MBA Advocacy Update June 12, 2023

Bill Killmer; Pete Mills

MBA Working for You

  1. Christine Chandler of M&T Realty Capital Corporation Nominated to Be 2024 MBA Vice Chair

Last Wednesday, MBA announced that Christine Chandler, Executive Vice President, Chief Credit Officer and Chief Operating Officer with M&T Realty Capital Corporation (RCC), has been nominated to serve as MBA’s Vice Chair for the 2024 membership year. She is expected to be installed at MBA’s 110th Annual Convention in Philadelphia in October.

• Why it matters: Chandler has been with M&T since 1991 and has more than 30 years of experience in commercial real estate finance. Since 2018, she has been responsible for making credit decisions for M&T RCC multifamily and healthcare transactions underwritten in the Fannie Mae and Freddie Mac (Agency) and Federal Housing Administration (FHA) platforms as well as managing the company’s operations and its Asset Management Group and Transformation team. Active in various committees and groups related to the mortgage banking industry, Chandler is a voting member of MBA’s Board of Directors, serves as the 2023 Chair of MBA’s Commercial Real Estate/Multifamily Finance Board of Governors (COMBOG), and was appointed to MBA’s DEI Committee in 2022 and its Audit Committee in 2021. She is a sought-after speaker at industry conferences and is a passionate advocate for mPower, MBA Promoting Opportunities for Women to Extend their Reach, the largest networking organization for women in real estate finance.
• Matt Rocco, 2023 MBA Chairman and President of Colliers Mortgage, said, “Christine is a passionate and influential leader in real estate finance and is a terrific choice to lead MBA and its members through the challenges and opportunities our industry faces. She is one of MBA’s most active members and is a strong advocate of ensuring sustainable homeownership and rental housing opportunities in communities nationwide. I congratulate her for this well-deserved honor of joining MBA’s leadership ladder.”
For more information, please contact Adam DeSanctis at (202) 557-2727.

  1. House Lawmakers Reintroduce the Neighborhood Homes Investment Act

Last week, Reps. Mike Kelly (R-PA), Brian Higgins (D-NY), and Dan Kildee (D-MI) reintroduced, the Neighborhood Homes Investment Act (NHIA), a bill that would create a new federal tax credit to increase housing supply. This bipartisan legislation is the House companion to the Senate NHIA bill (S.657), which was introduced earlier this year. The bill’s text reflects MBA’s long-held advocacy priorities, including encouraging the rehabilitation of single-family homes and potentially attracting $100 billion in development activity to underserved rural and urban communities across the country.

• Why it matters: The NHIA builds on the success of the Low-Income Housing and New Markets Tax Credits, which support affordable rental housing and economic development, respectively, but are not designed to build or rehabilitate owner-occupied homes. The bill would support the development of homes in rural communities struggling with the costs of new construction, as well as the rehabilitation of homes in blighted communities, where vacant homes depress property values and thwart broader revitalization efforts.
• What’s next: MBA will continue discussions with House and Senate members to push for action on this and other potential tax legislation that helps to increase the supply of affordable housing.

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

  1. Agencies Propose Guidance on Reconsideration of Value Process

Five federal regulatory agencies – the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB) – released proposed guidance on how lenders may incorporate reconsideration of value (ROV) processes into their risk management systems. The guidance additionally outlines a lender’s role in identifying, addressing, and mitigating risk of discrimination in real estate valuations. In addition to the ROV process, the agencies identify an independent, third-party review or second appraisal as potential actions to resolve valuation deficiencies.

• Why it matters: The ROV process is a tool borrowers and lenders can use in the event potential errors in the appraisal are flagged, and/or new information can be presented to the appraiser. That process currently has few standards or guidelines. Last week, MBA signed on to a joint letter in favor of clear guidance on ROV responsibilities and uniformity across agencies and investors. While MBA supports clear guidance, it disagrees with the agencies’ interpretation of the applicability of a lender’s anti-discrimination liability under the Equal Credit Opportunity Act (ECOA) and Fair Housing Act to valuations conducted by a third-party, independent appraiser. MBA’s legal interpretation of relevant aspects of ECOA and the Fair Housing Act can be found in the amicus brief MBA filed in the Connolly case.
• What’s next: MBA will be providing a summary of the proposed guidance to its policy committees and will submit comments in response to the proposed guidance.

