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  • April 12, 2019 8:00 AM | Michelle Martin (Administrator)
    Introduction
    This past week, Treasury Secretary Steven Mnuchin testified before both the full House Financial Services Committee and the House Appropriations Subcommittee on Financial Services and General Government regarding a broad slate of economic items and the Treasury Department's FY 2020 budget request, respectively. In the Senate, Cheryl Stanton was confirmed as Administrator of the Labor Department's Wage and Hour Division. Congress will now leave for its traditional two-week Passover/Easter/Spring recess. 

    Industry Update

     

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    Upcoming Congressional Hearings

     

    No relevant hearings yet scheduled. 

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    Bicameral Progress on IRS Modernization
    On Tuesday, the full House of Representatives passed H.R. 1957, the Taxpayer First Act of 2019, by voice vote. H.R. 1957 and its Senate companion, S. 928, introduced by Senators Charles Grassley (R-IA) and Ron Wyden (D-OR), is the first legislative reform to the Internal Revenue Service (IRS) in nearly two decades. Among the many provisions, the bill includes language to automate the 4506T tax transcript process. MBA submitted a letter supporting the validation of income as an important component of sound residential mortgage lending. The Senate Finance Committee held a hearing on modernization and reform issues on Wednesday with IRS Commissioner Charles Rettig. In addition to discussing general IRS reform, Chairman Grassley used this opportunity to discuss the importance of H.R.1957/S. 928, and said it is his hope that the Senate will take action on this bill quickly. Debate around the bill’s provision that codifies the IRS’s “Free File” system will determine how quickly it moves through the Senate.

    For more information, please contact Tallman Johnson at (202) 557-2866 or Bill Killmer at (202) 557-2736.

    HFSC Subcommittee Discusses Community Reinvestment Act
    On Tuesday, the House Financial Services Committee (HFSC) held a hearing in the Subcommittee on Consumer Protection and Financial Institutions entitled, “The Community Reinvestment Act (CRA): Assessing the Law’s Impact on Discrimination and Redlining.” The witnesses included advocacy groups, academics and a reporter. During the hearing, Subcommittee Chairman Greg Meeks (D-NY) advocated for the elimination of “loopholes” in CRA, specifically in three areas: (1) instances where CRA credit is provided on loans in low- and moderate-income (LMI) assessment areas even when those loans are not to LMI borrowers; (2) the application of CRA when a bank has a deposit-taking branch in an assessment area; and, importantly, (3) in cases when CRA does not yet apply to non-bank lenders. Republicans such as HFSC Ranking Member Patrick McHenry (R-NC) and Subcommittee Ranking Member Blaine Luetkemeyer (R-MO) advocated for CRA modernization that reflects new financial-service delivery methods. MBA will carefully monitor this dialogue as it progresses to ensure that effective CRA reform for banks moves forward, and that CRA burdens are not extended to non-depository institutions.

    For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

    Secretary Steven Mnuchin Testifies in House Financial Services
    On Tuesday, the House Financial Services Committee (HFSC) heard from Treasury Secretary Steven Mnuchin at a sometimes spirited hearing entitled, “Annual Testimony of the Secretary of the Treasury on the State of the International Financial System”. During the hearing’s period reserved for questions and answers, Mnuchin faced a broad range of inquiries, including a focus on both the role of the Financial Stability Oversight Council (FSOC) and implementation of Financial Accounting Standards Board's (FASB) Current Expected Capital Loss (CECL) accounting standard. Some committee members expressed concerns that CECL could have “drastic pro-cyclical” repercussions on the GSEs and credit unions. Rep. Blaine Luetkemeyer (R-MO) asked whether Treasury would support a delay of implementation in order to conduct a quantitative impact study. Sec. Mnuchin replied that FSOC is discussing CECL and that he hopes Treasury can work together with Congress on GSE reform on a bipartisan basis.

    For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

    OMB Asserts Authority Over Regulatory Actions by the Fed, FHFA and Other Independent Agencies
    Yesterday the Office of Management and Budget (OMB), an agency in the Executive Office of the President, released a memo instructing the independent government agencies such as CFPB, FHFA, the Fed and others on the need to provide for Congressional review under the Congressional Review Act (CRA) of almost all of their actions—notice and comment rulemakings, interpretative rules or statements of policy and guidance. (There are some defined limited exceptions, such as for Fed monetary policy decisions.) Most significantly, the memo instructs these agencies to get a determination from OMB if a particular action is a “major” rule as defined by the CRA before taking any action to implement it. This requirement could significantly delay independent agency action while these OMB reviews are occurring. It is also a clear shift from past practice, where these agencies did not have their actions subject to oversight by other parts of the Executive branch. 

    For more information, please contact Justin Wiseman at (202) 557-2854. 

    Senate Confirms Cheryl Stanton to Head DOL’s Wage and Hour Division
    On Wednesday, the U.S. Senate voted to confirm Cheryl Stanton to lead the Labor Department’s Wage and Hour Division, which is tasked with enforcing federal labor laws such as overtime and prevailing wage requirements. The Senate voted along party lines, 53-45, to confirm Ms. Stanton. President Donald Trump first nominated Stanton for the position in September 2017, but the Senate did not take action to confirm her in the 115th Congress. MBA sent a letter of support for Stanton on February 2, 2018. 

    For more information, please contact Tallman Johnson at (202) 557-2866 or Bill Killmer at (202) 557-2736.

    MBA Submits Comments on Agencies’ Community Bank Leverage Ratio (CBLR) Proposal
    On Monday, MBA submitted comments on the proposed CBLR framework issued by the OCC, Fed and FDIC (agencies) in February. The proposal, which was congressionally mandated, provides guidance to taxpayers on implementation of Section 201 of the Economic Growth, Regulatory Relief and Consumer Protection Actof 2018. Section 201 established a simple alternative methodology to measure capital adequacy for eligible community banks, providing significant regulatory relief. The agencies’ proposal provides eligibility factors and other required guidance for community banks that want to opt in to the new simplified regulatory capital rules. MBA appreciated the agencies’ efforts to provide clear and useful guidance, but strongly opposes both the inclusion of a 25% MSA threshold as an eligibility factor, and the proposed 9% CBLR level as the acceptable level under the framework. These requirements would disqualify many small community banks for which the simplified framework is actually intended. MBA recommended that the agencies increase the MSA threshold to a minimum of 50%, and reduce the acceptable CBLR level to 8%. This would allow more community banks, especially the smallest banks in rural areas, to qualify for this simplified regulatory capital framework. 

    For more information, please contact Fran Mordi at (202) 557-2860.

    Important Advocacy Victory in Maryland -- Harmful Licensing Law Defeated 
    In another victory for coordinated and sustained industry advocacy, legislation (SB 485/HB 593) introduced at the request of the Maryland Attorney General to amend the state’s Collection Agency Licensing Act (MCALA) to require statutory trusts to become licensed debt collection agencies was ultimately defeated when the Maryland legislature adjourned on Monday of this week. The legislation would have reversed the well-reasoned decision of the Maryland Court of Appeals in Blackstone v. Sharma, 461 Md. 87 (2018), where the court held that statutory trusts created for the purpose purchasing and holding mortgage backed securities did not require licensure. A coalition led by MBA and the Maryland Mortgage Bankers and Brokers Association ensured the defeat of what could have been a harmful, first-in-the-nation licensing bill that would have increased servicing costs without any substantive new protections or benefits for consumers. The advocacy effort included testimony in the Senate andHouse of Delegates, in-person meetings with legislators on key committees, as well as several Mortgage Action Alliance (MAA) Calls to Action.

