MBA Advocacy Update: Federal Reserve Keeps Rates Unchanged; MBA on CFPB’s Mortgage Closing Cost RFI; Advocacy in August Campaign Underway
Federal Reserve Keeps Rates Unchanged; Rate Cut in September?
The Federal Reserve held the federal funds rate at a target range of 5.25-5.50% on Wednesday, while indicating that recent signs of cooling inflation is paving the way for a rate cut as soon as September.
Read more of Fratantoni’s full commentary here.
For more information, please contact Mike Fratantoni at (202) 557-2935.
MBA Responds to the CFPB’s RFI on Mortgage Closing Costs
On Friday, MBA submitted its comment letter – and led efforts on a joint trades letter – in response to the Consumer Financial Protection Bureau’s Request for Information (RFI) “Regarding Fees Imposed in Residential Mortgage Transactions.” The RFI sought input from industry participants, consumers, and others on “the impact closing costs have on borrowers and the mortgage market,” citing, among other things, the rising costs for credit scores, credit reports, title insurance, and employment verification.
Why it matters: MBA shares the CFPB’s goal of reducing costs and removing regulatory barriers to homeownership. However, MBA also offered recommendations on other rule reforms that would be more impactful in lower consumer costs and improving affordability, including loan officer compensation changes, TRID changes, and appraisal reforms.
Go deeper: MBA for months has been vocal about the sharply rising costs of credit reports and other credit reporting products and is pleased that the RFI specifically provides an opportunity to share concerns about the factors driving these pricing changes amidst challenging market conditions for lenders of all sizes and business models.
While the RFI contained no specific policy proposals, MBA in press statements (here and here) and speeches made by MBA President and CEO Bob Broeksmit, CMB, (including at the Exchequer Club and at #MBASecondary24) has been critical about the CFPB’s consistent, illogical use of the term ’junk fees’ as it pertains to mortgage closing costs.
The RFI followed a March 2024 White House fact sheet and CFPB blog post on “lowering closing costs for home mortgages,” including the possibility of pursuing rulemaking and guidance to address purportedly “anticompetitive closing costs imposed by lenders on homebuyers and homeowners.”
What’s next: MBA welcomes the opportunity to respond to the CFPB’s RFI and will continue to work with them and the Biden administration on common sense initiatives to support affordable and sustainable homeownership.
For more information, please contact Pete Mills at (202) 557-2878, Justin Wiseman at (202) 557-2845, or Alisha Sears at (202) 557-2930.
MBA Updates Building Generational Wealth Through Homeownership and Affordable Housing Update White Paper
Last week, MBA released an updated version of the Building Generational Wealth Through Homeownership and Affordable Housing Update white paper.
The updated white paper highlights MBA’s efforts in advocating for legislation and regulatory actions that promote housing affordability and more options for both renters and homeowners as well as raising awareness and utilizing resources available to improve affordability and homeownership.
Go deeper: Tamara King, MBA’s Vice President of Residential Policy and Strategic Industry Engagement, discussed the latest updates to the white paper and why the industry should get involved in advocacy efforts to close the racial homeownership gap. Watch the MBA Now video here.
To learn more about the white paper and how to get involved, click here.
For more information, please contact Tamara King at (202) 557-2758 or Monique Ellis at (202) 557-2856.
MBA, NRMLA Submit Joint Letter to Ginnie Mae on Proposed HMBS 2.0 Term Sheet
Last Wednesday, MBA and National Reverse Mortgage Lenders Association (NRMLA) submitted a joint comment letter to Ginnie Mae on the proposed Home Equity Conversion Mortgage (HECM) Mortgage-Backed Securities (HMBS) 2.0 program term sheet. The letter commends Ginnie Mae’s efforts to boost liquidity for HECM issuers and emphasizes key recommendations to streamline processes, reduce costs, and ensure operation efficiency. The recommendations specifically include:
Implementing a 100% pooling maximum participation rate with a 5% risk retention requirement, aligning with the existing HMBS 1.0 program.
Clarifying “Loan Advances” definitions for transparency.
Adjusting certification requirements to address legal and operational considerations.
Revising the Adjusted Property Value Ratio calculation to facilitate the pooling of seasoned HECM loans.
Why it matters: If implemented, the proposed program could alleviate liquidity constraints for HMBS issuers by facilitating the re-pooling of active and non-active buyouts into new custom, single-issuer pools. HMBS 2.0 will permit the pooling of HECMs with an outstanding unpaid principal balance (UPB) of no less than 98 percent and no greater than 148 percent of the Maximum Claim Amount (MCA).
