MBA Advocacy Update Aug. 23 2021

August 23, 2021

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

Also on Wednesday, the Federal Housing Finance Agency announced a proposed rule for 2022-2024 housing goals for the GSEs. FHFA also announced results of both the 2020 and 2021 Dodd-Frank Act Stress Tests for the GSEs.

Finally, we encourage you to participate in a new DEI survey, run by McLagan. See below for more information.

1. Key Senator Introduces New Housing Affordability Legislation

On Wednesday, Senate Finance Committee Chairman Ron Wyden (D-OR) introduced a new bill that expands access to housing for first-time homebuyers and low-income individuals by investing in existing programs and establishing new tax credits geared toward renters and middle-income homeowners. The Decent, Affordable, Safe Housing for All (DASH) Act, which includes both tax and spending measures, would increase the production of affordable housing, invest in homeownership in underserved communities, and incentivize jurisdictions to modify zoning and land-use practices to encourage affordable housing.

Why it matters: Specifically, the bill would expand the Low-Income Housing Tax Credit (LIHTC), establish a Renter’s Tax Credit and Middle-Income Housing Tax Credit (MIHTC) and create a new down payment tax credit for first-time homebuyers. Additionally, it would establish the Neighborhood Homes Investment Act (NHIA), an MBA-supported proposed federal tax credit targeted to the new construction or substantial rehabilitation of affordable, owner-occupied housing located in distressed urban, suburban, and rural neighborhoods. This was a key issue during MBA’s virtual National Advocacy Conference earlier this year.
What’s next: As Chairman of the congressional tax-writing committee, Wyden is well-positioned to push to include some version of this and other tax proposals in the Senate reconciliation package this fall. The reconciliation process could begin in earnest as early as next week, following House action on the Senate-passed budget resolution. Though MBA will continue its direct lobbying efforts, Mortgage Action Alliance (MAA) members need to take action TODAY to urge Congress to support our industry tax priorities.

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

2. FHFA Proposed Rule Increases Benchmarks for GSE Affordable Housing Goals

On Wednesday, the Federal Housing Finance Agency announced a proposed rule for the 2022-2024 housing goals for Fannie Mae and Freddie Mac. The goals, required by law, specify benchmark percentages of GSE purchases of single-family mortgages serving low- and very-low-income borrowers, as well as benchmarks on the number of multifamily unit purchases for those same populations based on U.S. Census tracts. This year, FHFA also is announcing new single-family goals for subgroups based on minority Census tracts.

Why it matters: The housing goals help drive the GSEs’ efforts to achieve their mission of supporting liquidity for affordable homeownership. The proposed single-family goals are significantly higher, but appear achievable based on FHFA’s projections of the market opportunity and prior GSE performance.
What’s next: The public is invited to submit comments on the proposed rule, and MBA will be reviewing the data supporting the proposed rule and collecting feedback from its members on the increased housing goal benchmarks.

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

3. GSEs Report Strong Performance in Annual Stress Tests

Last week, FHFA announced the results of both the 2020 and 2021 Dodd-Frank Act Stress Tests of Fannie Mae and Freddie Mac. These stress tests are meant to estimate the impact of a dramatic economic and financial shock on the GSEs’ businesses. The “Severely Adverse” scenario varied slightly for each year. However, both included a decline in GDP, a rise in unemployment and gradually rising consumer price inflation resulting in significant drops in equity, home and commercial real estate prices. The stress tests also included the hypothetical failure of the largest counterparty of each GSE.

Why it matters: The stress test results continued their substantial year-over-year improvement, indicating high credit quality in the GSEs’ portfolios and guarantee businesses. Absent write-downs of deferred tax assets, the 2020 DFAST resulted in a combined $7.1 billion comprehensive loss (down from $18 billion in 2019 and $42 billion in 2018) and the 2021 DFAST resulted in combined positive income totaling $10.8 billion. Assuming write-downs of deferred tax assets, the 2020 DFAST resulted in combined losses of $29 billion (down from $43 billion in 2019 and $77 billion in 2018) and the 2021 DFAST resulted in combined losses of $11 billion.
What’s next: MBA will continue to engage with FHFA leadership on this and other critically important housing finance issues – including potential revisions to the GSE capital framework that are informed by these stress test results.

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

4. [VIDEO]: mPower Moments: On Confidence and Knowing Who You Are with MBA’s Lisa Haynes

In this episode of mPower Moments, MBA COO and mPower Founder Marcia M. Davies chats with Lisa Haynes, MBA’s Chief Financial Officer and Head of Diversity, Equity and Inclusion, about the top qualities that women leaders possess, why confidence is so important, and lessons learned following MBA’s highly successful, three-part series, Voices: Courageous Conversations with Women of Color.

What’s next: To watch more mPower Moments, click here.

For more information, please contact Marcia Davies at (202) 557-2707.

5. Participate in the New Diversity, Equity and Inclusion (DEI) Study

Sign up today to participate in a new offering to MBA members, the Diversity, Equity and Inclusion (DEI) Study. The study is separately designed and compiled for both the residential and commercial/multifamily sides of the real estate finance industry, and is administered by world-class human resources advisory firm McLagan, part of Aon plc. All participating companies are encouraged to complete as many sections of the study template as possible on the following topics: Policy and Initiatives; Headcount by Mortgage Job Function; Headcount by EEO-1 Categories; and Headcount by Movement.

Why it matters: Over the past year, racial and gender inequalities have shaped our nation’s conversation, and MBA remains committed to supporting our member companies by forming solutions. Participating will give our industry a baseline from which to improve and to see how member companies compare to the industry as a whole.
What’s next: Individual company data will be kept confidential in accordance with McLagan’s high standards. As a bonus, MBA members save $1,000 off the regular survey pricing. The general timeline is provided in the registration form, with data due back to McLagan in mid-September and results released in October.

For specific information about the DEI study, please email Dave Rosenthal at McLagan or call (203) 326-4349. For general questions, please contact MBA Research members Marina Walsh at (202) 557-2817 or Jamie Woodwell at (202) 557-2936.

6. 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:

Bank-Owned Mortgage Divisions: What Bankers Need to Know to Manage Mortgage Banking – August 26
Budgeting and Financial Planning for Non-Believers – September 9
Introduction and Walkthrough of MISMO’s Enhanced Logical Data Dictionary (LDD) – October 6

MBA members can register for any of the above events and view recent webinar recordings. For more information, please contact David Upbin at (202) 557-2890.

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