MBA Advocacy Update: Bob Broeksmit on Trigger Leads; New FHFA FHLB Proposal; California Updates
FHFA Proposes Rule on FHLB Unsecured Credit Limits
Last week, the Federal Housing Finance Agency (FHFA) issued a proposed rulemaking to expand access to liquidity for the Federal Home Loan Banks (FHLBs).
The proposed rule would align the treatment of interest-bearing deposit accounts (IBDAs) and other authorized overnight investments with the treatment of Federal Funds sales.
Currently, overnight federal funds are excluded from the more restrictive “general limit” on unsecured credit to a single counterparty and are limited only by the higher “overall limit.” Updating this regulatory treatment may provide greater flexibility and improved cost to yield than overnight federal funds and improve the FHLBs’ ability to provide liquidity to members.
Go deeper: This rulemaking is a result of industry engagement following the release of FHFA’s FHLB at 100 Report. Director Sandra Thompson noted that these modernizations will create more flexibility for the FHLBanks in their liquidity management, which will allow them to better serve their members, particularly during periods of market stress.
What’s next: The public is invited to submit comments on the proposed rule within 60 days of publication in the Federal Register. MBA will review the proposed rule in the coming weeks and will continue to engage with FHFA on this and other critical housing issues.
For more information, please contact Sasha Hewlett at (202) 557-2805.
FHA Announces Updates to its FHA Catalyst System
On September 27, the Federal Housing Administration (FHA) announced updates to its Catalyst software platform’s Electronic Appraisal Delivery (EAD) module. These updates follow earlier efforts to mandate appraisal submissions on the platform – a requirement that was later rescinded.
Go deeper: In 2021, FHA proposed requiring appraisal submissions through the EAD module. However, in September 2022, the agency decided to reassess the module to improve efficiency, leading to the rescission of the submission requirement by Mortgagee Letter (ML) 2022-19. FHA also halted onboarding new mortgagees and paused all activities related to the FHA Catalyst: EAD Module integration.
Why it matters: The update is part of FHA’s plan to modernize its appraisal data storage, dissemination, and analysis capabilities, aligned with ML 2022-19. The recent changes further synchronize data between FHA Catalyst: Case Binder Module and FHA Connection, enhancing data integrity within agency’s systems. ML 2022-19 policies are now entirely superseded by the Single-Family Housing Policy Handbook 4000.1.
What’s next: MBA views this update as a positive step toward modernizing FHA’s technology infrastructure and will continue collaborating with the agency.
For more information, please contact Matt Jones at (202) 557-2933 or John McMullen at (202) 557-2706.
FHA Heed’s MBA’s Recommendations; Updates Cybersecurity Reporting Requirements
Last Monday, in response to MBA’s recent letter and ongoing advocacy, the Federal Housing Administration (FHA) posted a draft Mortgagee Letter (ML) to the FHA Single Family Drafting Table that revises its cybersecurity incident requirements.
The draft ML closely aligns with MBA’s recommended modifications, narrowing the definition of a Reportable Cyber Incident to those that “materially disrupt or degrade the FHA-approved mortgagee’s ability to meet its operational obligations for originating or servicing FHA-insured mortgages.”
In addition to narrowing the scope of a Reportable Cyber Incident, FHA is also considering extending its timeline for reporting a cyber incident to 36 hours instead of 12 hours. MBA has recommended 48 hours, which would match Ginnie Mae’s timeline.
Why it matters: As the mortgage industry continues to face new cybersecurity threats, it is crucial for governmental authorities to provide clear, aligned, and practical requirements and guidance.
What’s next: MBA will submit comments through our Government Loan Production Subcommittee in response to the proposed ML, advocating for FHA to further align its reporting timeline requirements with Ginnie Mae’s 48-hour window until a federal standard can be established.
For more information, please contact Darnell Peterson at (202) 557-2922 or Megan Booth at 202-557-2740.
