MBA Advocacy Update: House Hearing Explores Housing Solutions
House Hearing Explores Housing Solutions
• Last week, the House Financial Services Subcommittee on Housing and Insurance held a hearing to address critical issues impacting housing affordability and development.
Republicans denounced regulatory barriers, including environmental rules, as significant impediments that unduly hinder housing supply. Democrats emphasized the benefits of energy efficiency regulations while also emphasizing their concerns regarding rising property insurance costs.
Why it matters: The hearing underscored the need for reforms to facilitate affordable housing solutions amid rising costs and regulatory complexities. Balancing energy efficiency mandates with affordability challenges remains a pivotal element of sustainable housing development.
• Go deeper: Rep. Nikema Williams (D-GA) used the hearing as an opportunity to highlight her HEIRS Act (H.R. 8127), bipartisan legislation that would establish a two-prong grant program to provide legal assistance for the heirs of property owners to help them establish clear title. The bill would also incentivize states to adopt a uniform process to establish and preserve ownership rights in a more cost-effective manner.
• Read the MBA-signed coalition letter supporting the bipartisan bill.
What’s next: A full hearing summary can be found here. MBA will continue to work with its coalition partners to advance policies that help combat barriers to housing affordability and supply.
For more information, please contact Rachel Kelley at (202) 557-2816 or Madisyn Rhone at (202) 557-2741.
Senate Appropriators Advance FY 2025 “T-HUD” Funding Bill
Thursday, the full Senate Committee on Appropriations completed its markup of its preferred version of the Transportation and Housing and Urban Development (“T-HUD”) funding measure for FY25.
• The bill was approved by a near-unanimous vote of 28-1 vote by the panel. A full summary of the bill is available here. The final bill text and its accompanying report is available here.
Why it matters: In contrast to the House version of its FY25 T-HUD funding bill, the Senate bill’s text (just released today) honors the Biden administration’s (and MBA-supported) request for FHA administrative expenses ($155 million) and multifamily commitment authority ($35 billion). Also, per MBA’s recommendation, the Senate bill fully funds HUD’s request of $67 million to cover its Ginnie Mae-related administrative expenses (including personnel and consultants) – a $13 million increase over FY24 levels.
What’s next: MBA will continue to analyze the differences between the House and Senate FY25 T-HUD bills against our requested priorities – and push for the most favorable resolution of those differences in a final “omnibus” or “minibus” bill – most likely during a “lame-duck” legislative session after the November elections.
For more information, please contact Ethan Saxon at (202) 557-2913 or George Rogers at (202) 557-2797.
Agencies Issue Final Guidance on Reconsiderations of Value
Recently, the Federal Reserve, the Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and the Office of the Comptroller Currency (OCC) issued final guidance on reconsiderations of value (ROV) for residential real estate valuations.
• The guidance outlines risks associated with deficient valuations and explains how lenders can incorporate ROV processes into their risk management practices. It includes examples for lenders on policies and procedures to identify, address, and mitigate risks, including discrimination in real estate valuations.
• This guidance follows a letter from the MBA to the Federal Housing Finance Agency (FHFA) and HUD requesting a six-month delay in implementing their revised ROV policies, which were announced in May 2024.
Why it matters: This additional guidance helps lenders further manage the risks of inaccurate valuations that could lead to overvaluing or undervaluing borrowers’ homes.
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.
Senate Requires VA to Report on Partial Claims Program
Recently, the full Senate Appropriations Committee approved the Military Construction and Veterans Affairs Appropriations Act for Fiscal Year 2025, which includes the annual funding the Department of Veterans Affairs (VA) Home Loan program.
• The committee report accompanying the legislation “directs the Department to provide a report… no later than 90 days after enactment of this act, with information on efforts undertaken to assist veterans impacted by the abrupt end of the Veterans Assistance Partial Claim Payment [VAPCP] Program.”
