MBA Advocacy Update Oct. 10, 2022

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

MBA Advocacy Update lede sentence HERE

On Tuesday, HUD published a Request for Information that seeks stakeholder input on barriers to originating small balance mortgages in the FHA loan program. Earlier this month, the federal District Court for the District of Columbia ruled that the Home Mortgage Disclosure Act reporting threshold should be decreased from 100 closed-end loans to 25 closed-end loans.

The real estate finance industry was saddened this summer to learn of the sudden passing of CoreLogic Chief Economist Dr. Frank Nothaft, an industry icon who previously spent 29 years at Freddie Mac, the last 14 as the organization’s Chief Economist. MBA is proud to partner with CoreLogic to establish the Dr. Frank Nothaft Memorial Fellowship Fund at Columbia University, where Frank earned his Ph.D., taught, and conducted research. Donate online at https://giving.columbia.edu/nothaft.

HUD Seeks Stakeholder Input on Small Balance FHA Loans 

On Tuesday, HUD published a Request for Information that seeks stakeholder input on barriers to originating small balance mortgages in the Federal Housing Administration loan program. The RFI is a follow-up to HUD’s plan to support underserved communities and promote homeownership, as detailed in its 2022-2026 Strategic Plan. Comments responding to the 11 questions posed in the RFI are due by December 5, 2022.

• Why it matters: MBA shares FHA’s concerns about the barriers to originating small balance FHA loans and previously has provided suggestions to reduce the costs to originate these loans. The RFI provides a more formal opportunity to pursue these and other recommendations that FHA can use to make needed program changes.
• What’s next: To obtain MBA member feedback on the RFI, MBA’s Government Loan Production Subcommittee is creating a working group that will meet on Wednesday, October 12, at 2:00 PM ET. 

For more informationon the Subcommittee and to receive a calendar invite, please contact Darnell Peterson at (202) 557-2922.

Federal District Court Ruling Lowers HMDA Loan Reporting Threshold 

Earlier this month, the federal District Court for the District of Columbia ruled that the Home Mortgage Disclosure Act reporting threshold should be decreased from 100 closed-end loans to 25 closed-end loans. The Consumer Financial Protection Bureau, under previous Director Kathy Kraninger, had engaged in notice and comment rulemaking that resulted in a final rule in 2020 that increased the reporting threshold to 100 closed-end loans. 

• Why it matters: As a result of the court’s ruling, only institutions originating fewer than 25 closed-end mortgage loans in each of the two preceding calendar years are exempt from HMDA reporting. Effective immediately, institutions that were previously exempt from reporting with loan volume in a range of 25 loans to 99 loans in each of the preceding two calendar years are now subject to HMDA reporting. MBA expects the CFPB to review the ruling and provide compliance guidance for institutions that are now subject to HMDA reporting. Banks, credit unions, and savings institutions with less than $50,000,000 in total assets remain exempt from HMDA reporting regardless of loan origination volume.
• What’s next: A detailed summary of the court ruling can be found here. MBA will keep members informed on all relevant updates.

For more information, please contact Justin Wiseman at (202) 557-2854 or Stephanie Milner at (202) 557-2747.

MBA Issues MAA Call to Action Urging Senate Support of Bill to Streamline VA Appraisals

On Thursday, MBA’s grassroots advocacy arm, the Mortgage Action Alliance, issued a Call to Action urging members to contact their senators in support of a bill that would modernize the appraisal process for Department of Veterans’ Affairs mortgage loans.

• Why it matters: S.4208, the Improving Access to the VA Home Loan Benefit Act of 2022, would direct the VA to revisit existing program requirements to make appraisals more readily available and less cumbersome for buyers and lenders, effectively making servicemembers’ purchase contracts more competitive. The bill, introduced by Sen. Dan Sullivan (R-AK) is a companion bill to H.R. 7735, the Improving Access to the VA Home Loan Benefit Act of 2022, introduced by Rep. Mike Bost (R-IL), which easily passed the House as amended on September 14, 2022. In May, MBA Vice Chair Mark Jones testified in favor of H.R. 7735 before a House Veterans’ Affairs subcommittee.
• What’s next: MBA continues to push for either the House bill (as passed in September) or the companion Sen. Sullivan bill to be considered by the Senate when it returns for a November “lame duck” session after the mid-term elections. For more information and to take action, click here.

