MBA Advocacy Update Monday Apr. 11, 2022

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

MBA President and CEO Bob Broeksmit, CMB, penned a new blog post emphasizing MBA’s continued support for a reduction of FHA’s mortgage insurance premium. On Wednesday, the House Financial Services Committee held a hearing featuring testimony from Treasury Secretary Janet Yellen on the state of the international financial system. And on Thursday, the Senate confirmed Judge Ketanji Brown Jackson to the U.S. Supreme Court, making her the first Black woman to serve as a Supreme Court justice. 

To the Point with Bob Blog Post: Reducing FHA’s MIP

MBA President and CEO Bob Broeksmit, CMB, penned a new blog post emphasizing MBA’s continued support for a reduction of Federal Housing Administration’s (FHA) mortgage insurance premium. Broeksmit highlighted the current health of the Mutual Mortgage Insurance Fund, factors contributing to its health including sound risk management by FHA, and how lowering the MIP will benefit low- to moderate-income borrowers. Additionally, Broeksmit sat down with MBA Now to further discuss the importance of lowering the premium.

• Why it matters: MBA has publicly supported a reduction in the FHA MIP set by HUD. In November 2021, Broeksmit issued a statement on the FHA’s annual report to Congress, remarking, “With the combined Fund capital ratio now at 8.03%, it is appropriate for HUD to expeditiously examine reductions in FHA mortgage insurance premiums, which have been at their current levels for nearly seven years.” In his blog post, Broeksmit emphasized that recent positive data on FHA borrowers successfully exiting forbearance should provide HUD the confidence needed to move forward now on a premium reduction.
• What’s next: MBA will continue to work with FHA and HUD to ensure that all borrowers can have access to affordable housing. 

For more information, please contactPete Mills at (202) 557-2878 or Dan Fichtler at (202) 557-2780.

Treasury Secretary Yellen Testifies before House Financial Services Committee

On Wednesday, the House Financial Services Committee held a hearing featuring testimony from Treasury Secretary Janet Yellen on the state of the international financial system. Lawmakers spent most of the discussion on Russia’s invasion of Ukraine and the effectiveness of sanctions from the United States and allies. Lawmakers offered resounding bipartisan support for the administration’s efforts in response to Russia.

• Why it matters: Additional discussion topics spanned a variety of other issues, including the Treasury Department’s role in the Organisation for Economic Co-operation and Development’s (OECD) Pillar Two Model Rules, the LIBOR transition, inflation, beneficial ownership, digital assets, climate change, and international financial institutions. A full summary of the hearing can be found here.
• What’s next: Secretary Yellen remains a central figure in organizing and implementing financial regulation (as head of the federal Financial Stability Oversight Council, known as FSOC) and tax policies. MBA will remain closely engaged with policymakers in the administration and Congress concerning our industry’s policy priorities within her jurisdiction.

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

Gordon’s FHA Nomination Inches Forward in Senate

On Tuesday, the Senate narrowly advanced Julia Gordon’s nomination to be HUD Assistant Secretary for Housing and FHA Commissioner by 51-50 vote. In a deadlocked Senate, Vice President Kamala Harris’ vote broke a tie to “discharge” Gordon from the Senate Banking Committee, placing her nomination on the Senate’s executive calendar for potential consideration. The “discharge” vote was needed as the banking panel had advanced her nomination by a 12-12 tie vote earlier this year. MBA submitted a letter of support for Gordon during her confirmation hearing last summer.

• Why it matters: The FHA, which insures over $1.2 trillion in single-family forward and reverse mortgages, has been without a confirmed FHA commissioner since January 2021.
• What’s next: Senate leadership can now call for a procedural vote on Gordon at any time, followed by a final confirmation vote. There is speculation that she may receive Senate floor time for these additional votes by the end of April (or early May), setting up her final confirmation shortly for after the two-week Easter/Passover congressional recess.

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

FHA Proposes Permanent 40-Year Modification

On April 1, HUD published a proposed regulatory change to increase the maximum modification loan term limit from 360 to 480 months. Adding a 40-year modification to FHA’s loss mitigation toolkit will allow servicers to provide deeper payment relief by spreading the outstanding mortgage balance over a longer period of time.

