MBA Advocacy Update: Broeksmit on GSE Release; House Passes $3.8T Reconciliation Package; House Passes VA Partial Claims Bill
House GOP Passes $3.8 Trillion Reconciliation Package; Preserves and/or Enhances MBA-Supported Tax Provisions
After nearly 24 hours of a House Rules Committee meeting and numerous negotiations, (including with the White House), the U.S. House of Representatives passed (215-214; one Republican voting “present”) H.R. 1, a $3.8 trillion congressional tax, energy, and border security package.
• The bill also raises the debt limit by $4 trillion.
Why it matters: Importantly, the tax policy component preserves – and in some cases, enhances – key elements of the 2017 Tax Cuts and Jobs Act identified as a priority by MBA’s Board-approved Tax Task Force. This includes making permanent the deduction for qualified residence interest/acquisition debt (includes HELOCs and capped at $750,000), the $500,000 homeowner exclusion on the gain on the sale of a principal residence, the use of Section 1031 like-kind exchanges, and the continued deductibility of business interest for real estate.
• Importantly, the bill also includes an expanded deduction (from 20% to 23%) for Qualified Business Income under a permanent a Section 199A, needed enhancements to the Low-Income Housing Tax Credit (LIHTC) program, and a new round of Opportunity Zones with program tweaks.
• MBA last week sent a letter to House Ways and Means members prior to the tax policy package amendment vote and, along with other real estate coalition partners, has continued to fight to preserve current tax code elements that help maintain an appetite for investment in real estate – both commercial/multifamily and residential.
What’s next: MBA will provide a more detailed summary of the bill in the coming days. Following next week’s congressional recess, the Senate will use the House product as a baseline while crafting its own version of a reconciliation package. Any changes contained in a Senate-passed bill would then have to be mirrored and approved again by the House before the package could be signed into law by President Trump.
• MBA staff will continue to engage with lawmakers and their key staff to advocate for our industry’s tax priorities throughout the remainder of the debate this summer.
For more information, please contact Bill Killmer at (202) 557-2736, Madisyn Rhone at (202) 557-2741, Rachel Kelley at (202) 557- 2816, and Fran Mordi at (202) 557-2860.
House Passes MBA-supported VA Partial Claims Bill Overwhelmingly; Senate Legislation Expected Soon
Monday, the full U.S. House of Representatives debated and overwhelmingly passed H.R. 1815, the VA Home Loan Program Reform Act, with broad bipartisan support. The bill creates permanent general authority for the Department of Veterans Affairs (VA) to offer partial claims, bringing the VA Home Loan program into alignment with the Federal Housing Administration’s (FHA) and Fannie Mae’s and Freddie Mac’s loss mitigation options for servicers.
Go deeper: MBA issued a Mortgage Action Alliance (MAA) Call to Action late last week upon learning of the bill being placed on the House floor schedule on short notice, and also sent a supportive letter.
• Unambiguous VA partial claim program authority is needed now more than ever to help veterans avoid foreclosure and maintain homeownership stability following the recent winddown of the Veterans Affairs Servicing Purchase Program (VASP) program.
Why it matters: MBA and its leadership – along with the member firms within its VA Home Loan Working Group – have been actively working “behind the scenes” in the House and Senate – and publicly through three witness testimonies before the House Veterans’ Affairs Committee – to help forge a bipartisan consensus on partial claims legislation for months. Several discussion drafts of the House proposal were refined last year (and earlier this year) based on the following recommendations made by the MBA:
• Clarifying that a partial claim shall not diminish the guaranty on an existing VA loan;
• Eliminating a proposed charging of interest on the partial claim balance;
• Ensuring alignment with FHA and GSE program structures that treat partial claims or loan deferrals as non-interest-bearing junior liens, and
• Increasing proposed lower maximum claim amounts to 30% of the unpaid principal balance, providing parity with FHA and a broader safety net for distressed borrowers.
The specific provisions related to the amount of the partial claim and other features sunset in five years, but the VA would have broad PC authority to renew and revise the program.
What’s next: MBA is now actively urging engaged senators on both sides of the political aisle to use the text of H.R. 1815 (as passed in the House) as a vehicle for action on companion legislation as quickly as possible, whether by adopting the bill in whole OR producing companion legislation swiftly that can be enacted by both the House and Senate.
• A number of legislative drafts are being considered for introduction by either Senate Veterans’ Affairs Committee Chairmen Jerry Moran (R-KS) and his staff and/or other Senate offices.
For more information, please contact Rachel Kelley at (202) 557-2816, Madisyn Rhone at (202) 557-2741, George Rogers at (202) 557-2797, Ethan Saxon at (202) 557-2913.or Brendan Kelleher at (202) 557- 2779.
