MBA Advocacy Update Dec. 5, 2022

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

The Federal Housing Finance agency last week published its 2023 maximum conforming loan limits for mortgages eligible to be acquired by Fannie Mae and Freddie Mac. FHA also published its 2023 Nationwide Forward Mortgage limits for FHA-insured Title II mortgages.

FHFA Announces Conforming Loan Limits for 2023  

On Monday, the Federal Housing Finance Agency published its 2023 maximum conforming loan limits for mortgages eligible to be acquired by Fannie Mae and Freddie Mac. The limits are calculated by FHFA according to a formula established by Congress in the Housing and Economic Recovery Act of 2008.

• Why it matters: The increases are significant, but reflective of slower home-price appreciation in 2022 compared to 2021. The baseline maximum conforming loan limit for one-unit properties will increase 12.21 percent from $647,200 to $726,200. The maximum conforming loan limit for one-unit properties in high-cost areas will increase to $1,089,300 – or 150 percent of the baseline limit, which is the “ceiling” set by Congress for high-cost area loan limits. 
• What’s next: MBA will continue to engage with FHFA and the GSEs on this and other critically important housing policy issues. 

For more information, please contact Sasha Hewlett at (202) 557-2805.

FHA Publishes 2023 Nationwide Forward Mortgage Limits 

On Thursday, the Federal Housing Administration (FHA) published 2023 Nationwide Forward Mortgage Limits (Mortgagee Letter 2022-20), which provides the maximum mortgage limits for FHA-insured Title II forward mortgages. The new loan limits are effective for case numbers assigned on or after January 1, 2023, through December 31, 2023.

• Why it matters: FHA’s “floor” and “ceiling” loan limits will increase from $420,680 and $970,800 in calendar year 2022 to $472,030 and $1,089,300 in calendar year 2023, respectively, for a one-unit property. Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon in a press release said the loan limits “reflect steep increases in home prices throughout much of the country and will ensure continued access to FHA-insured mortgage financing despite those increases.” 
• What’s next: MBA will continue to engage with FHA on this and other critically important housing policy issues. 

For more information, please contact Hanna Pitz at (202) 557-2796.

MBA Offers Recommendations to CFPB on Refinances and Forbearances

On Monday, MBA submitted a comment letter in response to the Consumer Financial Protection Bureau’s Request for Information on mortgage refinances and forbearances. The CFPB sought comments on ways to facilitate mortgage refinances for consumers who would benefit from refinancing, especially consumers with smaller loan balances. In addition, the CFPB also sought comments on ways to reduce risks and support household stability for consumers who experience disruptions in their financial situation that could interfere with their ability to remain current on their mortgage payments. 

• Why it matters: While MBA supports CFPB efforts to facilitate streamlined mortgage refinances for consumers who would benefit from refinancing, the letter encourages the Bureau to also focus on areas where its regulations add costs to the loan manufacturing or servicing process that outweigh purported consumer benefits. Additionally, the comment letter includes recommendations on how to apply the lessons learned from loss mitigation during the COVID-19 pandemic to loss mitigation procedures going forward.
• What’s next: An RFI is not a proposed rule but is often the first step towards an agency action or regulatory change and can provide an excellent opportunity to influence the next steps. MBA will continue to monitor developments on this topic and keep members informed about any updates. 

For more information, please contact Justin Wiseman at (202) 557-2854 or Alisha Sears at (202) 557-2930.

MBA, Broad Coalition Urges Action on Affordable Housing Tax Credits; Join the MAA Call to Action      

Last week, MBA joined two broad coalitions of real estate and lending groups urging Congress to include bipartisan, bicameral legislation in any year-end tax package, including the Affordable Housing Credit Improvement Act (S. 1136, H.R. 2573), which would enhance and expand the Low-Income Housing Tax Credit program, and the Neighborhood Homes Investment Act (S.98, H.R.2143), which would establish a parallel, MBA-supported federal tax credit for single-family developers to rehabilitate residences in LMI census tracts. These bills were included as key issues during MBA’s National Advocacy Conference earlier this year. In addition to the letters, MBA encourages members to help amplify the need to include these proposals within any package negotiated by the White House and congressional leaders by participating in its Mortgage Action Alliance (MAA) campaign. Act today.  

• Why it matters: The coalition groups, including MBA, have long supported bipartisan, bicameral efforts to promote tax credit programs that increase affordable housing supply and benefit individual renters and buyers. The NHIA coalition letter urges lawmakers to attach the full standalone NHIA bill text to any year-end budget or tax legislation. The LIHTC coalition letter more specifically urges Congress to expand the Housing Credit authority by 50 percent, and at a bare minimum reinstate the 12.5 percent cut the Credit suffered this year; and enhance the use of existing Private Activity Bond authority for rental housing production by lowering the bond financing threshold from 50 percent to 25 percent.
• What’s next: Very few “must-pass” legislative vehicles are likely to be considered prior to year’s end, including a potential tax “extenders” package during the “lame duck” session. MBA will continue to advocate for housing affordability-related priorities, including the NHIA and LIHTC, to be incorporated in any tax legislation considered by the House and Senate prior to year’s end.  

For more information, please contact Bill Killmer at 202-557-2736.

