Advocacy Update: MBA Update on HUD Operations, Recommendations for FHA, Ginnie Mae Program Improvements
MBA Update on HUD Operations, Recommendations for FHA, Ginnie Mae Program Improvements
MBA continues to monitor ongoing developments at the Department of Housing and Urban Development (HUD), including the Federal Housing Administration (FHA) and Ginnie Mae, regarding staffing, funding, and other activities.
Additionally, as the agencies develop their Agency Reduction in Force (RIF) and Reorganization Plans (ARRPs) – due to the Office of Management and Budget (OMB) and Office of Personnel Management (OPM) by Thursday, March 13 – MBA has been communicating to senior staff the importance of having appropriate staffing levels in place to ensure the continuity of programs and functions that serve single-family and multifamily real estate finance.
• As agencies initiate this process, there could be significant potential business-to-government disruption risks that impact lenders, servicers, and their customers.
• For example, there have been rumors that the FHA National Servicing Center (NSC) could be impacted by this process. MBA has shared with HUD the critical activities performed by the NSC and the need to ensure that there is a plan in place (and that servicers be notified in order) to maintain the continuity of core NSC functions, systems, and processes.
Why it matters: Last month, MBA sent recommendations to HUD that offer sensible changes to improve and/or enhance agency lending programs, lower the cost of lending, enhance access to mortgage credit, boost supply and affordability, and ensure the continued support for commercial and multifamily investment. These recommendations include, among others:
• Reverse New Energy Code Requirements and Flood Rule
• Continue Work on Ginnie Mae Liquidity and Expedited FHA Tax and Insurance Reimbursements
• Lower the Single-Family FHA MIP
• Preserve COVID-19 Servicing Reforms; and
• Minimize FHA False Claims Act Risk
What’s next: MBA has urged OMB and the other relevant federal housing agencies to engage stakeholders to ensure that lenders and servicers are involved early enough in the ARRP re-engineering processes to minimize disruption risks and improve performance for borrowers and Ginnie Mae investors. MBA is seeking more clarity from on the status of staffing and operations decisions and will keep members informed of any relevant updates.
For more information, please contact Bill Killmer at (202) 557- 2736 and Pete Mills at (202) 557-2878.
FHFA and CFPB Director Nominees Pulte and McKernan Reported to Floor
Last week, the Senate Banking Committee reported favorably the nominations of William Pulte to be the Director of the Federal Housing Financing Agency (FHFA) and Jonathan McKernan to be the Director of the Consumer Finance Protection Bureau (CFPB). The Banking Committee voted 15-9 in favor of Pulte, with Senators Ruben Gallego (D-AZ) and Angela Alsobrooks (D-MD) joining the Republicans on the committee in moving the nomination to the floor. McKernan’s nomination advanced on a party-line vote of 13-11.
What they’re saying: In a press statement, MBA President and CEO Bob Broeksmit, CMB, said, “We appreciate the importance being placed on William Pulte’s and Jonathan McKernan’s nominations to lead the FHFA and CFPB, respectively, and urge Senate leadership to schedule floor votes on their confirmations as soon as possible.”
Go deeper: Committee Republicans demonstrated their united support for these two nominees by moving their confirmation votes so quickly after their confirmation hearing just a week ago. By contrast, the panels’ Ranking Member Elizabeth Warren (D-MA) said the nominees failed to provide meaningful responses to questions for the record (QFRs) submitted after their hearing. She also expressed concerns about both Pulte and McKernan’s abilities to run their respective agencies without [what she considers] undue policy interference from the White House.
Why it matters: If confirmed, McKernan will play a key role in which CFPB regulations of concern to the housing finance industry are reformed, withdrawn or reconsidered through the notice and comment regulatory process, as well as determining the scope and nature of CFPB’s enforcement activities going forward. Similarly, Pulte will lead FHFA and that agency’s numerous efforts that impact MBA members, including any actions taken jointly with the Treasury Department to release Fannie Mae and Freddie Mac from their current conservatorship status.
What’s next: Senate Banking Chair Tim Scott (R-SC) will work with Senate Majority Leader Thune (R-SD) to schedule confirmation votes regarding Pulte and McKernan by the full Senate. The timing of those floor votes is yet to be determined, but could take several weeks to schedule given the backlog of other Executive Branch nominations already in the Senate queue.
