MBA Advocacy Update Oct. 4 2021

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

On Thursday, House and Senate lawmakers passed, and President Joe Biden signed, a continuing resolution ahead of the Sept. 30 government funding deadline to avert a shutdown. Also on Thursday, the Senate voted 50-48 to confirm Rohit Chopra as the next CFPB Director.

1. Congress Passes, Biden Signs Stopgap Funding Bill to Avert Government Shutdown

On Thursday, House and Senate lawmakers passed, and President Joe Biden signed, a continuing resolution ahead of the Sept. 30 government funding deadline to avert a shutdown. The debt ceiling hike, which was included in the House-passed bill last week, was removed to gain the bipartisan support needed to clear both chambers. House and Senate Democratic leaders are acutely aware that, in avoiding one fiscal cliff, they have forfeited leverage to prevent another — a national debt default expected to hit October 18, according to Treasury Secretary Janet Yellen.

• Why it matters: The CR, which includes a short-term extension of the National Flood Insurance Program (NFIP) authorization, extends government funding to December 3. Additionally, the bill provides $28.6 billion in funding for emergency disaster relief.
• What’s next: Congressional Republicans remain steadfast in their position that the debt ceiling be addressed through the reconciliation process — a move that has been adamantly opposed by Democrats. On Wednesday, House lawmakers passed a standalone bill that would raise the debt ceiling until December 16, 2022, but it is expected to be dead on arrival in the 50-50 Senate absent GOP support.

For more information, please contact Borden Hoskins at (202) 557-2712 or Alden Knowlton at (202) 557-2741.

2. Senate Confirms Rohit Chopra as CFPB Director 

After a series of required procedural votes, the Senate voted 50-48 Thursday to confirm Federal Trade Commission official Rohit Chopra as the next Consumer Financial Protection Bureau Director. The Senate had previously voted 49-48 to “discharge” the Chopra nomination from the Senate Banking Committee. This additional procedural floor vote was required because of the committee’s prior tie vote on his nomination along partisan lines. During his confirmation hearing weeks ago, Chopra indicated that he would focus on the housing market, “unlawful and avoidable foreclosures,” and “systemic inequities faced by families of color” in the mortgage market.

• Why it matters: The CFPB has taken an increasingly substantial role in the oversight of ongoing mortgage servicing and CARES Act forbearance and is expected to significantly ramp up fair lending examinations and enforcement. MBA believes that the market is best served when the CFPB uses its supervisory tools to provide clear and effective published guidance.
• What’s next: MBA will endeavor to work closely with the new CFPB Director and key staff at the agency.

For more information about the Chopra nomination, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866. Contact Justin Wiseman at (202) 557-2854 for questions about specific CFPB regulatory matters.

3. Powell, Yellen Testify Before Congress; Face Questions On Regulation, Economy and Inflation

Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen confronted difficult questions this week before House and Senate hearings regarding CARES Act oversight. Lawmakers demanded more action in response to perceived lapses over everything from ethics and diversity to inflation and financial regulation – as well as actions to raise the statutory debt limit. Senator Elizabeth Warren (D-MA), a vocal critic of the Fed’s oversight of Wall Street under Powell, said she would not back him for another term as Fed Chair, calling him a “dangerous man” to head the central bank. Secretary Yellen laid out in explicit terms what she expects to happen if Congress does not deal with the debt limit before October 18, which the Treasury now believes is when the United States will face default. A summary of both hearings can be found here.

• Why it matters: The country’s two top economic policymakers also warned lawmakers this week that the Delta variant of the coronavirus had slowed recovery, though they expressed optimism that the economy would continue to strengthen.
• What’s next: An announcement regarding President Biden’s plans to nominate a new Fed Chair is expected in coming weeks, with Powell’s term set to expire in early 2022. Yellen will continue to lead the administration’s efforts on the debt limit and finalizing a tax/reconciliation package with the Congress.

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

4. FHA Releases Details on Proposed 40-Year Loan Modification

This week, the Federal Housing Administration released its proposed COVID-19 40-year loan modification plan on the HUD Drafting Table for public comment. As proposed, the 40-year modification option would be incorporated into the COVID-19 Recovery Waterfall and used in conjunction with an FHA Partial Claim to provide servicers with an additional opportunity to achieve a minimum 25% principal and interest reduction to a borrower’s mortgage. A borrower would qualify for the 40-year modification if the already established 30-year modification could not achieve the targeted 25% P&I reduction.

• Why it matters: FHA’s adoption of a 40-year loan modification would further align it with GSEs, which already offer the option. However, while Ginnie Mae continues to work on a 40-year security for repooling these modifications, there is uncertainty over how these securities will trade that could impact the efficacy of the 40-year option.
• What’s next: The MBA Loan Administration Committee will hold a call on Monday, October 4, from 2:00 to 3:00 p.m. ET, to gather member feedback for comments to be submitted by October 27. For call details or to be added to the committee please reach out to Darnell Peterson.