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

Washington, D.C. Officially Permits Remote Online Notarizations

The Washington, D.C. Council recently implemented legislation (B24-0457), which will permanently allow the use of remote online notarization in real estate financial transactions. B24-0457 is generally consistent with the MBA-ALTA model bill.

• Why it matters: The District of Columbia joins 42 states with enacted RON laws. 
• What’s next: MBA will continue to work with ALTA and local partners to encourage the remaining states to adopt RON laws.

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

MBA Joins Coalition Opposing a Washington, D.C. Algorithm Bill 

On Thursday, MBA joined a coalition of financial services associations in opposition to legislation ( B24-0558) that would place significant restrictions on the use of algorithms in financial services decisions. Limiting the use of these algorithms could conflict with the processes used to provide federally insured mortgages that are sold on the secondary market to Fannie Mae or Freddie Mac. Originations of federally backed mortgages generally require reliance on GSEs’ automated underwriting systems, but financial institutions have no control over these systems and thus have no ability to audit or meet the bill’s transparency requirements. 

• Why it matters: B24-0558 includes requirements that are inconsistent with existing laws and lending standards governing financial services companies, which could affect access to federal mortgage programs for D.C. residents and would have significant adverse impacts on low- and moderate-income and first-time homebuyers who rely on those programs.
• What’s next: MBA will continue to work with our trade association partners to improve the bill and address industry concerns.

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

Oregon DCBS Implements Rules to Permit Remote Work

The Oregon Department of Consumer and Business Services Finance and Securities Regulation recently promulgated rules that will permit mortgage loan originators (MLOs) to work away from a licensed branch location. The finalized rules went into effect on October 1, 2022, and replace temporary guidance that was issued to address concerns related to the pandemic.

• Why it matters: DCBS’ rules are consistent with the MBA model and other states that have acted to permit remote work. There are now 21 states that 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 our 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.

Preparation for the NMLS Renewal Period Begins

As a reminder, the Nationwide Multistate Licensing System renewal period for state licenses will begin November 1, 2022, and end at midnight ET on December 31. The NMLS website has been updated to direct licensees to updated state licensing checklists and continued education requirements. 

• Why it matters: MBA members are encouraged to review and complete company and MLO license renewals when the window opens to avoid interruptions to business operations.
• What’s next: MBA is ready to engage with the Conference of State Bank Supervisors to address any NMLS system issues related to the renewal period.

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

Dr. Frank Nothaft Memorial Fellowship Fund

The real estate finance industry was saddened this summer to learn of the sudden passing of CoreLogic Chief Economist Dr. Frank Nothaft, an industry icon who previously spent 29 years at Freddie Mac, the last 14 as the organization’s Chief Economist. Frank’s research and insight were best-in-class, which is why he was an ever-present sight on stage at industry conferences and events, and a highly sought-after source by news outlets around the country.

• Why it matters: MBA is proud to partner with CoreLogic to establish the Dr. Frank Nothaft Memorial Fellowship Fund at Columbia University, where Frank earned his Ph.D., taught, and conducted research. The goal is to raise $250,000 to create an endowed fund that will provide a fellowship to a graduate student in Economics each year in perpetuity. MBA and CoreLogic, with help from a handful of other companies and industry leaders, have already raised almost $100,000, but we need your help to reach our goal of continuing Frank’s legacy.
• What’s next: Donate online at https://giving.columbia.edu/nothaft. Alternatively, you can mail a check, payable to Columbia University with a note in the memo line noting that it is for the Dr. Frank Nothaft Memorial Fellowship Fund, to: Columbia Alumni Center, Attention: Gift Systems, 622 West 113th Street, MC 4524, New York, NY 10025

For more information, please contact Columbia University representative, Julia Morton, at 347-880-1737.

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:

• CONVERGENCE: A Case for Change – Increasing Black Homeownership – October 11
• Prioritizing Compliance in Loan and Mortgage Digitization – October 12
• Marijuana and Real Estate in 2022: What Every CRE Professional Should Know – October 19
• Modern Day Redlining in Focus: Takeaways from Trident Mortgage and Beyond – October 20
• Climate Risk in CREF – What we know and are learning – November 1
• Inflation, Interest Rate, Cap Rates & Values: What Do We Really Know? – November 30

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.