MBA Advocacy Update: Federal Reserve Maintains Federal Funds Rate; Treasury Secretary Yellen Unveils “Green Book,” Defends Biden FY2025 Budget Proposal
Federal Reserve Maintains Federal Funds Rate
The Federal Reserve in its ongoing efforts to slow inflation decided to hold the federal funds rate to a target range of 5.25-5.50% on Wednesday.
Why it matters: The FOMC emphasized that, “the Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion. The Committee will maintain the monthly redemption cap on agency debt and agency mortgage‑backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.”
What they are saying: Read MBA SVP and Chief Economist Mike Fratantoni’s full statement here.
For more information, please contact Mike Fratantoni at (202) 557-2935.
Treasury Secretary Yellen Unveils “Green Book,” Defends Biden FY2025 Budget Proposal
On Tuesday, Treasury Secretary Janet Yellen testified before the House Ways & Means Committee to detail President Joe Biden’s Fiscal Year (FY) 2025 Budget request. Her statements and responses to committee members’ questions covered: the Biden administration’s tax proposals; the expiration and potential renewal of key provisions of the 2017 Tax Cuts and Jobs Act (TCJA); the implementation of the Inflation Reduction Act (IRA); the need for expansion and improvement of the Low-Income Housing Tax Credit (LIHTC) program; and additional key economic and tax policy issues.
• A full summary of the hearing can be found here.
Why it matters: Yellen’s testimony and question and answer session touched on various aspects of economic policy that impact the mortgage banking industry – from proposed tax incentives that affect housing affordability to supply chain resilience and IRS modernization.
Go deeper: Treasury Secretary Janet Yellen unveiled the Biden FY25 “Green Book,” which contains an annual inventory of key tax proposals and their accompanying federal revenue and economic impacts.
What’s next: The hearing dialogue between Yellen and committee members provided a preview of the expected tax debate regarding TJCA provisions in 2025 – including the consideration of proposals that could materially impact the real estate finance industry writ large.
For more information, please contact Madisyn Rhone at (202) 557-2741, Rachel Kelley at (202) 557-2816, and/or Bill Killmer at (202) 557-2736.
FHFA Releases Fair Lending Final Rule and Publishes Updates to Equitable Housing Finance Plans
Last week, the Federal Housing Finance Agency (FHFA) announced a Final Rule addressing fair lending practices and oversight and Fannie Mae and Freddie Mac’s (the GSEs) Equitable Housing Finance Plans (EHFPs). The final rule, which formalizes many existing requirements related to fair lending, codifies in regulation the EHFPs, the required collection of homeownership education, housing counseling, and language preference information from the Supplemental Consumer Information Form (SCIF), and adds oversight of unfair or deceptive acts or practices (UDAP) to FHFA’s fair housing and fair lending oversight programs.
• Along with this announcement, FHFA also published the GSEs’ 2024 EHFPs as well as their 2023 EHFP Performance Reports. The rule also includes equitable housing requirements for the Federal Home Loan Banks.
Why it matters: MBA welcomed FHFA’s proposal to codify the EHFPs and their associated practices into regulation, however we expressed concern regarding FHFA’s use of unfair or deceptive acts or practices (UDAP) as a standard for Fair Housing and Fair Lending Compliance. FHFA addressed these concerns and provided language clarifying that their UDAP authority only extends to the regulated entities and is not intended to interfere with or add regulation for primary market entities that are already subject to this regulation.
What’s next: The Final Rule is effective 60 days after publication to the Federal Register with the exception of the requirement that the Federal Home Loan Banks provide reporting on their efforts to address barriers to sustainable housing opportunities, which goes into effect February 15, 2026. MBA will continue to review the final rule in the coming days to determine the full scope of its impacts. MBA looks forward to continued engagement with FHFA on this and other critically important housing issues.
For more information, please contact Sasha Hewlett at (202) 557-2805.
HUD and the GSEs Release Long Awaited ROV Guidelines
On Wednesday, HUD, in alignment with Fannie Mae and Freddie Mac, (the GSEs) published their guidelines concerning Reconsideration of Value (ROV) for appraisals. These guidelines require lenders to establish an ROV process for borrowers to dispute appraisals and provide them with a comprehensive disclosure outlining the ROV procedure at the loan application stage. Furthermore, lenders must standardize communication with appraisers and set a timeframe for ROV responses. The rules also set standards for how to handle allegations of appraisal bias.