For more information, please contact George Rogers at (202) 557-2797 or Ethan Saxon at (202) 557-2913.
MBA Monitoring Developments Ahead of Possible March 15 Government Shutdown
Though recent negotiations suggest some room for optimism, congressional leaders remain in negotiations ahead of a deadline of 11:59 p.m. ET on Friday, March 14, to pass what would likely be a Continuing Resolution (CR) – either short-term (weeks or months) or through the rest of Fiscal Year (FY) 2025 (September 30, 2025).
• MBA remains directly engaged with lawmakers in both chambers of Congress and with affected regulators. Starting on Saturday, March 15, a shutdown would necessitate a furlough of certain federal employees and significant curtailment of certain operations requiring agency staff intervention or action at the Departments of Housing and Urban Development, Veterans Affairs, and Agriculture.
• National Flood Insurance Program (NFIP) authorities are also scheduled to expire on March 15. MBA continues to advocate for an extension of NFIP’s authority – including a possible separate/targeted authorization measure – to avoid disruptions to the housing market.
Go deeper: Congress passed a CR on Dec. 21, 2024, that extended FY 2024 funding levels until March 14, following lawmakers’ failure to pass a full FY 2025 budget before the start of the new FY on Oct. 1, 2024.
What’s next: Given that short-term shutdown threats have become somewhat routine, MBA anticipates that most agencies’ plans for maintaining essential functions will remain the same under the new Administration.
Once confirmed, MBA will provide a member guide that outlines the potential impacts to single-family and multifamily government lending programs.
A shutdown lasting a few days would only slightly inconvenience single-family and multifamily mortgage markets. A longer delay would have much more severe and disruptive impacts to members and the consumers, end users, and customers they serve.
For more information, please contact Bill Killmer at (202) 557-2736 and Pete Mills at (202) 557-2858.
HUD Delays Building Energy Standards Rule for New Construction
On Friday, HUD announced a six-month delay on the implementation of its final rule on Energy Efficiency Building Standards. The rule requires any new construction with FHA-insured and Department of Agriculture-guaranteed (USDA) financing to use significantly newer building codes that most states have yet to adopt.
• HUD said the six-month delay will provide additional time for them to “review questions of fact, law and policy supporting the Final Determination and determine the need for HUD to develop further technical assistance.”
• Single-family implementation: November 2025 to May 28, 2026. Multifamily: May 2025 to Nov 28, 2025.
Go deeper: Last year, MBA urged HUD and USDA to reconsider the impact of this proposal on affordable housing, and called for reversing the rule in a list of recommendations sent to HUD last month (as referenced earlier).
• MBA believes that reversing this policy is critical to maintaining affordable FHA financing for new homes and apartments and ensuring that new housing supply remains within reach for hardworking families.
Why it matters: Once into effect, newly constructed multifamily, single-family, Public Housing Capital Fund, and competitive grants must comply with the 2021 International Energy Conservation Code (IECC) in order to be eligible for FHA or USDA financing.
• Notably, only five U.S. states have adopted the 2021 code. 32 states are still on the 2009 code or earlier.
What’s next: MBA will continue to highlight its concerns with the policy – and in particular its implications for housing costs–in conversations with FHA, USDA, the White House, and on Capitol Hill.
For more information, please contact Megan Booth at (202) 557-2740 or Bill Killmer at (202) 557-2736.
Key Subcommittee and Task Force Panels Tackle Questions on Housing Supply, GSE Release
Last week, the House Financial Services Committee (HFSC) convened two separate hearings that explored questions surrounding: (1) housing supply and affordability concerns and (2) monetary policy considerations impacting the well-being of the broad U.S. economy (including mortgage markets).
Why it matters: At the hearing held by the panel’s Subcommittee on Housing and Insurance, lawmakers debated the impact of regulatory barriers on housing development. Subcommittee Chairman Mike Flood (R-NE) – and other Republicans – argued that environmental regulations, banking/lending restrictions, and zoning laws are limiting new housing construction. Subcommittee Ranking Member Emanuel Cleaver (D-MO) and full HFSC Ranking Member Maxine Waters (D-CA) countered that financial institutions and contractors often use their support for deregulatory efforts to “avoid accountability.”