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

    Remote Online Notarization Campaign Continues: Maryland Legislature Passes RON Bill
    This week, following the unanimous approval by the Maryland Senate, the state’s House approved SB 678 to permit remote online notarizations (RON) in the state. If signed by Governor Hogan, Maryland will join five other states – Utah, Kentucky, North Dakota, South Dakota and Idaho – that have enacted RON laws in the past month, with progress observed in several other states. SB 678 follows the contours of the MBA-American Land Title Association (ALTA) model state RON bill which, with the help of MISMO’s draft model RON implementation standards, is helping establish a national consensus among state policy makers for RON laws and rules. To view the model bill, all support materials for the MBA-ALTA campaign and the latest RON developments, please visit the MBA’s RON Resource Center.

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


  • April 05, 2019 8:00 AM | Michelle Martin (Administrator)

    Introduction
    MBA’s National Advocacy Conference took place in Washington this week, giving attendees a chance to petition their elected officials and hear from a large cast of speakers, including a bipartisan mix of key congressional leaders on financial services and housing issues – and HUD Secretary Ben Carson. Yesterday the full U.S. Senate confirmed Mark Calabria to be the next Director of the Federal Housing Finance Agency (FHFA). And earlier this week, the House Financial Services Committee (HFSC) held hearings on a range of topics including affordable housing and the Fair Housing Act.


    Industry Update

     

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    Upcoming Congressional Hearings

     

    Apr 9 House Financial Services Committee: The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System
    Apr 10 House Financial Services Committee: Holding Megabanks Accountable: A Review of Global Systemically Important Banks 10 years after the Financial Crisis

    Click here for Upcoming MBA Conferences and Events

    MBA Working For You

     

    MBA Hosts Successful National Advocacy Conference
    Over 400 industry advocates from over 40 states attended MBA’s annual NationalAdvocacy Conference (NAC) earlier this week. The conference program included a slate of congressional and administration speakers including HUD Secretary Ben Carson, Senate Banking Committee member Doug Jones (D-AL), key HFSC member and subcommittee chair Greg Meeks (D-NY), “Problem Solvers” Caucus members Rep. Josh Gottheimer (D-NJ) and Rep. Steve Watkins (R-KS), and Fox News Anchor Chris Wallace – in addition to a memorable reception with elected officials in the Great Hall at the Library of Congress.

    On Wednesday, 300 attendees participated in 272 official constituent meetings with their senators and representatives on Capitol Hill. The NAC Hill Day once again included a tailored Commercial/Multifamily track. Our CREF members heard directly from speakers including key Senate Banking Committee and Senate Finance Committee member Tim Scott (R-SC), HFSC member Brad Sherman (D-CA), along with key staff from the office of House Speaker Nancy Pelosi (D-CA), the Senate Banking Committee, Senate Appropriations Committee, and the Senate Health, Education, Labor, and Pensions (HELP) Committee.

    For more information please contact Bill Killmer at (202) 557-2746 or Alden Knowlton at (202) 557-2816.

    Senate Confirms Calabria to Lead the FHFA
    Yesterday the Senate confirmed Mark Calabria to serve as Director of the Federal Housing Finance Agency (FHFA). MBA President and CEO Bob Broeksmit released astatement congratulating the Director and vowing to work with FHFA to resolve the future of Fannie Mae and Freddie Mac. As expected, the vote tally was 52-44, falling along party lines. Earlier this week, MBA joined other industry trade groups in a letter urging the Senate to approve Calabria's nomination. This followed a previous letterMBA sent to the Senate Banking Committee urging the Committee to support Calabria’s nomination. 

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

    Legislation Introduced to Address 'Orphaned' VA Loans
    Last week, a bipartisan group of congressmen led by David Scott (D-GA), Lee Zeldin (R-NY), Mike Levin (D-CA), and Andy Barr (R-KY) introduced the Protect Affordable Mortgages for Veterans Act of 2019 (H.R. 1988), which preserves critical protections for veterans by allowing previously “orphaned” VA Home Program refinance loans to be pooled in the Ginnie Mae secondary market (while also maintaining strong refinancing reforms enacted into law last May). H.R. 1988 is very substantially similar to legislation passed by voice vote last September in the House of Representatives during the 115thCongress.

    Section 309 of last year’s regulatory reform law (previously known as S. 2155, now Public Law 115-174) sought to address the problem of loan churning targeted at service members and veterans. This section instituted new requirements that refinanced loans must meet to be eligible for the VA guaranty and for Ginnie Mae pooling. A gap between the timing dictated in S. 2155 and the implementation of the new rules left approximately 2,500 VA-guaranteed loans ineligible for pooling. These “orphaned loans” are barred from the secondary market, creating a strain on liquidity for the institutions involved. H.R. 1988 would provide a technical fix to correct this gap, maintain liquidity in the VA Home Loan market and ensure continued access to affordable VA mortgages. MBA submitted a letter of support for H.R. 1988 this week as well. Efforts remain underway with Senate offices to have a parallel measure introduced and advanced.

    For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

    FHFA Directs GSEs to Disburse Affordable Housing Funds
    Earlier this week, FHFA announced that it authorized Fannie Mae and Freddie Mac to release over $376 million to the Housing Trust Fund operated by HUD and the Capital Magnet Fund operated by the Treasury Department.

    Legislation passed in 2008 requires the GSEs to set aside an amount equal to 4.2 basis points of the unpaid principal balance of their new business for these affordable housing funds. FHFA suspended these payments shortly thereafter due to the poor financial condition of the GSEs, though it lifted this suspension in 2014.

    MBA has long advocated for continued funding of these affordable housing initiatives as a critical step toward improved borrower access to credit, a reasonable requirement of GSEs with public charters, and a necessary component of any practical GSE reform effort.

    For more information, please contact Dan Fichtler at (202) 557-2780.

    House Financial Services Committee Focuses on the Fair Housing Act
    On Tuesday, the House Financial Services Committee (HFSC) held a hearing on the state of fair housing and housing-related discrimination in America. The Committee heard testimony from representatives from the National Fair Housing Alliance, Greater New Orleans Fair Housing Action Center, the National LGBTQ Task Force, Zillow Group, and the Mercatus Center at George Mason University. During Q&A, Chairwoman Rep. Maxine Waters (D-CA) focused her questions on lawsuits involving Facebook and technology-based discrimination in the housing market, while Rep. Ann Wagner (R-MO) discussed HUD’s need for impactful tools and resources to enforce the Fair Housing Act and misuses of Community Development Block Grants.

