MBA Advocacy Update May 31 2022

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

On Wednesday, the Senate voted 49-46 to confirm Sandra Thompson as the Director of FHFA. On Tuesday, MBA sent a letter to the chairs and ranking members of the House and Senate Appropriations Committees, highlighting MBA’s views on the real estate finance industry’s priorities within the T-HUD appropriations bills for FY 2023.

Also last week, a House Energy and Commerce subcommittee held a legislative hearing on several bills, including MBA-supported remote online notarization legislation.

Senate Confirms FHFA Director Sandra Thompson 

On Wednesday, the Senate voted 49-46 to confirm Sandra Thompson as Director of the Federal Housing Finance Agency. Sen. Mike Rounds (R-SD) provided bipartisan support for her nomination. Thompson had been Acting Director since last summer and previously served as FHFA Deputy Director of the Division of Housing Mission and Goals.

• Why it matters: In response to the Senate vote, MBA President and CEO Bob Broeksmit, CMB, stated: “MBA applauds the confirmation of Sandra Thompson to continue leading the Federal Housing Finance Agency. Since being appointed Acting Director in June 2021, she has repeatedly demonstrated leadership, expertise, and a strong commitment to sound risk management principles while safely expanding access to mortgage credit and creating equitable and sustainable housing solutions for homeowners and renters.”
• What’s next: During her confirmation process, Director Thompson pledged that her focus will be on the “the safety and soundness mission Congress gave to FHFA,” and ensuring that the GSEs are “providing liquidity across the nation and especially supporting underserved markets.”

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

MBA Outlines Funding Priorities for FHA and HUD in Letter to House and Senate Appropriations Committees  

On Tuesday, MBA sent a letter to the relevant chairs and ranking members of the House and Senate Appropriations Committees, highlighting MBA’s views on the real estate finance industry’s priorities within the Transportation, Housing and Urban Development (T-HUD) appropriations bills for Fiscal Year (FY) 2023. A copy of both letters can be found here. 

• Why it matters: In its letters, MBA emphasized several priorities, including the need for direct funding to upgrade HUD’s information technology needs, especially for the Federal Housing Administration’s Project Catalyst.
• What’s next: Congressional negotiators late last month kicked off spending talks to fund the government for the upcoming fiscal year. With Congress unlikely to reach agreement to move all 12 appropriations bills prior to September 30, lawmakers must pass a stop-gap continuing resolution to keep the government operating beyond October 1.

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

Amended Community Reinvestment Legislation Passes California Senate 

Legislation in California (SB 1176) to apply community reinvestment requirements to IMBs, credit unions and state-chartered banks, which was introduced earlier this year by the Chair of the Senate Banking Committee (State Sen. Monique Limón), has been significantly amended. The bill was amended earlier this year to require the state’s Department of Financial Protection and Innovation to study the possible application of a “state CRA” requirement to state-licensed/chartered lenders. Additional amendments to the bill made by the Senate Appropriations Committee last week would further refine the framework for the DFPI study to ensure a fair assessment of lending activities by all market participants. This version of the bill has now passed the Senate (31-8).

• Why it matters: Coordinated and sustained industry advocacy, including Mortgage Action Alliance activation, resulted in critical amendments to the originally contemplated CRA mandates.
• What’s next: The bill now heads to the California Assembly for consideration. MBA and the California MBA have been, and will continue, collaborating in efforts to address concerns with the bill.

For more information, please visit the MBA State CRA Resource Center (www.MBA.org/StateCRA) or contact Pete Mills (202) 557-2878 or William Kooper (202) 557-2737.

House Energy and Commerce Panel Holds Hearing on RON Legislation

On Thursday, a House Energy and Commerce Consumer Protection Subcommittee held a legislative hearing on several bills, including H.R. 3962, the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act. The hearing featured testimony from Michael O’Neal of First American Title Co.  

• Why it matters: The SECURE Notarization Act is endorsed by MBA and would create a minimum federal standard for the use of remote online notarizations – including within the 10 states that have not yet enacted their own state standards.
• What’s next: MBA will continue advocating for swift passage of the SECURE Notarization Act – either as a stand-alone measure or as an amendment to “must-pass” legislation prior to year’s end. 

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

House Financial Services Committee Holds Hearings and Weighs in on HUD Program Funding in President Biden’s FY23 Budget Request

Last week, the House Financial Services Committee held hearings in the Diversity & Inclusion and Housing, Community Development, and Insurance Subcommittees and sent a letter to the House Budget Committee advocating for increased funding for HUD’s Community Development Block Grant, lead removal and fair housing programs.

• Why it matters: The D&I Subcommittee hearing focused on affordable housing, financial services and access to capital for people with disabilities. The Housing & Insurance Subcommittee hearing focused on reauthorization and reform of the National Flood Insurance Program. Hearing summaries are included here. Meanwhile in its letter, HFSC Democrats endorsed the Biden administration’s $71.9 billion HUD discretionary budget request for FY 2023, but called for increased funding levels for the CDBG, fair housing and lead paint removal (and other home hazard) programs.
• What’s next: President Joe Biden and congressional Democrats face several obstacles to securing HUD priorities funded at the proposed levels, given the broad 14% increase for all domestic programs within the administration’s ask.

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

Ginnie Mae Expands Access to Digital Collateral Program

On Monday, Ginnie Mae announced several updates to its Digital Collateral Program Guide, as well as a reopening of the Program to new participants next month. The Program, which Ginnie Mae has operated in a pilot phase since 2020, permits approved issuers to securitize loans containing electronic promissory notes (eNotes) and other digitized loan documents. The updates to the eGuide limit the length of time an issuer is required to maintain the recording of a notarial ceremony, allow for the electronic modification of eNotes, and revise the requirements and procedures for the release of documents due to a loan buyout, among other items.

