MBA Advocacy Update Oct. 11, 2021
On Thursday, the Senate Banking Committee held a nomination hearing for Alanna McCargo to be President of Ginnie Mae. Earlier last week, HUD issued an advance notice of proposed rulemaking on its process for transitioning away from the use of LIBOR for FHA-insured ARMs. And late Thursday, congressional leaders reached agreement to temporarily raise the statutory federal debt limit.
1. Senate Passes Short-Term Debt Limit Increase
On Thursday evening, the Senate voted to advance a measure that would temporarily shift the U.S. debt limit deadline from October to December. The temporary increase in the debt limit will allow the Treasury Department to continue funding the government’s financial obligations, staving off immediate economic disruption. The Senate reached a bipartisan last-minute agreement after a months-long standoff between Republicans and Democrats. The issue will resurface again in early December.
- Why it matters: A default in U.S. debt, which allows the Treasury Department to fund all aspects of the federal government, has never occurred and would create immediate national and global economic uncertainty.
- What’s next: The House was scheduled to be in a legislative recess until October 18 but will now reconvene on October 12 for a vote on the Senate’s temporary debt ceiling increase. President Joe Biden is expected to sign the bill into law as quickly as possible.
2. Ginnie Mae, Other HUD Nominees Testify During Senate Nomination Hearing
On Thursday, the Senate Banking Committee held a nomination hearing for Alanna McCargo to be President of Ginnie Mae. In addition, the hearing included two other nominees to run HUD’s community development and public housing departments. Questions from senators ranged from what McCargo might do as Ginnie President to prevent another foreclosure crisis, to how she might use her new position to address barriers to affordable housing. MBA submitted a letter of support for McCargo’s nomination, which can be found here.
- Why it matters: Ginnie Mae has been without a confirmed President for four years.
- What’s next: Once questions for the record are submitted by Senate Banking Committee members to the witnesses and that process is complete, Chairman Sherrod Brown (D-OH) will schedule a full committee vote to report the nominees to the full Senate for consideration.
3. HUD Seeks Input on LIBOR Transition for FHA Loans
Last week, HUD issued an advance notice of proposed rulemaking on its process for transitioning away from use of LIBOR for Federal Housing Administration-insured adjustable rate mortgages. HUD intends to use input from this process to issue a proposed rule that would remove LIBOR as an acceptable index, specify a new index for newly insured loans, and recommend a replacement index for existing loans.
- Why it matters: Most tenors of U.S. Dollar LIBOR will cease to be available beyond June 30, 2023. Domestic and foreign regulators, meanwhile, have urged financial institutions to cease originations of new loans indexed to LIBOR by the end of 2021. A rulemaking by HUD has the potential to provide greater clarity for lenders originating new FHA-insured ARMs, as well as for servicers transitioning existing ARMs to new indexes.
- What’s next: Comments will be due to HUD on December 6. Following review of the public input, HUD plans to issue a proposed rule containing the details of this transition.
For more information, please contact Dan Fichtler at (202) 557-2780.
4. 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:
- ESG 101: How ESG is changing Commercial Real Estate – October 12
- CFPB’s New AVM Guidelines – How to Be Prepared – November 3
- Are We There Yet? CRE and LIBOR Transition Check-Up – November 4
- Understanding the Surge in Single-Family Rentals – November 4
- The Impact of Increased Enforcement on Marketing Compliance – November 18
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.