Go deeper: The language states that the report “shall include an overview of the implementation of the Veterans Affairs Service Purchasing Program (VASP) and identify services available and needed to counsel veterans on avoiding or recovering from delinquency and foreclosure.”
Why it matters: The Senate Appropriations Committee expressed concern throughout its report over the end of the VA partial claim program that mortgage servicers successfully implemented to help Veterans during the COIVD-19 pandemic, and urged the VA to provide immediate assistance to those impacted. These views are consistent with MBA’s efforts to ensure Veterans have access to the same loss mitigation options as other homeowners.
What’s next: MBA will continue to work with House and Senate lawmakers to authorize permanent partial claim authority, while also encouraging the VA to appropriately finalize its implementation of VASP.
For more information, please contact Ethan Saxon at (202) 557-2913 or George Rogers at (202) 557-2797.
House Financial Services Committee Explores AI Applications in Housing
Last Wednesday, the House Financial Services Committee held a hearing entitled, “AI Innovation Explored: Insights into AI Applications in Financial Services and Housing.”
• The hearing follows the Committee’s recent publication of its bipartisan staff report on artificial intelligence (AI).
• Republican lawmakers argued that the existing laws and regulations governing the financial services sector are already sufficient to oversee new AI technologies, particularly due to the third-party vendor requirements for financial institutions.
• See a full summary of the hearing here, and watch a livestream of the full hearing here.
Why it matters: Many Democrats raised concerns about the potential for discrimination perpetuated by AI tools, especially discrimination in the housing and rental sectors due to third party tenant screening, automated valuation models (AVM), and automated mortgage underwriting. A few Democrats also called for legislative action to address algorithmic discrimination.
Go deeper: There was also extensive discussion of industry standards to maintain the safety and fairness of AI models, such as utilizing quality datasets, maintaining transparency, mandating human involvement, and testing models. A few lawmakers and witnesses also explored the possibility of congressional action to implement a single uniform digital identification standard to address the fraud risks posed by AI, such as “deep fakes” and synthetic identities.
Some members agreed on the need to pass bipartisan legislation to study and combat “deep fakes.”
What’s next: MBA will continue to work with lawmakers as they develop legislation and look to our industry for information on the use of this increasingly important technology by our sector.
For more information, please contact Rachel Kelley at (202) 557-2816 or Madisyn Rhone at (202) 557-2741.
House Committee on Administration Holds Hearing on Supreme Court “Chevron” Decision
Last Tuesday, the House Committee on Administration held a hearing to examine the future of congressional policymaking following the Supreme Court’s recent ruling in Loper Bright Enterprises v. Raimondo, which overturned a previous Court decision compelling courts to defer to federal agencies for their reasonable interpretations of ambiguous statutory text — commonly referred to as “Chevron deference.”
• Read a hearing summary here or watch a livestream of it here.
Why it matters: Given that the Loper Bright ruling will have sweeping implications for future rulemaking processes (see MBA’s summary of the decision’s implications here), members of the Committee questioned witnesses on possible solutions to expand Congress’ regulatory authority and the level of precision needed to craft meaningful legislation in the post-Chevron era.
• Democrats and Republicans strongly disagreed about the impact of the Supreme Court’s ruling in this case. While GOP lawmakers on the panel felt the decision will re-establish Congress’s primary role in the statutory construction of new law – and subsequent regulation, Democrats countered that it will instead unintentionally decrease the power of the Legislative Branch by empowering courts at the expense of Congress.
• Witnesses fielded questions from lawmakers on both sides of the aisle as to whether Congress should take action in the aftermath of the decision by: (1) establishing a dedicated regulatory authority function within Congress that would involve hiring additional staff with the necessary subject-matter expertise; and/or (2) enhancing bill drafting techniques to ensure clarity in statutory texts.
What’s next: MBA will continue to follow the ramifications resulting from this landmark ruling – both on Capitol Hill and beyond.
For more information, please contact Justin Wiseman at (202) 557-2854, Rachel Kelley at (202) 557-2816, or Madisyn Rhone at (202) 557-2741.
