the GSEs to forego submitting a remedial housing plan if they miss certain single-family housing goals within a specified range.
• MBA was supportive of these buffers in comments submitted earlier this fall.
What’s next: MBA is reviewing the goals in greater detail 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.
CFPB Finalizes Long-Awaited Rule on PACE Loans
On Tuesday, the Consumer Financial Protection Bureau (CFPB) issued a final rule that prescribes ability-to-repay rules for Property Assessed Clean Energy (PACE) financing.
Specifically, the final rule:
• amends Regulation Z’s exclusion of tax assessments and tax liens from the definition of credit to clarify that voluntary tax assessments and tax liens, such as PACE financing, are not excluded under TILA and Regulation Z;
• recognizes PACE financing as meeting the definition of credit under TILA and Regulation Z;
• prescribes ability-to-repay requirements for residential PACE financing; and
• makes other amendments and exemptions to make clear how other provisions of Regulation Z apply to PACE financing.
What they’re saying: MBA in a joint statement with the Housing Policy Council, state MBA’s, and various consumer groups, said, “The CFPB’s final rule is a significant step to protect consumers and reduce mortgage delinquencies by ensuring that consumers are both informed of the obligations they are signing up for when they take out a PACE loan and that they have the ability to repay the loan. This is a welcome culmination of a process that started in 2018 when President Trump signed bipartisan legislation to regulate PACE loans, which are secured by the homeowner’s property, in a similar fashion to other mortgages.”
But, but…“We note, however, that the rule does not change the fact that PACE loans are provided as a ‘super lien priority’ through the tax assessment process, which is damaging to the housing market and to borrowers who may not be able to refinance or recoup their investment at the time of a sale due to the PACE obligation’s priority status.
What’s next: MBA will monitor the implementation of the final rule and will continue to advocate in the states to require subordination of all PACE-style financing in order to preserve core principles of liens.
For more information, please contact Justin Wiseman at (202) 557-2854, or William Kooper at (202) 557-2737.
MBA Supports FHA’s Proposal to Modernize Title I Loan App
On Wednesday, MBA submitted comments supporting the Federal Housing Administration’s (FHA) proposal that replaces outdated Title I forms with the Uniform Residential Loan Application (URLA) and introduces a new HUD Addendum.
MBA’s comments commended FHA’s initiative to enhance program accessibility and functionality, and offered additional recommendation to increase participation and program effectiveness, including:
• Amending lender fee caps
• Ensuring consistent definitions
• Establishing greater underwriting parity with Title II loans
• Creating a designated manufactured housing loan pool
• Enabling e-signatures
Why it matters: These proposed changes aim to simplify processes, reduce costs, and attract more lenders to the Title I program.
What’s next: MBA will monitor FHA’s decision and will collaborate with members on further improvements.
For more information, please contact John McMullen, AMP, at (202) 557-2706.
VASP Discussed During House Veterans’ Affairs Oversight Hearing
On Wednesday, the House Veterans’ Affairs (VA) Committee held an oversight hearing to examine the Loper Bright decision and its impact on VA policies – including the Home Loan program. Witnesses and members debated how this ruling, which ended the well-discussed Chevron deference doctrine, will reshape the need for heightened legislative clarity and judicial review vis-à-vis the agency’s programs.
Why it matters: Although not the main focus of the hearing, the Veterans Assistance Servicing Purchase Program (VASP), a key loss mitigation tool and MBA advocacy priority, was a point of discussion.
• VASP helps veterans avoid foreclosure by allowing the VA to purchase delinquent loans and provide relief through loan modifications.
Go Deeper: Initially handling fewer than 100 loans annually, the VA now projects 60,000 loans qualifying for VASP over two years—costing $17 billion. GOP lawmakers questioned whether this expansion exceeded the VA’s statutory authority, raising taxpayer accountability concerns. Although there was bipartisan support to prevent foreclosures, lawmakers emphasized the uneven distribution of relief and inconsistent guidance, highlighting the need for robust congressional oversight and action going forward.
• Find a full hearing summary here and the hearing transcript here.
What’s next: MBA will continue to advocate for legislative solutions that reauthorize a VA partial claim program and collaborate with lawmakers and VA to improve VASP as a complementary loss mitigation tool for servicers.
For more information, please contact Bill Killmer at (202) 557-2936, Madisyn Rhone at (202) 557-2741, or Brendan Kelleher at (202) 557-2779.
