MBA Advocacy Update Nov. 15 2021

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

Both chambers of Congress were in recess last week, but MBA remained actively and directly engaged in key staff-level discussions regarding President Joe Biden’s Build Back Better Act tax and reconciliation package.

On Wednesday, the Consumer Financial Protection Bureau issued a statement in conjunction with other federal and state financial regulators that announced the end of Regulation X mortgage servicing flexibilities that have been in place since April 2020 as a result of the COVID-19 pandemic.  

MBA member companies are encouraged to sign the Home for All Pledge and join the nearly 100 organizations that have already committed to promoting minority homeownership; affordable rental housing; and company diversity, equity, and inclusion. A senior member of your organization (ex. CEO, COO, President) should complete this online form.

1. CFPB Announces End to Regulation X Flexibilities

On Wednesday, the Consumer Financial Protection Bureau issued a joint statement with the Federal Reserve Board of Governors, Federal Deposit Insurance Corp., National Credit Union Administration, Office of the Comptroller of Currency and state financial regulators announcing the end of Regulation X mortgage servicing flexibilities released in April 2020.

The April 2020 statement said the agencies would not take supervisory or enforcement actions against servicers for failing to meet timing requirements for certain notices and disclosures as long as they made a good faith effort in a reasonable amount of time. Under the new guidance effective November 10, the respective agencies will begin issuing supervisory and enforcement actions against servicers not in full compliance with Regulation X requirements. Recognizing that servicers will need time to comply with the abrupt end to the flexibilities, the agencies will examine the circumstances around violations before taking action. In addition to this announcement, the CFPB also released a report detailing its mortgage servicer efforts throughout the COVID-19 pandemic.

• Why it matters: The report accompanying the release notes that the Bureau “will continue targeted data collection and evaluation efforts to assess how individual servicers performed for consumers exiting forbearance.” In addition, it notes that the Consumer Response unit is conducting reviews of high-risk complaints (e.g., imminent foreclosure) and will follow up directly with the servicer, if appropriate. Servicers should ensure such inquiries are given the highest priority.  

For more information, please contact Sara Singhas at (202) 557-2826 or Darnell Peterson at (202) 557-2922.

2. NMLS Issues Statement Addressing Recent System Issues

On Wednesday, the Nationwide Multistate Licensing System apologized on its website for several system issues that have frustrated lenders and mortgage loan originators nationwide during the peak of licensing renewal season. The message emphasizes that NMLS staff have been working to fix these problems as quickly as possible, but notes that some challenges may continue to produce delays. Specifically, NMLS explained that increased volume in the system, a new credit reporting platform, and other system changes implemented earlier this year have “created unique sets of challenges to identify, troubleshoot, and resolve issues.” MBA has been in discussion with staff at the Conference of State Bank Supervisors to express members’ concerns and provide updates on user experiences with the system. 

• Why it matters: There is only a two-month window each year for all MLOs to renew all their licenses through the NMLS. There is also other mandatory reporting that must be performed in the system. The system issues have caused significant delays and imposed costs on state-licensed companies trying to renew hundreds of thousands of licensees in a timely manner.  
• What’s next: Members are encouraged to monitor www.nmls.org for further updates and, in the meantime, maintain all documentation related to these delays in case NMLS does not resolve the problems quickly. 

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

3. Federal Reserve Shares Perspectives on Mortgage Market; Quarles Announces Resignation

Last week, Federal Reserve Governor Michelle Bowman gave remarks on the state of the U.S. housing and mortgage market. She discussed the reasons she believes rapid home-price growth is supported by market fundamentals rather than speculation, the importance of smooth borrower exits from forbearance, and continued work to assess the financial strength of servicers. The Fed also released its semiannual Financial Stability Report, which highlighted falling mortgage delinquencies and rising home prices, while noting that an elevated number of borrowers remain in forbearance. Finally, Fed Governor Randal Quarles submitted his resignation from the Board of Governors, effective December 31.

• Why it matters: The Federal Reserve supervises many depository lenders and servicers, as well as monitors potential systemic risks throughout the financial system. These statements and reports support the view that, while risks due to the pandemic and elevated levels of forbearance remain, the mortgage market is healthy and well-functioning. The impending departure of Quarles underscores the potential for the Biden administration to reshape the Fed, as several Board openings are expected to be filled in the coming months.
• What’s next: The Fed will commence its tapering of Treasury security and agency mortgage-backed security purchases this month – representing the first pullback in accommodative monetary policy since the onset of the pandemic.

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

4. Mortgage Action Alliance Action Weeks 

MAA Action Week is a national, industry-wide campaign dedicated to helping real estate finance professionals learn how to become more engaged in political advocacy that supports our industry. MAA Action Week began on Monday, November 1, and was extended through November 12, with the goal of growing MBA’s free grassroots advocacy network. So far, 1,692 professionals have joined MAA and 2,348 have renewed their membership.

• Why it matters: Less than 20% of the real estate finance industry is represented in MAA. We need the full strength of our industry to effectively advocate for our industry, your business, and your customers.  
• What’s next: It’s not too late – take 30 seconds to join or renew your MAA membership and be added to our Action Week totals!

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

5. Sign MBA’s Home for All Pledge to Promote Minority Homeownership, Affordable Rental Housing, and DEI

Kristy Fercho, MBA Chair, and Executive Vice President and Head of Home Lending at Wells Fargo, announced the Home for All Pledge in October at the Annual Convention & Expo 2021. The member company action pledge represents a long-term commitment by MBA member companies and employees to promote minority homeownership; affordable rental housing; and company diversity, equity, and inclusion. Click here to see the growing list of companies that have already signed the pledge.

• Why it matters: Member companies are encouraged to sign the Home for All Pledge today and commit to aligning with MBA’s efforts to: foster public policies and industry practices that promote and sustain minority homeownership and affordable rental housing; support market-based solutions through MBA’s place-based CONVERGENCE programs; and champion diversity, equity, and inclusion in our workplaces and our industry.
• What’s next: To sign the Home for All Pledge, a senior member of your organization (e.g., CEO) should complete this online form. More information on how to act will follow. Only one senior member per organization needs to sign the pledge.

For more information, please contact Lisa Haynes at (202) 557-2835.

7. 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:

• Emergency Rental Assistance: What is Working, Where Are the Challenges, and What is to Come? – November 17
• The Impact of Increased Enforcement on Marketing Compliance – November 18
• Introduction to MISMO’s Commercial Appraisal Dataset – November 23
• Rental Housing Perspectives: Low-Income Housing Tax Credit Landscape – November 30
• Commercial Real Estate Tech Tools & Trends – December 1

MBA members can register for any of the above events and view recent webinar recordings. For more information, please contact David Upbin at (202) 557-2931.