• Why it matters: These updates should encourage greater use of the Digital Collateral Program by approved issuers, and the expansion of the Program should encourage broader industry adoption of digital mortgages. These developments are likely to increase liquidity in this space and build positive momentum for the transition from paper-based to fully electronic processes. The eGuide also includes several requirements that various components of the transaction adhere to MISMO standards – thereby ensuring consistency in the use of industry best practices.
• What’s next: The updates to the eGuide are effective on June 1, while the Program will be reopened for new participants a few weeks later beginning  June 21. MBA will work with Ginnie Mae to ensure broad access to the Digital Collateral Program for issuers of all types and sizes.

For more information, please contact Dan Fichtler at (202) 557-2780 or Sasha Hewlett at (202) 557-2805.

Connecticut Governor Signs Legislation to Overhaul State Data Privacy Law

Connecticut Governor Ned Lamont signed legislation (SB 6) that will create a new data privacy framework in the state. Connecticut becomes the 5th state to enact a comprehensive consumer data privacy law.

• Why it matters: Connecticut joins Virginia, Colorado, and Utah as states that have included in their respective data privacy laws a full Gramm-Leach-Bliley Act exemption for financial institutions and data that are subject to the federal law. This action shows a continued trend away from the standard set by the California Consumer Protection Act, which provides an exemption only for financial data (and not for GLBA-covered institutions).
• What’s next: MBA will also continue to work with state and local association partners to advocate for data privacy legislation that is consistent with the MBA Data Privacy Principles and includes a full GLBA exemption for financial institutions.

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

Financial Services Committee Members Seek Clarity from CFPB on Expanded UDAAP Authority

Last Thursday, House Financial Services Committee Ranking Member Patrick McHenry (R-NC) and senior HFSC member Blaine Luetkemeyer (R-MO) sent a letter to Consumer Financial Protection Bureau Director Rohit Chopra seeking clarity on the Bureau’s expanded unfair, deceptive, or abusive acts and practices authority. The letter was signed by 17 additional Republicans and expresses concern over the manner in which the CFPB derived this new authority and how it will impact lenders and other entities subject to Bureau supervision and enforcement.

• Why it matters: The expanded UDAAP authority manual now includes discrimination, whether “intentional or unintentional,” as an “unfair” practice in the delivery of all consumer financial products and services, including real estate contracts. 
• What’s next: The letter asked several questions about the impact and scope of the new supervisory authorities and how it will affect the Bureau’s internal adjudication process. Republicans will await an official response from the Bureau.

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

MBA Releases April Monthly Affordability Index Based on Weekly Applications Survey Data 

Last week, MBA released its monthly Purchase Applications Payment Index, which reports Weekly Applications Survey data every month by loan type, geography (state) and race, as well as how it compares to recent asking rents. The index itself measures how new monthly mortgage payments vary across time, relative to income. A FAQ document can be found here.

• Why it matters: Higher mortgage rates (up 80 basis points in April) and prices led to the median mortgage application payment jumping 8.8% to $1,889 from $1,736 in March (principal and interest). The median application payment was also $569 higher than in April 2021.
• Edward Seiler, MBA’s Associate Vice President, Housing Economics, and Executive Director, Research Institute for Housing America, said, “Despite strong employment and wage growth, housing affordability has worsened since the start of the year. Mortgage payments are taking up a larger share of homebuyers’ incomes, and sky-high inflation is making it more difficult for some would-be buyers to save for a down payment or come up with the additional cash they need to afford a higher monthly payment.”

For more information, please contact Eddie Seiler at (202) 557-2739.

MBA’s Mike Fratantoni in HousingWire: Why FHFA and GSEs should revisit their pricing framework

Last week, HousingWire published a guest column from Mike Fratantoni, MBA SVP and Chief Economist, that takes a look at why recent pricing changes to high-balance loans and second homes deserve reconsideration.

• Why it matters: Fratantoni argues that “given the challenges in affordability and headwinds facing the housing market, this also is a good time for the GSEs and FHFA to make adjustments to their pricing framework, ensuring that their pricing effectively supports market liquidity and helps to fund their missions.”

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

REGISTER: MBA Single-Family Research Showcase: June 22-23

On June 22-23, join MBA’s Research and Economics team for its annual, two-day online MBA Single-Family Research and Economics Showcase. Led by MBA SVP and Chief Economist Mike Fratantoni, analysts will detail the most current results and insights from their residential surveys, forecasts and reports.

• Why it matters: Session topics include: A Keynote on the Economy and the Mortgage Market; Latest Performance Benchmarking Data for Production and Servicing; Industry Volume and Demand; Demographics, Market Profiles and Players; Forbearance and Delinquency; Technology and Innovation; Staffing Issues; and Views on the Future of the Mortgage Industry, as well as a Q&A with MBA’s analysts.
• What’s next: Register to attend. CPE credit is available. 

For more information, please contact Marina Walsh at (202) 557-2817 or Jenny Masoud at (202) 557-2879.

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:

• What Trends will Shape the Lending Space in the Second Half of 2022 – June 2
• Effective Internal Audit Function: The Fundamentals – June 8
• CFPB, UDAAP and the Focus on Junk Fees – June 9
• Serving Loan Applicants with Limited English Proficiency – June 14
• Leveling Up Your Social Media Strategy with Paid Advertising – June 28
• How to Navigate Lower Margins and a Tighter Market Through Effective Leadership and Embracing Technology – June 28

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.