House Financial Services Committee Holds Hearing on Impact of Inflation on Housing; MBA, Industry Groups Send Letter on Policy Considerations     

On Thursday, the House Financial Services Committee held a hearing focused on housing investment needs and the impacts of inflation on the housing market. The hearing included discussions on high housing costs and government responses to inflation, including the Federal Reserve’s interest rate hikes. In advance of the hearing, MBA and several coalition partners sent a letter to the panel outlining key areas that have contributed to affordability challenges, including opposition to rent control/stabilization proposals.  

• Why it matters: Democrats used the opportunity to make a final push for more stimulus and investment in the housing sector, including provisions from the Build Back Better Act (BBBA) which passed the House late last year (but not the Senate). Republicans pointed to high inflation triggered by trillions of dollars in government stimulus as the main culprit for the affordability crisis.     
• What’s next: With Republicans set to take control of the House of Representatives next month, there will be a significant shift away from stimulus-based legislation towards differing priorities. Read a summary of the hearing here.     

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

Senate Banking Committee Holds Nominations Hearing on FDIC and HUD Positions    

On Wednesday, the Senate Banking Committee held a hearing to consider the nominations of: Federal Deposit Insurance Corporation Acting Chairman Martin Gruenberg, to be a Member and Chairperson of the Board of Directors of the FDIC; Travis Hill, to be Member and Vice Chairperson of the Board of Directors of the FDIC; Jonathan McKernan, to be a Member of the Board of Directors of the FDIC; and Dr. Kimberly Ann McClain, to be an Assistant Secretary of the Department of Housing and Development. Read a summary of the hearing here.

• Why it matters: MBA wrote a letter in support of Dr. McClain’s nomination, and she received bipartisan support during the hearing. Topics discussed at the hearing included efforts to reform the Community Reinvestment Act (CRA), as well as several previous FDIC actions.
• What’s next: Committee Chairman Sherrod Brown (D-OH) is likely to seek to schedule a vote on the nominees during the current “lame duck” session of Congress. 

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

MBA Files Amicus Brief Supporting the Flagstar Bank, FSB Petition for Supreme Court Review 

On November 23, MBA and other trades filed a joint amicus brief supporting a petition for a Writ of Certiorari requesting the Supreme Court to hear an appeal of the recent Ninth Circuit U.S. Court of Appeals decision in Flagstar Bank, FSB  v. Kivett. The issue is whether a California law requiring servicers to pay interest on escrow accounts is preempted by the National Bank Act. The Ninth Circuit held that the NBA did not preempt the California interest on escrow law because the law does not “significantly interfere” with national bank powers. MBA’s summary of the amicus brief is available here.  

• Why it matters: MBA has previously weighed in on this issue in the Ninth Circuit in Lusnak v. Bank of America, NA. There is now a circuit split with the Second Circuit (see Cantero v. Bank America, NA), which held the NBA preempted a New York Law that mandated the same 2 percent interest payments on mortgage escrow accounts as in the California law, creating a possibility of Supreme Court review. 
• What’s next: MBA will also continue to monitor any new developments and will inform members of the Supreme Court’s decision. 

For more information, please contact Justin Wiseman at (202) 557-2854 or Alisha Sears at (202) 557-2930.

FHA Extends HECM Loss Mitigation Waivers

On Monday, FHA announced that it would further extend two temporary partial loss-mitigation waivers under the Home Equity Conversion Mortgage (HECM) program. The first waiver, related to ML 2015-11, allows mortgagees to offer repayment plans on unpaid property charges – removing the $5,000 cap limit for which a borrower would be eligible for a repayment plan under the existing policy. The second waiver, ML 2016-07, allows mortgagees to seek assignment of a HECM loan immediately after using funds to pay unpaid property charges on or after March 1, 2020, by eliminating the three-year waiting period for such assignments. The new extensions change the expiration dates from December 31, 2022, to December 31, 2023. 

• Why it matters: These waiver extensions by FHA will allow seniors financially impacted by the COVID-19 pandemic to seek additional loss mitigation options regardless of their total outstanding arrearages and provide mortgagees with additional flexibility when assigning loans to the Department of Housing and Urban Development (HUD).
• What’s next: MBA will solicit feedback from HECM-originating and servicing members on any implementation concerns. 

For more information, please contact John McMullen at 202-557-2706.

D.C. Regulator Issues Guidance to Allow MLOs to Work Remotely

The District of Columbia Department of Insurance Securities and Banking recently issued a bulletin that outlines its guidance for mortgage loan originators to work away from a licensed branch location. The guidance requires the sponsoring licensee to have appropriate risk-based monitoring and oversight processes of work performed from a remote work location and to maintain records of the processes. Moreover, it prohibits MLOs from having in-person interactions with consumers outside of a licensed branch.

• Why it matters: DISB’s rules are generally consistent with MBA’s model and other states that have acted to permit remote work. Including the new D.C. guidance, 21 states have enacted legislation, promulgated rules, or issued regulatory guidance that permanently allows MLOs to work from a remote location.
• What’s next: MBA will continue to work with state and local association partners to advocate for its model legislation and regulation to create licensing flexibility nationwide. 

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

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:

• The Imperative to Control Cost to Originate… A Path Forward – December 6
• Tax Transcripts – Critical Updates to the IRS Process – December 6
• MAA Post-Election Update: November 2022 – December 7
• CONVERGENCE: Navigating Down Payment Assistance Programs – December 8
• Ensuring HMDA Data Integrity and Common Reporting Issues – December 14
• Ten Things Your Company Must Do in 2023 – January 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) 557-2931.