• Why it matters: Especially in a rising interest rate environment, a 40-year modification option may offer deep enough payment relief for borrowers who did not qualify for or could not sustain other FHA loss mitigation options.
• What’s next: MBA will submit a letter in support of FHA’s proposed rule change that will also note the importance of placing the 40-year modification at the end of the waterfall with appropriate pricing.

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

FHFA Announces Foreclosure Suspension for Borrowers Applying for State Homeowner Assistance Fund Programs

On Wednesday, the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac would be requiring servicers to suspend foreclosure actions for up to 60 days for borrowers who are known to have applied for assistance through the U.S. Treasury Department’s Homeowner Assistance Fund. This is a departure from FHA guidance that requires a servicer to suspend foreclosure action at the time a borrower is determined eligible for state HAF assistance.

• Why it matters: MBA appreciates that FHFA’s announcement is intended to prevent avoidable foreclosures; however, we are concerned that a blanket suspension for all borrowers with an application pending will unintentionally hurt those consumers who are most in need of expedited assistance. Servicers do not determine whether a borrower is eligible for a state HAF program — state HAF administrators do. FHFA’s policy does not hold states accountable or create incentives for them to use the data they already get from servicers to speed assistance to those borrowers most at risk of foreclosure.
• What’s Next: As FHA, the Department of Veterans Affairs (VA), and the Rural Housing Service evaluate this action by FHFA, MBA urges them to preserve servicer discretion and limit mandatory delays in foreclosure proceedings to those borrowers who have been approved by the state administrators for HAF eligibility.

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

MBA Meets with Regulators to Urge Remote Work and Licensing Flexibility 

On Thursday, MBA’s Kobie Pruitt participated in a panel discussion at the Conference of State Bank Supervisors Ombudsman meeting to encourage more state regulators to adopt the MBA state model legislation and regulations that would allow mortgage loan originators to work away from a licensed branch location.  

• Why it matters: At the meeting, Pruitt urged the regulators in attendance to help pass legislation or implement regulations that would modernize their state licensing requirements and permanently allow MLOs to work remotely. In addition, state regulators were encouraged to issue extensions until at least December 31, 2022, for any existing temporary written guidance. In the past 12 months, 15 states have passed laws or issued regulatory guidance that permanently permits working from a remote location.
• What’s next: MBA will continue to work with state regulators and our local partners to promote the adoption of MBA’s state model legislation and regulations for remote work.

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

MBA’s Fratantoni Delivers Remarks on Residential Real Estate Trends at Basel Committee on Banking Supervision Virtual Workshop 

On Wednesday, Mike Fratantoni, MBA SVP and Chief Economist, delivered remarks on residential real estate trends at a Basel Committee on Banking Supervision virtual workshop on risks and vulnerabilities. The workshop featured panel discussions from Fratantoni and other representatives from ratings agencies, supervisors, and banks.

• Why it matters: Fratantoni’s presentation focused on MBA’s economic and mortgage market forecast, rental housing market conditions, loan performance, and mortgage company productivity.
• What’s next: Slides from Fratantoni’s presentation can be viewed here.

For more information, please contact Mike Fratantoni at (202) 557-2935.

Register Today: MBA’s National Advocacy Conference – April 26-27

Registration is open for MBA’s National Advocacy Conference (NAC) to be held April 26-27 in Washington, D.C. NAC allows you to connect directly with elected officials in our nation’s capital. Your story matters – share it with key policymakers as they consider and pass legislation that affects all of us.

• Why it matters: The last two years have been unprecedented for millions of Americans, and the real estate finance industry is no different as we navigate new terrains. NAC gives you the opportunity to share your narrative with the key staff and decision-makers while networking with your colleagues from all over the industry. When we work together and combine our voices, we can do great things.  
• What’s next: Share your experiences, your voice, and your passion for our industry April 26-27! Register today at mba.org/nac.

For more information, please contact Rachel Kelley at (202) 557-2816.

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:

• Special Purpose Credit Programs: The What, the Why, and the How – April 12
• Technology Investment: Keeping Pace with Your Peers – April 19
• CFPB Enforcement Authority Over Student Loans and Impact on Mortgage Lending – April 21
• CONVERGENCE: Measuring Housing Affordability in America – April 25
• Introduction to Commercial Mortgage-Backed Securities – May 19
• New Fannie Mae and Freddie Mac Condominium and Cooperative Guideline Changes – May 24

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.