Federal Housing Officials Provide Updates on Regulations, Future Plans

(From left: Panel moderator Joseph Grassi, chief legal and risk officer with loanDepot.com, Joseph Gormley, Craig Trainor and Patrick Zondervan, by Anneliese Mahoney)

WASHINGTON–Midway through the second Trump administration, federal housing officials shared their optimism and gave updates at the Mortgage Bankers Association’s Compliance and Risk Management Conference here Sept. 28.

Joseph Gormley, president of Ginnie Mae and acting FHA commissioner, highlighted some recent successes. On the FHA side he pointed to the implementation of additional credit scoring with the addition of VantageScore 4.0 and FICO 10T. “I think one of the things I’m really proud about with regards to our announcement is it gives originators optionality,” he said.

He also noted that at FHA there’s been an effort to withdraw outdated requirements and closely examine guidelines. He listed the changes last year to the FHA loss mitigation waterfall, which allows borrowers to obtain only one loss mitigation solution every 24 months. He also touted the FHA’s withdrawal from the IECC code earlier this year.

And, there’s a team working around implementing new requirements around manufactured housing as outlined in the 21st Century Road to Housing Act, Gormley noted.

Looking at Ginnie Mae, Gormley said that there’s a plan to implement a set of improvements to its pool data delivery set–either adding or updating 16 new fields in the disclosure regime. Ginnie Mae has been working on a multiyear transformation to allow loan-level transfers of mortgage servicing rights from Ginnie Mae pools between issuers. “It’s also going to open up a lot of exciting possibilities in our program for issuers who want to tailor their MSRs to a specific geographic area or a specific type,” said Gormley.

Ginnie Mae is also evaluating a proposal to allow bifurcation for servicing advances. And, it has begun working with MISMO to create a standardized bilateral agreement for financing MSRs.

Craig Trainor, assistant secretary for fair housing and equal opportunity at HUD, outlined his office’s priorities. “My mandate from President [Donald] Trump and Secretary [Scott] Turner has been to enforce the law vigorously, enforce it as required and enforce it for all Americans,” he stated. He gave some specific examples of interest related to the Fair Housing Act, including looking into special purpose credit programs in Washington state and affinity or other housing programs at colleges or universities.

“Neither ECOA Regulation B or any sort of subregulatory guidance or consensus of an interagency [view] as expressed by, say, the prior administration, can defeat the categorical prohibitions of the Fair Housing Act,” Trainor said. He stated that if there’s a special purpose credit program that is taking into account race, that’s a potential violation of the Fair Housing Act.

“It is not a defense to a Fair Housing Act charge that you are relying on some reading of another statute,” he said.

Patrick Zondervan, executive director of Loan Guaranty Service at the Department of Veterans Affairs described implementation of the partial claims program after the VA Home Loan Program Reform Act was signed last year. He said the department has been working well with servicers, but he encourages them to reach out and ask the VA questions about the implementation process and noted that training is ongoing.

He also pointed to a new VA mobile app for certificate of eligibility and shared that the VA has updated the lender’s handbook. Moreover, he shared the VA is now a part of the appraisal subcommittee based on the 21st Century Road to Housing Act.
And, the VA is continuing to emphasize education, Zondervan said, describing the real estate professional toolkit, which helps real estate agents support families toward homeownership and dispel myths about the VA home loan program.

“We’re working on a mailer that’s going to go out to all veterans that we have on record and will inform them about the VA home loan program and financial resources,” he said. “This is a passion of mine and I’ll keep working on it.”