Advocacy Update: MBA Proposes Ginnie Mae Early-Buyout Securitization; Responds to HUD’s Proposed Flexibilities for Underwriting Rental Income
MBA Proposes Ginnie Mae Early-Buyout Securitization to Improve Issuer Liquidity
MBA last week proposed the development of a new Ginnie Mae security designed to attract more private capital sources of liquidity to support Ginnie Mae issuers in the event of market stress or a severe economic downturn. Read the press release.
• Under MBA’s proposal, an early-buyout (EBO) securitization would be comprised of non-performing Federal Housing Administration (FHA), Veterans Affairs (VA), and USDA loans bought out of traditional Ginnie Mae pools.
What they’re saying: “An EBO security addresses the timing mismatch within Ginnie Mae’s program, helping to alleviate an ongoing issue that has concerned issuers and regulators alike. It also has the potential to increase the value of Ginnie Mae servicing, which could translate into lower costs for FHA, VA, and USDA borrowers,” said MBA President and CEO Bob Broeksmit, CMB.
Go deeper: The EBO security would allow the issuer to sell pools of EBOs to private investors who would receive an accrual of the scheduled principal and interest payments when the loans resolve through either the borrower reperforming on the loan, or when the loan is foreclosed and goes to claim with FHA, VA, or the Rural Housing Service.
Why it matters: MBA’s proposal would provide critical liquidity relief for government servicers by solving for monthly advancing requirements. The approach can be implemented by Ginnie Mae without any need for federal appropriation or additional authority from Congress, relying entirely on the private capital markets to mitigate operational risk.
What’s next: MBA’s policy staff will work with members to refine the proposal and will engage with the current and incoming Ginnie Mae leadership teams to pursue this proposal, as well as other practical opportunities to enhance servicing liquidity.
For more information, please contact Matt Jones at (202) 557-2933 or Sara Singhas at (202) 557-2826.
MBA Responds to HUD’s Proposed Flexibilities for Underwriting Rental Income
MBA filed comments on Tuesday regarding the Department of Housing and Urban Development’s (HUD) draft Mortgagee Letter that proposes changes to how rental income is considered in mortgage underwriting.
• The draft policy would expand FHA-insured mortgage qualification criteria by permitting borrowers to include tenant income in their financial calculations, subject to certain specific requirements.
Go deeper: MBA supports the intent of the proposal but urged caution in its comments, recommending the implementation of an automated risk flagging mechanism in the FHA TOTAL Mortgage Scorecard to identify potential financial instability when borrowers rely on multiple income sources. The comments also requested clarifications on several key areas, including borrower reserve requirements, the handling of gaps in boarder income history, and the applicability of the policy to different loan types.
Why it matters: This policy change reflects a more flexible approach to mortgage underwriting that recognizes the growing importance of rental income in borrowers’ overall financial profiles.
What’s next: MBA will continue to engage with FHA through the Government Loan Production Subcommittee.
For more information, please contact Darnell Peterson at (202) 557-2922.
FHA Waives Early Payment Default QC Requirements for Recent Disasters
Last week, FHA issued a limited waiver of its Early Payment Default (EPD) review requirements for FHA-insured mortgages in areas affected by Hurricane/Tropical Storm Helene and Hurricane Milton.
• The waiver applies to loans closed before the disaster’s start date that became an EPD between Nov. 1, 2024, and April 30, 2025, recognizing that these early defaults are likely due to unforeseen circumstances like job loss, property damage, or forced relocation.
Go deeper: Despite the waiver, mortgagees must continue to provide borrowers with FHA Loss Mitigation options and report delinquencies and meet other servicing requirements.
Why it matters: FHA’s approach to providing flexibility in mortgage servicing aims to safeguard borrowers from the risk of foreclosure while promoting economic stability in communities rebuilding after natural disasters.
What’s next: MBA will continue to engage with FHA on policies concerning disaster relief.
For more information, please contact Darnell Peterson at (202) 557-2922 or Sara Singhas at (202) 557-2826.
MBA Leads Housing Coalition Letter to Congress on ROAD to Housing Act
On Tuesday, MBA led a coalition of 15 housing trade groups in a letter sent to all members of the U.S. House and Senate in support of the Renewing Opportunity in the American Dream to Housing Act (“ROAD to Housing Act,” S. 5027/H.R. 990), authored by Senator Tim Scott (R-SC) and Representative French Hill (R-AR) and recently introduced in the Senate (September) and House (October).
• Senator Scott and Congressman Hill will chair the Senate Banking, Housing, and Urban Affairs and House Financial Services Committees, respectively, at the start of the 119th Congress in January.
Go deeper: The proposed legislation offers reforms to current housing counseling and financial literacy, rental housing assistance, manufactured housing, and construction grant and small dollar lending programs. The legislation would also require annual congressional testimony from the Secretary of HUD and increased congressional oversight of the Federal Housing Administration’s Mutual Mortgage Insurance Fund.
Why it matters: The supportive joint letter highlights that the proposal is positioned to serve as a baseline for discussions of any housing program reauthorizations or reforms in both chambers of Congress next year. The letter also notes the groups’ strong collective belief that both legislative and regulatory reforms are needed to boost housing supply and improve affordability.
What they’re saying: In a press statement after the bill was introduced in the Senate, MBA President and CEO Bob Broeksmit, CMB, said, “MBA continues to be a fierce proponent for legislative reforms that increase housing supply and affordability. We will work with Senator Scott – and policymakers on both sides of the aisle – to build consensus and promote the enactment of workable solutions like those proposed in this bill.”
What’s next: MBA has been actively engaged with Senator Scott and Congressman Hill (and their fellow committee members on the Senate Banking and House Financial Services panels, respectively) on housing policy matters – and will continue that dialogue during the 119th Congress.