    Four pieces of legislation were announced in conjunction with the hearing including theRestoring Fair Housing Protections Eliminated by HUD Act of 2018, the Equality Act of 2019, the Housing Fairness Act of 2019, and the Sexual Harassment Awareness and Prevention Act of 2018. The committee memorandum with summaries of the legislation can be found here.

    For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

    Legislation Approved to Combat Illegal Robocalls Heads to Full Senate
    On Wednesday, the full Senate Commerce Committee approved S. 151, the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act, by voice vote. Introduced by Senators John Thune (R-SD) and Ed Markey (D-MA), this bipartisan bill would amend the Telephone Consumer Protection Act (TCPA) by requiring voice service providers to establish a call-authentication network to combat spoofing and significantly increase the penalties that the FCC can charge for violations of the statute. Senator Thune offered a substitute amendment for the measure during the committee markup, and Senator Jerry Moran (R-KS) further amended the bill by providing for a TCPA annual enforcement report. Both amendments were accepted by voice vote. The bill now moves to the Senate floor for consideration.

    For more information, please contact Tallman Johnson at (202) 557-2866 or Bill Killmer at (202) 557-2736.

    FASB Rejects Recommendation to Tweak CECL
    On Wednesday, the Financial Accounting Standards Board (FASB) voted to reject a recommendation by a coalition of midsized banks to tweak some sections of CECL that would help eliminate confusion for auditors, investors, and the banks. FASB stated that the recommendation would force institutions and auditors to make complex judgments or decisions about whether loans qualified for a 12-month forecast. FASB also concluded that stakeholders had ample opportunity to raise these issues prior to finalization of CECL. While this conclusion essentially makes it clear that FASB is not open to making any complex tweaks to CECL before the 2020 implementation date, the Board did not mention whether it was considering delaying implementation, or whether it would consider any other tweaks that are not deemed to be too complex to be incorporated at this time. A recording of the meeting is available on FASB’s website

    For more information, please contact Fran Mordi at (202) 557-2860.

    Regulators Issue Additional FAQs and Answers on CECL
    On Wednesday, the same day that FASB rejected recommendations from a coalition of midsized banks to tweak some aspects of CECL, the OCC, FDIC, Fed Reserve, and NCUA (the regulators) released a set of FAQs and answers on CECL implementation. The document updates answers to previously issued questions in response to recent developments. The questions and answers address a broad range of issues, including how CECL changes existing U.S. GAAP, which includes replacing the existing incurred loss methodology with CECL; stress test modeling and scenarios; internal control considerations related to data; and the continued relevance of concepts, processes, and practices in existing supervisory guidance on the allowance for loan and lease losses. It also provides updates on the recent amendment of CECL effective date for nonpublic business entities. 

    For more information, please contact Fran Mordi at (202) 557-2860.

    MBANow Discusses MLO Temporary Authority; Conference of State Bank Supervisors to Address Implementation at MBA Legal Issues Conference
    In an MBANow video interview released this week, MBA staff discuss the implementation of MLO Temporary Authority, and the steps companies should be taking to prepare ahead of November 24, 2019, when the new law becomes operational. Specifically, state-licensed companies should be building expanded tracking systems to monitor new licensing activity by their MLOs and anticipating new operational contingencies that may be necessary under the new federal law. Many of these potential challenges are discussed in frequently asked questions released by state regulators on the NMLS.org website, and as a starting point all MLOs and state-licensed companies should review them. MBA will also host the staff from the Conference of State Bank Supervisors (CSBS) at the upcoming MBA Legal Issues and Regulatory Compliance Conference in a dedicated session to review how implementation will work on the NMLS system. Lastly, MBA Education will also be holding webinars with CSBS that will be announced soon. 

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

    Remote Online Notarization Progress Continues In States as Arizona Legislature Sends Bill to Governor
    This week, following the unanimous approval by the Arizona Senate in February, the state’s House gave SB-1030 its unanimous approval. If signed by Governor Doug Ducey, the bill would authorize remote online notarization (RON) in the state. This early April action follows a month in which five states – Utah, Kentucky, North Dakota, South Dakota, and Idaho – enacted RON laws. If approved in Arizona, there will be 16 states that have established RON as a permissible method of performing notarizations for real estate finance transactions. SB-1030 follows the contours of the MBA-American Land Title Association (ALTA) model state RON bill, which, with the help of MISMO’s draft model RON implementation standards, is helping establish a national consensus among state policy makers for RON laws and rules. To view the model bill, all support materials for the MBA-ALTA campaign, and the latest RON developments, please visit MBA’s RON Resource Center

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

    MBA Education Webinar on UMBS Readiness
    Join MBA Education on April 10 for a look at UMBS readiness and the critical information your staff needs to be aware of. This webinar will provide an overview of the driving force behind the Single Security Initiative, how the structure of the mortgage industry will (and will not) change, and what mortgage lenders, servicers and third-party providers need to know to participate in the new To-Be-Announced (TBA) marketplace. Furthermore, attendees will develop an understanding of how the UMBS impacts sellers (mortgage bankers, originators, and aggregators) as well as origination, servicing, and hedging processes. To register for this webinar, please click here.

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


  • March 29, 2019 1:22 PM | Michelle Martin (Administrator)

    Introduction
    On Wednesday, MBA President and CEO Bob Broeksmit testified before the Senate Banking Committee as part of the second in a pair of hearings to discuss Chairman Mike Crapo’s (R-ID) secondary mortgage market reform outline. On the same day, the Trump administration issued presidential memoranda directing the Treasury Department and HUD to develop prescribed plans for housing finance reform. And MBA's National Advocacy Conference begins next Tuesday, with speakers including a bipartisan cast of key congressional leaders, HUD Secretary Ben Carson, Fox News Anchor Chris Wallace, and MBA’s Senior Officers. 


    Industry Update

     

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    Upcoming Congressional Hearings

     

    Apr 2 House Financial Services Committee:The Fair Housing Act: Reviewing Efforts to Eliminate Discrimination and Promote Opportunity in Housing
    Apr 2 House Financial Services Committee: The Affordable Housing Crisis in Rural America: Assessing the Federal Response
    Apr 3 House Appropriations Committee, Subcommittee on Transportation, and Housing and Urban Development, and Related Agencies: Department of Housing and Urban Development

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    MBA Working For You

     

    Senate Banking Committee Holds Two Days of Hearings on Housing Finance Reform
    This past Tuesday and Wednesday, the Senate Banking Committee held hearings on Chairman Mike Crapo’s (R-ID) housing finance reform outline. MBA President and CEO Bob Broeksmit testified at the Wednesday hearing alongside other housing finance participants including the Structured Finance Industry Group; U.S. Mortgage Insurers; the National Association of Realtors; National Association of Federally Insured Credit Unions; and the Center for Responsible Lending. Both hearings featured a balanced panel of witnesses representing both industry, academia, and housing and civil rights advocates. Both hearings focused on potential areas of consensus across the majority of witnesses, in addition to topics ranging from housing affordability to a new end state utilizing a multi-guarantor model with a Ginnie Mae securities wrap to the need for small lender access to any new system. Chairman Crapo emphasized numerous times that GSE reform remains one of his top priorities, and he appeared energized by both hearings. MBA’s testimony and a summary of the hearing can be found here.