California Delays, Makes Minor Tweaks to Costly Climate Impact Disclosure Laws
Last week, California Governor Gavin Newsom signed legislation (SB-219) that amends the Corporate Climate Data Accountability Act of 2023 (SB-253) to provide six additional months (until July 1, 2025) for the California Air Resources Board to write rules to implement SB 253’s emissions reporting requirements for companies operating in the state and subject to its provisions.
MBA and the California MBA originally opposed SB 253 and urged Mortgage Action Alliance members living in California to tell the Governor to veto it.
SB-253, along with related legislation enacted last year (SB-261), requires companies operating in California to report their various points of climate impact or face penalties. Both efforts create a complex reporting and accounting regime for companies to navigate with little to no baseline reference or guidance.
Why it matters: California’s Scope 3 reporting requirements are troubling for two reasons. They represent a significant departure from the Securities Exchange Commission’s (SEC) final rule on emissions reporting, which, as a result of MBA’s advocacy efforts, eliminated Scope 3 reporting. California’s law also sets a possible precedent for other states seeking to establish their own climate disclosure policies that could lead to a costly patchwork quilt of divergent requirements.
While Governor Newsom noted his concerns regarding the overall fiscal impact on business of SB-253 when he signed it, SB-219’s delay and minor amendments do not address nor improve upon the significant challenges of implementing this first in the nation law.
What’s next: MBA will continue to advocate for consistent national standards by opposing similar policies in other states and will work with the California MBA and other stakeholders to engage in the now-delayed rulemaking process.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
Participate in National Voter Education Week
This week, MBA’s Mortgage Action Alliance (MAA) will be participating as part of National Voter Education Week (October 7-11) in a Get Out The Vote (GOTV) campaign. National Voter Education Week is a non-partisan campaign to help you prepare to make your voice heard during the Tuesday, November 5, general election!
Why it matters: Throughout the week, MAA will provide industry advocates with voting information and resources needed during this election season utilizing MAA’s Election Center, including voter registration status, absentee or mail-in ballot deadlines, polling locations, and more.
What’s next: Follow MAA on LinkedIn and Facebook and don’t forget to register for the next MAA Quarterly Webinar: Post-Election Briefing on Wednesday, December 4, from 3:00pm- 4:00pm ET.
For more information, please contact Margie Ehrhardt at (202) 557-2708.
MBA and California MBA Launch Campaign Opposing Rent Control Ballot Initiative; Participate in Free Webinar on October 15
Last Tuesday, the Mortgage Action Alliance (MAA) sent a joint message from MBA and the California MBA launching the “No for Me on Prop 33” campaign, urging members to vote against California’s Proposition 33 (Prop 33).
California voters have rejected rent control at the ballot twice before and hopefully will do so again.
Why it matters: Prop 33 would repeal the Costa-Hawkins Rental Housing Act and would allow local governments to set residential rental rates when a unit becomes vacant – actions which will harm the multifamily real estate market and housing affordability. Repealing Costa-Hawkins would create a patchwork of state and local price control laws that would make lending more costly and negatively impact affordable credit availability throughout the state.
What’s next: MBA and the California MBA are holding a webinar at 4:00 PM Eastern/1:00 PM Pacific on Tuesday, October 15, that will provide more information about this campaign, the ballot process in California, and explain why rent control is a fails to achieve its stated policy objectives and actually results in more expensive rents or less availability. Register for the free webinar here.
For more information, please review this issue brief and contact William Kooper (202) 557-2737 or Jamey Lynch (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:
• Unlocking Private Credit Finance: A Conversation On Key White Papers & Research – October 9
• Understanding the CFPB’s Non-Bank Registry – Oct. 16
• Mastering MSR Valuations in a Shifting Marketplace – Nov. 13
• From Mortgage Eligibility to Affordability: Adapting Lending Strategies to Market Conditions – November 19
• Transition Climate Risks: From Initial Assessment to Mitigation – November 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.
