MBA President and CEO David Stevens traveled to Capitol Hill last week to testify before the Senate Banking Committee hearing on the Federal Housing Administration’s financial condition in the wake of the recent actuarial report that found the agency’s single-family programs in the red.
The hearing presented an opportunity to have a robust discussion about the steps being taken to stabilize the mutual mortgage insurance fund, protect taxpayers and preserve the agency’s mission in the single-family housing market.
Attention in Washington, D.C. has also centered on the budget sequester, which went into effect on Friday night, with the White House directing agencies to begin implementing across-the-board spending reductions. Those cuts will impact agencies such as HUD and will likely lead to staff furloughs at FHA.
Key MBA Actions
MBA Submits QM Concurrent Comment Letter
On February 25 MBA submitted a comment letter on the Consumer Financial Protection Bureau’s concurrent proposal–released simultaneously with the Final Rule–and amending this final ability to repay/qualified mortgage rule.
The comment letter calls for the removal of all individual and mortgage broker compensation from the 3 percent points and fees limit by applauding the CFPB’s netting approach that would address these issues, but then calling for a complete exclusion in order to solve the problems raised by their inclusion. MBA used the opportunity provided by the CFPB to raise other concerns with the final QM rule in the hopes that they would consider these issues to provide solutions and guidance early in the implementation process.
MBA’s comments supported the amendments that would exempt from the ability to repay requirements to certain government refinance programs and community development programs, as well as certain charitable creditors–provided these exemptions are clearly articulated and delineated. Finally, MBA expressed approval for the expansion of the safe harbor for smaller creditors that hold loans in portfolio and called for an expanded safe harbor for all loans in order to remedy issues with the average prime offer rate that unintentionally undermine the protections.
MBA Testifies Before Senate Banking Committee
On February 28, MBA President and CEO David Stevens testified before the Senate Banking Committee at a hearing, Addressing FHA’s Financial Condition and Program Challenges, Part II.
The hearing offered an occasion to have a concentrated dialogue on the Federal Housing Administration’s 2012 actuarial report, as well as the actions being employed to guard taxpayer interests, secure the mutual mortgage insurance fund and protect FHA’s housing market objectives.
To view Stevens’ full written testimony, click here.
MBA Presses for Uniformity in State Loan Officer Licensing
Last week, during the annual Nationwide Mortgage Licensing System and Registry User Conference, MBA staff spoke in support of uniformity in mortgage loan originator licensing among states. More than 58 state mortgage banking regulators–representing 49 states, the District of Columbia, Puerto Rico and the Virgin Islands–attended this year’s event in San Antonio.
MBA thanked regulators for progress made through adoption of “approved-inactive” statuses by 24 states/agencies, as well as the future rollout of the new Uniform State Test by 20 states/agencies on April 1 and an additional four states/agencies on July 1. MBA also appealed to non-adopting states to discuss with MBA the legislative or regulatory obstacles that may currently prevent them from embracing both important initiatives and to work with MBA and their state MBAs, to remove them.
Additionally, MBA made clear that state regulators need to do more to address the inconsistencies that exist among states in the requirements for the licensing of servicing personnel. MBA expressed that it is inappropriate to require staff that assist consumer access to federal programs such as HAMP or HARP, or who perform loan modifications rather than originate a loan, to meet the licensing requirements of MLOs.
MBA Requests CFPB to Publicly Support UST
On February 25, MBA wrote a letter to the Consumer Financial Protection Bureau to express its support for the Uniform State Test for mortgage loan originators, as well as to request that CFPB indicate in writing that a state’s adoption of the UST will not violate the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.
The UST is a clear example of how the real estate finance industry and regulators are cooperating to meet consumer protection needs, while alleviating many of the unintended economic and employment constraints created by the SAFE Act. In its letter, MBA noted that many current non-adopting states/agencies have expressed their desire for CFPB’s public approval, in order to consider joining the current list of 24 adopting states/agencies.
Update on Sequestration
The Budget Control Act of 2011 institutes mandatory discretionary spending cuts–known as sequestration–across many government programs, including the Federal Housing Administration. As the Obama administration and Congress could not reach an agreement by the Mar. 1 deadline, sequestration went into effect late Friday night.
Guidance disseminated by FHA indicates that its staff will be subject to furloughs, which have the potential to impact endorsement and claims processing times. Information received from the Department of Veterans Affairs and the Department of Agriculture indicates that their loan guaranty operations are exempt from sequestration, and that they will be operating as normal. MBA will provide more information on the impact of the sequestration as it becomes available.
Fed Chairman Bernanke Testifies, Addresses Basel III, QRM
On February 26, Federal Reserve Board Chairman Ben Bernanke testified before the Senate Banking Committee and addressed Basel III and the risk retention rule’s qualified residential mortgage definition.
Bernanke told the Committee (click here to watch the video) that the final Basel III capital rules will be published in the middle of this year and that the implementation date would also be in 2013 (noted at the hearing’s 1:15:00 mark). He also commented that the QRM definition is being developed and that he and his colleagues at the Fed are sensitive to the mortgage industry’s concerns about aligning the QRM definition with the qualified mortgage definition in the ability to repay rule.
MBA Urges Congress to Preserve Access to Rural Housing Programs
On February 25, MBA joined other trade associations in urging congressional leadership in the House and Senate to address a looming lapse in access to certain Department of Agriculture Rural Housing Service programs. Click here to read the letter sent to House leadership, and here to read the letter sent to Senate leadership.
On Wednesday, March 27, the USDA will revise its list of communities that qualify as “rural,” based on data from the 2010 Census. As a result, more than 900 communities across the nation are expected to lose access to these vital programs.
MBA is seeking a short-term extension that preserves eligibility for these communities while Congress considers broader legislation that would update the definition of “rural community.”
MBA 2013 National Fraud Issues Conference Coming in April
This year’s MBA National Fraud Issues Conference will take place April 14-17 in Hollywood-Fort Lauderdale, Fla.
The Conference will bring together mortgage fraud executives, managers, investigators, attorneys and industry venders, as well as government officials from the federal and state levels to discuss prevention, detection and investigation efforts in pre-closing and closing and during the life of the loan. Panelists will also address the current and evolving environment of mortgage fraud in the context of limited credit availability, repurchase investigations and greater regulatory scrutiny.
For more information, please contact Andrew Szalay, (202) 557-2941 aszalay@mortgagebankers.org; or Joe Gormley, (202) 557-2870 jgormley@mortgagebankers.org.
MBA 2013 National Advocacy Conference Coming in April
The MBA 2013 National Advocacy Conference will take place April 24-25, in Washington, D.C. To register for the conference, click here. For more information, please contact Kelley Williams, (202) 557-2777 kwilliams@mortgagebankers.org.
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