• The discussion also explored expanding housing supply through greater production of manufactured housing, the repurposing of commercial buildings for residential use, and an increase in HUD funding and the state-by-state allocation of Low-Income Housing Tax Credits.
Separately, the HFSC’s Task Force on Monetary Policy hearing examined the Federal Reserve’s use of its monetary policy mandate on the broad U.S. economy – including within housing markets across the country. GOP lawmakers debated the history of the Fed’s purchase of mortgage-backed securities (MBS), with some arguing the central bank should exit the MBS purchase market altogether, while Rep. Brad Sherman (D-CA) warned that “privatizing [conservatorship release]” Fannie Mae and Freddie Mac would ultimately lead to higher mortgage rates.
• High interest rates and their impact on first-time homebuyers was another point of discussion, with lawmakers emphasizing the affordability challenges facing younger families. Additionally, proposed tariffs on Mexico and Canada drew criticism from Democrats, who warned that increased costs for building materials would further constrain housing affordability.
Go deeper: For a more complete breakdown of both hearings, including key policy discussions and witness testimony, find a summary of the Housing and Insurance Subcommittee hearing here, and the Task Force on Monetary Policy hearing here.
What’s next: MBA will continue to advocate for policies that seek to expand housing supply, improve access to credit, and undergird stable single- and multifamily mortgage markets – while remaining engaged with lawmakers from both parties to promote bipartisan solutions that directly address these challenges.
For more information, please contact Madisyn Rhone at (202) 557-2741 or Bill Killmer at (202) 557-2736.
Federal Government Office Leases Terminated; GSA Publishes, Deletes List of Buildings for Potential Closing or Sale
Amidst numerous actions regarding staffing, funding, and/or contract cancellations at federal agencies, the Department of Government Efficiency (DOGE) has published a running list that displays (see Real Estate section) 748 lease federal government office lease terminations, “totaling 9,587,384 square feet and $468 million in lease savings.”
• Various press reports put the dollar amounts and square footage lower, if the figures include paid lease months and those already set to expire.
Additionally, the General Services Administration (GSA) published (it is now deleted) a list of more than 440 federal properties across the country it had identified to close or sell. The page now states that a “non-core property list is coming soon.”
Why it matters: The abrupt cancellation of office leasing adds more potential iambiguity to already uncertain office markets in cities across the country. It will create challenges for owners of properties where federal leases are cancelled and for a market where large amounts of (often antiquated) space becomes available for lease or sale. On the other hand, there will likely be opportunities for investors who can reinvent vacated space as apartments, hotels, repositioned office or other uses.
What’s next: MBA is closely monitoring this situation and will keep members updated on any relevant developments.
For more information, please contact Jamie Woodwell at (202) 557-2936 or Pete Mills at (202) 557- 2858.
USDA Delays Implementation of Final Rule for Special Servicing Options for Non-Performing Loans
On Tuesday, the U.S. Department of Agriculture’s Rural Housing Service (USDA) announced that the implementation date of the final rule for the Special Servicing Options for Non-Performing Loans has been delayed from February 11, 2025, to April 14, 2025.
Go deeper: The final rule transformed the Mortgage Recovery Advance (MRA) from a subordinate lien to a recoverable servicing advance (i.e., a deferred balance akin to the GSE’s Payment Deferral).
• Additionally, the final rule created a single loss mitigation waterfall by requiring that servicers exhaust traditional servicing options before a borrower can be evaluated for special servicing options.
• USDA believes that these changes will benefit borrowers by offering a less cumbersome option to eliminate documentation and eligibility challenges for borrowers who do not require payment reduction, while providing lenders more flexibility in their servicing options and reducing program risk.
Why it matters: Servicers have flexibility to transition to a single MRA process for all decisions after April 14, 2025. This updated guidance will apply for loans with an initial delinquency on or after April 14, 2025. If the delinquency occurred prior to the final rule’s effective date of April 14, 2025, and the final documents have not been executed with the borrower, servicers can execute according to the final rule, providing they are adhering to applicable regulations, document requirements, and timeframes.
