MBA Advocacy Update Feb. 22 2021

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

On Tuesday, FHA, VA, and USDA extended their foreclosure and eviction moratoria, as well as the deadline for borrowers impacted by the COVID-19 pandemic to request initial forbearance, to June 30.

Also last week, the Federal Housing Finance Agency released its 2021 Scorecard for Fannie Mae, Freddie Mac and Common Securitization Solutions. It mirrors last year’s Scorecard and focuses on three main objectives: fostering competitive, liquid, efficient, and resilient national housing finance markets; ensuring safety and soundness; and preparing the GSEs for an exit from conservatorship.

And on Thursday, the Senate Banking Committee held a hearing on COVID-19 relief and the economy.

1. Senate Banking Committee Hearing on The Coronavirus Crisis: Paving the Way to an Equitable Recovery

On Thursday, the Senate Banking Committee held a hearing on the economic impacts of the COVID-19 pandemic. Chairman Sherrod Brown’s (D-OH) opening remarks highlighted enduring economic racial disparities, noting that minorities in Ohio “were the first to be preyed on by shady mortgage lenders, the first to lose their jobs, and the first to get foreclosed on. Now they feel like they’re watching history repeat itself.” Sen. Jack Reed (D-RI) noted that one of the best forms of personal protective equipment (PPE) is “safe, affordable housing” and that the government’s cost to provide healthcare and support services increase because of homelessness.

Newly elected Sen. Jon Ossoff (D-GA) asked, “What are the forms of exploitation and abuse that the constituents and legal aid clients you serve are facing in this crisis?” In response, Youngstown, Ohio, Mayor Jamael “Tito” Brown described predatory lending practices that result in above-market rents and other sham legal agreements that mislead homeowners. Jyoshu Tsushima, Staff Attorney with the Legal Aid Society of Columbus, described predatory housing practices as preceding the pandemic and continuing because “both tenants and homeowners are scrambling to find funds… Sometimes they don’t know what the consequences of not paying their mortgage or taxes are.”

• Why it matters: The testimony indicates a clear tone and direction by Brown to focus the committee’s oversight work on economic racial disparities and federal assistance to homeowners.
• What’s next: MBA will continue to advocate for housing counseling and a homeowners’ assistance fund to address the concerns raised at the hearing as additional COVID-19 relief legislation is advanced.   

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

2. Federal Agencies Extend Foreclosure/REO Eviction Moratoriums, COVID-19 Forbearance Period

On Tuesday, the Federal Housing Administration (FHA), Department of Veterans Affairs (VA ), and U.S. Department of Agriculture (USDA) extended their foreclosure and eviction moratoria, as well as the deadline to request initial forbearance, for borrowers impacted by the COVID-19 pandemic, from March 31 to June 30.

In addition to the moratoria extension, FHA, VA, and USDA also will allow eligible borrowers to extend the maximum time in forbearance beyond 12 months for an additional six months, to be offered in three-month increments based on Quality Right Party Contact. To qualify for the additional six months of forbearance, borrowers must have initiated a COVID-19 forbearance plan before June 30, 2020. Borrowers whose forbearance started after June 30, 2020, are permitted up to 12 months in forbearance.

FHA has also expanded use of its COVID-19 loss mitigation options. Eligible borrowers may now receive more than one COVID-19 home retention option, and borrowers who are more than 90 days delinquent but not in a COVID-19 forbearance plan may be eligible for COVID-19 loss mitigation options.

• Why it matters: The forbearance program changes are designed to extend the availability of COVID-19-related forbearance and to help borrowers who are approaching the end of their initial forbearance period and cannot yet resume payments. In addition, FHA’s expanded use of COVID-19 loss mitigation options will provide servicers with additional tools to assist borrowers impacted by the COVID-19 pandemic.
• What’s next: The Biden administration will continue to evaluate existing pandemic relief measures at the various federal housing agencies. MBA will continue to advocate for FHA to allow servicers to claim incentive fees for implementing COVID-19 loss mitigation options.

For more information, please contact Darnell Peterson at (202) 557-2796.

3. FHFA Releases Annual Scorecard for the GSEs

Last week, the Federal Housing Finance Agency (FHFA) released its 2021 Scorecard for Fannie Mae, Freddie Mac and Common Securitization Solutions. It closely mirrors last year’s Scorecard and focuses on three main GSE objectives: fostering competitive, liquid, efficient and resilient national housing finance markets, ensuring safety and soundness; and preparing the GSEs for an exit from conservatorship. Notably, the 2021 Scorecard includes initiatives related to GSE capital retention, level playing field standards, IMB liquidity requirements, housing market reform and the response to the COVID-19 pandemic.

