MBA and Coalition Partners Urge Changes to FHA Loan-Level Certifications and Defect Taxonomy
Late last week, a coalition featuring MBA, the Housing Policy Council, the American Bankers Association, and the Bank Policy Institute submitted detailed recommendations to FHA on its proposed revisions to the program’s loan-level certifications and Defect Taxonomy. These recommendations were developed to limit the overbroad use of the False Claims Act to penalize FHA lenders, often for minor loan defects.
The coalition’s recommendations focused on three areas:
- Recognition that the underwriting process entails judgment and discretion on the part of the underwriter;
- Exclusion of certifications related to minor defects that would not impact the eligibility of the loan for FHA insurance; and
- Formal incorporation of the Defect Taxonomy to provide greater certainty regarding the remedies for various types of loan defects.
FHA is expected to consider the public input it has received to date via its “drafting table” approach before publishing a revised version of the loan-level certifications in theFederal Register for an additional round of comments.
For more information, please contact Justin Wiseman at (202) 557-2854, Fran Mordi at (202) 557-2860, or Dan Fichtler at (202) 557-2780.
House Financial Services Committee Expected to Consider Numerous Bills
MBA anticipates the House Financial Services Committee will hold a significant mark-up – with as many as 20 bills on the docket – beginning on Thursday, July 11, and stretching until Tuesday, July 16. The focus of the proposals will be grouped into four major policy areas: Consumer Protection, Diversity and Inclusion, Housing, and Investor Protection. As is our customary practice, MBA will offer its policy feedback on the bills pertinent to real estate finance in a letter to the committee when the mark-up agenda is formally announced.
For more information, please contact Dan Grattan at (202) 557-2712 or Ernie Jolly at (202) 557-2736.
Mortgage Servicing and Subservicing Webinar Series
Join MBA Education and industry experts on July 17 and 24 for a two-part series on mortgage servicing and subservicing. The completion of this series will provide you with the information necessary to understand servicing and its related components. Anyone who seeks to increase their knowledge of mortgage servicing will benefit from these conversations that will cover critical topics such as how to manage and pick a subservicer, which loans should be retained, why or why not to retain servicing in today’s market, and profitability trends for servicers. To register for part I, please clickhere. To register for part II, please click here. To receive a discount for registering for both, please email firstname.lastname@example.org.
For questions, please contact Danielle Jackson at 202-557-2873.