Advocacy Update: MBA Recommendations on FHA BNPL RFI; MBA Urges FHFA to Revise Condo Project Standards; NMLS Changes Coming Sept. 20
MBA Offers Recommendations on FHA’s Buy Now Pay Later RFI
On Monday, MBA sent the Federal Housing Administration (FHA) a comment letter in response to its Request for Information (RFI) on Buy Now Pay Later (BNPL) unsecured debt.
Why it matters: MBA’s comments emphasize the challenges lenders face when underwriting borrowers who use this alternative form of credit, which typically does not appear on credit reports. While FICO has announced plans to incorporate BNPL data into its FICO 10T score, reporting will remain incomplete because most BNPL providers do not currently furnish information to the credit bureaus, and of those that do, it is reported selectively (e.g., only longer-term plans, or not to all three bureaus).
• As an interim measure, MBA recommends that FHA establish a temporary underwriting procedure that lenders can rely on using information provided directly by borrowers. Once BNPL providers begin consistent reporting to the credit agencies, FHA should revisit and update the procedure to ensure alignment with the newly available data.
• MBA believes setting an interim framework would provide lenders certainty and would establish a consistent approach while credit bureaus and FICO catch up, avoiding fragmented practices across the industry.
What’s next: MBA will continue working with FHA and BNPL providers to ensure members receive clearer guidance on how to identify and underwrite BNPL transactions.
For more information, please contact Darnell Peterson at (202) 557-2922
MBA Urges FHFA to Revise Condo Project Standards Guidelines
On Monday, MBA submitted comments to the Federal Housing Finance Agency (FHFA) recommending targeted reforms to Fannie Mae’s and Freddie Mac’s (the GSEs) Critical Repairs policy.
• While intended to safeguard condo homeowners after the Surfside condo collapse, FHFA’s response in 2021 to the incident has expanded beyond its original scope, leading to a surge of ineligible buildings that is limiting financing for thousands of prospective condo buyers.
Why it matters: The overly broad definition of “critical repairs” is constraining liquidity in the condo market, particularly for first-time buyers. MBA’s recommendations would refocus the policy on true safety and structural risks while reducing unnecessary barriers to eligibility for GSE loan purchases.
What’s next: MBA will continue working with FHFA and the GSEs to advance a more calibrated, risk-based approach that preserves safety standards while restoring financing options in this vital housing segment.
For more information, please contact John McMullen, AMP, at (202) 557-2706.
FHA Adopts Modernized Uniform Appraisal Dataset 3.6
On Thursday, the FHA announced that beginning in early Spring 2026, it will adopt the modernized Uniform Appraisal Dataset (UAD) 3.6.
• In coordination with the GSEs — and building on the Department of Housing and Urban Development’s FHA Catalyst investment— the new UAD 3.6 Uniform Residential Appraisal Report (URAR) will replace current GSE forms with a single, dynamic, data-driven report across all residential property types. FHA systems, including EAD, are being updated to support optional deliveries beginning Spring 2026.
Why it matters: This important move preserves FHA alignment with industry standards and strengthens collateral risk management through more consistent, data-rich appraisals — while giving stakeholders a longer implementation runway for necessary tech updates.
What’s next: FHA will announce a transition timeline, updated policies, and tech specs later this year. A transition period will allow deliveries in both UAD 2.6 and 3.6. FHA roster appraisers should engage their software providers now to prepare for optional adoption in Spring 2026.
• MBA will work with FHA and the GSEs to ensure members have the guidance and lead time needed for a smooth transition
For more information, please contact John McMullen, AMP, at (202) 557-2706 or Darnell Peterson at (202) 557-2922.
MBA Submits Amicus Brief Arguing that Retroactive Application of FAPA is Unconstitutional
On Tuesday, MBA and other trades submitted a joint Amicus Brief in response to a question certified to the New York Court of Appeals from the U.S. Second Circuit Court of Appeals regarding whether the Foreclosure Abuse Prevention Act (FAPA) applies retroactively and, if it does, whether this violates the right to substantive and procedural due process under the New York Constitution. This is a continuation of MBA’s efforts to challenge New York’s FAPA, most recently with an Amicus Brief to the Supreme Court in the U.S. Bank v. Fox case.
• In this case, Ponce De Leon Bank is challenging the constitutionality of New York’s FAPA.
• FAPA states that the statute of limitations cannot be stopped by the voluntary discontinuance of a foreclosure. FAPA prohibits New York servicers from unilaterally halting a foreclosure action and restarting the loan’s statute of limitations to offer homeowners facing financial hardship with loss mitigation opportunities.
Go deeper: MBA argues that the retroactive application of FAPA disrupts longstanding New York mortgage servicing practices and would severely damage the state’s mortgage market. Additionally, interpreting FAPA to apply retroactively would violate the New York and U.S. Constitutions by destroying the lender’s rights to collect payments on mortgages after voluntary discontinuance. Specifically, retroactive application violates the New York and Federal Due Process Clauses, the New York and Federal Takings Clauses, and the Federal Contract Clause.
What’s next: MBA will keep members updated on next steps and any developments in the case.
For more information, please contact Justin Wiseman at (202) 557- 2854 or Alisha Sears at (202) 557-2390.