• Why it matters: The Scorecard outlines the specific priorities for the GSEs in the coming year. FHFA has stated its intent for the GSEs to focus on their core mission responsibilities and operate in a safe and sound manner appropriate for entities in conservatorship.
• What’s next: MBA will continue to work with FHFA and the GSEs as the GSEs implement the Scorecard initiatives and, over a longer term, pursue the necessary conditions to exit conservatorship.

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

4. MBA Submits Comments on Federal Reserve ANPR on Community Reinvestment Act

On Tuesday, MBA submitted comments on the Advance Notice of Proposed Rulemaking (ANPR) issued by the Federal Reserve Board in September 2020.   

• Why it matters: MBA commended the Fed’s efforts to ensure that the Community Reinvestment Act (CRA) regulatory framework continues to reflect the goals of the statute by meeting the needs of low- to moderate-income (LMI) individuals and communities. The letter focused mostly on proposals addressing housing, including providing full CRA credit for mortgage purchases and MBS holdings (not just origination activity), and also urged the Fed to ensure continued CRA consideration for bank investments in low-income housing tax credit (LIHTC) projects.
• What’s next: MBA looks forward to continuing constructive engagement with the Fed (and the other banking agencies) to develop a modified CRA regulatory framework that banks can comply with, regulators are able to consistently implement, and benefits communities and LMI. 

For more information, or to join MBA’s CRA Working Group, please contact Fran Mordi at (202) 557-2860.

5. GSEs Issue URLA Implementation Reminder

On Tuesday, Fannie Mae and Freddie Mac issued a joint announcement reminding the industry about the March 1 implementation date for the new Uniform Residential Loan Application (URLA) and automated underwriting system (AUS) interfaces. The announcement provides guidance on how to handle applications that may straddle the March 1 effective date. The announcement also includes information about critical edits that will be implemented within the GSEs’ respective AUS platforms. 

• Why it matters: New loan applications taken March 1 or later are required to use the new URLA and AUS interfaces for loans submitted to the GSEs. 
• What’s next: MBA will continue to monitor industry adoption of the new form and will maintain ongoing communications with Fannie Mae and Freddie Mac.

For more information, please contact Rick Hill at (202) 557-2718.

6. MBA’s State Remote Online Notarization Campaign Continues Momentum

With state legislative sessions well underway, MBA has resumed its campaign to secure adoption of legislation enabling Remote Online Notarization (RON) that is consistent with the MBA-ALTA state model RON bill. Progress has been on several fronts: 

-On Tuesday, MBA joined the MBA of Georgia and a coalition of industry representatives on a joint letter to urge Georgia policymakers to adopt RON) legislation ( HB334) introduced by Georgia Rep. Joseph Gullett prior to a hearing on the bill.

-In New Mexico, RON legislation (SB12) passed in its committee of original jurisdiction with a “Do Pass” recommendation as it goes for a state Senate vote.

-In Wyoming, the House and Senate passed legislation (SF29) that would enable both RON and remote ink notarizations (RIN). SF29 is consistent with MBA’s views on RON and includes the necessary provisions to protect consumer information and provide legal certainty. However, the bill also allows for the use of RIN, which MBA believes is a temporary measure created to address challenges created by the pandemic and typically enabled by state executive order.

-Last week, Kansas legislators held a hearing on legislation (SB106) that would allow their constituents to use RON. The bill is consistent with the national standard for RON adoption.

• Why it matters: The pandemic has revealed the need to modernize our state laws to allow for the use of technology to serve consumer needs. RON is a tool that can help facilitate financial transactions in a safe and secure manner long-term.
• What’s next: There are currently 29 states with laws enabling RON, and MBA will continue to work with local partners to promote the adoption of RON in states without laws enabling its use.

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

7. Momentum Growing on MBA’s Remote Work Licensing Flexibility Campaign

This week, MBA Now released its latest video that discusses the association’s new model state bill and regulation to broadly modernize licensing requirements for state-licensed companies and mortgage loan originators. Earlier in the week, the campaign was the subject of a NewsLink feature story that included additional industry perspectives on the urgent need for these proposed changes, and a discussion with state associations about the campaign and MBA’s new resource center, mba.org/licensingflexibility. The developments reflect early momentum building in the states. For example, recently the Maryland Department of Labor’s (DLLR) Office of the Commissioner of Financial Regulation proposed rules to permanently allow remote work. Additionally, legislation has passed the first chamber in Washington, and a bill has been introduced in Arkansas to address the issue.

• Why it matters: Licensing flexibility is not only necessary during the current economic and health crises, but also to help the industry and regulators respond to future national emergencies, and to facilitate remote work in an increasingly digital economy.
• What’s next: MBA will engage with state regulators and their staffs on this issue at the NMLS User Conference next week.

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

8. Upcoming and Recent MBA Education Webinars on Critical Industry Issues

MBA Education continues to deliver timely single-family and commercial/multifamily 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:

• 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
• Overview and Key Points for QM Implementation – 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.