    For more information, please contact Tallman Johnson at (202) 557-2866 or Bill Killmer at (202) 557-2736.

    White House Requests Treasury, HUD Plans for Housing Finance Reform
    On Wednesday, the White House issued presidential memoranda on the need to develop robust housing finance reform policy across multiple federal agencies. Specifically, the memo directs the Treasury Department to publish a framework of administrative and legislative options to reform the GSEs, while directing HUD to undertake similar analysis with respect to FHA and Ginnie Mae. MBA President and CEO Bob Broeksmit issued a statement applauding the memoranda.

    The requirements and considerations of the memo mirror a number of MBA recommendations for housing finance reform. For the GSEs, these recommendations include: preserving access to the 30-year fixed-rate mortgage, fostering competition, maintaining equal access to the secondary market for lenders of all sizes and types, compensating taxpayers for any guarantees, limiting the size of the retained mortgage portfolios, and ensuring strong safety and soundness regulation. For FHA and Ginnie Mae, these recommendations include: improving risk management practices, modernizing operations and technology, addressing abusive practices (such as “loan churning”), and diversifying lender participation.

    MBA will continue to engage with policymakers in the administration and on Capitol Hill as efforts to tackle the challenges of housing finance reform progress.

    For more information, please contact Dan Fichtler at (202) 557-2780.

    MBA’s National Advocacy Conference
    This year’s National Advocacy Conference (NAC) will take place next week, April 2-3, at the Capital Hilton in Washington, D.C. Speakers will include HUD Secretary Ben Carson, Senate Banking Committee member Senator Doug Jones (D-AL), House Financial Services Committee member Representative Greg Meeks (D-NY), Problem Solvers Caucus Co-Chairs Representative Josh Gottheimer (D-NJ) and Representative Tom Reed (R-NY), House Ways and Means Vice Chair Terri Sewell (D-AL), and Fox News anchor Chris Wallace – in addition to a memorable reception with elected officials in the Great Hall at the Library of Congress.

    NAC attendees will hear from MBA’s advocacy/policy team about key industry issues including GSE Reform, federal housing program support and the need for further regulatory clarity – in addition to hearing the “dos and don’ts” of how to address these priorities with lawmakers. The NAC program will again provide prescribed time on Tuesday for individual state delegations to meet, review strategies and rehearse talking points for the Hill meetings the following day. MBA subject matter experts will be available to answer outstanding questions about key policies and priorities. Click here to view the full schedule

    Register today to be a part of our industry's largest advocacy event of the year.

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

    Ginnie Mae Issues Guidance on Seasoning Provisions for VA Refinances
    This morning, Ginnie Mae issued APM 19-03 which provides additional clarity regarding seasoning provisions for VA refinances. Effective immediately, Ginnie Mae is amending the MBS Guide in accordance with this memorandum to aid Issuers in their compliance with APM 18-04 requirements published in May 2018. The new guidance includes additional definitions to illustrate the various scenarios that implicate the requirements in APM 18-04.

    APM 19-03 reinforces the seasoning requirements found in the previous guidance which states that the note date of any VA-guaranteed refinance loan must be on or after the later of: a) the date that is 210 days after the date on which the first monthly payment was made on the mortgage being refinanced and b) the date on which 6 full monthly payments have been made on the mortgage being refinanced. Key takeaways from APM 19-03 include: 

    • Transactions subject to the seasoning requirements in APM 18-04: loans refinancing mortgages without a VA guaranty and re-performing refinance loans.
    • Transactions not subject to the Seasoning Requirements in APM 18-04: modified loans and loans used to refinance mortgages without scheduled monthly payments.
    • Permanent financing construction loans may or may not be subject to the Seasoning Requirements depending on the circumstances. In cases where the permanent financing is guaranteed under VA’s Loan Guaranty Program as a “refinancing”, Ginnie Mae will require compliance with APM 18-04. If the loan is structured and guaranteed under VA’s Loan Guaranty Program as a “purchase”, then it will not be subject to the seasoning requirements of APM 18-04.

     For more information, please contact Dan Fichtler at (202) 557-2780.

    House Financial Services Committee Holds First Markup
    Earlier this week, over the course of several days, the House Financial Services Committee (HFSC) considered a wide-ranging series of bills – including legislation focused on cannabis, the CFPB, and homelessness – as part of Chairwoman Maxine Waters’ (D-CA) initial legislative markup.

    Chairwoman Waters' homelessness bill (H.R. 1856) aims to curb shelter-related problems by authorizing $13.27 billion in mandatory emergency relief/federal housing program funding over five years. The bill passed along strict party lines by a vote of 32-26. The panel also approved legislation (H.R. 1500) that would restore the powers of the Bureau’s fair lending office, reestablish a dedicated student loan office, reactivate prior agreements to promote certain interagency efforts, and make recommendations for enhanced agency staffing (and applying limits on the number of political appointees.

    H.R. 1500, introduced by Waters (and co-sponsored by all HFSC Democrats), garnered no support from Republicans. Though the bill did not contain any changes to the governance or structure of the Bureau, there was significant bipartisan discussion of considering changes from a single directorate to a multi-member commission (no amendments on that topic were offered). 

    For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

    Fannie Mae Releases Guidance on Non-Citizen Borrower Eligibility
    Last week, Fannie Mae released guidance clarifying the eligibility criteria for non-citizen borrowers. Notably, the guidance addresses “lawful presence” for non-citizen borrowers — including DACA recipients. Fannie Mae considers a borrower legally present in the United States if:

    • he/she has a valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN); AND
    • he/she has current, verified status, which may be documented by a valid employment authorization document (EAD) or other documentation showing immigration status is current (e.g., Green Card, work visa, etc.). 

    Fannie Mae emphasizes that none of this is new policy, but rather clearer guidance. MBA has consistently advocated for the government housing finance programs and the GSEs to provide clarity on the eligibility status of non-U.S. citizens, particularly with respect to individuals who fall under the DACA policy.

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

    Idaho, Kentucky and Utah Enact Remote Online Notarization Laws as MBA’s Nationwide Campaign Gains Momentum 
    Late last week, Idaho Governor Brad Little signed legislation (SB 1111) to enact remote online notarization (RON) in the state, which was closely followed by similar action this week in both Kentucky (SB 114) and Utah (SB-52) by their respective governors. These states follow on the heels of North Dakota and South Dakota, which enacted RON laws earlier this month. The language of each of these new laws follows the contours of the model state RON bill from MBA and the American Land Title Association (ALTA), which can be found on the MBA Remote Online Notarization Resource Center. These five new states join Ohio, Michigan, Minnesota, Tennessee, Indiana, Virginia, Montana, Texas, Nevada, and Vermont in permitting RON. Importantly, MBA responded to a few misperceptions about the Kentucky bill once it was passed by the legislature by sending a letter to the governor urging his support. MBA applauds its member volunteers and state association partners who have been instrumental in this nationwide advocacy campaign.

