As 2013 kicks off, I wanted to give you a brief update on recent and upcoming policy activity that will immediately impact your business and the residential real estate market.
Fiscal Cliff: On Wednesday the President signed a bill that will, among other things, make permanent the Bush-era tax cuts for all individuals making under $400,000 (and families under $450,000), allow the payroll tax holiday to expire and extend unemployment benefits.
Of particular note for those of us in the industry, although the deal does not substantially limit the mortgage interest deduction, it does phase out itemized deductions for certain higher income households. On the other hand, the cliff compromise also reinstitutes the deductibility of private mortgage insurance premiums and extends the treatment of forgiven mortgage debt through year-end 2013.
As part of the deal reached between Congress and President, action was not taken to increase the debt ceiling and the mandatory spending reductions scheduled for Jan.1 (aka: Sequestration) were postponed for two months, almost guaranteeing another political fight later this winter.
FHA: On December 30, 2012, the Senate confirmed Carol Galante to be Assistant Secretary of Housing and FHA Commissioner at the U.S. Department of Housing and Urban Development. MBA was very involved in back-channel discussions and direct lobbying efforts on Galante‘s behalf with numerous Senate offices in the months leading up to the vote.
Regulatory Rulemakings: As I have reported to you many times, in January policymakers will present our industry with enough new rules and regulations to last us a lifetime. The Dodd-Frank Act mandates that regulators publish the following final rules no later than January 21, 2013:
1. Ability to Repay/Qualified Mortgage (QM); 2. HOEPA/High Cost Mortgage; 3. Loan Originator Compensation and Qualification; 4. Servicing Standards; 5. Escrow Accounts; 6. ECOA Appraisal Notice; and 7. Appraisals for Higher Risk Mortgages.
Further, we are expecting several additional final or proposed rules later in 2013, including:
1. Risk Retention/Qualified Residential Mortgage (QRM); 2. RESPA-TILA Disclosure Integration; 3. HUD Disparate Impact Enforcement Standards; 4. Anti-Steering, 5. Basel III Capital Standards; and 6. Expanded HMDA Reporting Rule.
To help our industry navigate the demands of multiple policy imperatives, MBA has called for the creation of a temporary Special Advisor on Housing Policy Coordination to be part of the White House team. The goal is for this new role to ensure coordination and communication among the different regulators and policymakers as these various policy efforts proceed. In addition, MBA has asked the CFPB to establish a process for providing the industry with written guidance to resolve expected ambiguities and unintended consequences in the forthcoming rules. If our industry is to function effectively in meeting the needs of consumers, it is critical that there be a rational and systemic approach to implementing major policy changes.
MBA will be on top of each and every one of these rulemakings, and we will communicate with you each and every step of the way. If you have any questions, please let me know.
David Stephens, President and Chief Executive Officer
Mortgage Bankers Association
1717 Rhode Island Avenue, NW
Washington, DC 20036
(800) 793-6222
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