Go deeper: HMBS 2.0 will also provide issuers with an incremental source of servicing income to ensure that customer service operations can sustainably meet the needs of borrowers requiring assistance. This process, in turn, would help improve investor confidence in the HMBS market and support HECM MSR values.
What’s next: MBA encourages HMBS Issuers to continue sharing their feedback on the structure of the HMBS 2.0 program as Ginnie Mae decides the next steps. This collaborative effort is essential in crafting a program that bolsters issuer liquidity while protecting taxpayers’ interests.
For more information, please contact John McMullen, AMP, at (202) 557-2706.
MAA Update: Senate Procedural Vote on Bipartisan Tax Bill with LIHTC Fix Falls Short
On Thursday, the Senate held a procedural vote on H.R. 7024, the “Tax Relief for American Families and Workers Act of 2024” – the bipartisan, House-passed tax package that includes much-needed Low-Income Housing Tax Credit (LIHTC) program improvements and enhancements.
Unfortunately, the “cloture” motion to proceed to the bill failed – as expected – by a tally of 48-44 (60 votes needed, 8 Senators not voting) due to differences over non-housing-related policy matters (such as the size and scope of the federal Child Tax Credit).
What they’re saying: During floor debate, Senate Majority Leader Chuck Schumer (D-NY) supported the bill’s LIHTC provisions, saying, “[T]he housing crisis in America would ease, one of our biggest crises – housing costs, [would ease] by expanding the Low-Income Housing Tax Credit, something I deeply cared about and urged to be put in the bill. I’m glad it’s there.”
In a press statement supporting the bipartisan House passage of H.R. 7024, MBA President and CEO Bob Broeksmit, CMB, previously said, “MBA and its members have long called for enacting tax provisions that address our nation’s housing affordability crisis and the acute shortage of homes for owning and renting. We support this bill, particularly for its meaningful enhancements to the Low-Income Housing Tax Credit (LIHTC) that will produce an estimated 200,000 additional rental units over the next two years.”
MBA also joined a previous broad coalition letter in support of the bill’s LIHTC provisions here.
Why it matters: A large bipartisan group of Senators has expressed strong support for the LIHTC provisions embedded in H.R. 7024’s affordable housing title. The bill would restore a LIHTC program ceiling increase from 9 percent to 12.5 percent for calendar years 2023 through 2025, which would allow states to allocate more credits for affordable housing projects. It would also temporarily lower the Private Activity Bond (PAB) threshold test from 50 percent to 30 percent for 4 percent LIHTC property projects with an issue date before 2026.
What’s next: Since February, MBA’s Mortgage Action Alliance (MAA) members have sent almost 3,000 messages urging the Senate to take a vote on H.R. 7024. A similar procedural vote could come up again later this year, but it is more likely that programmatic LIHTC changes will be folded in as part of a more comprehensive tax policy debate in 2025. MBA’s ongoing support for affordable housing programs like the LIHTC will be critical to help maintain momentum for the consideration of a mix of housing supply-related credits – and other key industry priorities – as part of the tax debate next Congress. Along with our coalition partners, MBA will continue to advocate strongly for the enactment of housing affordability solutions.
For more information, please contact Bill Killmer at (202) 557-2736, Ethan Saxon at (202) 557-2913, George Rogers at (202) 557-2797.
Participate in the MAA Advocacy in August Campaign!
MBA’s “Advocacy in August” campaign has begun! Join your fellow industry advocates and MAA members and get involved during the congressional August recess by taking action on current real estate finance policy priorities – and by arranging to meet with elected officials back in their states or districts.
Why it matters: The “Advocacy in August” campaign is an important political engagement strategy for our industry to help advance key policy and advocacy priorities. Your participation allows us to build and strengthen individual relationships with lawmakers during the traditional congressional August recess.
What’s next: MBA’s Legislative and Political Affairs team will help coordinate in-person and virtual meetings in your elected officials’ home states or districts. Get involved!
For more information, please contact Jamey Lynch at 202-557-2818.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family 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:
Benchmarking & Performance Ratios Mortgage Bankers Must Know – August 20
Adding Reverse Mortgages to Your Business Line: Regulatory/Compliance Considerations – August 20
Analyzing the Commercial/Multifamily Borrower’s Balance Sheet and REO Schedule – August 27
Understanding the New FHFA and HUD ROV Policy: Implications and Implementation – August 27
Understanding Consumers, Buyers, and Uses of Accessory Dwelling Units – August 29
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.
