MBA Advocacy Update Apr. 5, 2021

Bill Killmer bkillmer@mba.org; Pete Mills pmills@mba.org.

On Wednesday, President Joe Biden unveiled a $2.3 trillion infrastructure proposal known as the American Jobs Plan, which centers on investing in infrastructure, affordable housing, and green energy – and employs tax policy changes to partially fund the ambitious set of proposed initiatives. On Thursday, the U.S. Supreme Court issued its opinion in Facebook v. Duguid, a dispute concerning the scope of the TCPA’s automatic telephone dialing system definition.

And on Tuesday, HUD Secretary Marcia Fudge issued a statement on the health of the Mutual Mortgage Insurance Fund and the Department’s decision to not change FHA premiums in the near future. 

1. President Biden Unveils Public Works Package; Proposal Would Boost Corporate Taxes To Pay For Roads, Research

On Wednesday, President Joe Biden unveiled a $2.3 trillion infrastructure initiative known as the American Jobs Plan. It centers on fixing roads and bridges, expanding broadband internet access and boosting funding for research and development. At the same time, he announced his ‘Made in America Tax Plan’ that would raise corporate tax rates and make other changes to the corporate tax code. More information on the President’s proposals can be found here. The measure is the first of a two-part economic plan that President Biden and Congressional Democrats hope to move through the House and the Senate in the coming months.

• Why it matters: The president has made housing a centerpiece of his plan, proposing to invest $213 billion to produce, preserve, and retrofit more than two million affordable and sustainable housing units. MBA President & CEO Bob Broeksmit, CMB, issued a member letter welcoming the administration’s engagement on housing, while also highlighting MBA’s engagement on potential tax changes/revenue raisers that could affect our members’ business operations.
• What’s next: Wednesday’s announcement begins what will be a long and likely contentious process of trying to enact variations of the President’s proposals into law. On the tax front, the announcement introduces the broad strokes of corporate tax reform, but the coming days and weeks will likely see more focus on specific tax proposals that affect the housing finance community. MBA Chair Susan Stewart has already convened a blue-ribbon task force on tax reform, consisting of a diverse group of MBA members representing the different capital sources and business models in the residential, commercial, and multifamily segments of the real estate finance industry. MBA will remain closely engaged with policymakers in the administration and Congress as this process unfolds. 

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

2. Supreme Court Decides Scope of TCPA’s ‘Autodialer;’ Aligns with MBA Advocacy Efforts

On Thursday, the U.S. Supreme Court issued its opinion in Facebook v. Duguid, a dispute concerning the scope of the Telephone Consumer Protection Act’s automatic telephone dialing system (autodialer) definition. In a unanimous decision, the Court sided with Facebook and amici to hold that to qualify as an autodialer under the TCPA, a device must have the “capacity to use a random or sequential number generator to either store or produce phone numbers to be called.” Agreeing with arguments made in MBA’s amicus brief, the Court rejected the broad autodialer definition advanced by Duguid, under which any equipment that stores and dials telephone numbers would qualify as an autodialer. Such a definition, the Court explained, “would capture all modern cell phones[,]” a result that is inconsistent with the TCPA’s text and Congress’ intent when drafting the TCPA.

• Why it matters: Through more than six years of advocacy involving multiple amicus briefs, petitions to the Federal Communications Commission (FCC), and legislative lobbying, MBA has worked to establish a clear and statutorily appropriate definition of ‘autodialer.’ With the Court’s ruling in Facebook v. Duguid, the issue has now been settled decisively in our favor. To the extent Thursday’s decision helps stem the tide of costly TCPA litigation, it is a major victory for businesses, including many mortgage servicers, and, ultimately, consumers who will benefit from modern communication techniques.  

For more information, please contact Justin Wiseman at (202) 557-2854 or Blake Chavis at (202) 557-2930.