For more information, please contact Hanna Pitz at (202) 557-2796.

  1. MBA Responds to HUD Floodplain Proposal

Last Tuesday, MBA submitted comments in response to an FHA proposed rule on Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; and Building to the Federal Flood Risk Management Standard. The proposal moves to newly defined floodplain areas based on a Climate Informed Science Approach (CISA) and would impact FHA-insured single-family and multifamily housing.

• Why it matters: The new proposal would increase elevation requirements in expanded floodplain areas and would propose higher levels of required flood insurance.
• What’s next: MBA urged the Department of Housing and Urban Development (HUD) to reconsider the entire proposal and remains committed to working with FHA on how to best address flood risk for FHA-insured and assisted housing.

For more information, please contact Sara Singhas at (202) 557-2826.

  1. RON Legislation Excluding Mortgage Transactions Sent to Connecticut Governor

Last week, legislation (SB-1040) that would permit remote online notarization (RON) in Connecticut was sent to Governor Ned Lamont. Unfortunately, the language of the bill included amendments specifically excluding real estate finance transactions. MBA, in coordination with Connecticut Mortgage Bankers Association, had issued a Mortgage Action Alliance Call to Action in May urging lawmakers to remove that prohibition.

• Why it matters: 45 states and D.C. have now passed RON legislation, but if signed, Connecticut will become the first state to exclude mortgage transactions from RON transactions.
• What’s next: If signed, MBA, the Connecticut MBA, and other industry partners will collaborate to amend the law to include mortgage loans next year.
For more information, please review MBA’s RON resource page or contact, William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.

  1. Updates on MBA’s Advocacy on MLO State Licensing Flexibility

MBA and its state and local association partners have made significant progress on licensing flexibility policy for mortgage loan originators (MLOs). Earlier this month in Illinois, legislation (HB 2325) passed both chambers and is expected to be signed by Governor Pritzker this summer. Last week in Florida, remote work legislation ( HB 1185) was signed by Governor Ron DeSantis. Additionally, a bill (SB 355) in Nevada was amended this week to include remote work language, and it passed during the last day of session thanks to efforts by members, the Nevada Mortgage Lenders Association, and MBA. These latest developments mean that five states have now passed or enacted MLO remote work policy changes so far in 2023. Furthermore, the California Department of Financial Protection and Innovation provided MLOs the same flexibility by issuing a policy statement.

• Why it matters: Providing MLOs remote work flexibilities allows mortgage companies to save costs and meet consumer expectations on their terms.
• What’s next: MBA will continue to work with its state partners to support policy changes in states with limiting statutes and regulations consistent with MBA’s model law and regulation.
For more information, please contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.

  1. Texas Legislature Passes Broad Data Privacy Bill

The Texas state legislature recently passed the Texas Data Privacy and Security Act (HB 4), which would make Texas the 10th state to enact broad data privacy laws. MBA expects HB 4 will be signed by Governor Abbott shortly. The majority of the law will take effect July 1, 2024, and exempts financial institutions and data subject to the federal guidelines in the Gramm-Leach-Bliley Act (GLBA).

• Why it matters: Without a national standard for data privacy, the cost of compliance for state-by-state patchwork increases costs ultimately for consumers and may lead to lower competition in the market. By including the GLBA provision, the Texas bill helps ensure our industry can continue to process information pursuant to federal data protection guidelines while instituting much needed regulation in other industries.
• What’s next: Since 2018, broad data privacy legislation has been gaining traction across the states and this trend is expected to gain momentum. It is important for member companies and state and local association partners to continue to coordinate with MBA to help educate policymakers on the importance of the GLBA exemption to our industry.
For more information, please contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.

  1. 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:

• Benchmarking for Performance and the Performance Ratios Every Mortgage Banker Must Know – June 13
• MSR Transfers: Balancing Risk, Customer Experience and Efficiency – June 15
• Expanding Homeownership through a Commitment to DEI – June 21
• How to Leverage Document AI for Unparalleled Efficiency in Loan Production and Loan Servicing – June 27
• Mastering Revenue Metrics of Construction to Permanent Loans – July 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.