MBA Advocacy Update: MAA Call to Action on Trigger Leads; MBA Letters to Regulators; NMLS Improvements
MBA Issues Senate-side MAA Call to Action on Trigger Leads Legislation
MBA issued a Mortgage Action Alliance (MAA) Call to Action last week that urges members to contact their Senators to vote for the Hagerty/Reed amendment (Senate Amendment 2358) that would add the Homebuyers Privacy Protection Act of 2024 to the Fiscal Year 2025 National Defense Authorization Act (NDAA).
This bipartisan amendment would, if passed, improve the homebuying process by curtailing the abusive use of mortgage credit “trigger leads.”
MBA encourages members to contact (or thank) their Senators and urge them to cosponsor S. 3502 (if they have not already) and, in turn, vote for the amendment to be offered by Senators Bill Hagerty (R-TN) and Jack Reed (D-RI) to the NDAA when it’s considered in the coming weeks.
Why it matters: Since last year, MBA members have worked to build bipartisan momentum in Congress for legislation to curb the abusive use of trigger leads.
A vote in the Senate to add the Homebuyers Privacy Protection Act to this year’s NDAA would be a critical step towards curtailing the practice of firms seeking to confuse mortgage applicants by inundating them with phone calls, texts, or direct mail solicitations.
What’s next: MBA and our coalition partners are working with Sens. Hagerty and Reed – the lead Senate bill (S. 3502) sponsors – and key committee leaders – to advance this proposal when the Senate debates the NDAA and potentially votes on amendments later this month.
For more information, please contact Ethan Saxon at (202) 557-2913, George Rogers at (202) 557-2797 or Jamey Lynch at (202) 557-2818.
MBA Joins Joint Trades Reg X Extension Request
On Wednesday, MBA joined a coalition of housing finance trade associations to request an additional 30-days (comments are currently due on September 9, 2024) to respond to the Consumer Financial Protection Bureau’s (the Bureau) recently announced mortgage servicing proposal.
Why it matters: The Bureau’s highly-anticipated Notice of Proposed Rulemaking (NPR) covers several complex mortgage servicing issues. Additional time allows the industry to develop thoughtful responses to the Bureau’s proposal, while simultaneously continuing the implementation of several new loss mitigation policies, such as Veterans Affairs Servicing Purchase (VASP) and the Federal Housing Administration’s (FHA) Payment Supplement.
Go deeper: The Bureau’s NPR amends the mortgage default servicing provisions of Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA) and adds new possible obligations for serving borrowers with limited English proficiency.
The proposal overhauls the existing loss mitigation rules to allow distressed borrowers to receive timely assistance immediately upon request and strengthens dual tracking protections by prohibiting servicers from advancing the foreclosure process unless the servicer has satisfied a “procedural safeguard.”
Notable changes to required processes also include expanding borrower communications and notices, including a requirement to communicate with borrowers in languages other than English.
What’s next: MBA will continue to push for additional time. In the meantime, members are encouraged to submit feedback on the proposal through MBA’s Loan Administration and Legal Issues and Regulatory Compliance Committees ahead of the comment deadline.
For more information, please contact Brendan Kelleher at (202) 557-2557 or Alisha Sears at (202) 557-2930.
MBA to FHFA: Expand FHLB Membership to IMBs and REITs
On Monday, MBA submitted comments to the Federal Housing Finance Agency (FHFA) on its Request for Input (RFI) on the mission of the Federal Home Loan Banks’ (FHLBanks).
FHFA’s RFI sought industry feedback on three key areas: (1) updating the regulatory statement of the FHLBank System’s mission to better reflect its appropriate role in the housing finance system; (2) developing metrics and thresholds to evaluate mission achievement; and (3) identifying how the FHLBanks could incorporate incentives for members with a strong and demonstrable connection to the FHLBank System’s mission.
In November 2023, FHFA released its FHLBank System at 100: Focusing on the Future report, its comprehensive review of the FHLB System in anticipation of the System’s centennial in 2032.
Why it matters: MBA’s letter reiterated its longstanding position that FHLB membership should be expanded to independent mortgage banks and real estate investment trusts with a “strong and demonstrable connection to the mission of the FHLBank System.”
The letter also:
Explained why expanding eligible collateral types – and then aligning collateral standards across the FHLBs – would also allow the FHLBs to better serve their mission, acknowledging that expanding both FHLB membership and the eligible collateral would require certain adjustments to the current system.
Called for harmonizing the acceptance of warehouse lines, which directly support housing finance activities, to all FHLBs
Encouraged FHFA to consider expanding types of eligible collateral to mortgage servicing rights (MSRs) and mortgage servicing advances
Go deeper: MBA also stressed the importance of expanding FHLB membership and maintaining the types of collateral that members can pledge under the current system in an October 2022 comment letter.
What’s next: MBA will remain engaged with FHFA, the FHLBs, and lawmakers to advocate for expanding membership to institutions that are almost exclusively focused on housing finance, while ensuring the continued safety and soundness of the FHLB system.
For more information, please contact Sasha Hewlett at (202) 557-2805.
MBA Requests Delay for ROV Policy Implementation
On Wednesday, MBA sent a letter to FHFA and the Department of Housing and Urban Development (HUD) asking for a six-month delay in implementing their revised Reconsideration of Value (ROV) policies, which were each announced in May 2024.
The new policies require lenders to establish an ROV process for borrowers to dispute appraisal valuations and provide them with a comprehensive disclosure outlining the ROV procedure at the loan application stage, among other changes.
Go deeper: Many MBA members have reported that it will be impossible to meet the August 29, 2024, Fannie Mae and Freddie Mac (GSEs) deadline or the September 2, 2024, FHA deadline, as many of the required changes are extensive, involving significant modifications to lender LOS, training programs, and technology systems.