3. HUD Secretary Fudge Issues Statement on the Mutual Mortgage Insurance Fund and FHA Premiums

On Tuesday, HUD Secretary Marcia Fudge issued a statement on the health of the Mutual Mortgage Insurance Fund and the Department’s decision to not change Federal Housing Administration premiums in the near future. Fudge asserted that while the Fund is currently in strong condition, HUD has no near-term plans to change FHA’s mortgage insurance premium pricing, given significant uncertainties in the upcoming year regarding the financial impact of delinquencies related to the pandemic. MBA President & CEO Bob Broeksmit, CMB, issued a statement in support of this decision.

• Why it matters: While it is desirable to have lower financing costs, MBA noted the wide range of potential outcomes in terms of how the high levels of serious delinquencies will impact the health of the Fund.
• What’s next: This HUD announcement leaves open the potential for future changes in FHA premiums once the effects of the pandemic are better understood. 

For more information, please contact Hanna Pitz at (202) 557-2796.

4. CFPB Releases 2020 HMDA Data   

On Wednesday, the Home Mortgage Disclosure Act Modified Loan Application Register data for 2020 was published on the Federal Financial Institutions Examination Council’s HMDA Platform. Like last year, the 2020 published data contains substantial loan-level LAR information for each of the 4,400 HMDA filers. The 2020 HMDA LAR data is available here.

• Why it matters: HMDA data represents the most comprehensive publicly available information on mortgage market activity. It is widely used by industry, consumer groups, and regulators.  
• What’s next: Later this year, the 2020 HMDA data will be made available in other forms “to provide users insights into the data, including a nationwide loan-level dataset.” According to the announcement, “that dataset will provide all publicly available data from all HMDA reporters, aggregate and disclosure reports with summary information by geography and lender, and the HMDA Data Browser to allow users to create custom datasets and reports.” 

For more information, please contact Justin Wiseman at (202) 557-2854, Lucia Jacangelo at (202) 557-2941, or Blake Chavis at (202) 557-2930.

5. CFPB Rescinds Supervisory Flexibilities 

On Wednesday, the Consumer Financial Protection Bureau rescinded seven policy statements that temporarily provided financial institutions with flexibilities regarding certain regulatory filings or compliance with consumer financial laws and regulations. The rescissions are effective as of April 1.

Included in the rescinded policies are the CFPB’s Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic, issued last March, and its Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act, issued April 1, 2020. The latter rescission, however, leaves intact the “Furnishing Consumer Information Impacted by COVID-19” section, which articulates the CFPB’s support for furnishers’ voluntary efforts to provide payment relief.

The Bureau also withdrew as a signatory to two interagency statements: the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus, and the Interagency Statement on Appraisals and Evaluations for Real Estate Related Financial Transactions Affected by the Coronavirus, both issued last April.

• Why it matters: The Bureau noted that circumstances have changed since the early days of the pandemic and that institutions should have adjusted their operations accordingly. The Bureau announced that it intends to “use its supervisory and enforcement tools to the full extent and with the full flexibility afforded by Congress.”
• What’s next: Click here for a summary.

For more information, please contact Sara Singhas at (202) 557-2826 or Blake Chavis (202) 557-2930.

6. CFPB Issues Warning to Servicers: Be Prepared

On Thursday, the Consumer Financial Protection Bureau issued a warning to mortgage servicers, advising them to take the required steps to prevent a wave of avoidable foreclosures as we progress to the later stages of the pandemic and federal and state support – including expiring foreclosure moratoria.

• Why it matters: The CFPB further warned that it would be closely monitoring servicer and borrower interactions and the manner in which servicers process loss mitigation applications. The CFPB also noted that it would consider a servicer’s overall effectiveness in helping consumers when using its discretion to address compliance issues that arise.