Go deeper: Although lender requirements are consistent, there exists a disparity between Federal Housing Administration (FHA) and the GSEs regarding the party responsible for covering the cost for the second appraisal. While the GSEs have not specified, FHA prohibits borrowers from incurring this expense. Borrowers will be able request one ROV request per appraisal.
Why it matters: A ROV is a request to an appraiser to re-assess the appraised value of a property due to potential appraisal reporting deficiencies or inappropriate selection of comparable properties, or based upon additional information the appraiser should consider.
What’s next: The GSE guidelines will become effective on August 29, 2024, while FHA’s will take effect on September 2, 2024. MBA will continue to engage with HUD, the VA, the USDA, and the GSEs and gather member feedback on loan production issues through the Residential Loan Production Committee and Government Loan Production Subcommittee.
For more information, please contact Darnell Peterson at (202) 557-2922.
Acting Secretary Todman Testifies Before Appropriators on HUD’s FY2025 Budget Request
On Tuesday and Wednesday, Acting Secretary Adrianne Todman testified before the Transportation and HUD (T-HUD) subcommittees of the House and Senate Appropriations Committees on HUD’s FY 2025 budget request. A summary of the Senate hearing can be found here. A summary of the House hearing can be found here.
Why it matters: Todman fielded questions on the FY 2025 budget request’s funding for proposals designed to expand the nation’s housing supply, address zoning barriers, disaster assistance, and a series of potential programmatic reforms. Both Democrats and Republicans emphasized the importance of expanding the nation’s housing supply within the constraints of a “flat” HUD budget.
What’s next: Congress will proceed to markup the twelve individual FY 2025 appropriations bills–including House and Senate versions of the T-HUD funding measure. MBA has submitted its annual letter to appropriators outlining priorities for the HUD budget (as well as Veterans Affairs (VA) and the Department of Agriculture (USDA) budget proposals) that impact MBA members who utilize the key federal housing programs.
For more information, please contact Ethan Saxon at (202) 557-2913, George Rogers at (202) 557-2797, Rachel Kelly at (202) 557 2816, or Madisyn Rhone at (202) 557-2741.
Freddie Mac Announces Expansion of Use of Attorney Opinion Title Letters
On Wednesday, Freddie Mac announced that it updated requirements for using attorney opinion of title letters (AOLs). Specifically, Freddie Mac has expanded the types of mortgages that are eligible for delivery with an attorney opinion of title letter, including:
• Mortgages secured by a property located in all U.S. jurisdictions, unless prohibited by law or identified as an ineligible transaction type in Section 4702.3
• Mortgages secured by a unit in a Condominium Project,
• Mortgages secured by a property subject to restrictive agreements or restrictive covenants, and
This Guide update also includes additional specificity for both the attorney opinion of title letter and attorney requirements. Guide impacts occur in Sections 4702.1, 4702.3, 4702.4 and 4702.7.
Why it matters: This announcement removes one of the largest identified impediments to the broader adoption of AOLs – the customarily accepted geographical requirements – on the Freddie side. The acceptance of AOLs for condos and in areas with deed restrictions also potentially enables broader usage.
What’s next: These changes are a necessary pre-condition for the possible broader adoption of AOLs on Freddie Mac loans, but it remains to be seen whether lenders will choose to use them, or customers will be aware of the option. MBA continues to monitor developments in the title insurance space.
For more information, please contact Justin Wiseman at (202) 557- 2854.
MBA and NRMLA Submit Joint Letter to HUD on HECM Application and Origination Documents
Recently, MBA and National Reverse Mortgage Lenders Association (NRMLA) submitted a joint comment letter in response to HUD’s request for comments on FHA’s HECM application and origination documents. The letter supports HUD’s proposed transition to Form 1003 and Form HUD 92900-A with Form HUD 92900–C for reverse mortgages. However, MBA and NRMLA emphasize the importance of soliciting HECM mortgagees’ feedback on the new HUD 92900-C before switching from the FNMA-1009/HUD 92900-A. Additionally, we request that HECM mortgagees be given a minimum of 120 days to implement the new forms.
Why it matters: HUD’s proposed changes closely align HECM loans with FHA forward mortgages while further ensuring the safety and soundness of the Mutual Mortgage Insurance Fund (MMI) and the interests of seniors and potential borrowers.
What’s next: MBA will continue to engage with HECM mortgagees and HUD on opportunities to ensure that the borrowers are clear on the HECM product features and the durability of the FHA MMI Fund.
For more information, please contact John McMullen, AMP, at (202) 557-2796.
