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MBA Advocacy Update Oct. 31 2022

October 31, 2022

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

Congratulations to Matt Rocco, Chairman of the Board and Chief Executive Officer of Grandbridge Real Estate Capital, for being sworn in as 2023 Chairman at MBA’s Annual Convention. Read Matt’s speech here, and this HousingWire article on his mission to expand affordable housing.

FHFA Announces Targeted Changes to GSEs’ Pricing Framework

The Federal Housing Finance Agency announced at MBA’s Annual Convention on Monday that it would eliminate upfront fees for certain first-time homebuyers and affordable mortgage products, while implementing targeted revisions to the upfront fees for most cash-out refinance loans. MBA President and CEO Bob Broeksmit, CMB, issued a press statement applauding these changes for reducing costs for homebuyers most impacted by today’s affordability challenges. FHFA is eliminating upfront fees for first-time homebuyers at or below 100 percent of area median income (AMI) in most of the United States and below 120 percent of AMI in high-cost areas, and for HomeReady and Home Possible loans, HFA Advantage and HFA Preferred loans, and single-family loans supporting the Duty to Serve program. FHFA will implement the new fee reductions as soon as possible and plans to announce an implementation date shortly. The implementation of new fees for cash-out refinance loans – which will include targeted increases – will begin February 1, 2023, in an effort to minimize market and pipeline disruption.​

  • Why it matters: The fee reductions for mission-oriented loans are part of FHFA’s ongoing pricing review, which began with increased fees for second homes and high-balance loans that were announced earlier this year. Given the ongoing affordability challenges facing homebuyers, FHFA’s targeted adjustments to the GSEs’ pricing framework are well-timed and will improve access to credit for low- and moderate-income households, first-time buyers, and minority buyers.
  • What’s next: MBA believes that other aspects of GSE pricing framework warrant further review, including a recalibration of second home LLPAs and the differential pricing on correspondent and wholesale deliveries. MBA will continue to work with FHFA leadership as the agency continues its pricing review. 

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

Broeksmit Calls on CFPB to Establish Clear and Consistent Standards

In prepared remarks on Monday at MBA’s Annual Convention, President and CEO Bob Broeksmit, CMB, called on the Consumer Financial Protection Bureau to establish clear and consistent standards when enacting rules by providing opportunities for stakeholder input through notice and public comment periods. He noted that the Bureau is sometimes announcing new legal obligations without formal process or deliberation, which “exacts high cost on markets and, ultimately, consumers.”  

  • Why it matters: The CFPB has used processes outside of the rulemaking process such as “circulars,” changes to exam manual guidance, and blog posts to announce new compliance requirements or to change standards. These mechanisms are not legally binding and are often difficult to understand and implement. On Wednesday – two days after Broeksmit’s speech – the Bureau issued a sweeping circular and guidance without notice and comment that makes far-reaching new policy on certain bank fees – essentially validating MBA’s concerns about the Bureau’s failure to provide stakeholders constructive notice or a formal process for deliberation.
  • What’s next: MBA will continue to work with industry stakeholders to ensure the Bureau understands the need for clear and consistent rulemaking that allows for stakeholder input and provides market certainty and lower costs to consumers.

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

FHFA Approves New Credit Score Models for Use by the GSEs

FHFA also announced at MBA’s Annual Convention the validation and approval of both the FICO 10T credit score model and the VantageScore 4.0 credit score model for use by the GSEs. The new models improve accuracy by capturing new payment histories for borrowers when available, such as rent, utilities, and telecom payments. Based on input from MBA and other industry groups, FHFA has acknowledged the need for a multiyear implementation process. Once implemented, lenders will be required to deliver both FICO 10T and VantageScore 4.0 credit scores with each loan sold to the GSEs. FHFA also announced that the GSEs will only require lenders to provide credit reports from two of the three nationwide credit reporting agencies. FHFA and the GSEs will work with stakeholders to ensure a smooth transition to the new credit score models and the new bi-merge requirement. The bi-merge option will be implemented within the next few months. MBA’s Bob Broeksmit, CMB, applauded both moves in his press statement on FHFA’s Monday announcements.  

  • Why it matters: The new models bring improved accuracy and a more inclusive approach to evaluating borrowers, which should benefit borrowers and the GSEs while maintaining safety and soundness. Moving to a bi-merge standard will introduce a measure of competition between the credit bureaus that is lacking when all three reports are mandated.
  • What’s next: Additional details can be found in FHFA’s fact sheet. MBA will remain deeply engaged with FHFA to ensure costs and the implementation process are monitored to mitigate unintended consequences to lenders and borrowers and to ensure smooth market functioning during the transition. 

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

MBA Recommends Improvements to Title I Manufactured Housing Program

Last Friday, MBA and the Community Home Lenders of America submitted comments jointly in response to Ginnie Mae’s Request for Input on suggested policy enhancements for the Federal Housing Administration’s Title I Manufactured Home Loan Program. The associations recommend that FHA align its underwriting requirements for the Title I program with those of the FHA Title II program, in addition to increasing the loan limits to reflect the increased price of labor and materials. MBA also recommends that FHA increases the lender origination fee cap from 2% to the greater of 2% or $2,000, to ensure lenders can recover costs of origination on small balance Title I loans.