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

7. Ginnie Mae Extends Delinquency Threshold Relief Through January 2022

Last week, Ginnie Mae announced it would extend exemptions made to Issuer delinquency thresholds implemented last year in response to the COVID-19 pandemic. These exemptions, originally outlined in All Participant Memorandum 20-06 (APM 20-06), now will be extended from July 31 through January 31, 2022 (December 2021 investor reporting). Ginnie Mae will continue to exclude any delinquencies occurring on or after April 2020, and will provide this exclusion automatically to Issuers that were compliant with Ginnie Mae’s delinquency rate thresholds as of their April 2020 investor accounting report.

• Why it matters: The extension of this temporary policy aligns with MBA advocacy and reflects the continued coordination and collaboration between MBA and Ginnie Mae during the COVID-19 pandemic.
• What’s next: MBA will continue to work with Ginnie Mae on policy responses to the pandemic to ensure a well-functioning market.

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

8. GSEs’ Adverse Market Refinance Fee Reportedly in Place Through At Least December 1

Federal Housing Finance Agency officials confirmed the 50-basis-point adverse market refinance fee currently imposed on most Fannie Mae and Freddie Mac refinances will remain in place until at least December 1. FHFA reportedly plans to evaluate data in early October to determine if the fee has been successful in offsetting pandemic response costs, which would determine whether the fee subsequently could be phased out in early December.

• Why it matters: During its initial rollout last August, the adverse market refinance was set to negatively impact locked refinance pipelines and raise costs for both lenders and borrowers in the midst of a public health crisis. Swift MBA-led advocacy resulted in key revisions to the policy, such as a delay of the fee’s implementation date from September 1, 2020, to December 1, 2020, as well as exemptions for loans with balances below $125,000, and HomeReady and Home Possible refinances.
• What’s next: MBA will continue to work with FHFA to ensure that the adverse market refinance fee and future policy and pricing decisions are continuously evaluated throughout the pandemic, and allow Fannie Mae and Freddie Mac to manage their risk while supporting affordable and sustainable home purchase and refinance opportunities for borrowers.

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

9. MBA Seeks Guidance on VA Pandemic-Related Origination Flexibilities

Over the past week, MBA has been in close contact with representatives from the Department of Veterans Affairs regarding the VA’s COVID-19-related verification of employment and appraisal flexibilities, which have rescission dates of April 1. The temporary policies, first released April 10 of last year, provided critical aid to the market and were reflective of MBA advocacy.

• Why it matters: The verification of employment and appraisal flexibilities allow for reduced face-to-face contact in the home-buying process and relieve difficulties associated with social distancing or work-from-home policies.
• What’s next: MBA will provide updates as more information is put forth by VA and will continue to assess the impacts of various pandemic-related policies.

For more information, please contact Hanna Pitz at (202) 557-2796.

10. New York Policymakers Continue State Budget Negotiations, Including Proposed New Mezzanine Debt Tax

New York legislative leaders and Gov. Andrew Cuomo (D) continued their budget and tax negotiations for the state’s new fiscal year, which began on April 1. These discussions include a potential new tax and recording of mezzanine debt and preferred equity investments. Last week, MBA led a coalition letter in opposition to this concerning policy, which would have a deleterious effect on commercial real estate.

• Why it matters: While the budget proposed by Cuomo in January did not include this tax, the New York Assembly and Senate each added it to their respective state budget proposals released in March. The tax would substantially increase the cost of mezzanine debt or preferred equity financing.
• What’s next: MBA will remain engaged with its national and state partners. Industry professionals who live in New York are highly encouraged to complete the Mortgage Action Alliance Call to Action by clicking here.

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

11. MBA RON Campaign Continues Momentum 

On Tuesday, remote online notarization legislation (SB 106) passed both chambers of the Kansas legislature and is now headed to Gov. Laura Kelly (D) for her signature. MBA supports SB 106, which would adopt the Uniform Law Commission’s Revised Uniform Law on Notarial Action.

In New Mexico, MBA and the New Mexico Mortgage Lenders Association sent a joint letter to Gov. Lujan Grisham (D) urging her to expeditiously sign legislation ( SB 12) that would enable RON within the state.