Remote Work Updates: Oklahoma Signs Legislation & Nevada Proposes Regulations
Oklahoma Governor Kevin Stitt signed legislation to permit Mortgage Loan Originators (MLOs) to work remotely, SB 1492. Ahead of this signature, Oklahoma MBA (OMBA) and MBA signed a joint letter in support to assure the Governor understood the fee structure changes were industry negotiated and supported. With the advancement of remote work, the industry worked with regulators to understand and support needed updates to our supervisory partners.
Additionally, Nevada proposed regulations following the enactment of SB 355 which allowed remote work. The proposal includes a more restrictive view on remote work. The Nevada Mortgage Lenders Association and MBA plan to coordinate comment to ensure the spirit and purpose of SB 355 is not lost.
Why it matters: Oklahoma is the 30th state to permanently enact remote work since COVID and will be the third to enact legislation this year, behind Iowa (HF 2392) and West Virginia (SB 613). The Nevada proposal restricting the flexibility provided by SB 355 moves this policy in the wrong direction, away from creating a nimbler and more sustainable workforce in times of natural disasters.
What’s next: MBA will continue to work with its members and partner state associations to support remote work policies consistent with the association’s model. MBA will be gathering feedback on the Nevada proposal to help inform industry comment letters. Please provide your comments to Liz Facemire (lfacemire@mba.org) by Friday May 10th.
For more information, please visit the MBA’s Remote Work Policies resource center or contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.
Healey Signs Massachusetts Bill Restoring Remote Counseling for Reverse Loans
On Tuesday, Massachusetts Governor Maura Healey signed legislation, H.4582, which included H.4466 language that reinstates provisions to permanently allow remote counseling options for reverse mortgage loans. H.4582 provisions are went into effect March 31, 2024.
• In April, MBA along with the Massachusetts Mortgage Bankers Association (MMBA), issued a Mortgage Action Alliance call to action for members to contact their representatives to allow telephone and video counseling for reverse mortgages in Massachusetts to continue.
• Thanks to MMBA’s advocacy, language was included in the House version of an emergency funding bill (sections 11 & 12 of H.4466 – now signed H.4582), but the Senate version did not. The call to action was issued while a six-member conference committee worked to resolve final language differences between the two chambers and to include the House language in a final bill.
• The provision in state law, which permitted these forms of consumer counseling on reverse mortgage loans, expired on March 31, 2024.
Why it matters: MMBA’s efforts to retain flexibilities proven through the pandemic provide another advancement for our industry to operate safely and efficiently while meeting consumer where they are located. Any instance of embracing remote policies moves the mortgage industry into a more flexible workforce that adapts to changing consumer demands and expectations.
What’s next: MBA will continue to support efforts to advance aspects of remote work throughout the mortgage process to meet today’s consumer demands and create a more sustainable and flexible industry.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire at (202) 557-2870.
Hawaii Legislation to Reinstate AMC Licensing Sent to Governor
On Wednesday, the Hawaii legislature passed legislation, HB 2641, to reestablish an appraisal management company (AMC) licensing standards program within the Department of Commerce and Consumer Affairs (DCCA). The Hawaii Legislature had created the program in 2017, but it failed to reauthorize it before adjourning for the year in 2023. Further complicating matters, the DCCA delayed notification to licensed AMCs, finally sending communication on August 29th that the program had ended June 30th and all AMC licenses we no longer valid.
Go deeper: The MBA of Hawaii (MBAHI) and MBA sought to amend the current version of the bill to include language that would provide a safe harbor for the gap through testimony and other advocacy efforts, but the state was unwilling to accept responsibility for the lapse in licensing. This legislation will re-start licensing September 1, 2024.
Why it matters: Dodd-Frank requires state licensure for lenders to utilize AMCs for Federally Related Transactions
What’s next: The Governor is expected to sign the bill as late as July 2024. MBA will continue to support efforts by MBAHI and other trades to urge the Governor to sign HB 2641 sooner, so DCCA has more time to re-create the AMC program.
For more information, please contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.
Illinois Regulators Finalize Problematic Community Reinvestment Act Regulations
On Wednesday, the Illinois Department of Financial and Professional Regulation (IDFPR) posted final regulations for the Illinois Community Reinvestment Act on their website. The finalization of these regulations comes after years of advocacy and warnings from MBA and the Illinois MBA (ILMBA) and two attempts at finalizing these regulations. In the last year, MBA and ILMBA attended numerous meetings and submitted comments urging the IDFPR and the Joint Committee on Administrative Rules (JCAR) to reconsider certain elements of the rules.
