MBA Releases White Paper on IMBs
Today, MBA released a white paper on the important role independent mortgage banks (IMBs) play in today’s market. IMBs are now the primary source of single-family mortgage credit, and particularly so for low- and moderate-income families. The paper examines recent developments driving the growth of the IMB segment and the enhanced regulatory climate in which they operate. It also suggests policy recommendations designed to make the origination and servicing of mortgages an attractive and stable market for any lender — bank or nonbank — that wants to devote investment capital to supporting sustainable homeownership.

For more information, please contact Pete Mills at (202) 557-2878.

Senate Banking Committee to Consider Calabria Nomination to Head FHFA
Next Tuesday morning, the full Senate Banking Committee will vote on the nomination of Mark Calabria, the current Chief Economist to Vice President Mike Pence, to lead the Federal Housing Finance Agency (FHFA). The committee vote comes very quickly on the heels of the panel’s hearing last week featuring Calabria, and may portend relatively swift movement of his nomination to the full Senate for a floor vote as soon as late March or early April. Also on the Committee’s Tuesday docket are votes on Bimal Patel to be Assistant Secretary for Financial Institutions at Treasury, and Todd Harper and The Honorable Rodney Hood to be members of the National Credit Union Administration Board.  In addition, the Committee will consider nominees who were not confirmed in the 115th Congress, including Dino Falaschetti to be Director of Treasury’s Office of Financial Research, and HUD Assistant Secretary nominees Seth Appleton (Policy, Development, and Research) and Hunter Kurtz (Public and Indian Housing). Immediately following votes, the Committee will transition to a hearing on the Federal Reserve’s Semiannual Monetary Policy Report to Congress – with Chairman Jerome Powell as the sole witness.

For more information, please contact Tallman Johnson at (202) 557-2866 or Erin Barryat (202) 557-2913. 

FHA Issues Guidance to Allow Third-Party Verification of Borrower Employment, Income, and Assets
Late last week, HUD issued Mortgagee Letter 2019-01, which details the ways in which FHA lenders can use third-party services to verify borrower employment, income, and asset information. The accompanying FHA Handbook revisions apply to Title II forward mortgages and HECM loans. This guidance is directly responsive to a request MBA made in July 2018, urging HUD to adopt substantially similar standards as those already in place at Fannie Mae, Freddie Mac, and VA. MBA staff will continue to analyze the FHA Handbook revisions in the coming days. While these revisions take effect immediately, HUD is inviting public feedback for a 30-day period (through March 17).

For more information, please contact Julienne Joseph at (202) 557-2782 or Andrea Ohat (202) 557-2922.

‘Patience’ the Theme in January FOMC Meeting 
The Federal Open Market Committee on Wednesday released the minutes from its two-day January meeting. Even though the job market remains strong and inflation hovers at its 2 percent target, meeting participants stressed the need to be patient in regard to future short-term rate hikes. Citing signs of a slowing global economy, coupled with trade tensions and the stock market volatility at the end of 2018, the minutes, as expected, reiterated a data-dependent stance on any decision to raise rates. However, some participants did leave open the possibility of a rate increase later this year.

Additionally, it was revealed that most Fed officials during the meeting signaled that they were prepared to soon release an action plan on stopping the shrinking of the Fed’s $4 trillion balance sheet. It was suggested that the decrease in reserves – which started in 2017 – could end as soon as later this year. 

For more information, please contact Mike Fratantoni at (202) 557-2935.

Federal Banking Regulators Publish Notice of Proposed Rulemaking on the Community Bank Leverage Ratio in the Federal Register
On February 8, 2019, the FDIC, OCC, and Federal Reserve (the “Agencies”) published a joint notice of proposed rulemaking on the community bank leverage ratio (CBLR) framework in the Federal Register. The notice contains provisions that would implement section 201 of the regulatory burden relief bill, S. 2155, which was enacted by Congress last year. Under Section 201, qualifying community banks are eligible for regulatory burden relief in the form of simplified capital leverage requirements. The notice proposes eligibility criteria, which, if met, would allow the bank to opt into the simplified regulatory capital calculation rules, and avoid the complex Basel III capital rules. MBA applauds the Agencies’ efforts to provide much-needed guidance implementing the CBLR rule, but continues to be very concerned that the eligibility factors outlined in the notice might make it difficult for many community banks to qualify for this important relief. The Agencies are soliciting comments/feedback on the notice, which will be due on or about April 8, 2019 (60 days after publication in the Federal Register). MBA is currently putting together a working group of member community banks to develop comments on the notice. 

For more information or to join the working group, please contact Fran Mordi at (202) 557-2860.