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

    MBA Education Webinar on UMBS Readiness and Best Practices
    Join MBA Education and subject matter experts on April 10 for a look at UMBS readiness. This webinar will provide an overview of the driving force behind the Single Security Initiative; how the structure of the mortgage industry will (and will not) change; and what mortgage lenders, servicers, and third-party providers need to know to participate in the new To-Be-Announced (TBA) marketplace. Attendees will also develop an understanding of how the UMBS impacts sellers (mortgage bankers, originators, and aggregators) as well as origination, servicing, and your hedging processes. To register for this webinar, please click here.

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

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  • March 15, 2019 8:00 AM | Michelle Martin (Administrator)

    Introduction
    This week, the Trump administration released its proposed budget blueprint (which holds no force of law) for Fiscal Year 2020. In Congress, the Senate Banking Committee held an oversight hearing on the Consumer Financial Protection Bureau (CFPB) with Director Kathy Kraninger, while the House Financial Services Committee (HFSC) held a hearing on flood insurance. And MBA's National Advocacy Conference is just around the corner on April 2 and 3 in Washington, D.C., with HUD Secretary Ben Carson, senior HSFC Democrat Gregory Meeks (D-NY), key Senate Banking Committee member Doug Jones (D-AL), and Fox News Anchor Chris Wallace all slated to address attendees.

     

    Industry Update

     

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    Upcoming Congressional Hearings

     

    No relevant hearings yet scheduled. 

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    MBA Releases The Roadmap to CFPB 2.0
    On Monday, MBA released a new paper, The Roadmap to CFPB 2.0, which details recommendations to ensure stability and consistent consumer protections in the Consumer Financial Protection Bureau's practices and consumer financial laws. The paper draws from the detailed responses MBA submitted to the series of 12 requests for information (RFIs) the Bureau released in 2018 seeking suggestions for how it could better align its supervisory practices and the regulations it administers with its statutory mandate and generally accepted principles of sound prudential regulation. MBA CEO Bob Broeksmit, CMB, issued a statement and published a blog post announcing theRoadmap. The Roadmap is a follow-up to MBA’s 2017 paper, CFPB 2.0: Advancing Consumer Protection.

    For more information, please contact Justin Wiseman at (202) 557-2854.

    Trump Administration Releases 2020 Budget Proposal
    On Monday, the Trump Administration released its budget proposal for Fiscal Year 2020.  The Trump blueprint includes the following key elements:

    GSEs

    • Recommends an increase of the 10-basis point tax on g-fees to 20 basis points and would extend the tax to 2023 (currently set to expire in 2021);
    • Recommends suspending contributions to the Housing Trust Fund and the Capital Magnet Fund;
    • With respect to GSE reform efforts, “The Administration has publicly expressed its desire to work with members of Congress to facilitate a more sustainable housing finance system.”

    HUD/FHA/Ginnie Mae

    • Requests $44.1 billion in funding for HUD, an $8.7 billion or 16.4 percent decrease from the 2019 request;
    • Proposes a lender fee to raise $20 million to fund FHA IT infrastructure improvements;
    • Requests $550 billion in new guarantee authority for Ginnie Mae;
    • Eliminates funding for CDBG and HOME Investment Partnership Programs.

    VA

    • Requests $93.1 billion in funding for VA, a $6.5 billion or 7.5 percent increase from the 2019 enacted level;
    • Provides $4.3 billion for technology improvements, an increase of more than $200 million.

    USDA/RHS

    • Requests $20.8 billion in funding for USDA, a $3.6 billion or 15 percent decrease from the 2019 estimate

    The annual budget proposal is a framework that does not have the force of law, and represents the first step in the much lengthier federal budget/appropriations process. Throughout the process of discussing key elements of the budget plan, MBA will work to ensure continued support for vibrant real estate markets that benefit all market participants.

    For more information, please contact Pete Mills at (202) 557-2878 or Bill Killmer at (202) 557-2736.

    MBA’s National Advocacy Conference
    This year’s National Advocacy Conference (NAC) will take place April 2-3 at the Capital Hilton in Washington, D.C. NAC is an annual tradition that enables MBA members to speak directly to their elected officials as advocates for our industry. Speakers at NAC will include HUD Secretary Ben Carson, Senate Banking Committee Member Senator Doug Jones (D-AL), House Financial Services Committee member Rep. Greg Meeks (D-NY) and Fox News Anchor Chris Wallace – in addition to a memorable reception with elected officials in the Great Hall at the Library of Congress. Register today to be a part of our industry's largest advocacy event of the year.

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

    Senate Banking Committee Receives Consumer Financial Protection Bureau Semi-Annual Report
    This past Tuesday, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing entitled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.” The Honorable Kathy Kraninger, Director of the CFPB, was the sole witness. A summary of the hearing can be found here.

    Chairman Mike Crapo (R-ID) noted the positive steps the CFPB took recently regarding HMDA reporting requirements, and said he hoped the CFPB would identify opportunities to update the Fair Credit Reporting Act so that it works in a digital world. Senator Mark Warner (D-VA) expressed concern—and Director Kraninger agreed—that the termination of the QM Patch would be detrimental to affordable housing and said he was optimistic that the Senate would find a legislative solution. Ranking Member Sherrod Brown (D-OH) and other Committee Democrats were sharply critical of Director Kraninger and the CFPB’s efforts to eliminate the ability to repay requirement in its payday loan rule, its decision to discontinue Military Lending Act compliance examinations, and the decline in CFPB enforcement activity with regard to fair lending and student loan servicing.

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

    Senate Banking Committee Holds Hearing on FSOC Designations
    Yesterday, the Senate Committee on Banking, Housing, and Urban Affairs held ahearing entitled, “Financial Stability Oversight Council Nonbank Designations.” Witnesses were Dr. Douglas Holtz-Eakin, American Action Forum, Mr. Paul Schott Stevens, Investment Company Institute, and Professor Jeremy Kress, University of Michigan Ross School of Business.

    During the question and answer portion of the hearing, Senator Mike Rounds (R-SD) highlighted S. 603, the FSOC Improvement Act that would require FSOC to consider non-designation alternatives but would not take away from FSOC’s emergency designation process.  Chairman Mike Crapo (R-ID) noted S. 603 in his statement and emphasized that FSOC’s designation process must be clear, robust and focused on addressing real underlying risks.

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

    House Panel Discusses National Flood Insurance Program
    This past Wednesday, the House Financial Services Committee held a two-panel hearing entitled “Preparing for the Storm: Reauthorization of the National Flood Insurance Program.” The first panel featured six members of Congress while the second featured a broad array of industry participants. Before the hearing, Chairwoman Maxine Waters (D-CA) introduced a package of legislation to reform and reauthorize the long-debated insurance backstop. The package would extend the program until 2024, provide discounted premium rates for people with lower incomes, expand flood mapping, and cancel the program’s debt of more than $20 billion. While Republicans agree with the majority that the program requires significant overhaul ahead of its May 31 expiration, forgiving the program’s mounting debt was noted by GOP members as a non-starter. While both Chairwoman Waters and Republicans said they hoped to work together to tackle the issues and reauthorize the program, odds are long that legislation could be agreed upon given the time frame. Current expectations are for bipartisan discussions to continue while another short-term extension of the program is enacted close to the deadline.

