Advocacy Update: MBA’s Concerns with Senate-passed Housing Package; Basel III Re-proposal Expected Thursday; MBA Calls for Risk Weight Reductions on Warehouse Lines
Senate Passes Bipartisan Housing Package; MBA Expresses Concerns with Single-family Rental Investor Ban and Other Provisions
Last week the full Senate passed an Amendment in the Nature of a Substitute (ANS) to the 21st Century ROAD to Housing Act, an updated version of H.R. 6644 (Housing for the 21st Century Act) that aims to help boost housing supply, expand homeownership, reduce unnecessary regulatory burdens, and embrace modern manufactured and modular housing. The package also contains a problematic provision that requires firms owning more than 350 units to dispose of those holdings after seven years.
• The updated legislation combines the bulk of H.R. 6644 (passed the House in February) with the Senate’s ROAD to Housing Act (S. 2651) – which was cleared unanimously by the Senate Banking Committee last summer.
• MBA supported the underlying House and Senate (S. 2651, the ROAD to Housing Act) housing proposals that formed the basis of this bipartisan package, which was negotiated and amended by Banking Committee Chair Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) last week.
• Read the bill text here, and a section-by-section here.
Why it matters: While the package includes many positive provisions that address affordability and improve the efficiency of the nation’s housing finance system, MBA does not yet fully support the housing package in its current form because of provisions that contain (read MBA’s letter):
• Restrictions on institutional investment in single-family housing (as mentioned above) that would further limit financing for build-for- and built-to-rent housing communities;
• A requirement that servicers provide foreclosure-mitigation counseling – paid for from FHA insurance reserves — for all government-backed loans at 30 days delinquent. The provision would unnecessarily drain the FHA’s Mutual Mortgage Insurance Fund without meaningfully improving borrower outcomes; and,
• Changes to FHA’s Informed Consumer Choice Disclosure that could create costly compliance burdens while doing little to help the veteran homebuyers it is intended to benefit.
• In a positive development, MBA is pleased about the bill’s enhancements to FHA’s manufactured housing program, refinements to sections of the legislation regarding appraisal-related lender liability, and Rural Housing Service reforms designed to improve Accessory Dwelling Unit (ADU) financing options and facilitate USDA loan assumptions.
What they’re saying: In a press statement, MBA President and CEO Bob Broeksmit, CMB, said, “MBA urges Senate leaders and the Trump administration to work with the House to address these provisions before the legislation moves any further. The goal should be clear: a final package that puts the country on a path to increased affordability, lower operational costs, less red tape, and more housing, not less.”
Go deeper: In joint trades letters here and here and numerous conversations with lawmakers, MBA has stressed several key points regarding the investor ban, namely that any final legislation should avoid: inadvertently scoping in properties that have traditionally operated as multifamily rental communities, undermining housing supply and affordability by constraining capital for rental housing, limiting build-to-rent communities, and restricting mortgage servicers’ ability to acquire and dispose of REO properties – activities essential to maintaining housing supply and neighborhood stability.
What’s next: The White House has urged Congress to pass this bicameral housing package – with the institutional single-family rental investor ban included – as soon as possible. MBA remains engaged with the Administration and lawmakers in both Chambers (and on both sides of the aisle) and will press the House to make refinements to the remaining problematic provisions.
For more information, please contact Bill Killmer at (202) 557-2736, Rachel Kelley at (202) 557-2816, George Rogers at (202) 557-2797, and Jeremy Green at (202) 557-2849.
Fed Vice Chair of Supervision Bowman Previews Basel III Re-Proposal to be Released Thursday
Last Thursday, Federal Reserve Vice Chair of Supervision Michelle Bowman in a speech at the Cato Institute previewed the expected Basel III Endgame capital re-proposal to be released this Thursday with a 90-day comment period.
• Bowman said the re-proposal will eliminate the cap on mortgage servicing assets (MSAs) included in tier one capital and set the capital charge at 250% while regulators seek public feedback about the appropriate risk weight.
• To encourage banks to hold mortgages on balance sheets, it will also lower the capital charge on home loans based on borrower equity (LTV) and the presence of credit enhancements like mortgage insurance.
• Bowman also notes that there will be a companion rulemaking that will extend many of the capital recalibrations for consumer and commercial loan exposures to all banks, including those not required to adopt Basel III.
• Bowman’s speech comes on the heels of several others over the past month where she has highlighted the post-2008 retreat by banks from mortgage lending and servicing, questioned whether capital rules are over-calibrated, and signaled targeted reforms to revive prudent bank participation without compromising safety and soundness.
Why it matters: Strong capital requirements, while necessary for financial stability, can reduce lending and raise funding costs for market participants if not calibrated appropriately.
• For years, MBA has stressed that banks play a critical role in the mortgage lending and servicing markets – both directly and indirectly by financing IMBs – and that the current capital rules keep banks from playing a larger role in these markets.
Go deeper: MBA recently submitted a Statement for the Record ahead of a Senate Banking Committee hearing with the prudential bank regulators and led a broad joint trades letter to the banking agencies. Both letters expressed strong support for the Basel III re-proposal and made several recommendations, including:
• Reducing the punitive capital treatment of MSRs;
• Adopting more granular, LTV-based risk weights;
• Lowering the capital treatment of mortgage warehouse credit facilities,
• Properly recognize private mortgage insurance as credit enhancement; and,
• Ensuring predictable capital treatment for credit risk transfers.