MBA Submits Comments Questioning NMLS Fee Increase Proposal
On Monday, MBA submitted comments to state regulators questioning their recent proposal to increase Nationwide Multistate Licensing System (NMLS) fees for member companies.
• MBA noted that the proposal lacks the necessary specifics to determine if the suggested fee increases are reasonable because the NMLS did not explain how the funds generated by the additional costs to the industry would be used.
• The letter 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 their state regulator members go through with respect to budget authority or fee increases and providing transparency about the planned programmatic uses of these increased revenues.
Go deeper: The proposed increases would take effect in March 2025 and would 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 independent mortgage banks (IMBs), among other increases.
Why it matters: Real estate finance companies have been, and remain, the largest payor of fees for a system that has significantly expanded to numerous non-mortgage license types. MBA wants to ensure that the expanded NMLS mission is being appropriately funded by the other nonmortgage licensees benefiting today from the many years of mortgage industry investment.
What’s next: MBA will continue to engage with state regulators and discuss the upcoming conference of the American Association of Residential Mortgage Regulators (AARMR).
For more information, please contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.
Minnesota Regulators Issue Interpretive Guidance: Use APOR for Max Interest Rate Calculation
Recently, the Minnesota Commerce Department (Department) issued an interpretive opinion letter instructing industry to substitute the Average Prime Offer Rate (APOR) for the Fannie Mae Required Net Yield index (RNYI) when calculating the interest rate threshold for high cost loan rules, starting Aug. 1, 2024.
• The Department outlines the conflict now in statute which previously relied on Fannie Mae’s RNYI. Fannie Mae announced the planned retirement earlier this year and fully retired it on June 3, 2024, which did not provide opportunity for Minnesota to enact legislation.
Go deeper: Minnesota joins South Carolina in relying on interpretive guidance until legislation can be enacted. By substituting the index in state law to rely on APOR, the state provides alignment with Federal definitions and allows lenders to apply a known index into the calculation.
Why it matters: Minnesota is one of five states previously relying on the Fannie or Freddie Required Net Yield Index. Without addressing this conflict in statute, lenders would not be able to calculate the interest rate threshold for on certain high cost loan products per Minnesota Stat. § 47.20, subd. 4a(a). The action by the Department provides a stop gap measure for industry to continue loan production in compliance with state statutes.
What’s next: Arkansas, Minnesota, and South Carolina will eventually require legislation to update and remove the Fannie Mae or Freddie Mac index by statute. MBA’s state partners are working with the regulators or attorneys general in their respective states to find opportunities to resolve this issue. MBA and its state partners will support all three states as they pursue legislation in 2025.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire at (202) 557-2870.
[VIDEO]: mPower Moments: On the Importance of Putting Yourself First with MBA’s Jamika Adams
mPower Founder Marcia M. Davies sits down with Jamika Adams, MBA’s Board Coordinator and Senior Executive Assistant, for an inspiring conversation on her career journey at MBA and why she decided to return to her current role following a move to another department at MBA.
Go deeper: Adams also discusses the importance of creating opportunities that best fit for your career and not worrying about how others may react to your choices. She also emphasizes the value of work-life balance and clearly communicating your needs so that you can continue to be successful while also managing personal life and obligations.
To watch more mPower Moments, click here.
For more information, please contact Marcia Davies at (202) 557-2707.
Participate in the MAA Advocacy in August Campaign!
MBA’s “Advocacy in August” campaign starts next week! 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: 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 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:
• Rethink Everything: You “Know” To Be A Next Gen Loan Officer – A Deeper Dive With the Writers & Experts Webinar Series: Advocacy – Aug. 1
• What Value Will AI Bring to the Mortgage Industry? – Aug. 13
• Benchmarking & Performance Ratios Mortgage Bankers Must Know – Aug. 20
• Understanding Consumers, Buyers, and Uses of Accessory Dwelling Units – Aug. 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.
