MBA Advocacy Update Dec. 12 2022
Bill Killmer bkillmer@mba.org; Pete Mills pmills@mba.org
MBA Offers Recommendations to FHA on Small Mortgage Lending
On Monday, MBA submitted comments in response to the Federal Housing Administration’s request for information seeking stakeholder input on the barriers to supporting, facilitating, and making available mortgage insurance for mortgages with original balances of $70,000 or less. MBA’s response highlighted cost and regulatory requirements as the primary impediments for borrowers and lenders and recommended HUD reform FHA’s Qualified Mortgage definition, and consider creating an internal fund to help offset the fixed costs of originating and servicing small balance mortgages – those under $100,000 – that meet specific qualifying criteria.
- Why it matters: Increasing access to small-balance mortgage lending can play a significant role in helping some borrowers achieve homeownership, particularly in exurban and rural areas, where this type of lending is most prevalent.
- What’s next: MBA will continue to engage with FHA to ensure industry input is received on future program changes.
For more information, please contact Darnell Peterson at (202) 557-2922.
CFPB Provides Guidance on HMDA Loan Reporting Threshold
The U.S. District Court for the District of Columbia ruled in late September that the Home Mortgage Disclosure Act reporting threshold is now 25-closed end loans in each of the preceding two years, rather than the 100-closed end loan threshold set by the 2020 HMDA Final Rule. In a blog post on Tuesday, the Bureau provided guidance, stating that it does not plan to “initiate enforcement actions or cite HMDA violations for failures to report closed-end mortgage data collected in 2022, 2021 and 2020” for covered institutions that originated at least 25 closed-end loans, but less than 100 closed-end loans in each of the previous two calendar years. A detailed MBA summary of that court ruling is here.
- Why it matters: The Bureau in its blog post said that it would not view action regarding affected financial institutions’ HMDA data as a priority, recognizing that they “may need time to implement or adjust policies, procedures, systems, and operations to come into compliance with their reporting obligations.”
- What’s next: MBA will continue to engage with the CFPB on the impact of the ruling and the necessary steps to help the industry comply.
For more information, please contact Justin Wiseman at (202) 557-2854 or Stephanie Milner at (202) 557-2747.
GSEs Publish Guidance on Florida’s Temporary Market Stabilization Arrangement
This week, Fannie Mae and Freddie Mac published guidance on the Temporary Market Stabilization Arrangement implemented by the Florida Office of Insurance Regulation, which requires Florida’s Citizens Property Insurance Corporation provide reinsurance to specifically identified insurers that suffer a financial rating downgrade. While the GSEs continue to evaluate the impacts of the TMSA, servicers are permitted to accept renewal insurance policies provided by an insurer that is participating in Florida’s TMSA on a temporary basis beginning August 2, and ending on the earlier of May 31, 2023, (the date FLOIR terminates the TMSA) or when the GSEs provide further guidance on the acceptability of the TMSA. This temporary arrangement does not allow sellers to deliver new loans with property insurance provided by an insurer that is participating in the TMSA as of the Note Date, and does not authorize servicers to accept a new (i.e., replacement) policy provided by an insurer participating in the TMSA.
- Why it matters: Several Florida insurers have recently been downgraded, placing them below the GSEs’ current rating requirements. This temporary solution provides some relief to lenders while a longer-term plan to address the situation for Florida insurers is debated.
- What’s next: More details can be found in Bulletin 2022-25 and Lender Letter LL-2022-08. MBA will continue to engage with the GSEs and will monitor developments related to the TMSA as well as the broader situation regarding Florida insurers.
For more information, please contact Sasha Hewlett at (202) 557-2805.
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:
- Ensuring HMDA Data Integrity and Common Reporting Issues – December 14
- Ten Things Your Company Must Do in 2023 – January 18
- Using the MISMO API Toolkit to Build Your Own FIPS Code Lending API – January 26
- Combating the Downturn: Strategies to Optimize Borrower Support in Recessionary Environments – January 31
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.
