Advocacy Update: Government Shutdown Latest; ROAD to Housing Clears Senate; Senate Confirms Jonathan McKernan; more
Federal Government Shutdown Enters Second Week; Read MBA’s Member Guide
Bipartisan talks to reopen the government via a short-term spending stopgap bill are frozen, with the Senate for the seventh time this week (as of late Friday) failing to pass competing government funding bills, prolonging the government shutdown into its second week.
• Read MBA’s member guide that outlines the potential impacts to single-family and multifamily government lending programs.
• The federal government has been shut down since Congress failed to come to an agreement on Fiscal Year (FY) 2026 funding before last Tuesday (September 30) 11:59 p.m. ET deadline.
Why it matters: The shutdown has necessitated the furloughs of many federal employees as well as significant curtailment of certain operations that require agency staff intervention or action. Actions at the Department of Housing and Urban Development, Treasury Department, Veterans Affairs, and the Department of Agriculture are particularly impactful for lending activity.
• National Flood Insurance Program (NFIP) authorities have expired, a disruptive development that impacts real estate transactions in flood-prone areas where insurance is required. MBA continues to advocate for an immediate extension of NFIP’s authority – including a separate/targeted authorization measure – to avoid long-term disruptions to the housing and flood insurance markets. Read the recent trade groups/coalition letters to congressional leadership here and here.
Go deeper: On Sept. 19, House Republicans passed a short-term Continuing Resolution (CR) to extend FY 2024-2025 funding through November 21, 2025. In the Senate, multiple attempts to advance either the House bill or a Democratic alternative have failed, with Democrats seeking to include additional health care priorities.
What’s next: MBA remains in contact with lawmakers and regulators and encourages members to share any real-time operational impacts. A prolonged shutdown – particularly with extended federal agency furloughs – risks significant disruption for the industry and consumers. MBA continues to monitor all funding votes as negotiations evolve.
For more information, please contact Bill Killmer at (202) 557-2736 or Pete Mills at (202) 557-2858.
ROAD to Housing Proposal Advances Within Senate Version of NDAA
Last week, the full Senate passed its version of a Fiscal Year (FY) 2026 National Defense Authorization Act (NDAA) by a bipartisan vote of 77 to 20. A “Manager’s Amendment” that contained the text of the Renewing Opportunity to the American Dream (“ROAD”) to Housing Act, was adopted by voice vote prior to the bill’s final passage.
• The “ROAD” proposal, which cleared the full Senate Banking Committee by a bipartisan vote of 24-0 earlier this summer, contains numerous individual bills that seek to expand and preserve housing supply, improve housing affordability and access, and bolster the oversight of major federal housing programs.
What they’re saying: MBA President and CEO Bob Broeksmit, CMB, in a press statement released last night said, “The Senate’s passage of the ROAD to Housing Act [within the NDAA] is a win for housing affordability and consumers. MBA applauds Senate Banking Committee chair Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) for championing practical, bipartisan solutions on housing issues.”
Broeksmit added, “As the bill moves to the House, MBA will stay fully engaged with congressional leaders in both chambers to refine key provisions – including those dealing with lender liability and second appraisals – to ensure the final package delivers meaningful results…”
Why it matters: MBA has previously indicated support for the overall proposal and provided specific commentary on several key sections of the package, including:
• Rural Housing Service (RHS) program reforms that include vital IT upgrades, improved lending guidelines for Accessory Dwelling Units (ADUs), and the assumption of USDA/RHS loans;
• the study of incentives to encourage small dollar mortgage loan originations – including an evaluation of regulations limiting mall dollar loan “points and fees”;
• simplification/acceleration of National Environmental Protection Act (NEPA) reviews for small and infill housing projects;
• Federal Transit Administration (FTA) program guide changes designed to encourage more housing located near public transportation routes; and,
• directing HUD to develop “best practice” zoning and land-use frameworks to help communities identify and overcome barriers to housing development.
Go deeper: One specific section of the ROAD to Housing bill codifies a set of appraisal process modifications that would amend the Truth in Lending Act (TILA) and impose potentially punitive penalties on lenders, while creating a de facto consumer right to a second appraisal (with costs to be borne by the creditor).
What’s next: MBA will continue conversations with senior House members and key staff, including those serving on the Financial Services Committee, to support efforts to offer targeted counterproposals to many elements contained within the now Senate-passed ROAD to Housing text.
• At this writing, it is unclear how–and when–the House will proceed on many of those individual housing proposals–and/or how House and Senate leaders will ultimately reconcile their differences between respective versions of a defense authorization proposal prior to year’s end. There are no parallel housing provisions within the House version of an FY26 NDAA product that cleared that chamber shortly after Labor Day.
For more information, please contact George Rogers at (202) 557-2797 or Bill Killmer at (202) 557-2736.
Senate Confirms Jonathan McKernan as Undersecretary of the Treasury for Domestic Finance
On Tuesday, Jonathan McKernan was confirmed by the full Senate by a vote tally of 51-47 to be Undersecretary of the Treasury for Domestic Finance. McKernan previously served on the Federal Deposit Insurance Corporation (FDIC) Board, as a key Treasury, Federal Housing Finance Agency (FHFA), and congressional aide, and in private law practice.
Why it matters: In his role as Undersecretary, McKernan will play a key role on issues related to financial institutions/markets and fiscal service – including municipal debt finance and the housing GSEs.