MISMO Releases Proposed Standards for Remote Online Notarization 
Earlier this week, MISMO^®, the mortgage industry's standards organization, announcedthat new standards for remote online notarizations (RON) have been released for a 60-day public comment period. This period opened Tuesday, February 19, and will end on Monday, April 22, 2019. Any comments received will be reviewed and dispositioned; after which the standards are expected to be elevated to Candidate Recommendation status. MBA and the American Land Title Association (ALTA) collaborated to prepare model legislation that provides the framework for any state to adopt a RON process. At the same time, the mortgage industry asked MISMO to develop standards to promote consistency across the states that passed RON legislation. MISMO's RON standards enable states to adopt consistent practices and permit lenders and other industry participants to quickly adopt new procedures to meet consumer demands for convenience and a better consumer experience. For more information about the RON legislative campaign, please visit the MBA RON Resource Center. 

For more information or questions about the proposed MISMO RON standards, please visit the MISMO website or contact Rick Hill at (202) 557-2718 or Jan Davis at (202) 557-2715.

mPact Young Professional Event: Increasing the Visibility of Your Brand
mPact, MBA’s initiative to engage the next generation of young professionals in the real estate finance industry, is hosting an event at MBA’s National Mortgage Servicing Conference & Expo on February 26, 2019, at the Urban Tide restaurant starting at 6:30 p.m. This event will be led by mPact Steering Committee Leader Candace Russell, VP at Carrington Mortgage Services. Understanding the valuable role mPact members play within our industry, Russell will provide insightful perspectives on how to enhance your visibility to advance your career and make your mark within your company. Come ready to share your experiences and learn from your peers. Food and drinks will be provided.

To register for the event, please contact Krystal Thomas at (202) 557-2726.

MBA Leads Industry Coalition to Oppose Harmful Licensing Legislation in Maryland  
This week, MBA, the Maryland Mortgage Bankers and Brokers Association, and the Maryland Bankers Association submitted testimony to the Maryland House Economic Matters Committee for a hearing on HB-593/SB-485. The groups opposed these companion bills, which were introduced at the request of the Maryland Attorney General. The legislation would require statutory trusts to become licensed debt-collection agencies prior to the initiation of a foreclosure action. The proposed law would reverse the well-reasoned decision last year of the Maryland Court of Appeals inBlackstone v. Sharma, 461 Md. 87. The testimony points out that the bills do not offer any additional consumer protections beyond already robust federal and state servicing laws and rules, and that this requirement would make Maryland the only state in the country that requires trusts to obtain a license to foreclose on a loan that the trust itself owns. Moreover, Maryland would be requiring investors to obtain a license for legal entities that in many cases do not have any individual associated with the trust. The letter made clear that if enacted, this requirement would increase the costs of mortgage credit to Maryland borrowers. MBA and its industry partners will continue to work together to oppose this harmful legislation in the remaining weeks of the state’s legislative session. 

For more information, please contact William Kooper at (202) 557-2737 or Kobie Pruittat (202) 557-2870.

MAA Issues Call to Action to Support Important Bill to Stop Regulatory Overreach in Arkansas
Partnering with the Arkansas MBA and the National Association of Home Builders (NAHB), MAA this week issued a Call to Action to support SB-170, which would block unnecessary local regulations in the state that relate to residential building designs. These regulations would mandate design standards on residential construction that have no effect on consumer health or safety, and they are estimated to increase Arkansas housing costs by an estimated $10,000 to $20,000, according to NAHB. SB-170 has already passed the Arkansas Senate, and thanks to the testimony and support of the Arkansas MBA and Arkansas MAA members, the bill is now on its way to the House floor for consideration. 

For more information, please contact William Kooper at (202) 557-2737 or Alden Knowlton at (202) 557-2816.

MBA Education Webinar on California Consumer Privacy Act 
Join MBA Compliance Essentials and the California Mortgage Bankers Association on March 13, 2019, as subject matter experts discuss the new California Consumer Privacy Act (CCPA) and how it will impact lenders in California. While the CCPA is scheduled to go into effect in 2020, there are a number of tasks that every company needs to start doing right now. The CCPA is about giving California residents — including employees, vendors, and even visitors to your web site — more control over data that you have collected about them. To register for this webinar, please click here.

For more information, please contact Lisa Volb at (202) 557-2919. 

MBA Education webinar on: ‘What the heck do I do now?’
Join MBA Education on February 27, 2019, for a look at the state of mortgage lending in 2019 and what you can do to make this year profitable while still positioning your company for the future. With margins way down and seemingly going even lower, and with many companies already cutting expenses, it may seem like you’re out of options. This webinar will focus on the issues that matter, the necessary trade-offs, which tactics seem to be working in the industry and which ones aren't, and some of the strategic choices you may never have considered. To register for this webinar, please click here.

For more information, please contact Laura Vanegas at (202) 557-2785.