MBA also met with FHFA and HUD staff earlier this week to discuss these concerns.
Why it matters: MBA recognizes the value of ROV policies as a helpful tool in ensuring fairness, transparency, and accuracy in property valuations. An extension will allow lenders and their vendors to ensure that all necessary measures are in place to comply with the new standards, enabling the industry to better support the objectives of HUD and FHFA.
What’s next: MBA will continue to engage with FHFA and HUD staff to secure additional implementation time.
For more information, please contact Darnell Peterson at (202) 557-2922.
MBA Asks VA for Additional Time on Transition to Loan Review API
On Thursday, MBA sent a letter to the Department of Veterans Affairs (VA) requesting a 12-month delay of the requirement to utilize the new VA Loan Review API in lieu of WebLGY for files selected for full-file loan review (FFLR).
The new API was originally announced in January 2023 as an optional feature. In June 2024, VA made it a mandatory program feature with little advanced notice, requiring all loan-level documentation to be submitted via the new API for files requiring a full-file loan review (FFLR) beginning on November 4, 2024.
Go deeper: After this date, lenders will no longer be able to submit FFLR documents through WebLGY. The sudden shift from an optional feature to a mandatory requirement has left many lenders scrambling at the last minute to modify this workflow and train staff.
Why it matters: Additional time will allow for a proper rollout, including more time for training, troubleshooting, a smoother transition, and more favorable outcomes for the VA Loan Guaranty Service.
What’s next: MBA will continue to engage with VA to delay the sunset of WebLGY, as well as relay ongoing concerns from members related to the implementation of this process change.
For more information, please contact Darnell Peterson at (202) 557-2922.
HUD Proposes New Rule to Govern Mortgage Note Sales
On Tuesday, HUD proposed a new rule to govern the sale of seriously delinquent mortgage notes insured by FHA.
Why it matters: To maximize recovery for FHA’s Mutual Mortgage Insurance Fund, the mortgage note sale program allows FHA to facilitate the sale of seriously delinquent loans to qualified purchasers for both its single-family forward mortgages and Home Equity Conversion Mortgages (HECM). The proposed rules establish a permanent note sale program. HUD’s press release is here.
Dig deeper: Similar to FHA’s 2022 updates to the Claims Without Conveyance of Title program, HUD’s proposed rule on note sales also imposes mission-oriented post-sale requirements, such as a ‘first-look’ for owner-occupants, non-profits, and government entities when notes are sold.
What’s next: MBA will continue to review HUD’s proposal and provide a summary to members. Members are encouraged to submit feedback through MBA’s Loan Administration Committee ahead of the September 16, 2024, deadline.
For more information, please contact Brendan Kelleher at (202) 557-2557.
Senate Passes VA Home Loan Awareness Act
Last week, the Senate passed by unanimous consent the VA Home Loan Awareness Act (S.3068), which modifies the Uniform Residential Loan Application (URLA) to notify applicants with military service that they may qualify for a VA Home Loan.
The text of the legislation, introduced by Senator Mike Braun (R-IN), can be found here. For months, MBA has engaged with the bill’s author (and other sponsors) to try and mitigate concerns regarding the bill’s implementation requirements.
Why it matters: The legislation provides six months after enactment for the URLA change to be implemented and also requires a U.S. Government Office of Accountability report to Congress within 18 months of enactment to check on whether no less than 80 percent of lenders have included the newly required information on their forms.
What’s next: The full House is considered highly likely to pass this legislation under expedited procedures (“suspension of the rules”) later this year.
For more information, please contact George Rogers at (202) 557-2797, Ethan Saxon at (202) 557-2913, Rachel Kelley at (202) 557-2816 or Madisyn Rhone at (202) 557-2741.
CSBS Announces Technical Improvements to NMLS
On Tuesday, the Conference of State Bank Supervisors (CSBS) announced that the first phase of a number of enhancements for the Nationwide Multistate Licensing System & Registry (NMLS) will be released on July 20.
The effort is a response to requests for system improvements in recent years, and will apply to all industries being managed by the NMLS, including mortgage.
One change will allow users to create a username and password without having to contact the NMLS Call Center. Another update will allow users who have multiple NMLS accounts to be able to access their accounts using one username and password.
Why it matters: CSBS and state regulators are currently proposing a new and increased fee structure for the 600,000 industry users of the NMLS and appear eager to demonstrate customer value during this process.
What’s next: CSBS indicates that the next phase of enhancements to further modernize NMLS will focus on making it easier for individuals in the mortgage industry to apply for a state license(s) in NMLS.
For more information and the full list of updates, visit the NMLS Modernization page or contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
Participate in the MAA Advocacy in August Campaign!
MBA’s “Advocacy in August” campaign is just two weeks away! 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 legislative issues – and by arranging to meet with elected officials back in their states or districts.
Why it matters: Like the National Advocacy Conference (NAC), “Advocacy in August” is an important political engagement strategy for our industry to help advance key policy and advocacy priorities. Participation through these types of meetings allows us to build and strengthen individual relationships during the traditional congressional August recess.
What’s next: MBA’s Legislative and Political Affairs team will once again coordinate in-person and virtual meetings in 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:
Adding Reverse Mortgages to Your Business Line: The Roadmap – July 23
Rethink Everything: You “Know” To Be A Next Gen Loan Officer – A Deeper Dive With the Writers & Experts Webinar Series: Advocacy – August 1
What Value Will AI Bring to the Mortgage Industry? – August 13
Benchmarking & Performance Ratios Mortgage Bankers Must Know – August 20
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.