What’s next: Based on Bowman’s comments, MBA is encouraged to see that most of its longstanding feedback has been considered, is eager to review the forthcoming proposal, and stands ready to work with the banking agencies on a balanced framework that supports sustainable mortgage origination, warehouse lending, robust servicing capacity, and continued access to affordable home financing offered by both depositories and independent mortgage banks.
For more information and to participate in the Working Group that will meet to comment on this proposal, please contact Pete Mills at (202) 557-2878, Fran Mordi at (202) 577-2860, and John Lammle at (202) 557-2789.
MBA Urges the Banking Agencies to Reduce Risk Weighting for Warehouse Lines
On mortgage-related provisions top-of-mind in the forthcoming Basel III revisions, MBA submitted a letter to the OCC, FDIC, and Federal Reserve (the Agencies) on Monday, reminding them of the critical role bank warehouse lending plays in providing liquidity for two-thirds of single-family originations. MBA urged the Agencies to address the excessive 100% risk weight on warehouse lines, which is twice the risk weight assigned to the collateral securing the lines.
• The current capital treatment is largely driven by accounting considerations rather than the economic substance of warehouse lending. The result misaligns the capital treatment of warehouse lending with the facility’s credit risk and the underlying collateral supporting it.
Why it matters: The letter cautions that the excessive risk weight creates a barrier to banks’ ability to scale up warehouse lending quickly when needed and could encourage quick exits from this line of business in a downturn. MBA urges the Agencies to better align capital with risk and re-establish a 50% risk weight for warehouse lines for all U.S. banks.
• The letter includes data supporting both the importance of warehouse lines and the low risk of loss experience in the business over the last 15 years.
Go deeper: Prior to 2014, a 50% risk weight applied to both the warehouse line and the mortgage loans that collateralized it. MBA believes the 2014 change in risk weighting for warehouse lines, made pursuant to an accounting policy change, ignores the economic substance of the underlying transaction and instead focuses on its form.
• The letter reminded the Agencies of IMBs’ expanded role in the U.S. mortgage market today and urged them to reduce the risk weight to 50% to promote through-the-cycle availability of warehouse lines.
What’s next: MBA supports the Agencies’ continued efforts to encourage greater bank participation in the mortgage market and will continue to engage as they roll out a revised Basel III Endgame rule that presents an opportunity to strengthen mortgage market stability and improve housing affordability.
For more information, please contact Pete Mills at (202) 557-2878 or Fran Mordi at (202) 557-2860.
MBA Responds to the VA’s Proposed Partial Claim Program and Waterfall Changes
On Wednesday, MBA sent a letter and detailed comments to the Department of Veterans Affairs (VA) in response to its proposed policies implementing a Partial Claim program and changes to their loss mitigation waterfall.
• MBA applauded the VA for its use of the Drafting Table to gather feedback from stakeholders before implementing these policies. MBA has long advocated for VA to adopt a drafting table process to foster more collaboration with stakeholders that will result in better policy rollouts, more resilient programs, and better outcomes for veterans.
MBA suggested the following changes to make the VA loss mitigation process significantly more efficient, aligned with other loss mitigation waterfalls, and effective:
• Only allowing payment increase modifications at the last step of the waterfall;
• Adding Forbearance into the waterfall to help Veterans with short-term/temporary hardship;
• Only allowing a Veteran to qualify for one permanent home retention option within a 24-month period, among other changes;
• Not requiring servicers to make judgment calls on Veteran’s ability to afford payment options; and,
- Improving the Trial Payment Plan program.
MBA also suggested changes to better incorporate the Partial Claim into the loss mitigation waterfall. Most importantly, MBA emphasized that payment reduction is the most important driver of successful modifications and urged VA to restructure the waterfall to only allow increased monthly payments as a last resort. Other recommendations included:
• Minimizing the eligibility requirements for Partial Claims as much as possible within the limits of the statute;
• Making appropriate fixes to better align with the servicer advance model;
• Clarifying servicers’ responsibilities in administering Partial Claims; and,
• Providing reasonable timelines for administering partial claims, among other changes.
What’s next: MBA will keep members informed about next steps on the VA’s proposed changes.
For more information, please contact Justin Wiseman at (202) 557- 2854 or Kaitlin Hildner at (202) 557-2933.
Participate in MAA Action Week 2026: May 11-15
MAA Action Week is right around the corner, and this year’s campaign makes it easier than ever for members to raise their voices and advocate for the issues that matter most to our industry. From May 11–15, MBA will mobilize members nationwide to engage with policymakers, share their stories, and help shape the future of real estate finance.
• SIGN UP to participate and run a company-wide campaign during this important week to help us grow MBA’s FREE MAA membership and reach our association-wide goal of reaching 80,000 members by year‑end.
Why it matters: Your engagement truly moves the needle. MBA is committed to supporting you every step of the way with ready-to-use resources, such as email templates, social media content, active MAA rosters, and more. Whether you have five minutes or an hour, there’s always a meaningful action you can take, and MBA ensures every option is simple, accessible, and impactful.
What’s next: Register now for MBA’s National Advocacy Conference (NAC), April 14–15, 2026, at the Westin DC Downtown. Reconnect with peers, gain fresh insights, and get equipped with the tools and training you need to be an effective advocate on Capitol Hill.
For more information, please contact maa@mba.org or Jamey Lynch 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:
• Fraud Detection and Prevention in Non-Agency Lending – March 31
• How Secondary Marketing Powers Mortgage Lending – April 1
• Data & System Privacy in an AI World – April 2
• Social Media Compliance Risk Mitigation and Best Practices – April 9
• Drilling into Mortgage Accounting – April 22
• State of the Market: Tech Trends Shaping the Future of Mortgage Lending – May 14
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.