  • Why it matters: FHA’s Title I Program guarantees loans made to purchase manufactured homes and home improvement loans and can be instrumental in addressing the nation’s affordable housing crisis, particularly in rural areas.
  • What’s next: MBA will continue to advocate for improvements to both the FHA Title I and II programs.

For more information, please contact Darnell Peterson at (202) 557-2922.

FHFA Publishes New Uniform Appraisal Dataset

This week, FHFA announced the publication of its new Uniform Appraisal Dataset (UAD) Aggregate Statistics Data File and the launch of the UAD Aggregate Statistics Dashboards, which will provide user-friendly visualizations of the newly available data. The UAD Aggregate Statistics Data File and UAD Aggregate Statistics Dashboards give stakeholders and the public new access to a broad set of data points and trends found in appraisal reports. Additionally, the appraisal statistics may be grouped by neighborhood characteristics and geography. Director Sandra Thompson noted that the deployment of these tools exemplifies FHFA’s “commitment to the development of a more efficient and equitable valuation system that ultimately reduces appraisal bias.” MBA President and CEO Bob Broeksmit, CMB, said in his press statement that the move will “help the industry work together on data collection, with a shared goal of providing more accurate and equitable appraisals for borrowers.”

  • Why it matters: Appraisals are a key component of the mortgage process and in recent years the industry has sought ways to make appraisals more efficient and cost effective and less biased. Publishing transparent, aggregate data on appraisals is a good first step to unlocking the GSEs’ vast appraisal database to improve valuation quality and lower costs market-wide.  
  • What’s next: FHFA will be accepting written public comments on this proposed rule within 60 days of publication in the Federal Register. MBA will be further evaluating the proposed amendments in the coming weeks and will continue to engage with FHFA to expand loan-level data availability with appropriate consumer privacy protections.  

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

Ginnie Mae to Change Re-Pooling Requirements

At MBA’s Annual Convention on Monday, Ginnie Mae announced plans to shorten the current seasoning requirement for pooling re-performing loans from six months to three months and to allow issuers the option to pool re-performing loans into TBA eligible Ginnie Mae II Multi-Issuer Pools. This change reverses the pandemic-induced, temporary pooling restrictions placed on re-performing loans (see APM 20-07), including the mandatory use of custom RG pools. Ginnie Mae hopes the changes will strengthen the mortgage sector by increasing issuer liquidity.​ 

  • Why it matters: These pooling policies have important implications for the servicing of loans in forbearance, and the changes should provide additional flexibility to support issuers and borrowers to ensure liquidity is reliably available.
  • What’s next: Ginnie Mae will release an official policy notice making these changes effective no later than first-quarter 2023. MBA will remain engaged with Ginnie Mae on this and other critically important policy issues.  

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

NMLS Schedules Maintenance Ahead of License Renewal Period

For planned system maintenance, the Conference of State Bank Supervisors informed MBA of its intention to make the Nationwide Multistate Licensing System unavailable from Monday, October 31 at 9 p.m. ET until Tuesday, November 1 at 7 a.m. ET. The scheduled maintenance is in preparation for the license renewal period that begins on November 1 and ends at midnight on December 31.

  • Why it matters: MBA members are encouraged to review and complete company and mortgage loan originator (MLO) license renewals when the window opens to avoid interruptions to business operations. In addition, MBA urges members to make them aware of any major system performance or availability problems so we can communicate those concerns to CSBS staff.
  • What’s next: MBA will continue to engage with CSBS leading up to and during the license renewal period to address any NMLS system issues.

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

MBA to FTC: Exempt Mortgage Industry from Future Surveillance and Data Security Rulemaking

On Friday, October 21, MBA submitted comments in response to the Federal Trade Commission’s Advance Notice of Proposed Rulemaking on Commercial Surveillance and Data Security. MBA pointed out that the existing regulatory scheme, as well as firm practices, show that the mortgage industry should largely be exempt from future rulemaking. Additionally, any rulemaking that FTC might undertake should allow financial institutions to share data with third parties when selling servicing rights or mortgage loans to the secondary market. Future rulemaking should also preserve the current TILA-RESPA Integrated Disclosure regime without labeling such disclosures as “dark patterns.” 

  • Why it matters: The FTC’s ANPR is the first step in potential future rulemaking on data privacy and security. 
  • What’s next: MBA will continue to keep members appraised of future proposed rules.

For more information, please contact Justin Wiseman at (202) 557-2854 or Gabriel Acosta at (202) 557-2811.

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:

  • Climate Risk in CREF – What we Know and are Learning – November 1
  • Augmenting Talent with Technology – November 8
  • TRID Housekeeping & Latest Information – November 15
  • Inflation, Interest Rate, Cap Rates & Values: What Do We Really Know? – November 30
  • 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

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