MBA Outlines Priorities in Banking Agencies Letter to Encourage More Bank Lending
Last week, MBA sent a letter to the three banking agencies (the “Agencies”) and the Treasury Department requesting review of key risk-based capital reforms sought by MBA on behalf of banks focused on the mortgage market.
Go deeper: MBA has advocated for years to reduce the excessive risk weightings on mortgage servicing assets and warehouse lines of credit – two critical asset exposures for the mortgage market. Specifically, MBA recommends a significant reduction in the punitive 250% risk weight on MSAs and calls for a reduction in the 100% risk weight for warehouse lines of credit to match the risk-weighting on the mortgage collateral securing the line. MBA also called for an indexing the current thresholds used to categorize banks for purposes of establishing capital standards.
Why it matters: The punitive treatment of MSAs is a major factor in the banking industry’s pullback from the mortgage market over the past decade. That retreat diminishes the value of mortgage servicing rights for all market participants that originate and sell mortgages (not just banks). Similarly, even while banks have deemphasized mortgage lending and servicing, the provision of warehouse lines to IMBs is a critical source of mortgage market liquidity. Both assets categories are assigned capital charges that exceed the underlying risk, raising borrowing costs and diminishing mortgage market liquidity.
What’s next: MBA looks forward to continuing to work with the Trump administration on necessary changes to address these priorities.
For more information, please contact Fran Mordi at (202) 557-2860.
CSBS Announces New Catalyst Initiative to Reduce State Regulatory Burden; Will Leverage MISMO Mortgage Compliance Data Set
On Tuesday, the Conference of State Bank Supervisors (CSBS) announced that it is launching a new effort that addresses state financial regulatory agencies’ key supervisory challenges and attempts to reduce regulatory burdens. The announcement was made at CSBS’ Mortgage Policy Summit in Washington, DC, which featured MBA panelists Justin Wiseman, Vice President for Residential Policy, Managing Regulatory Counsel, and Rick Hill, Vice President for Industry Technology.
Go deeper: The “Catalyst Initiative” will focus on partnering with the private sector to leverage modern technology and improve the efficiency and effectiveness of financial services supervision. CSBS will host a series of exploratory initiatives, known as innovation challenges, and each will have a different supervisory focus. These may include tech sprints; proofs of concept; pilots; single or multi-year contracts; and developing minimum viable products.
Why it matters: The Catalyst Initiative will include experimenting with ways to leverage the new MISMO mortgage compliance dataset, which was created with input from state regulators to help them better review mortgage files for compliance with state and federal laws.
What next: MBA will continue to work with CSBS and brief member companies about opportunities to partner state agencies and CSBS.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870
That’s a Wrap on the 2025 Mortgage Action Alliance (MAA) Action Week!
Mortgage Action Alliance (MAA) Action Week was a hole in one! Last week, 122 professional organizations, including 38 state associations, ran company-wide campaigns aimed to grow MAA membership.
• As a result, 2,417 new industry professionals joined MAA and 5,039 renewed their memberships, bringing total MAA membership to over 76,000! 994 advocates also responded to MAA Calls-to-Action alerts, including the MBA-supported Trigger Leads Bills and VA Home Loan Program Partial Claims legislation.
Why it matters: There is strength in numbers and policymakers pay attention when a large number of people weigh in. To date, MAA membership totals roughly 76,000 industry voices. Through regular contact with your lawmakers and their staff members via MAA Calls to Action, you can establish yourself as a “go-to” constituent for our industry. The LARGER the Group, the LOUDER the Voice.
What’s next: You can continue to make an impact and help grow our industry’s PAC. MBA’s federal, bipartisan political action committee, MORPAC, will also be hosting its annual fundraising campaign on June 23-27. Take the next step and SIGN UP to run a MORPAC company campaign (executive or grassroots). MORPAC provides access to build and strengthen relationships with pro-industry candidates and advance MBA’s legislative agenda.
For more information, please contact Jamey Lynch, AMP at (202) 557-2818 or Margie Ehrhardt at (202) 557-2708.
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:
• Bank-Owned Mortgage Divisions: What Bankers Need to Know to Manage Mortgage Banking – June 3
• Fundamentals of Loss Mitigation for Residential Servicers – June 3
• Strategies to Improve Retail Mortgage Production – June 5
• Getting to Accept – Using Loan Product Advisor to Your Advantage – June 25
• AI on Trial: Fair Lending, Compliance, and the Fight for Transparency in Mortgage Lending – July 9
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.
