MBA Urges Senate Passage of FY2020 THUD Appropriations
With the Senate expected to vote today on a key HUD fiscal 2020 appropriations bill, the Mortgage Bankers Association sent a letter to Capitol Hill urging the bill’s passage.
The Senate is expected to consider the fiscal year 2020 Transportation-Housing and Urban Development appropriations bill, known as T-HUD. The letter from MBA Senior Vice President of Legislative and Political Affairs Bill Killmer reiterated MBA’s support for the T-HUD bill.
The Oct. 29 letter reiterates MBA’s strong support for providing the Federal Housing Administration with the resources, both in staffing and systems upgrades, it needs.
“We continue to support the overall efforts to accelerate IT modernization and maximize the impact to the public and return on investment to taxpayers,” wrote MBA Senior Vice President of Legislative and Political Affairs Bill Killmer. “Given the scope of need to modernize the decades-old IT infrastructure at FHA, additional ongoing appropriations or set-asides of at least $20 million from the HUD IT Fund for FHA systems improvements are again warranted for FY 2020.”
Kilmer noted beyond funding levels, MBA has been a long-time proponent of potential improvements to FHA’s IT systems that would allow the agency to better manage the risks to its Mutual Mortgage Insurance Fund. “Additionally, MBA is pleased that FHA has proposed significant revisions to its annual and loan-level certifications and a new version of its defect taxonomy for stakeholder review and feedback,” he said. “These updates will provide lenders with greater certainty regarding loan review–and, in doing so, expand access to credit for low- to moderate-income homebuyers.”
For Ginnie Mae, MBA supports increasing funding for staffing, training and technology needs. “Given Ginnie Mae’s role in providing liquidity targeted to low- and moderate-income families, first-time homebuyers, renters, veterans and rural households, this funding level is necessary to prudently manage the increased loan volume in the single-family and multifamily mortgage markets,” MBA said. “In addition, in recent years, market share for FHA, VA, and Rural Housing Service single-family lending has continued to shift towards a more diversified base of smaller lenders. MBA believes that this is a positive trend for Ginnie Mae that reduces concentration risks in the program, but cautions that it may require increased oversight or funding in the near future to support Ginnie Mae’s counterparty risk management of the expanded issuer base.
MBA noted with respect to FHA’s multifamily and healthcare finance programs, it supports the Senate’s inclusion of $30 billion in commitment authority for the General and Special Risk Insurance Fund in its FY 2020 proposal, as well as adequate funding for rental assistance, particularly Section 8 Project Based Rental Assistance. “Together, these programs allow private sector lenders to continue to finance workforce and affordable apartments and residential healthcare facilities that serve millions of Americans,” the letter said.
MBA said it supports the bills inclusion of a provision including the prohibition on federal funds being used to facilitate eminent domain seizures of performing mortgage loans, noting by enacting this prohibition for the past five fiscal years, Congress has defused this threat. “If the ban is not renewed, the threat posed by these schemes may return. If so, the introduction of this new risk to the housing finance system would severely impact the return of private capital to our markets, and would undermine any congressional efforts to successfully transition to a new housing finance system,” MBA said.
The bill also includes $45 million in funding for housing and homeownership counseling, a priority for MBA. “These funds are critical to assisting homeowners facing foreclosure, helping first-time homebuyers navigate the challenges of the purchase process, and counseling for reverse mortgages (a program requirement) for seniors, a traditionally high-risk group for financial fraud,” MBA said.
The letter also commends Sens. Todd Young, R-Ind., and Cory Gardner, R-Colo., for offering an amendment to create a task force on the impact of the affordable housing crisis.
“The affordable housing task force envisioned in the amendment will evaluate and quantify the effect of housing costs on other government programs and provide recommendations to Congress on how to increase affordable housing options. MBA is pleased to support this amendment,” MBA said. “The lack of affordable housing presents significant challenges to families across the country.” In June, MBA launched a strategic initiative to help develop stronger and more effective affordable housing partnerships in both the policy and business arenas. Led by MBA Senior Vice President Steve O’Connor, the objective of these partnerships will be to promote more sustainable, affordable homes for purchase and rental for underserved people and communities, especially minorities and low-to-moderate-income Americans. “MBA will continue to explore how the lending community can better partner with public, private and nonprofit stakeholders to ensure more Americans have access to homes they can afford,” Killmer said.
