MBA Advocacy Update: MBA Releases Webinar on Real Estate Commission Lawsuit Settlement; CFPB News

WATCH: MBA Releases Webinar on NAR Commission Lawsuit Settlement

MBA recently released a pre-recorded webinar with Pete Mills, SVP of Residential Policy and Strategic Industry Engagement, Justin Wiseman, VP of Residential Policy and Managing Regulatory Counsel, and Alisha Sears, Director and Regulatory Counsel, on the National Association of Realtors (NAR) Commission Settlement.

• The webinar covers the scope of the settlement; the changes in real estate agent compensation practice it requires; the potential changes in how buyers, sellers, and their respective agents contract and get compensated; and the possible implications for the financing transaction and how lenders engage with their Realtor referral sources.

Go deeper: Last month, NAR agreed to settle a series of lawsuits by paying $418 million in damages and eliminating its rules on “cooperative” commissions. If approved, changes will likely go into effect mid-July 2024. The impact on the home sales process and the mortgage industry is likely to evolve, with new approaches to the negotiation and payment of buyer agent commissions.

• As new business models emerge in the real estate brokerage space, MBA’s focus will be on helping our members adapt to these developments and ensuring that the changes adhere to core principles that ensure buyers that need or want representation have access to it, that buyers can negotiate over who pays for that representation, and that the new models do not disrupt the home financing process and make the experience worse for homebuyers and home sellers.
Read MBA’s summary of “key takeaways” from the settlement and a blog post from MBA’s President and CEO Bob Broeksmit, CMB.  

What’s next: MBA encourages members to share how the market is evolving so that market participants (and regulators, if necessary) can be held to core principles that make sense for sellers, buyers, and lenders.

• MBA has been in discussions with NAR, the GSEs, Federal Housing Finance Agency (FHFA), Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA) to identify the likely permutations and the best way forward. As noted below, FHA has responded to a joint MBA/NAR inquiry seeking confirmation that sellers paying buyers’ agent commissions will not count against interested party contribution limits.

For more information, please contact Pete Mills at (202) 557-2878 or Justin Wiseman at (202) 557- 2854.

MBA Seeks Clarity from Government Agencies, GSEs on ICPs; FHA Confirms Existing Policy

MBA has been in discussions for months with the GSEs, FHFA, FHA, and the VA to identify possible guideline clarifications or changes that may be needed as a result of new real estate agent compensation arrangements that may arise from NAR’s commissions litigation settlement. This includes ensuring that buyer agent compensation paid directly by the seller remains exempt from Interested Party Contribution (IPC) caps.

• On Wednesday, MBA and NAR sent a joint letter to leadership at FHA, FHFA, and the GSEs that asked for confirmation that their policies will continue to exclude seller or listing agent payment of buyer agents’ commission from IPCs. The letter stressed the urgency of addressing this, stating that “confirming your policies and maintaining this practice will sustain the current flow of mortgage capital to home buyers without change or delay.”
• In response to MBA’s and other groups’ ongoing advocacy, FHA on Wednesday night confirmed that “under existing FHA policy, if sellers continue to pay buyer-side real estate agent commissions and fees as a matter of state or local law or local custom, and if the commissions and fees are reasonable in amount, existing policy would not treat those payments as interested party contributions provided all other requirements are met.”

What’s next: MBA will continue its advocacy on this issue with the VA, Rural Housing Service, and the GSEs.

• In addition, MBA has been calling on the VA to expedite regulatory changes to it rule that prohibits Veterans and active-duty service members from paying any portion of brokerage commission when purchasing a home with a VA mortgage. Failure to do so would put VA buyers at a significant disadvantage – especially in today’s tight inventory market.
• MBA is also assessing other changes that may be needed in agency guides and Consumer Financial Protection Bureau (CFPB) rules to ensure any new agent compensation arrangements do not limit access or raise the cost of mortgages.