FHFA Issues Advisory Bulletin on UDAP Prohibitions Under Section 5 of the FTC ACT
On November 29, FHFA issued Advisory Bulletin 2024-06: “Regulated Entity Unfair or Deceptive Acts of Practices Compliance” requiring the GSEs to certify compliance with Unfair or Deceptive Acts or Practices (UDAP) laws in the future.
FHFA’s Advisory Bulletin provides a comprehensive framework for addressing UDAP under Section 5 of the FTC Act, particularly in the context of the activities of Fannie Mae and Freddie Mac (the GSEs) and the Federal Home Loan Banks (FHLBanks).
• Of great concern to the MBA is that the bulletin outlines specific expectations for GSE oversight of third parties and seller/servicers, and offers guidance on what constitutes UDAP and its intersection with fair lending laws.
Go deeper: The guidance addresses potential direct and vicarious liability, highlighting that the regulated entities are responsible for UDAP violations by employees, agents, or third parties if they knew or should have known about the conduct. The bulletin also details how the enterprises and FHLBs can identify and mitigate risks associated with unfair acts and urges the regulated entities to establish clear policies and procedures.
Why it matters: MBA is deeply concerned because the bulletin reads as an attempt to set up the GSEs as consumer finance compliance regulators of their seller/servicers in a fashion that exceeds their current role and is duplicative of federal and state oversight regulatory of UDAPs. It also could carry significant repurchase risk given the GSEs’ “compliance with laws” representation.
What’s next: MBA will be meeting with FHFA soon to raise our objections to the broad scope of the Advisory Bulletin and will work with members to determine next steps.
For more information, please contact Justin Wiseman at (202) 557-2854.
PFCRA Changes Enacted in FY25 Defense Authorization Bill
Last week, previously unidentified language within a provision on “Law Enforcement and Victim Support,” which was part of a much larger amendment, became law as a part of the annual National Defense Authorization Act (NDAA) legislation (H.R. 5009).
• Senator Grassley, (R-IA), who will become the President Pro Tempore of the Senate in 2025, has long sought changes to the PFCRA statute with the stated purpose of increasing the ability to combat procurement fraud. Under new law, PFCRA will become known as the Administrative False Claims Act (AFCA).
Why it matters: Among the changes to PFCRA are: (1) increasing the dollar amount of claims from a maximum of $150,000 to a maximum of $1 million; (2) adjusting that amount to inflation; (3) allowing for any amount collected to be credited first to reimburse the Federal entity that expended costs in the investigation or prosecution of an action and any remaining amount will be deposited in the Treasury of the United States; and (4) a minimum of 30 days’ notice must be given to the Attorney General before any agreement to compromise or settle allegations of liability may be entered.
Go deeper: In June, the Supreme Court found in SEC v. Jarkesy that the SEC administrative (i.e., in house) tribunals to seek civil monetary penalties for securities fraud are improper because of the Seventh Amendment’s right to a jury trial. PFCRA, or as it now will be known AFCA, is similarly an administrative remedy that imposes civil money penalties for fraud where claims are pursued by an investigating official of an agency and ultimately heard before an Administrative Law Judge (ALJ).
• Given the strong similarities to the U.S. Securities and Exchange Commission conduct found to be unconstitutional, future AFCA enforcement may be subject to challenge under the holding in the Jarkesy decision.
What’s next: MBA will follow ongoing developments closely and continue to advocate against harmful False Claims Act amendments that may re-emerge in the 119th Congress. MBA will also engage with HUD to protect against any expansion of false claims risk related to participation in the FHA program.
For more information, please contact Ethan Saxon at (202) 557-2913 and George Rogers at (202) 557-2797.
FHA Proposes Servicer Reimbursement for Taxes and Insurance Advances
On Wednesday, FHA proposed to the Single-Family Drafting Table a new claim type for servicers to request reimbursement for costs associated with advances of tax and insurance payments on defaulted FHA-Insured loans. MBA has advocated for and strongly supports FHA’s proposed policy as a significant step in helping servicers manage their liquidity and alleviate the financial burden mortgagees incur on FHA’s behalf on delinquent loans.
Why it matters: With the rising costs of escrow, the proposed Optional Reimbursement Claim Alternative (ORCA) provides a vehicle for servicers to recover tax and insurance advances earlier in the default and foreclosure process after the borrower’s escrow funds have been exhausted. FHA will need to make technology enhancements to its claims systems to implement the ORCA, priorities which will also compete with FHA’s new Loss Mitigation Waterfall.