    A copy of the official hearing memorandum can be found here and a summary of the hearing can be found here.

    For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

    FHA Expands Manual Underwriting to Address “Risk Layering”
    Earlier this week, FHA released a memo describing new steps to address increasing risks in its single-family portfolio. Effective for loans with case numbers assigned on or after March 18, 2019, updates to the TOTAL Mortgage Scorecard will require manual underwriting for certain loans with higher-risk characteristics.

    While the memo references an earlier FHA policy requiring manual underwriting for loans with credit scores below 620 and DTI ratios above 43 percent, the new guidance does not include specific thresholds.

    MBA will engage with FHA and provide further information as it becomes available.

    For more information, please contact Dan Fichtler at (202) 557-2780.

    MBA and State Associations Submit Testimony to Oppose Changes to Maryland Licensing Law
    On Tuesday, MBA was joined by the Maryland Mortgage Bankers and Brokers Association, the Maryland Bankers Association, and the Maryland Realtors in testimonyopposing legislation (SB 485), which would revise the implementation of the Maryland Collection Agency Licensing Act (MCALA) and require statutory trusts to become licensed debt collection agencies. SB 485 and its companion in the Maryland House (HB 593) would reverse the well-reasoned decision of the Maryland Court of Appeals in Blackstone v. Sharma, 461 Md. 87 (2018) where the court held that statutory trusts created for the purpose purchasing and holding mortgage backed securities did not require licensure. Moreover, the legislation would not address perceived servicing issues that were described by the proponents of the legislation in the House and Senate Committee hearings and would negatively affect the ability to originate, sell, hold and enforce mortgages in the state. MBA staff recently met with the offices of Senator Brian Feldman (Vice Chair of Senate Finance) and Representative Dereck Davis (Chair of House Economic Matters) to discuss the risk to lending in Maryland and the potential harm to consumers by requiring statutory trusts to be licensed.

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

    Flawed New Mexico Remote Online Notarization Bill Withdrawn; Law Enacted in North Dakota and Progress Being Made in Other States
    Following a second industry coalition letter and a Mortgage Action Alliance Call to Action opposing well-intentioned but flawed remote online notarization (RON) legislation (HB-470) in New Mexico, the bill was withdrawn by its sponsor ahead of the legislature’s anticipated adjournment this week. Coalition partners – MBA, the New Mexico Mortgage Lenders Association, the American Land Title Association, and the New Mexico Land Title Association – gave assurances that they would help develop a bill for 2020 that would better conform to the emerging national consensus regarding RON and that would embrace the industry’s core RON principles including: the need for robust provisions for ID proofing and credential analysis; that acknowledgements performed online can be readily identified and distinguished from those done in person; that technology requirements should not be so specific as to favor one vendor over another; and that legislation should conform to other legal standards and laws. The MBA-ALTA RON principles have been embraced in adopted and proposed legislation in several states, including North Dakota, which this week enacted HB-1110 to authorize RON. Bills continue to progress in several others states including South Dakota and Utah, where bills are awaiting gubernatorial consideration.

    For more information, please visit MBA’s RON resource page or contact William Kooperat (202) 557-2737 or Kobie Pruitt at (202) 557-2870.

    Compliance Essentials Webinar on Social Media and Digital Advertising Regulations
    Join MBA on March 20 for a conversation on the increasing use and application of social media and digital advertising platforms with regard to the mortgage finance industry and associated risks arising within that context. Social media is a rapidly evolving and powerful tool to generate revenue, reach new customers, and increase brand recognition. That power brings many potential pitfalls and scrutiny from regulators that impact almost everyone in your company. To register for this webinar, please click here.

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


  • March 01, 2019 8:00 AM | Michelle Martin (Administrator)



    Dear MBA Member:

    Today, MBA led a coalition of 28 housing and real estate stakeholders in a letter to Joseph Otting, Acting Director of the Federal Housing Finance Agency (FHFA), laying out key objectives and principles that we believe FHFA should bear in mind as it considers administrative policy reforms that could impact the role Fannie Mae and Freddie Mac (the GSEs) play in the housing market.

    The two key objectives we outline – preserving what works in the current system and maintaining stability in the secondary mortgage market – have been at the core of MBA’s thinking on GSE reform for more than a decade.   Likewise, the principles we lay out are consistent with those developed by several task forces that MBA has convened in recent years to look at a variety of aspects related to the future of the GSEs and the secondary mortgage market.

    Finally, as we make clear in the letter, the steps that FHFA may take administratively should not preclude Congressional action on housing finance reform.  Only through legislative action can policymakers make the structural changes necessary to ensure long-term safety and soundness and provide the certainty necessary for private capital to establish a more reliable presence in housing finance.

    If you have any questions about our letter, or MBA’s efforts around housing finance reform, please do not hesitate to contact me.     

    Bob Broeksmit, CMB
    President and Chief Executive Officer
    Mortgage Bankers Association

  • March 01, 2019 8:00 AM | Michelle Martin (Administrator)

    Introduction
    This week, the Senate Banking Committee voted to advance the nomination of Mark Calabria as director of the Federal Housing Finance Agency (FHFA). MBA President and CEO Bob Broeksmit released a congratulatory statement and called on the full Senate to confirm him. Also MBA and 27 other organizations sent a letter to FHFA Acting Director Joseph Otting on priorities for preserving access and affordability when undertaking administrative reforms to the GSEs. And Federal Reserve Chairman Jerome Powell addressed both the House and Senate, answering questions on both GSE reform and the Current Expected Credit Losses (CECL) accounting standard.


    Industry Update

     

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    Upcoming Congressional Hearings

     

    Mar 7 House Committee on Financial Services - Putting Consumers First? A Semi-Annual Review of the Consumer Financial Protection Bureau
    Mar 7 House Committee on Appropriations; Subcommittee on Transportation, Housing and Urban Development, and Related Agencies - Stakeholder Perspectives: Affordable Housing Production

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    MBA Working For You

     

    Broad Coalition Urges Policymakers to Prioritize Market Stability in Administrative GSE Reform Efforts 
    Earlier today, MBA was joined by 27 organizations, representing a broad cross-section of consumer and industry organizations, in sending a letter to FHFA Acting Director Otting on priorities for preserving access and affordability when undertaking administrative reforms to Fannie Mae and Freddie Mac. Specifically, the coalition advised that GSE reform must seek to further two key objectives: 1) preserving what works in the current system, while 2) maintaining stability by avoiding unintended adverse consequences for borrowers, lenders, investors, or taxpayers.

    In its letter to Otting, the coalition also noted that “comprehensive legislative reform … is ultimately necessary in order to codify structural changes that ensure safety and soundness and provide the certainty needed for private capital to establish a more reliable presence in housing finance.” MBA continues to call on Congress to institutecomprehensive reforms to address the structural problems in the GSE charters and business models that contributed to the financial crisis a decade ago.

    For more information, please contact Dan Fichtler at (202) 557-2780.