What’s next: Corresponding changes have also been made to the Servicing Chapters in Handbook 1-3555, Chapter 17, 18, and 19. MBA will monitor for additional updates and communicate those changes to members as announced.
For more information, please contact Brendan Kelleher at (202) 557- 2779 or Gabe Acosta at (202) 557- 2811.
FHA Extends Foreclosure Moratorium for Borrowers Impacted by the LA Wildfires
On Thursday, FHA published Mortgagee Letter 2025-27, Extension of the Foreclosure Moratorium in Connection with Presidentially-Declared Major Disaster Areas in Los Angeles County, California, to prohibit mortgage servicers from initiating or completing foreclosure actions on FHA-insured single family forward and Home Equity Conversion mortgages in the Los Angeles County PDMDA through July 7, 2025. The 90-day moratorium was originally set to expire on April 8, 2025.
Why it matters: According to FHA, there are more than 100,000 FHA-insured mortgages in the LA County PDMDA. Given the severity of the economic and property damage across the county, FHA is providing additional time for homeowners to access federal, state, and local housing resources, consult with HUD-certified housing counselors, and/or rebuild their homes. Such resources include:
• HUD’s Disaster Resources web page; MBA’s Natural Disaster Resource guide can be found here.
• FHA’s Section 203(h) program provides 100 percent financing for eligible homeowners to rebuild their home or purchase a new one.
• FHA’s Section 203(k) loan program allows individuals to finance the purchase or refinance of a house, as well as the costs of repair or renovation, through a single mortgage.
What’s next: MBA will monitor and communicate additional developments as they become available.
For more information, please contact Brendan Kelleher at (202) 557- 2779 or Sara Singhas at (202) 557- 2826.
MBA Delivers VA Loss Mitigation Policy Priorities to Secretary Collins
On Wednesday, MBA communicated its loss mitigation policy priorities in a letter to the newly-confirmed Secretary of Veterans Affairs (VA), Doug Collins. To strengthen the VA Home Loan Program, MBA encourages the agency to collaborate with Congress to expand the loss mitigation options available to distressed Veteran borrowers to include a partial claim.
Why it matters: MBA’s letter strongly encouraged the VA to work with Congress to develop a partial claim loss mitigation option for Veterans, so that they have access to loss mitigation solutions that are cost-effective, viable, and on equal footing with the FHA program.
• MBA also expressed concerns that VA could shut down the recently implemented VA Servicing Purchase (VASP) program in response to congressional pressure. Considering the exhaustive efforts servicers committed to adjusting their operations to implement VASP and communicate its availability to Veterans, MBA cautioned strongly against ending the program abruptly.
What’s next: MBA will testify at an upcoming House Veterans Affairs Economic Subcommittee hearing on Tuesday, March 11, where it will communicate its support of legislation that establishes permanent partial claim authority for the VA – and in strong opposition to legislation that caps the allowable amount of VASP loans acquired by the VA to 250 per Fiscal Year. MBA will provide a more detailed summary and recap following the hearing.
For more information, please contact Brendan Kelleher at (202) 557- 2779 or Madisyn Rhone at (202) 557- 2741.
Joint Trades Respond to FHA’s Partial Claim Payoff Statements Draft Mortgagee Letter
Last week, MBA, along with the Housing Policy Council and National Council of State Housing Agencies, responded to FHA’s Draft Mortgagee Letter, Updating Requirements for Partial Claim Payoff Statements and Recording Timeframes. In short, the trades strongly opposed FHA’s proposal to require mortgage servicers to confirm the accuracy of the data submitted to HUD’s SMART Integrated Portal (SIP) dashboard and provide partial claim payoffs to borrowers if the original PC payoff statement was not delivered.
Why it matters: FHA’s draft ML is FHA’s second proposal requiring mortgage servicers to provide partial claim payoff statements to borrowers upon request for payoff of the FHA-insured first lien mortgage. MBA originally expressed concern with FHA’s intent to transfer risk and legal obligations to mortgage servicers to own the partial claim payoff process even though mortgage servicers are not parties to the partial claim agreement.