Go deeper: The significant concerns raised start with the continued change in regulatory direction by IDFPR, because the revisions diverge from: the language of the enacted Illinois CRA statute; IDFPR’s own public commentary about its direction for the rules in written public statements and stakeholder meetings dating back to the Spring of 2021; and the proposed rules released for comment in December 2022. Despite continued engagement by industry, the final rules retain problematic elements both MBA and ILMBA objected to, including the misconception of “loan churning” in the space and an inappropriate legal standard to analyze lenders control over independent appraisers and possible bias.
Why it matters: IDFPR rejected MBA’s suggestion to rely on HMDA lending data as the independent objective metric for establishing annual examination priorities for IMBs. The rules will also establish an unnecessarily narrow approach that could upend lending to LMI borrowers by counting only the origination and then initial sale of a mortgage loan as eligible for CRA credit along with conflicting language around third-party lending which may disrupt the broker/lender relationship. Lastly, the final language aims to hold lenders accountable for decisions made by independent appraiser.
What’s next: MBA and ILMBA will continue to monitor the situation as the rules take effect and pursue any avenues to rectify the harm seen in these rules.
For more information please visit MBA’s State CRA resource page or contact William Kooper (202) 557-2727 or Liz Facemire (202) 557-2870.
Mortgage Call Report Version 6 (MCRV6) Office Hours Next Monday
Monday, the Conference of State Bank Supervisors (CSBS) will host its biweekly “Office Hours” on MCRV6 implementation. MBA urges members to participate in these office hours to ensure all issues are addressed prior to the May 2024 filing date. CSBS has continued to make updates to their FAQs document, provided a list of states who have agreed to use the State Specific Supplemental Form (SSSF), and updated the list states offering a grace period for Q1 2024 MCRV6 filings.
Go deeper: All updates and resources can be found on the new Mortgage Call Report page, including a self-led course on MCRV6. To join office hours, use the following link (valid for all sessions) and ID and Passcode:
• Link: https://us02web.zoom.us/j/82102995323?pwd=dTV6WHdXWjZNUWVsQzVmVmpUdTR2UT09
• Meeting ID: 821 0299 5323
• Passcode: 102696
Why is this important: Licensees should already be collecting the appropriate MCR data for this new version and preparing to file.
What’s next: The office hours series is expected to end on May 20th just after the first quarter filing deadline. Additionally, MBA will record a live conversation on MCRV6 implementation featuring CSBS staff and the leadership of the MBA State Legislative & Regulatory Committee. To submit questions for this conversation please email questions@mba.org by close of business Monday, May 6th. All names/companies who submit questions will remain confidential.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
COMBOG Chair Testifies on Health of CRE Market; Identifies Regulatory Barriers
On Tuesday, current MBA COMBOG Chairman Jeff Weidell, CEO of Northmarq, testified before the House Oversight & Accountability’s Health Care & Financial Services Subcommittee at a hearing titled, “Health of the Commercial Real Estate Markets and Removing Regulatory Hurdles to Ensure Continued Strength.”
• Read Weidell’s written and oral statements here and here; watch a recording of the hearing here.
Why it matters: Weidell’s testimony and responses to lawmakers’ questions centered on the need for changes to the Department of Housing and Urban Development’s (HUD) “hidden and unnecessary fees, which make it a multifamily lender ‘of last resort.’” He also indicated support for increasing affordable housing stock through tax changes that facilitate office conversions, and a reproposal of the Basel III Endgame proposed rule.
Go deeper: Weidell drew careful distinctions between today’s current CRE market conditions versus those of the Great Recession in an extended “question and answer” dialogue with the subcommittee’s Chair and Ranking Member near the close of the hearing.
What’s next: MBA will continue to work with elected officials and regulators on impactful ways to continue to maintain an appetite for investment in commercial real estate – and increase the supply of affordable rental housing.
For more information, please contact Madisyn Rhone at (202) 557-2741 or Rachel Kelley at (202) 557-2816.
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:
• Basics of Commercial Loan Closing and Loan Documentation – May 9
• Using Data and Technology to Connect with Today’s Buyers to Increase Homeownership – May 14
• Rethink Everything: You “Know” To Be a Next Gen Loan Officer – A Deeper Dive with the Writers & Experts Webinar Series: Show Up on Video – May 14
• Fundamentals of Secondary Marketing: Broad Concepts Every Mortgage Professional Should Know – May 15
• Introduction to Commercial Mortgage-Backed Securities – May 23
• Culturally Competent Marketing and Messaging for Hispanic Homebuyers and Homeowners – May 30
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.