    Senate Banking Committee Advances Calabria as Head of FHFA
    On Tuesday, the Senate Banking Committee voted to advance the nomination of Mark Calabria as director of the Federal Housing Finance Agency.  The vote passed along party lines, 13 to 12. MBA President and CEO Bob Broeksmit sent a letter of supportand called on the Senate to confirm Calabria when his nomination heads to the Senate floor in the coming weeks.  Also on Tuesday, the Senate panel approved nine other nominations by President Donald Trump, which included Bimal Patel to be Assistant Secretary for Financial Institutions at Treasury, Todd Harper and The Honorable Rodney Hood to be members of the National Credit Union Administration Board, 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).

    For more information, please contact Dan Grattan at (202) 557-2712 or Tallman Johnson at (202) 557-2866.

    FHFA Finalizes Rule to Align GSE MBS Cash Flows Ahead of Single Security Launch
    Earlier this week, FHFA finalized a rule to better align the cash flows of certain Fannie Mae and Freddie Mac single-family securities. This alignment process is being undertaken to support implementation of the Single Security Initiative.

    In November, MBA submitted comments on the FHFA proposal, noting that “the development of the [Uniform MBS] and the Common Securitization Platform…will represent a vastly improved single-family secondary mortgage market infrastructure.” MBA recommendations around alignment monitoring, corrective actions in response to misalignment, and transparency in setting alignment thresholds were incorporated into the final rule.

    As a reminder, issuance of the Uniform MBS is expected to begin on June 3, 2019. MBA hosted a webinar in December to help prepare members for the transition.

    For more information, please contact Dan Fichtler at (202) 557-2780.

    Fed Chairman Powell Addresses GSE Reform, CECL 
    Federal Reserve Chairman Jerome Powell addressed both the House and Senate this week and answered questions on GSE reform and Current Expected Credit Losses (CECL) accounting standard. During Powell’s hearing in the Senate, Banking Committee Chairman Mike Crapo (R-ID) noted his committee will be aggressively trying to put together a bipartisan solution to address GSE reform. Chairman Powell stated that it is one of the biggest pieces of unfinished business in the post-crisis reform era, and offered that recent proposals have the right elements to ensure that significant private capital stands in front of taxpayers. Powell pledged to work with the committee in its effort, offering the services of the Fed’s staffers with housing expertise. In the House, Financial Services Committee Ranking Member Patrick McHenry (R-NC) raised the importance of GSE reform, to which Powell suggested that it should be a priority for Congress.

    Also in the House, Rep. Brad Sherman (D-CA) called CECL an “esoteric accounting theory discussion gone awry.” He asked Powell if he thinks a quantitative impact study is required to understand whether CECL implementation will limit lending, especially in economic downturns. Chairman Powell said they will implement CECL and that there was no such study required, though he said they will be watching closely thereafter and will take appropriate action if needed. 

    For more information, please contact Dan Grattan at (202) 557-2712 or Tallman Johnson at (202) 557-2866.

    Appendix Q Legislation
    This week, Senators Mark Warner (D-VA) and Mike Rounds (R-SD) reintroduced the Self-Employed Mortgage Access Act, which addresses the challenges presented in documenting the ability to repay for borrowers with non-traditional forms of income. Senator Cory Booker (D-NJ) joined as an original cosponsor. The legislation, which embodies recommendations made by MBA to the Bureau of Consumer Financial Protection, would allow the use of existing underwriting standards such as those found in the Fannie Mae and Freddie Mac Seller/Servicer Guides or the FHA, VA, and USDA Handbooks as alternatives to Appendix Q. These existing standards could be used to satisfy the requirements needed for a loan to achieve Qualified Mortgage status. 

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

    Consumer Data Privacy Hearings in the House and Senate
    On Tuesday, the House Energy and Commerce Committee’s Subcommittee on Consumer Protection and Commerce held a hearing entitled, “Protecting Consumer Privacy in the Era of Big Data." The following day the Senate Commerce Committee held a hearing entitled, “Policy Principles for a Federal Data Privacy Framework in the United States.” The hearings restarted the congressional conversations and followed similar themes regarding consumer data collection and privacy. Members from both sides of the aisle in the House and Senate agreed that a federal standard is necessary. However, the Senate Commerce Committee Ranking Member, Senator Maria Cantwell (D-WA), stressed the importance of a strong federal standard that does not weaken state efforts to protect consumers. While the European Union’s General Data Protection Regulation and the California data privacy model are examples of consumer data protection standards, neither committee elevated those models as the starting point for a federal data standard. Consumer data protection requires additional monitoring given the bipartisan, bicameral interest in a federal standard. 

    For more information, please contact Erin Barry at (202) 557-2913 or Dan Grattan at (202) 557-2712.

    House Panel on Diversity and Inclusion Holds First Hearing
    On Wednesday, the newly formed Diversity and Inclusion Subcommittee of the House Financial Services Committee held a hearing entitled, “An Overview of Diversity Trends in the Financial Services Industry.” The hearing had one witness, Daniel Garcia-Diaz, Director of Financial Markets and Community Investment at the U.S. Government Accountability Office (GAO). The hearing largely discussed the findings in the GAO report: Financial Services Industry: Trends in Management Representation of Minorities and Women and Diversity Practices, 2007-2015. The report was in response to a request by Chairwoman Maxine Waters (D-CA), along with Senator Sherrod Brown (D-OH) and Congressman Al Green (D-TX). Garcia-Diaz said that research shows there is still a shortage of women and minorities in leadership roles in the financial services industry. He also highlighted that the GAO study found the banking sector had the greatest representation of minorities in overall management, whereas the insurance industry had the highest proportion of women in overall management. 

    For more information, please contact Bill Killmer at (202) 557-2736 or Dan Grattan at (202) 557-2712. 

    Industry Coalition Opposes Flawed New Mexico Remote Online Notarization Bill
    This week, in a letter drafted by MBA, an industry coalition weighed in on the flaws of proposed legislation (HB-470) in New Mexico to allow remote online notarization (RON). Joining MBA on the letter were the American Land Title Association (ALTA), the New Mexico Mortgage Lenders Association, and the New Mexico Land Title Association. The letter pointed out that while well intentioned, the legislation does not adhere to the industry’s core principles for state RON laws, which include: the need for robust provisions for ID proofing and credential analysis; that acknowledgements performed online can be readily identified and distinguished from those done in person; that technology requirements should not be so specific as to favor one vendor over another; and that legislation should conform to other legal standards and laws. These principles are at the core of the MBA-ALTA model RON state law and have been embraced in the adopted laws and proposed legislation of several states. They were also embraced by the non-partisan Uniform Law Commission (ULC) in its update to the Revised Uniform Law on Notarial Acts (RULONA) to include RON, which was released earlier this year. 

    For more information, please visit MBA’s RON resource page or contact William Kooperat (202) 557-2737 or Kobie Pruitt at (202) 557-2870.

    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.


  • February 25, 2019 8:00 AM | Michelle Martin (Administrator)

    Introduction
    Both the House and Senate were in recess for the traditional Presidents’ Day holiday week of in-district and state work periods. On Wednesday, the Federal Open Market Committee (FOMC) released minutes from its two-day January meeting. In the minutes, the Fed explained why it decided to be patient with monetary policy, and it also offered more clarity on its plans for balance sheet normalization.