Go deeper: Though FHA’s proposal improves the PC process by requiring servicers to communicate those requests to FHA’s SIP dashboard, FHA’s ML maintains the original legal and operational risks of an attempt to collect a debt not owned by the servicer. Providing these comments is critical as the new Administration begins to consider whether to finalize the policy proposals from the Biden administration.
What’s next: MBA will continue to monitor and communicate developments to members.
For more information, please contact Brendan Kelleher at (202) 557- 2779.
MBA Comments on Proposed Changes to the NMLS Mortgage Call Reports; Urges Alignment with MBFRF
Last week, MBA submitted a comment letter to the Conference of State Bank Supervisors (CSBS) in response to proposed changes to the NMLS Mortgage Call Report Form Version 7 (MCRV7). The letter reminded regulators that MBA members had just completed herculean efforts to implement MCR Form Version 6 despite a very short implementation timeline and without key technical documents until just a few weeks before data collection needed to begin.
Key additional points stressed by MBA were that:
• State regulators should clarify that their intent is to align the MCR with the Mortgage Bankers Financial Reporting Form (MBFRF);
• state regulatory authority to collect new data fields should be fully established before data collection begins;
• regulators should remove reporting requirements regarding subservicing delinquencies and mortgage forbearance assistance;
• regulators should provide the XML file when announcing the final MCRV7 and provide an adequate implementation timeline; and
• regulators must assure the confidentiality of MBA member company information submitted to the NMLS.
Why it matters: MBA has long advocated for alignment of the MCR and the MBFRF and the MCRV7 comments are another opportunity to stress how such consistency will reduce regulatory burdens and lower compliance costs for MBA members.
What’s next: MBA will continue to engage with CSBS on the reporting requirements and keep members briefed on any developments.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
IMB CRA Legislation Introduced in Connecticut
Recently, a bill (SB-1398) was introduced in the Connecticut Senate to establish a Community Reinvestment Act (CRA)-style mandate for independent mortgage banks (IMBs) licensed in the state. The day after introduction, the legislation was the subject of a hearing during which the Connecticut Department of Banking delivered testimony in opposition.
• The Department noted significant unfunded cost implications, stating that the examination requirement in the proposed bill “would place extraordinary burdens on the Department, which – at its current staffing levels – the Department would be unable to meet.”
Why it matters: CRA-style requirements for IMBs represent a “solution in search of a problem” and do not recognize the incompatibility of the CRA with the business models of IMBs and their historical lending activities. IMBs do not have deposits to reinvest; do not have access to direct government support; already engage in sustainable lending in low- to moderate-income (LMI) communities; and are subject to robust oversight and supervision in every state where they operate (as well as from federal regulators).
What’s next: MBA will work with the Connecticut MBA to oppose this bill.
For more information, please visit MBA’s State CRA resource center or contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.
Attend MBA’s National Advocacy Conference on April 8-9; Over 400 Advocates Registered
Join us in Washington, D.C. to meet with key policymakers, network with colleagues across the industry, and hear from policy experts on the topline issues impacting the industry. Key advocacy issues to be covered will include housing tax policy, trigger leads, legislation to increase housing supply, technology-related issues, cost and availability of insurance, and more.
Confirmed speakers for the conference include GOP Conference Chair Congresswoman Lisa McClain (R-MI), key House Financial Services Committee member Ritchie Torres (D-NY), and managing editor of Hotline at National Journal Kirk A. Bado.
An exclusive reception will be held on Tuesday, April 8, at the Renwick Gallery of the Smithsonian American Art Museum. Lend your voice to our efforts and bring your expertise and experiences to the table.
Check out MBA’s group passes pricing.
Why it matters: Your participation at NAC ensures that members of the 119th Congress and the administration will better understand how proposed legislation affects your customers, as well as your employees and the communities you (and they) serve.
What’s next: MBA will continue to advocate for issues impacting the real estate finance industry.
For more information, please contact Jamey Lynch, AMP, 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 – all complimentary to MBA members:
• Drilling into Mortgage Accounting – April 9
• AI Voice Agents and Use Cases for Mortgage Lending – April 10
• Loan Level Accounting – April 16
• Tech Trends Shaping the Future of Mortgage Lending – May 13
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.