MBA Requests a Grace Period for Q1 2026 MCR Form Version 7 Filings
Last week, MBA sent letters to the American Association of Residential Mortgage Regulators (AARMR) and the Conference of State Bank Supervisors (CSBS) requesting that they encourage state mortgage regulators to provide licensees a grace period for the first quarter 2026 filing deadline of the new version of the Mortgage Call Report (MCR).
Go deeper: MCR Form Version 7 is set to launch on January 1, 2026. This new version introduces significant changes and requires companies to begin collecting data immediately in 2026. A similar request made two years ago during the rushed transition to Form Version 6 was granted.
Why it matters: The ambitious MCRV7 implementation schedule does not allow enough time to fully and accurately comply, because it presents substantial technical challenges — not only for licensees, but also for the third-party technology vendors on whom they rely.
• Making matters more difficult is that the needed technical specifications (i.e. the XML file) for software programming will not be released until November or December. This release is unacceptably late in the development timeline and coincides with the busiest period of the year for mortgage companies due to license renewal season.
What’s next: MBA will follow up with regulators and continue to urge all states grant grace periods and also inform members of any developments. Members should also review the recently released definitions and sample MCRV7.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
REMINDER: Prepare for NMLS Changes Coming on September 20, 2025
As we have reported previously, the NMLS is launching significant changes as part of its broader system modernization efforts. MBA encourages members’ licensing and registration staff to familiarize themselves with the new system ahead of this year’s licensing renewal season, as the layout, bookmarks and organizational structure of the system will be significantly different.
The key updates to the system include:
• A modernized NMLS Resource Center with new navigation and content;
• New, streamlined individual application process for individual applications;
• System updates for new policies such as new remote work policies and the adoption of the latest Mortgage Call Report (MCR) Form Version 7; and an
• Updated policy guidebook.
Why it matters: The changes are all effective September 20, 2025, and MBA members are encouraged to review the materials on the NMLS Modernization Resource Center. This includes FAQs, recorded Town Hall webinars, release notes, PowerPoints, and much more.
What’s next: MBA members can attend the MBA’s Compliance and Risk Management Conference on September 28-30 in D.C., where CSBS staff and industry experts will review and discuss these changes.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
Colorado Delays Implementation of State’s Artificial Intelligence Law
On Thursday, Colorado Governor Jared Polis approved a bill (SB-25B) to push the implementation date of the Consumer Protections for Artificial Intelligence Act to June 30, 2026, to give time for the Legislature to amend the law during the next legislative session. Previously, the effective date for the law was February 1, 2026.
• This move came after Governor Polis sent a letter to the state Legislature and called a Special Session urging them to pass legislation to delay the implementation. The letter was co-signed by Colorado Attorney General Phil Weiser, U.S. Senator Michael Bennet, U.S. Representatives Joe Neguse and Brittany Pettersen, and Denver Mayor Mike Johnston.
• During the last week of the regular legislative session, several amended and delayed implementation bills were filed without success as Colorado adjourned their 2025 regular session on May 7. MBA assisted the Colorado Mortgage Lenders Association (CMLA) with suggested amendments to the law.
Go Deeper: MBA’s summary of the Consumer Protections for Artificial Intelligence Act is available here.
• Colorado was the first in the nation to enact a law seeking to regulate AI. The number of amendments and stakeholder meetings since the enactment of SB 24-205 demonstrate the complications these laws pose with how AI is regulated and the need to acknowledge that current consumer protections and anti-discrimination laws still apply.
What’s next: MBA will continue to support CMLA in looking for any opportunity to fine-tune the existing law in the next session.
For more information, please visit the MBA resource center mba.org/stateai or contact Liz Facemire at (202) 557-2870 or Gabriel Acosta at (202) 557-2811.
Register for MAA’s Next Quarterly Webinar: September 10
On September 10, join MBA’s Legislative and Political Affairs Team for the next Mortgage Action Alliance (MAA) Quarterly Webinar, which will discuss the remaining agenda for Congress in 2025 and beyond.
• Both chambers of Congress, set to return from their three-week August recess, will have a busy September, with various policy issues and budget matters on the agenda, including funding the government beyond September 30th. Register now for this can’t-miss virtual event!
Why it matters: MAA’s Quarterly Webinar Series provides valuable insights into the legislative process, policy landscape, and addressing key issues impacting the real estate finance industry, allowing MBA and MAA members to effectively engage in advocacy year-round.
What’s next: Register to attend MBA’s National Advocacy Conference (NAC), taking place April 14-15, 2026, at The Westin DC Downtown. Join hundreds of industry advocates to meet with and educate policymakers on issues impacting your businesses and customers. It’s never too early to make your plans!
Register by March 2, 2026, to receive the early bird rate. MBA offers special rates for members of MBA’s young professionals’ network (mPact), the Certified Mortgage Banker (CMB) Society, and group rates for MBA member companies as well.
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:
• Benchmarking for Performance and the Performance Ratios Every Mortgage Banker Must Know – September 3
• Non-Agency Training Series: Jumbo Loans – September 16
• On Your Way with LPA: Feedback to Impact – September 16
• Smart Strategies to Retain, Recapture, & Grow Your Servicing Portfolio – September 25
• Non-Agency Training Series: Alt Doc and Interest-Only – September 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 at (202) 557-2931.
