MBA Advocacy Update Feb. 16 2021

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

On Thursday, the House Financial Services Committee passed legislation along party lines that includes key housing provisions of President Biden’s $1.9 trillion American Rescue Plan. On Tuesday, the Federal Housing Finance Agency extended its foreclosure and eviction moratorium for Enterprise-backed, single-family mortgages and REO properties through March 31. FHFA also announced it would extend GSE origination flexibilities through March 31.

1. House Committee Advances Legislative Components of the Stimulus Reconciliation Package 

On Thursday, the House Financial Services Committee passed legislation that includes key housing provisions of President Joe Biden’s $1.9 trillion American Rescue Plan. The Financial Services Committee title of the larger reconciliation package included $10 billion for a Homeowner Assistance Fund to provide relief for mortgage payments, reinstatement from a forbearance, principal reduction, interest rate reductions, utility payments, internet service payments, property taxes, homeowner’s insurance, flood insurance, mortgage insurance, HOA fees and other assistance as approved by Treasury. The legislation also includes $100 million for housing counseling services.

• Why it matters: The legislation passed the Committee along party lines and no amendments were accepted. It will be combined into a larger package for consideration by the full House as early as next week.    
• What’s next: The Senate will take up the House’s bill, with the possibility of amending it, in the coming weeks so that it can be signed into law by President Biden by mid-March.    

For more information, please contact Borden Hoskins at (202) 557-2912, Tallman Johnson at (202) 557-2866 or Ethan Saxon at (202) 557-2913.

2. FHFA Extends Foreclosure and REO Eviction Moratoriums and COVID-19 Forbearance Period

On Tuesday, the Federal Housing Finance Agency extended its foreclosure and eviction moratorium for Enterprise-backed, single-family mortgages and REO properties through March 31.

In addition to the moratorium extension, FHFA also will allow eligible borrowers to extend their time in forbearance for an additional three months. To qualify, borrowers must have initiated a COVID-19 forbearance plan before February 28. To accommodate the additional three months of forbearance, FHFA has also amended the terms of its COVID-19 Payment Deferral option to cover up to 15 months of missed payments instead of the initial 12 months.

• Why it matters: Extension of the foreclosure and eviction moratorium aligns the GSEs with other agencies.
• What’s next: The Biden administration will continue to evaluate existing pandemic relief measures at the various federal housing agencies. MBA continues to urge the FHFA and the federal housing agencies to align their COVID-19 relief requirements.

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

3. FHFA Further Extends COVID-19-Related Loan Flexibilities

This week, FHFA also extended Fannie Mae and Freddie Mac origination flexibilities through March 31. The origination flexibilities include temporary policies related to appraisals, employment verification, and power of attorney, which allow transactions to occur in a safer manner that avoids person-to-person contact.

• Why it matters: Further extending these flexibilities helps to temporarily relieve uncertainty for market participants and brings additional stability to the housing market as the economy continues to be heavily impacted by the effects of the COVID-19 pandemic.
• What’s next: MBA will continue to advocate for longer-term extensions of pandemic-related flexibilities.

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

4. FHFA Holds Listening Session for Appraisal RFI  

On Thursday, FHFA held a listening session to collect feedback from industry stakeholders regarding its Request For Information on Appraisal-Related Policies, Practices and Processes. The purpose of the listening session was to give interested parties a public opportunity to provide input and feedback on specific topic areas related to appraisals that include:

Appraisal modernization;

• The Uniform Appraisal Dataset (UAD) and the design of appraisal forms;
• Automated Valuation Models (AVMs) and appraisal waivers; and
• Valuation differences by borrower and neighborhood ethnic makeup.
• Why it matters: The individual input and feedback received in response to the RFI will be considered by FHFA to determine the necessary modifications needed to ensure Fannie Mae and Freddie Mac operate in a safe and sound manner.
• What’s next: MBA will submit its comments to the Federal Register on or before the RFI’s deadline of February 26.

For more information, please contact Julienne Joseph at (202) 557-2782.