What they are saying: In a press statement following his confirmation, MBA President and CEO Bob Broeksmit, CMB, said, “MBA congratulates Jonathan McKernan on his well-deserved confirmation as Undersecretary for Domestic Finance. We believe that he will demonstrate a balanced perspective on issues pertaining to fiscal policy, financial markets, housing affordability, and financial institutions. Importantly, Undersecretary McKernan will play a key role in the future of the GSEs. We will work collaboratively with Treasury staff and the Federal Housing Finance Agency to develop and execute a careful and calibrated plan for the GSEs’ future in a way that avoids any market disruption or increased costs for borrowers.”
What’s next: MBA looks forward to working with Undersecretary McKernan and his staff on all issues pertinent to real estate finance – both commercial/multifamily and single-family in nature.
For more information, please contact George Rogers at (202) 557-2797 and Bill Killmer at (202) 557-2736.
Banking Agencies Issue NPR Regarding “Unsafe” or “Unsound” Practices and Matters Requiring Attention
On Tuesday, the FDIC and Office of the Comptroller of the Currency (OCC) announced a Notice of Proposed Rulemaking (NPR) aimed at defining key banking terms and revising the framework for issuing Matters Requiring Attention (MRA). Comments are due 60 days after publication in the Federal Register.
• The proposal would define an “unsafe” or “unsound” practice as, “a practice, act, or failure to act, alone or together with one or more other practices, acts, or failures to act, that (1) is contrary to generally accepted standards of prudent operation; and (2)(i) if continued, is likely to (A) materially harm the financial condition of the institution; or (B) present a material risk of loss to the Deposit Insurance Fund; or (ii) has already materially harmed the financial condition of the institution.”
• Under the proposal, examiners may only issue an MRA for conduct defined under the new “unsafe” or “unsound” definition or if an actual violation of a banking or banking-related law or regulation occurs.
• Examiners will not be allowed to issue an MRA for potential future conditions that are possible but not reasonably foreseeable.
Why it matters: “Unsafe” and “unsound” practices have been undefined under current banking rules and regulations. Establishing a uniform definition provides greater transparency for insured depositories throughout their examination processes.
Go deeper: MRAs may be issued for a wide variety of banking activities, including those related to CRE and multifamily loan issuance. Having a well-defined framework for MRA issuance clarifies the process for insured depositories and levels the amount of examiner discretion throughout the process.
What’s next: MBA remains supportive of the Trump administration’s efforts to ensure supervisory exams are both fair and transparent and looks forward to collaborating with members on this important issue to formulate a response.
For more information, please contact Fran Mordi at (202) 557-2860 or John Lammle at (202) 557-2789.
HUD Solicits HECM Modernization Feedback from Industry
Last Thursday, FHA and Ginnie Mae published a joint request for information (RFI) seeking comments regarding the Home Equity Conversion Mortgage (HECM) program and the HECM Mortgage-Backed Securities security (HMBS).
Why it matters: The RFI represents a comprehensive review of the HECM and HECM-MBS program to facilitate access to home equity for senior homeowners and closely align these programs with their intended roles. Over the past decade, despite programmatic improvements to mitigate losses to FHA’s Mutual Mortgage Insurance Fund (MMIF), HMBS issuance volumes have returned to the same levels as a decade ago, while a private label market has begun to develop in parallel as another source of liquidity.
Go deeper: To address persistent challenges with the HECM programs, the RFI solicits feedback on the following categories:
• Program performance, market role, and emerging risks;
• Consumer interest and demand;
• Origination volume;
• Liquidity; and,
• Program Improvements
What’s next: MBA will formulate its response through its Reverse Mortgage working group before submitting comments by the Dec. 1, 2025, deadline.
For more information, please contact Anthony Siller at (202) 557-2944.
MBA Outlines Concerns to Proposed Changes to Bankruptcy Rules in North Carolina
Recently, MBA submitted comments to the Local Rules Committee of the United States Bankruptcy Court for the Middle District of North Carolina (MDNC) regarding its proposed changes to several Local Rules. The MDNC Local Bankruptcy Rules are region-specific procedural requirements supplementing the Federal Rules of Bankruptcy Procedure, governing all bankruptcy cases and adversary proceedings within that district.
Dig deeper: MBA appreciates the Court’s efforts to improve the bankruptcy process and supports measures that enhance transparency and communication for debtors. However, the MDNC proposal conflicts with federal mortgage servicing laws and rules, is not operationally feasible, and would sow considerable confusion and legal risk for servicers. In addition, MBA highlighted that the rules themselves are internally inconsistent.
MBA urged the Court to withdraw or substantially revise the different elements of the proposal, address industry concerns, and work collaboratively with stakeholders across all jurisdictions to develop rules that are legally sound, practical, and beneficial to all parties.
What’s next: MBA will stay engaged on this issue and will keep members updated on any developments.
For more information, please contact Justin Wiseman (202) 557 or William Kooper (202) 557-2737.
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:
• Non-Agency Training Series: Second Liens and HELOCs – Oct. 28
• Say It So Borrowers Understand: Plain Language + Translation That Cut Call Volume and Improve Outcomes – Oct. 29
• Leveraging Rental Payment History – Part I: Current GSE Policy and Recent Enhancements – Nov. 6
• Simplify, Automate and Elevate through AIM with LPA – Nov. 12
• Leveraging Rental Payment History – Part II: Industry Practices and Consumer Experience Improvements – Nov.13
• Using Quality Assurance, Control and Fraud Prevention to Strengthen Loan Operations – Nov.17
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.