Go deeper: Specific parameters proposed for the ORCA are:
• The loan must be a minimum of 6 months delinquent;
• A servicer may file multiple “ORCA” claims but the cumulative amount for a single default episode must not exceed 48 months;
• Servicers must reconcile T&I amounts received if a loss mitigation, sale, assumption, or disposition option are completed in the future.
What’s next: MBA will respond will work with its Loan Administration Committee to submit comments by the March 3, 2025, deadline.
For more information, contact Brendan Kelleher at 202-557-2779.
IDPFR Responds to MBA’s Urgent Letter Regarding IMB CRA Exam Fees
On Tuesday, MBA sent an urgent letter to the Banking Division of the Illinois Department of Financial and Professional Regulation (IDPFR).
• The letter was in response to member company concerns about a lack of communication from IDFPR amidst a vastly abbreviated timeframe for payment of the first fees to implement the Illinois Community Reinvestment Act for independent mortgage banks (IMBs).
• The letter also urged the IDFPR to provide licensees a grace period for timely payment. The due date for the first annual exam fees for IMBs is January 1st, but the new fee structure was only published in the Illinois Register (starting page 147) on December 6th. Making matters worse is that MBA member companies reported that on the eve of the December holidays they have not yet received IDFPR’s invoices.
Why it matters: On Wednesday, IDFPR responded to MBA that they began mailing invoices directly to IMBs this week and were providing a 30-day period for payment. Their response also noted that they updated the IMB CRA pages of its website to be more communicative about their policies in general and these fees in particular. Lastly, IDFPR clarified that to calculate exam fees, which are based on previous year Illinois loan originations, they will be using 2023 NMLS Mortgage Call Report data.
What’s next: MBA will continue to urge for a reasonable timeline and inform member companies of any developments.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
CSBS Opens Comment Period for Proposed Changes to the Mortgage Call Report
Last week, the Conference of State Bank Supervisors (CSBS) proposed updates to the Mortgage Call Report.
• The new report, Mortgage Call Report Version 7 (MCRV7), will make changes to the servicing section by adding new data fields to account for the make up of the servicing portfolio (Ginnie Mae, Fannie Mae, etc.), metrics on delinquency, foreclosure and forbearance, and the total volume of the MCRV7 filer’s servicing portfolio, and other smaller line item edits in prior fields.
Why it matters: This proposal is another effort to further align the MCR with the reporting requirements under the Mortgage Bankers Financial Reporting Form. CSBS’ comment period provides MBA and its members the opportunity to make sure these changes reduce reporting burdens and consolidate duplicative requirements across state regulators and investors.
What’s next: MBA will continue to engage with CSBS on the reporting requirements and coordinate a response on behalf of members by the February 17, 2025, deadline.
For more information, or to provide feedback on this proposal, please contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
NYDFS Releases Draft IMB CRA Rule for Pre-proposal Comments
On Tuesday, the New York Department of Financial Services (NYDFS) issued a press release that included a link to the text of a draft regulation to implement Chapter 549 of the Laws of 2021, the state’s Community Reinvestment Act (CRA) for IMBs. The announcement also included an invitation to provide feedback during a pre-proposal comment period ending on December 31, 2024.
Go deeper: NYDFS intends to offer a 60-day comment period once the final proposal is printed in the New York State Register. The release did not specify any other timeline details for the regulation other than to note that the regulation would take effect one year after it is issued as final.
Why it matters: Despite IMBs’ strong track record of lending to LMI and minority borrowers in the state, the debate among New York policymakers has relied on a dubious premise that federal CRA and the state’s own CRA requirements for banks operating in New York have worked well, and that requiring IMBs to comply with CRA would lead to them increase lending to minorities and low-income borrowers (LMI).
• These assumptions are not supported by an evaluation of the CFPB’s Home Mortgage Disclosure Act data. Over the last decade and a half, the IMB share of home purchase loans to LMI borrowers has consistently exceeded their overall market share. In 2024, IMBs accounted for 50% of all single-family mortgages in New York, but made 56% of all home purchase loans to LMI borrowers.
What’s next: MBA and the New York MBA are reviewing the proposal and will continue to coordinate efforts, which began with joint opposition to this law when it was being considered three years ago.
For more information, please visit MBA’s state CRA www.mba.org/stateresourcecenter, or contact William Kooper (202) 557-2737 or Liz Facemire (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:
• New Entrants in the Mortgage Industry and Their Winning Strategies – Jan. 16
• Fundamentals of Commercial Insurance Issues and Problems – Jan. 28
• Turning Data into Action: Enhancing Recruiting and Solving Loan Officer Performance Challenges – Feb. 4
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.
