MBA Advocacy Update: Hill Hearings Recap on Housing Affordability and Large Banks; MBA Letter to CFPB on Servicing Modernization
House Financial Services Subcommittee Holds Hearing on Housing Affordability
Last Wednesday, the House Financial Services Subcommittee on Housing and Insurance held a hearing, Housing Affordability: Governmental Barriers and Market-Based Solutions. Ahead of the hearing, MBA submitted a Statement for the Record that outlined policy concerns and steps policymakers can undertake to reduce regulatory impediments, increase affordable housing stock, and benefit renters and housing consumers.
Go deeper: Subcommittee Republicans suggested that burdensome regulations, inflationary pressures, and government involvement in the housing sector are contributing factors to housing affordability challenges, underscoring a need for more private-sector solutions. Democrats on the panel countered that private market solutions are insufficient to address housing needs, arguing that federal assistance programs should continue to be funded and expanded as appropriate.
There was some bipartisan agreement that state and local zoning laws, as well as land use restrictions, are contributing to housing scarcity and warrant reform. Find a full summary of the hearing here.
Why it matters: Several pieces of legislation were discussed at the hearing, including the bipartisan, bicameral Yes in My Backyard (YIMBY) Act (H.R. 3507 and S. 1688). This proposal would provide the federal government with new tools to encourage localities to remove legal and regulatory barriers that impede new construction and housing development. MBA joined a broad coalition in expressing support for the bill.
What’s next: MBA will work with the Administration and members of Congress on both sides of the aisle to advocate for policies that improve housing affordability – for both prospective homeowners and renters.
For more information, please contact Rachel Kelley at (202) 557-2816 or Bill Killmer at (202) 557-2936.
Full House of Representatives Passes HOME Act
On Tuesday, the House of Representatives passed H.R. 3848, the Housing Our Military Veterans Effectively (HOME) Act by a 408-10 vote.
Why it matters: The bill, now passed overwhelmingly by the full House, seeks to improve and reauthorize the VA’s Grant and Per-Diem program that assists housing providers and maintains transitional housing for homeless veterans. The bill’s Section 4 “pay-for” is a six-month extension of VA Home Loan program fee increases, which would sunset in 2031 under the bill’s provisions.
What’s next: MBA will continue to advocate against the use of VA fee increase pay-fors for purposes other than those directly related to housing. The bill now advances for possible Senate consideration in the near future.
For more information, please contact Rachel Kelley at (202) 557-2816 or Bill Killmer at (202) 557-2936.
Senate Banking Committee Holds Oversight Hearing on Major Financial Institutions
Also on Tuesday, the Senate Banking Committee held a hearing with testimony from the chief executives of eight of the nation’s largest financial institutions, including MBA members. A summary of the hearing can be found here.
Why it matters: The executives expressed strong opposition to regulators’ Basel III Endgame capital proposal, arguing that it will restrict mortgage lending, and also addressed Senators’ questions relating to the Consumer Financial Protection Bureau (CFPB), the Community Reinvestment Act, investor ownership of single-family housing, and the ongoing role of the Federal Home Loan Bank Systems.
What’s next: MBA will continue to engage Congress on the real estate-finance issues raised at the hearing.
For more information, please contact Ethan Saxon at (202) 557-2913 or George Rogers at (202) 557-2797.
MBA Submits Recommendations to Modernize the Mortgage Servicing Rules of Regulation X
Last Wednesday, MBA submitted recommendations to the CFPB to modernize the mortgage servicing rules under the Real Estate Settlement Procedures Act (Regulation X). MBA supports amending the Early Intervention and Loss Mitigation provisions to create a flexible regulatory framework for mortgage servicers to deliver effective relief to borrowers facing financial hardship.
Why it matters: Following MBA’s own petition to the CFPB to amend Regulation X, the CFPB recognized the need to ‘simplify and streamline’ the mortgage servicing rules in public statements and its June 2023 blog post after the expiration of the COVID-19 National Emergency expired. The CFPB is expected to release a proposed rule in March 2024, according to the Fall 2023 Regulatory Agenda.
Go deeper: Modernizing the mortgage servicing rules is critical. The current framework reflects a document-intensive loss mitigation paradigm from the Great Financial Crisis. MBA’s recommendations for amending Regulation X would eliminate the current framework’s rigid structure that has inhibited the ability of servicers to deliver innovative loss mitigation offerings. Modification offerings, the loss mitigation toolbox, and technology have advanced over the years to enable streamlined solutions and long-term forbearance plans, neither of which were contemplated by the CFPB. MBA’s recommendations include:
Retaining the Complete/Incomplete Application Framework with Reforms;
Removing or revising the Anti-Evasion Clause to Facilitate Streamlined Loss Mitigation; and
Providing Clear, Reasonable Triggers to Start and End Protections, if the Bureau Prohibits Dual Tracking Upon Receipt of an Incomplete Application.
What’s next: MBA will monitor and communicate developments on these issues through its Legal Issues and Regulatory Compliance and Loan Administration Committees.
For more information, please contact Brendan Kelleher at (202) 557-2700.
Biden Administration Publishes Fall 2023 Regulatory Agenda
On Wednesday, the Biden administration published the Fall 2023 Regulatory and Deregulatory Actions (Agenda). This report outlines the regulatory actions federal administrative agencies plan to issue over the next six months.
Why it matters: Many of the rules and proposals published by federal agencies will have significant impacts on lenders and borrowers.
Topics of interest to MBA Residential members include:
FHA Final Rule on Modernization of Engagement of Borrowers in Default (January 2024)
CFPB Proposed Rule on Mortgage Servicing (March 2024)
FHFA Final Rule on Suspended Counterparty Program (March 2024)
FHFA Proposed Rule on Federal Home Loan Bank Core Mission Activities (April 2024)
FHA Final Rule Update to the Manufactured Housing Construction and Safety Standards Regulations (April 2024)
HUD Final Rule Revising Mortgagee Branch Registration Requirements (April 2024)
FHA Proposed Rule on Claims Curtailment and Maximum Deadline (May 2024)
Basel III Final Rule Revising the Capital Standards for Large Banking Organizations (June 2024)
RHS Proposed Rule Single Family Housing Guaranteed Loan Programs (June 2024)
RHS Final Rule Update to Manufactured Housing Provisions (April 2024)
VA Proposed Rule on Loss Mitigation Option for Guaranteed Loans (October 2024)
What’s next: It is important to note that the dates listed above are “aspirational” and federal agencies regularly miss these targets. MBA will work with members to monitor and respond to these proposals.
For more information, please contact Brendan Kelleher at (202) 557-2700.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family and commercial/multifamily programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – which are complimentary to MBA members:
Ten Things Your Company Must Do in 2024 – December 12
California’s Corporate Climate Data Accountability Act – December 14
C-PACE for New Development, Refinance, Renovation, and Rescue – January 30
Transforming Lending Operations: How to Leverage Intelligent Automation – January 30
Builder’s Risk Insurance: Analysis & Perspectives – March 20
MBA members can register for any of the above events and view recent webinar recordings by clicking here.
For more information, please contact David Upbin or (202) 557-2931.