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

5. USDA, HUD Extend Deadline to Request Initial Forbearance

On Monday, the U.S. Department of Agriculture (USDA) and the HUD announced they have removed their September 30, 2021, deadline for borrowers with HUD and USDA insured mortgages to request an initial COVID-19 forbearance. Borrowers will now have until the expiration of the COVID-19 National Emergency to request an initial forbearance, which will provide them with up to 12 months of forbearance.

While HUD has also removed its September 30, deadline, it has opted to provide borrowers who request an initial forbearance between July 1 and September 30, with a maximum of 12 months of forbearance, which may not be extended beyond September 30, 2022. Borrowers who request an initial forbearance after September 30, will have until the expiration of the COVID-19 National Emergency or September 30, 2022, whichever comes later, to request an initial forbearance for a maximum of 12 months, which may not extend beyond six months after COVID-19 National Emergency or September 30, 2022.

• Why it matters: HUD initially provided borrowers who requested an initial COVID-19 forbearance between July 1 and September 30 with a maximum of six months. This did not comply with the time frame required by the CARES Act, which guaranteed a maximum of 12 months.
• What’s next: MBA will continue to work with HUD, U.S. Department of Veterans Affairs (VA), USDA and the GSEs to provide input on pandemic-related policies and programs.

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

6. MBA, MBAC Submit Letter Supporting North Carolina RON Legislation Ahead of Conference Committee 

On Monday, in anticipation of a conference committee hearing, MBA and the Mortgage Bankers Association of the Carolinas submitted a letter to North Carolina legislators urging them to support the passage of legislation (H776) that would enable use of remote online notarization. The letter encouraged the conferees to pass the House version of H776, because the amended Senate version contains problematic language that does not align with the national consensus for RON adoption. The Senate version would require the principal and notary to be in the state at the time of the notarization and would limit benefits of RON for North Carolina consumers. 

• Why it matters: The House version of H776 overwhelmingly passed (107-1) the House and is consistent with the 39 states that have acted to pass RON legislation and model legislation released by the non-partisan Uniform Law Commission. If adopted, the House version of H776 would help create legal certainty for RON transactions in North Carolina by using a framework that is based on a common set of core principles used by a growing list of states.
• What’s next: MBA issued a Mortgage Action Alliance (MAA) Call to Action for members in North Carolina to support the passage of the House version of H776.

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

7. MBA Meets with Regulators to Discuss Remote Work at NMLS Ombudsman Meeting

On Thursday, MBA Associate Director of State Government Affairs Kobie Pruitt participated in panel discussion regarding policy implications of allowing mortgage loan officers to work away from a licensed branch location. The panel consisted of state regulators and other representatives of the real estate finance industry.

• Why it matters: At the meeting, Pruitt highlighted the need for states to continue their remote work guidance through the end of 2022 because the health emergency created by the COVID-19 pandemic has not yet passed. In addition, Pruitt urged the regulators in attendance to help MBA pass legislation or implement regulations that would modernize their state licensing requirements regarding remote work and utilize the best practices learned during the pandemic to better serve consumers.
• What’s next: MBA will continue to work with state and local association partners to advocate for its model legislation and regulation for licensing flexibility. In addition, MBA is asking members to provide any information on legislative or regulatory efforts in their state that would allow remote work by contributing to a Google spreadsheet that will be used to update the information on MBA’s resource center. If you do not have access to a Google account, please contact Kobie Pruitt and he will provide you with a digital copy of the spreadsheet to fill out.

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

8. Texas SML Remote Work Guidance Scheduled to go into Effect

The Texas Department of Savings and Mortgage Lending’s proposed rules to implement standards that will allow mortgage loan originators to work from a remote location are scheduled to go into effect as early as October 3. If you have comments regarding the proposal, MBA encourages members to share them with the Department prior to implementation.

• Why it matters: The Department’s proposal is consistent with the MBA model and other states that have acted to permit remote work.

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

9. [VIDEO]: mPower Moments: On Leadership and Embracing New Opportunities with Fannie Mae’s Michele Evans  

In this new episode of mPower Moments, mPower Founder Marcia M. Davies chats with Fannie Mae Executive Vice President and Head of Multifamily Michele Evans. During the interview, Evans discusses the importance of embracing new opportunities within an organization, the characteristics future leaders have, and why women should support and celebrate each other.

• What’s next: To watch more mPower Moments, click here.

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

10. 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:

• How Support Automation Drives Immediate ROI for Lenders – October 4
• Introduction and Walkthrough of MISMO’s Enhanced Logical Data Dictionary (LDD) – October 6
• Regulation F: Overview & Considerations – October 6
• Increasing Profitability: Transitioning to Delegated Underwriting and Improving Loss Mitigation – October 7
• ESG 101: How ESG Is Changing Commercial Real Estate – October 12
• Are We There Yet? CRE and LIBOR Transition Check-Up – November 4

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.