MBA Advocacy Update Feb. 21, 2023

Bill Killmer; Pete Mills

MBA, Industry Trades Request Extended Comment Period for SEC’s Securitization Conflicts of Interest Rule 

Last week, MBA joined 10 other trade associations in a letter to the Securities and Exchange Commission requesting an extension to the recently re-proposed Securitization Conflicts of Interest Rule. The proposed rule is intended to prevent the sale of certain securities that could be subject to material conflicts of interest. The proposal would prohibit securitization participants from engaging in certain transactions that could incentivize a securitization participant to structure a security in a way that would put the securitization participant’s interests ahead of those of the investors. The SEC originally proposed this rule in September 2011 and allowed a comment period of approximately five months

  • Why it matters: The proposed rule has an extensive scope and will likely have wide-ranging impacts on market participants. There is concern that the reproposed rule could lead to an explicit prohibition on certain ordinary-course securitization activities, including normal prudential risk management activities of banks and other financial services companies and the extension of consumer and commercial credit. An extended comment period is needed to accurately assess all possible impacts of the proposed rule and to ensure there are no unintended consequences. 
  • What’s next: An extension to June 24, 2023, has been requested instead of the current deadline for comments due on March 27, 2023. MBA will continue to engage with the SEC on this and other critical housing issues.

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

FHA Releases RFI on 203(k) Rehabilitation Program

On Tuesday, the Federal Housing Administration released a request for information inviting industry feedback on how to improve lender participation in the FHA’s 203(k) Rehabilitation Mortgage Insurance Program. The RFI is a follow-up to HUD’s efforts to support underserved communities, expand housing supply, and promote homeownership, as detailed in its 2022-2026 Strategic Plan. Comments responding to the 15 questions posed in the RFI are due by April 17.

  • Why it matters: Improving financing options for rehabilitation of existing housing stock is a key recommendation in the Biden Administration’s Housing Supply Action Plan. In September 2022, MBA submitted a letter detailing suggested updates to the 203(k) Rehabilitation Mortgage Insurance Program. The letter highlighted specific improvements that would make the program more appealing to borrowers and lenders alike, including increasing the cap on “Limited” 203(k) mortgages, increasing accessibility to consultants, and eliminating second appraisal requirements.
  • What’s next: MBA will work with its Government Loan Production Subcommittee to respond to the RFI. 

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

FHFA Requests Input on the GSEs’ Single-Family Social Bond Program

On Thursday, the Federal Housing Finance Agency issued a Request for Input on Fannie Mae and Freddie Mac’s social bond policy. The RFI is aimed at helping FHFA understand the opportunities and potential risks associated with the GSEs issuing single-family social bonds, under the framework of Environmental, Social, and Governance securities. FHFA also seeks input in defining the criteria and appropriate impact measures for GSE-labeled single-family social bonds        

  • Why it matters: Currently, each GSE issues labeled multifamily social bonds—neither issues labeled single-family social bonds. Through this RFI, FHFA seeks to inform future actions by the GSEs to develop and issue such social bonds. The GSEs’ establishment of a social bond program should provide investors with the additional information that they seek and promote sustainability, affordability, and equity in homeownership. 
  • What’s next: FHFA invites interested parties to respond to the RFI by April 17, and will also hold a listening session open to all on March 28, for additional public input. MBA will review the RFI in the coming weeks and will work with members on next steps. 

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

Troubling Maryland Community Reinvestment Act Bill Withdrawn from Consideration

Last week, ahead of a hearing of the Maryland House Economic Matters Committee, MBA and the Maryland Mortgage Bankers and Brokers Association collaborated on testimony in opposition to legislation (HB-392) that would apply Community Reinvestment Act mandates to independent mortgage banks, credit unions, and state-chartered banks. The bill was ultimately withdrawn by the bill’s sponsor. MBA believes such proposals are ineffective and misguided as IMBs do not have deposits to reinvest, do not have access to direct government support, and already lead the market in sustainable lending in low- to moderate-income communities. The approach also fails to address the need for expanded programs that have been proven to successfully improve access to affordable mortgage credit for LMI borrowers.

  • Why it matters: Given the brevity of the Maryland legislative session, it is unlikely that this bill can be fully considered this year.
  • What’s next: MBA will continue to work with its state and local partners and sister trade associations to oppose the application of CRA to IMBs.  

For more information, please review MBA’s State CRA resource center or contact William Kooper (202) 557-2737.

Register for MBA’s mPact Summit on March 7 

On March 7, mPact, MBA’s network for young professionals, will host its first mPact Summit in Plano, Texas. Join an exclusive group of young professionals from both the residential and commercial/multifamily real estate finance sectors for a day of career development and industry programming. Young professionals have selected the sessions and developed networking opportunities with senior leaders for this inaugural event. 

  • Why it matters: Event topics include developing leadership skills, learning how to navigate your career, and building and practicing networking skills. You won’t want to miss this opportunity. 
  • What’s next: Registration is capped at 100 participants and closes on February 27. Register now.

For more information, please contact Jacky Salazar at (202) 557-2746.

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 ofupcoming webinars – which are complimentary to MBA members:

  • FHFA Credit Scoring Changes: MISMO Takes Lead to Surface Impact to Industry – February 22
  • Single Family Rental Remains Resilient – February 23
  • CREF Market Outlook – Insights on Economic Data Released at CREF Convention and Expo 2023 – February 24
  • Market Recommendations and Profitability Insights for 2023 – February 28
  • Top Commercial Mortgage Servicing Issues in 2023 – March 6
  • Responsibly Using AVMs and AI to Automate Appraisal Underwriting – March 8
  • Achieving Success in Ginnie Mae’s Digital Collateral Program – March 14

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.