For more information, please contact Pete Mills at (202) 557-2878 or Justin Wiseman at (202) 557- 2854.

MBA Objects to CFPB Overreach on “Abusiveness” Authority

Last Monday, MBA submitted a comment letter in response to a CFPB proposed rule to ban instantaneous nonsufficient fund fees as an abusive practice.

• While the rule would not directly affect the mortgage industry, MBA objected to the Bureau’s overbroad interpretation of the scope of its “abusiveness” authority. In particular, the Bureau has set too low of a bar to prove that consumers lack understanding of a product or service. A well-crafted disclosure should be able to cure a consumer’s lack of understanding, especially for novel products. The Bureau’s interpretation in the overdraft rule undermines the entire purpose of consumer disclosures.

Why it matters: The Bureau is attempting to ban the instant NSF practice under its unfair, deceptive, abusive, acts or practices (UDAAP) authority. The Bureau’s overly broad formulation of its authority would allow it to declare a practice as abusive if a consumer does not understand any single material cost, condition, or risk and how it might be incurred by the individual consumer, by consumers generally, or by other similarly-situated consumers. Additionally, the consumer’s lack of understanding does not need to be reasonable. This would essentially allow the Bureau to preliminarily declare many practices as abusive.

What’s next: MBA will keep members informed of any updates.

For more information, please contact Alisha Sears at (202) 557-2930 or Gabriel Acosta at (202) 557-2811.

CFPB Releases 2023 HMDA LAR Data

On Tuesday, the CFPB announced that Home Mortgage Disclosure Act (HMDA) Modified Loan Application Register (LAR) data for 2023 is now available. LAR data can be found on the Federal Financial Institutions Examination Council’s (FFIEC) HMDA Platform, accessible here.

Why it matters: Previously, LAR data could only be obtained by requesting data from individual institutions.

What’s next: HMDA data from 2023 will be available in other forms, including: nationwide loan-level datasets with all publicly available data for all HMDA reporters; aggregate and disclosure reports with summary information by geography and lender; and 2023 data through the HMDA Data Browser to allow users to create custom datasets, reports, and data maps. 

For more information, please contact Alisha Sears at (202) 557-2930 or Gabriel Acosta at (202) 557-2811.

Get Involved in MAA Action Week: April 29 – May 3!

MBA’s annual Mortgage Action Alliance (MAA) Action Week is arriving soon, April 29 – May 3! Sign up today and promote the importance of advocacy within your company or organization. This industry-wide campaign allows ALL of us to take part and engage in the legislative and regulatory process on issues that directly impact real estate finance professionals. Membership in MAA can make a difference in how YOU and your company drive positive change by adding your voice to our collective efforts.

Why it matters: Advocacy happens 365 days a year. Through regular contact with your lawmakers and their staff members via MAA Calls to Action and other sustained “grasstops” efforts, you can establish yourself as a “go-to” constituent for our industry.

What’s next: Save the date for MAA’s Quarterly Webinar Series hosted by the Legislative & Political Affairs team on Thursday, May 2, at 2:00 PM ET. Hear key policy updates – along with case studies describing how the MBA staff is advocating on behalf of our association’s members to help achieve pro-industry outcomes. More information will be shared in the coming weeks.

For more information, please contact Jamey Lynch, AMP at (202) 557-2818 or Erin Reilly at (202) 557-2751.

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:

The Intersection of Pricing Concessions and Fair Lending – April 4
Mastering Compliance, Efficiency, and Successful Adoption with Consumer Permission Platforms – April 11
Rethink Everything: You “Know” To Be A Next Gen Loan Officer – A Deeper Dive With the Writers & Experts Webinar Series: Social Media – April 17
Climate-Change Disclosure Rules and Impact on Mortgage Lending – April 18
Basics of Commercial Loan Closing and Loan Documentation – May 9
Introduction to Commercial Mortgage-Backed Securities – May 23

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.