MBA Advocacy Update Mar. 8 2021
On Wednesday, the Consumer Financial Protection Bureau issued a notice of proposed rulemaking to delay mandatory compliance date of the General QM final rule. On Monday, the Federal Housing Finance Agency authorized Fannie Mae and Freddie Mac to release $1.09 billion in affordable housing allocations, more than double last year’s disbursement. And the Senate moved into floor debate and toward likely passage of its version of the COVID-19-related American Rescue Plan (H.R. 1319).
1. CFPB Proposes Delay of Mandatory Compliance Date for General QM Final Rule
On Wednesday, the Consumer Financial Protection Bureau issued a notice of proposed rulemaking to delay the mandatory compliance date of the General Qualified Mortgage final rule. The Bureau’s proposal would delay the mandatory compliance date for the new General QM rule (i.e., the price-based QM standard) from July 1, 2021, to October 1, 2022. MBA’s summary of the proposed rule is available here. The proposed rule does not alter the March 1 voluntary compliance date for the new General QM definition for those lenders that were prepared to implement the new rule before the July 1 mandatory compliance date.
- Why it matters: If finalized as proposed, transactions for which creditors receive an application on or after March 1, 2021, and before October 1, 2022, could be originated under either the original General QM standard (i.e., DTI/Appendix Q standards), the GSE “Patch” QM standard, or the new General QM rule’s price-based standards.
- What’s next: MBA will work with members to prepare a response to the CFPB’s proposal. The deadline for comments is April 5.
2. GSEs Release $1 Billion to Affordable Housing Funds
On Monday, the Federal Housing Finance Agency (FHFA) announced it authorized Fannie Mae and Freddie Mac to release $1.09 billion in affordable housing allocations, more than double last year’s disbursement. By law, 65% of the funds will be allocated to the Housing Trust Fund operated byHUD, with the remaining 35% allocated to the Capital Magnet Fund operated by the Treasury Department.
- Why it matters: These funds are used for a variety of affordable housing activities – most notably property acquisition and improvement, as well as new construction.
- What’s next: MBA has long advocated for continued funding of these initiatives as a critical step toward improving housing affordability throughout the nation.
For more information, please contact Hanna Pitz at (202) 557-2796.
3. U.K. Regulator Confirms LIBOR Termination Dates
On Friday, the Financial Conduct Authority (FCA) – the British regulator of the London Interbank Offered Rate (LIBOR) – announced dates on which LIBOR no longer will be published or deemed representative for use. As expected, for most tenors of U.S. Dollar LIBOR, this termination date will be June 30, 2023. For one-week and two-month U.S. Dollar LIBOR tenors, this termination date will be December 31, 2021. The FCA also clarified that it does not expect any LIBOR settings to be deemed unrepresentative prior to these dates.
- Why it matters: This announcement provides the clearest indication yet of the timeline by which various tenors of U.S. Dollar LIBOR will become unavailable. The extended timeline should help market participants develop processes to transition the servicing of existing LIBOR-indexed loans to new benchmarks. As U.S. regulators have made clear, however, financial institutions are expected to shift their new adjustable-rate loan production away from LIBOR as soon as possible.
- What’s next: MBA will continue to work with regulators and market participants to ensure the transition away from LIBOR in the mortgage market is as smooth as possible.
For more information, please contact Dan Fichtler at (202) 557-2780.
4. Biden’s Pick to Run CFPB Vows to Focus on Borrowers Struggling During Pandemic, Addresses QM Rule in Hearing
On Tuesday, the Senate Banking Committee held a nomination hearing for Rohit Chopra to be Director of the CFPB. During testimony and in the question-and-answer period, President Joe Biden’s nominee pledged the Bureau would come to the aid of student loan borrowers, consumers trying to correct inaccurate credit reports, and homeowners affected by the coronavirus pandemic. While responding to a question on the Qualified Mortgage/Ability to Repay rule, Chopra said he would keep an open mind when it comes to addressing the rule.
“The CFPB is not here to dictate housing finance policy,” Chopra said. “When it comes to QM, it is important that we balance the consumer protections that Congress has put into place with access, including for rural and other areas.” He added that “ultimately, we are stronger as an economy, stronger as a country, if mortgage lending is safe, broadly accessible and a way that people can build wealth. I’m looking forward to getting input from everyone and determining how [the QM rule] needs to evolve over time.” A full summary of the hearing can be found here.
- Why it matters: The 2008 financial crisis and regulators’ responses to it loomed large in questions for Chopra. “My intuition is we have to be ready for potentially looming problems when it comes to forbearances that might flip to foreclosures,” he said. “I don’t want to see another foreclosure crisis in this country. And we need to do everything we can to make sure the laws are being followed and homeowners can navigate their options.”
- What’s next: The Senate Banking Committee is likely to move forward with Chopra’s nomination in the coming weeks. If confirmed, he would be returning to the Bureau. He served as the agency’s first student loan ombudsman, from 2011 to 2015.
5. MBA’s State RON Campaign Continues
Thanks to industry advocacy, Remote Online Notarization (RON) bills are advancing in several states.
Last week, Wyoming Governor Mark Gordon signed SF 29, which will enable RON implementation consistent with MBA’s model state bill by enacting necessary provisions to protect consumer information and provide legal certainty. However, the bill also allows remote ink notarizations (RIN), which have typically been authorized temporarily by governors through executive orders to address short-term pandemic challenges. In a forthcoming letter, MBA will recommend that the Secretary of State require RIN transactions to follow the same requirements as a RON to verify a principal’s identification.
In Georgia, HB 334 passed the House and moved to the Senate. Because the bill is consistent with the MBA-American Land Title Association (ALTA) state model RON bill, MBA joined the MBA of Georgia and an industry collation urging legislators to support it.
There is also momentum in New Mexico, where SB 12 was introduced. MBA and the New Mexico Mortgage Lenders Association (NMMLA) support this legislation, which would adopt the Uniform Law Commission’s Revised Uniform Law on Notarial Acts (RULONA), which is consistent with the MBA-ALTA model.
Lastly, in Kansas, SB 106, which is consistent with industry minimum standards for RON, passed the Senate and will now be considered in the House.
- Why it matters: With the enactment of SF 29 in Wyoming, specifically, there are now 30 states with RON laws – an increase from 23 at the start of the pandemic.
- 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.
6. Register Today: MBA’s 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 FHFA Director Mark Calabria and other prominent Washington policymakers and stakeholders.
- Why it matters: Calabria will discuss the various policy issues at FHFA, while MBA leadership and others will examine the latest updates on Capitol Hill and within the Biden administration.
- What’s next: To register for the conference, click here.
For more information, please contact Dawn Williams at (202) 557-2877.
7. Upcoming 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 webinars – which are complimentary to MBA members:
- Multifamily Real Estate Financial Crimes Training – March 10
- Steps Warehouse Lenders Must Take in Today’s Market – March 17
- Analyzing Housing Supply Shortages in the U.S. – March 19
- CCPA Review and What Lies Ahead – March 23
- Receivership 101 and Exploring Financing Opportunities – March 24
- Renter Counseling to Mitigate Evictions and Reduce Operational Costs – March 31
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.