On Wednesday the Georgia legislature tabled legislation (HB 334) that would enable the use of RON for financial transactions. Due to an impasse in the Senate regarding HB 334’s amended language that would allow RON to be used in residential real estate transactions, the bill was tabled until the start of the next session. Georgia has a two-year legislative session and therefore deliberation on HB 334 will begin in the Senate Judiciary Committee with the amended language. HB 334 is consistent with the national standard for RON adoption. MBA worked with the MBA of Georgia to advocate for HB 334’s passage, including a MAA Call to Action that received a robust response from MAA members in Georgia, which contributed to moving the bill closer to final passage than in prior years.

• Why it matters: If RON legislation is signed by their respective governors, New Mexico and Kansas would become the 31st and the 32nd states with RON laws.
• What’s next: MBA will continue to work with members and state and local partner associations to enact RON laws in the remaining states. To learn more, visit www.mba.org/ron.

For more information, please contact Kobie Pruitt at (202) 557-2870.

12. Mortgage Action Alliance Issues Call to Action on Washington Data Privacy Bill

On Monday, MBA worked with the Washington MBA to issue a MAA Call to Action urging members in the state to oppose any provision that would create a private right of action in the proposed Washington Privacy Act (SB 5062). SB 5062 is a comprehensive overhaul of the state’s data privacy law that would be similar to the California Consumer Privacy Act. The bill provides for a data-level exemption of information collected, processed, or sold pursuant to the Gramm-Leach-Bliley Act and the sale, disclosure, or sharing of credit information under the Fair Credit Reporting Act.

• Why it matters: A private right of action potentially could allow consumers the ability to file lawsuits based on unsubstantiated claims of data privacy violations. This would lead to an increase in legal fees and raise the cost of lending in the state.
• What’s next: If you reside in Washington, please take action by clicking here.

For more information, please contact Kobie Pruitt at (202) 557-2870.

13. Sign Up for the Sixth Annual MAA Action Week 

The Mortgage Action Alliance, MBA’s free grassroots advocacy network, will hold its sixth annual Action Week May 3-14. Action Week is a national, industrywide campaign aimed at growing MAA and activating real estate finance professionals in key states and congressional districts. MAA has more than 71,000 active members nationwide in an industry of more than 330,000 employees.  

• Why it matters: In 2020, total MAA membership tripled and resulted in critical legislative and regulatory policy wins at the federal and state levels. Collectively, MAA members sent more than 150,000 emails to elected officials supporting calls to action to protect and secure our industry amid the pandemic.
• What’s next: MBA’s goal is to grow and sustain MAA’s membership to 75,000 members. Complete this form to participate and receive further information.

For more information, please contact Rosie Sheehan at (202) 557-2933.

14. Register Today: MBA Spring Conference & Expo 2021 – April 20-22 

MBA’s Spring Conference & Expo 2021, taking place via MBA Live, will feature several must-see sessions, including remarks from HUD Secretary Marcia Fudge, FHFA Director Mark Calabria, and other prominent Washington policymakers and stakeholders. 

• Why it matters: MBA President and CEO Bob Broeksmit, CMB, will share an update on MBA’s work in Washington. We will also hear remarks from Secretary Fudge and Director Calabria will discuss a variety of policy issues under consideration at FHFA.
• What’s next: To register for the conference, click here. 

For more information, please contact Dawn Williams at (202) 557-2877.

15. Upcoming 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, please see a list of upcoming webinars – which are complimentary to MBA members:

• The Location of Affordable & Subsidized Rental Housing Across and Within the Largest Cities in the United States – April 8
• MAA Quarterly Webinar: April 2021 – April 14
• Key TCPA Compliance Issues – April 15
• Practical Use Cases for Intelligent Automation and RPA in Mortgage Processing – April 15
• Construction Loan Considerations During the COVID-19 Pandemic – April 28
• The 2020 Pandemic and Other Primary Factors of Urban Exodus – May 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) 557-2890.