5. MBA, NY MBA Respond to NY Department of Financial Services Climate Change Supervisory Expectations

Last week, the New York MBA and MBA wrote to the New York Department of Financial Services providing feedback to DFS’ October memorandum to all financial institutions it regulates, laying out the potential risks from climate change and also detailing DFS’ expectations for risk mitigation plans. DFS expects that all regulated organizations will begin integrating the financial risks from climate change into their governance frameworks, risk management processes, and business strategies. MBA and the New York MBA urged the Department to review its new policy mandates against the federal affordable housing programs that could be affected by the climate-change directive, and cautioned against possible disproportionate effects on underserved communities. Lastly, the associations asked for additional guidance on how member companies can develop an approach to climate-related financial risk disclosure and the increased risk of climate change on community banks.

• Why it matters: New York DFS is the first state mortgage regulator to issue such a directive, and this could lead to similar action from other states. The federal banking agencies and FHFA are also considering how to incorporate climate change into their supervisory processes. 
• What’s next: MBA and the New York MBA will continue to engage with DFS and brief members on any developments. 

For more information, please contact William Kooper at (202) 557-2737 or Kobie Pruitt at (202) 557-2870.

6. OCC Introduces LIBOR Transition Self-Assessment Tool 

On February 10, the Office of the Comptroller of the Currency issued a bulletin that provides a self-assessment tool for banks to evaluate their preparedness for the expected cessation of the London Interbank Offered Rate.

• Why it matters: Found here, the tool is useful to asses three areas: 1) the appropriateness of a bank’s transition plan; 2) bank management’s execution of the bank’s transition plan; and 3) related oversight and reporting.
• What’s next: MBA has been an active participant in the Alternative Reference Rates Committee and continues to engage with regulators on different elements of the transition, working to ensure it does not disrupt markets or expose market participants to undue litigation risk.

For more information, please contact Dan Fichtler at (202) 557-2780.

7. Legislation Introduced in New Mexico to Address Issue with LIBOR-to-SOFR Transition

MBA and the New Mexico Mortgage Lenders Association achieved introduction of a bill (SB-365) to amend state law to address an unintended consequence of the transition from LIBOR to SOFR. Fannie Mae and Freddie Mac announced last year that they would no longer acquire mortgages indexed to LIBOR. A key difference in the GSEs’ parameters is that, while LIBOR-indexed loans featured interest rate resets once per year, SOFR-indexed loans reset the interest rate twice per year. The bill fixes a state law that prohibits a state-chartered mortgage lender, whether a bank or a nonbank, from originating an adjustable-rate mortgage that resets more than once every 12 months. Without this change, some GSE-eligible SOFR-based ARMs may violate the terms of the New Mexico statute.

• Why it matters: The New Mexico Legislature only meets every other year to consider policy changes, and this year’s session is already well underway.
• What’s next: MBA and the NMMLA will continue to collaborate in educating policymakers and urge them to quickly pass this bill and send it to the Governor.

For more information, please contact William Kooper at (202) 557-2737 or Dan Fichtler at (202) 557-2780.

8. [VIDEO]: mPower Moments: On Overcoming Challenges, Promoting DE&I with Wells Fargo’s Kristy Fercho

In this new episode of mPower Moments, mPower Founder Marcia M. Davies sits down with Kristy Fercho, 2021 MBA Chair-Elect and Executive Vice President and Head of Wells Fargo Home Lending. Fercho shares the keys to success in her career, including transitioning to many different industries and roles; how to overcome adversity; and what is important for organizations to do to make a difference in Diversity, Equity, and Inclusion (DE&I).

• Why it matters: Fercho also explains the significance of her being the first Black Chairman – and fourth female – to lead MBA.
• What’s next: To watch more mPower Moments, click here.

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

9. Upcoming and Recent 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 and recent webinars – which are complimentary to MBA members:

• Pandemic Servicing: Preparing for CFPB Scrutiny – February 17
• Commercial/Multifamily: Market Distress and Loan Workouts – February 24
• Compliance in a Rapidly Changing Servicing Environment – February 24
• MAA Quarterly Webinar: February 2021 – February 25
• Achieving Touchless Mortgage Automation: Insights from Industry Experts – March 3
• Multifamily Real Estate Financial Crimes Training – March 10

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.