    Industry Update

     

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    Upcoming Congressional Hearings

     

    Feb. 26: Senate Committee on Banking, Housing and Urban Affairs: The Semiannual Monetary Policy Report to the Congress
    Feb. 26: House Financial Services Committee: Who’s Keeping Score? Holding Credit Bureaus Accountable and Repairing a Broken System
    Feb. 26: House Appropriations Committee, Subcommittee on Financial Services and General Government: Leveraging Private Capital For Underserved Communities and Individuals: A Look Into Community Development Financial Institutions
    Feb. 27: House Appropriations Committee: Subcommittee on Transportation, and Housing and Urban Development, and Related Agencies: Stakeholder Perspectives: Fair Housing
    Feb. 27: House Financial Services Committee: Monetary Policy and the State of the Economy 
    Feb. 28: Senate Committee on Banking, Housing and Urban Affairs: Legislative Proposals on Capital Formation and Corporate Governance 

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    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.


  • February 19, 2019 11:20 AM | Michelle Martin (Administrator)

    February 18, 2019 | Issue 4

    I asked a House member this week how his Session is going. He said: "It's like a rocket sitting on the launching pad. The engines are rumbling, the smoke is billowing, you can feel the ground shaking, but so far we haven't gone anywhere." That is an apt description. Bills are being filed. Legislative Council continues to churn out bill drafts. Committees are holding their organizational meetings. But per Constitutional mandate, no bills other than Governor declared emergency bills can be voted on until after March 8.

    Here are this week's highlights.

    The House Pensions, Investments, and Financial Services Committee had two days of organizational hearings. The first day was devoted to pensions. The second day was devoted to financial services. Invited testimony was provided by the Commissioners of Banking, Savings and Mortgage Lending, and Consumer Credit. The financial trade associations also provided testimony. On behalf of the TMBA, I gave an overview of our membership for the Committee new members; a brief state of the industry; and an overview of our legislative objectives for 2019.

    Last Tuesday, Rep. Capriglione of South Lake held a stakeholder meeting on data privacy and his outline of a bill that he is drafting. He described his proposal as "California Lite." That is he is using a number of concepts from last year's California's data privacy act. He stated that there would be carve-outs consistent with Graham, Leach, Bliley, and HIPPA. In response to a question I raised, he said that he envisioned enforcement would be by civil penalties from agencies or the AG, and did not anticipate permitting private causes of action.

    Bills of interest

    HB 1569 (Lambert). This is the Sunset bill for the Finance Commission, Department of Banking, and Savings and Mortgage Lending. Our initial analysis is that it contains all of the Sunset Commission's recommendations for Savings and Mortgage Lending. It extends the life of SML as a free-standing agency until 2031 (the traditional 12 years). It removes the phrase "good moral character" from the Chapter 157 qualifications for a residential mortgage originator license. At first look, this might seem like a weakening of licensing standards, but it isn't really. "Good moral character" has not ever been satisfactorily defined and is one of the things that numerous administrative law judges endlessly debate.   The Sunset Commission in its review of occupational licensing agencies has recommended eliminating this phrase from licensing statutes over the last several Sunset review cycles for all agencies.

    SB 763 (Menendez). This bill would require that a creditor or landlord provide expanded notices relating to a default of an obligation relating to the residence of a person over 65. If a payment is more than 30 days late, the creditor or landlord would be required to also notify the person who had a durable power of attorney for the borrower or tenant before the creditor or landlord could take any other action such as foreclosure or eviction. It only takes a New York minute to identify a lot of issues with this. How is a creditor to know whether or not the borrower gave a durable power of attorney? If more than one agent is named, does notice have to go to both? How is the creditor to determine if the borrower is now over 65? Do servicing systems have to be reprogrammed to update monthly to identify whether or not a borrower who was 55 when the loan was originated is now turning 65? And what about whether or not the principal wants the agent to know about the default? There are privacy concerns here.

    SB 860 (Paxton). This bill creates a regulatory "sandbox" to test "innovative" financial products (in the emerging so-called Fintech space) by permitting the Attorney General through its consumer protection division to authorize persons to offer the financial product for a limited time without the person being licensed or registered. The financial products include "innovative" products otherwise subject to Finance Code Chapter 342 (consumer installment loans); retail installment contracts; money service business products; and acting as an investment advisor. This last category has produced a bit of feather-ruffling, because Senator Paxton's husband, current Attorney General Ken Paxton, admitted in a Texas Securities Board administrative action that he acted as an unregistered investment advisor and he paid an administrative penalty. That also led to his indictment in a criminal case because acting as an unregistered investment advisor is a felony under the Texas Securities Act. The criminal case is still pending. At least as currently drafted, the bill excludes mortgage loans. This is good because if it did cover mortgage products, the bill would place Texas out of compliance with SAFE Act requirements.   I see a real structural problem with granting the Attorney General this authority rather than placing this authority within the agencies that have substantive expertise over these agencies: the Finance Commission agencies (here prominently Banking and Consumer Credit) and the Texas Securities Board. As currently structured and funded, the AG's consumer protection division does not have the expertise or the infrastructure to carry out this mandate.


  • February 19, 2019 8:00 AM | Michelle Martin (Administrator)

    LODGING | VENUE

    The Driskill Hotel (downtown)
    604 Brazos St, Austin, TX 78701
    P 800-233-1234

    Hotel cut-off: February 27- make your reservations today.

    WHO REPRESENTS ME?

    There are two ways to find out who represents you:

    1. Visit the "Who Represents Me?" website and see who represents.
    2. Text (520) 200-2223 with your zip code and you will receive a text back with your US Senator, US Rep., State House and State Senator's phone number.

    Note: Keep in mind, it's not totally accurate because some zip codes have multiple districts.

    GENERAL INFORMATION

    In March 2019, mortgage bankers and associated real estate finance professionals from across the state will participate in TMBA's biennial Advocacy Day. Please help us communicate the importance of our industry to Texas' economy through your support and participation in TMBA's Advocacy Day. We must ensure that the views of Texas' real estate financial industry are heard by our State Legislators as they consider issues vital to the future of Texas housing.

    The event begins with a general session, briefing by John Fleming, TMBA's General Counsel, and evening reception on March 25th at the Driskill Hotel. On the morning of March 26th, participants will meet for breakfast and last minute updates. Immediately after, we will walk over to the Capitol for scheduled meetings with key members of the legislature including your Legislators. Based on the information provided on your registration form, TMBA will pre-schedule appointments with your local legislators and/or their staffers.

    TMBA represents your interests to the Texas Legislature, but no one's voice carries more weight with your elected officials than your own. By sharing information and industry issues, you will increase awareness, knowledge and boost support for the Texas mortgage industry.

     


  • August 29, 2018 8:00 AM | Michelle Martin (Administrator)


    HMBA President, Scott Gillen, was presented the esteemed "Spirit of Stewart" Award for his pioneering efforts to bring eClosing to the mortgage industry.   Stewart CEO, Matt Morris, presented the award.

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