For more information, please contact Bill Killmer at (202) 557-2936, Ethan Saxon at (202) 557-2913, George Rogers at (202) 557-2797, and Madisyn Rhone at (202) 557-2741.
CFPB Director Testifies Before Senate Banking Committee
On Wednesday, the Senate Banking Committee held its last hearing in 2024, titled “Consumer Protection: Protecting Workers’ Money and Fighting for the Dignity of Work.” Director Rohit Chopra of the Consumer Financial Protection Bureau (CFPB) testified on his semi-annual report to Congress. A transcript of the hearing can be found here.
Why it matters: While much of the hearing was spent re-litigating the role and structure of the CFPB, Senators discussed rising housing costs, mortgage servicing rules, the use of algorithms in setting rents, and recent CFPB enforcement actions. Senators Tina Smith (D-MN) and Mike Rounds (R-SD) mentioned their bipartisan efforts to expand rural housing and their intent to continue working on housing issues in the new Congress.
What’s next: At the hearing, Chopra indicated he would not resign from his post but would wait to be relieved from his duties by incoming President Trump on January 20, 2025 (or shortly thereafter). The nomination of a new CFPB Director to serve in the Trump administration would result in the likelihood of changes to the agency’s resource allocations and enforcement/rulemaking practices and priorities.
For more information, please contact Ethan Saxon at (202) 557-2913, George Rogers at (202) 557-2797 or Justin Wiseman at (202) 557-2854.
State Regulators Approve NMLS Fee Increases
Last week, the Board of Directors of the Conference of State Bank Supervisors (CSBS) approved a set of Nationwide Multistate Licensing System (NMLS) fee increases that were subject to notice and comment earlier this year.
• The increases, which were approved as proposed, become effective on March 1, 2025. MBA previously submitted comments to state regulators questioning the proposal, noting that the NMLS did not explain how the funds generated by the additional costs to the industry would be used.
• MBA also made clear that since the NMLS serves as a nationwide regulatory system with mandatory compliance, it should be obliged to engage in a budgetary process similar to what CSBS’s state regulator members go through by providing transparency about the NMLS budget and the planned programmatic uses of any proposed fee increases.
Why it matters: The fee increases will be implemented for all mortgage, consumer finance, debt, and money services businesses applicants and licensees in the NMLS. Specifically, the proposal would increase from $100 to $120 in initial set-up/application and annual processing fees for banks and IMBs, among other increases.
What’s next: MBA will continue to engage with state regulators as they evaluate NMLS fees. The next NMLS fee review phase will occur next year and will related to business-to-business and ad-hoc reports. NMLS is planning a third fee review in 2026 on testing and education.
For more information, please visit the NMLS resource center, or contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.
Newly Adopted Illinois Rules Require IMB CRA Exam Fees on Jan. 1, 2025
Recently, the Illinois Department of Financial and Professional Regulation’s (IDFPR) rules to revise the fee structure for Illinois Community Reinvestment (ILCRA) exams of independent mortgage banks (IMBs) were adopted by the Joint Committee on Administrative Rules (see the Illinois Register, page 147).
• The new ILCRA exam fees for IMBs will be due by Jan. 1, 2025.
Go deeper: In August, IDFFPR proposed replacing the ILCRA examination fee with this annual fee on each Illinois licensed IMB based on their total loan volume regardless of whether an actual exam is performed. This annual assessment would cost roughly $22,000 a year for the largest IMBs. MBA’s previous comments strongly opposed the proposal and requested further cost analysis to understand the need for fee structure change as well as clarification to consider origination count.
In its comments, among other objections, MBA pointed out that it was highly inappropriate to base this fee on total national loan volume, and that IDFPR must narrow that scope to only loans on Illinois properties. The IDFPR agreed, and issued this important change, which will save MBA members thousands in annual fees. However, IDFPR’s previously proposed payment date for 2025 fees of November 1st was only delayed to January 1st, providing little notice to licensees.
What’s next: The first examinations for IMBs originating over 100 loans annually is set to begin February 1st, 2025. MBA will communicate any information regarding the examination schedule and how to assist IMBs’ preparation for these exams.
For more information, please visit the MBA State CRA Resource Center or contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
MBA Relaunches State Legislative Tracking Tool for Members
This week, MBA’s State Government Affairs program announced the return of its comprehensive database of state legislation, available to staff at member companies and current state association partners. Once a member logs into MBA’s website, they can track any current piece of real estate finance-related legislation in any state.
Go deeper: Members of MBA’s State Legislative and Regulatory Committee (SLRC) have seen the return of the biweekly email updates on the status of major bills; free monthly database trainings sessions will recommence in January.
Why it matters: The policy challenges facing member companies – particularly state-licensed firms – are voluminous, and the database will be tracking thousands of introduced bills. The system offers members a single and effective way to stay abreast and informed of any developments by “flagging” or “grouping bills” for automatic email updates.
What next: MBA will be utilizing the database to brief SLRC members and will also encourage its state partners to take advantage of its many functions for enhancing their member value and their voices in their respective state capitals.
For more information on the functions of the database, please contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.
To log in, click here. To sign up for the next training session or to be added to the SLRC for biweekly updates, please contact Ainsley Zimmer at (202) 557-2796.
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 – all complimentary to MBA members:
• Ten Things Your Company Must Do in 2025 – Dec. 17
• High Performance Negotiations – Lessons and Strategies – Dec. 17
• New Entrants in the Mortgage Industry and Their Winning Strategies – Jan. 16
• Fundamentals of Commercial Insurance Issues and Problems – Jan. 28
• Turning Data into Action: Enhancing Recruiting and Solving Loan Officer Performance Challenges – Feb. 4
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 at (202) 557-2931.
