MBA Advocacy Update

Steve O'Connor soconnor@mba.org; Bill Killmer bkillmer@mba.org  

December 18, 2017

Tax reform continues to dominate the discussion in Washington, with the House and Senate slated to vote on a final package this week. Congress will also need to pass a continuing resolution to keep the government open beyond December 22 before leaving for the holidays.   

At the committee level, H.R. 2948, the SAFE Transitional Licensing Act, was approved unanimously by the House Financial Services Committee this past Wednesday. This bill would amend the SAFE Mortgage Licensing Act of 2008 to provide a transitional authority to originate for mortgage loan officers transitioning between federally insured depositories and non-depositories, as well as across state lines.   

Partial Tax Agreement Details Released

We are currently waiting for the final text of the House and Senate conference committee on tax reform. The agreement will reconcile the differences between the House and Senate tax reform bills and sets the stage for final votes early this week in both the House and Senate.  

Conferees are said to have agreed to cap mortgage interest deductibility at $750,000, splitting the difference between the House bill (which would have reduced the limit to $500,000) and the Senate bill (which would have preserved the current law limit of $1 million). Negotiators are also rumored to have agreed to allow Americans to deduct up to $10,000 in property or income taxes and shift the corporate tax rate to 21%. The final Senate bill did not include a prior provision that would have required any item of income that an accrual taxpayer recognizes for accounting purposes, including mortgage servicing rights, also be recognized for tax purposes (MBA has lobbied to preserve this key fix in any final conference report).    

Once the final text is released, MBA will analyze the legislation for the final status of all issues important to the real estate finance industry. Once the House and Senate vote on the report, it will then go to President Trump, who is expected sign it into law before Christmas.  

For more details, please contact Bill Killmer at (202) 557-2736 bkillmer@mba.org; or Meghan Sullivan at (202) 557-2866 mullivan@mba.org.  

House Financial Services Committee Holds Final Markup

Last week, the House Financial Services Committee held its final markup of the year. The Committee advanced 13 bills, including measures that would place renewed restrictions on the Administration's ability to sell stakes in Fannie Mae and Freddie Mac.  

Importantly, HR 2948, the SAFE Transitional Licensing Act, was also included in the markup. MBA sent a letter (http://mba-pc.informz.net/mba-pc/data/images/FSC Markup 12 12 17 final.pdf) and released a statement regarding the three of bills we were monitoring (https://www.mba.org/2017-press-releases/december/mba-statement-on-financial-services-committee-passage-of-mortgage-related-bills). Below are the vote tallies for each:  

--HR 2948, the SAFE Transitional Licensing Act, was passed and reported out of the Committee 60-0;

--HR 4545, the Financial Institutions Examination Fairness and Reform Act, passed 50-10; and

--HR 4560, the GSE Jumpstart Reauthorization Act of 2017, passed 33-27*.  

*Ranking Member Maxine Waters, D-Calif., offered an amendment to HR 4560 which would strike section 3 of the bill. As a reminder, this section would suspend contributions to the Housing Trust Fund and the Capital Magnet Fund if the dividend payments are not made on schedule. The amendment was not agreed to (26-34).  

For more information, please contact Kelley Williams at (202) 557-2741 kwilliams@mba.org; or Dan Grattan at (202) 557-2712 dgrattan@mba.org.  

FSOC Reiterates Need for Housing Finance Reform Legislation

On December 14, the Financial Stability Oversight Council--a group comprising heads of the major federal and state financial regulators--released its 2017 annual report (https://www.treasury.gov/initiatives/fsoc/studies-reports/Documents/FSOC_2017_Annual_Report.pdf).  

The report, mandated by the Dodd-Frank Act, provides FSOC's views regarding the health of the U.S. financial system, including potential emerging threats and vulnerabilities as well as recommendations to strengthen financial stability. As has been the case in prior years, FSOC called for both regulators and market participants to take steps to increase the role of private capital in mortgage markets. FSOC also endorsed continuing efforts to advance the Common Securitization Platform and the Single Security Initiative. Importantly, FSOC also "reaffirm[ed] its view that housing finance reform legislation is needed to create a more sustainable system." MBA fully agrees, and has developed a detailed proposal to create a more vibrant secondary mortgage market (https://www.mba.org/issues/gse-reform).  

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

GSEs Revise Seller Data Requirements in Uniform Closing Dataset

In response to MBA raising various operational and cost concerns, Fannie Mae and Freddie Mac announced last week they will no longer require a PDF of the Seller Closing Disclosure as part of the mandatory Uniform Closing Disclosure submissions by lenders (https://www.fanniemae.com/content/news/ucd-announcement-december-2017.pdf).  

Additionally, the GSEs communicated their intent to reduce the number of additional seller data points that will be required to be transmitted in the UCD submission.  

More details on these data requirements will be provided in the second quarter; mandatory implementation will not occur before January 2019. MBA remains concerned about the costs associated with lenders creating new processes to provide such data and will continue to engage with the GSEs and FHFA to develop a responsible path forward.  

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

Resolution on PACE Lending Withdrawn at Counsel of State Governments National Conference

Last week, at the Council of State Governments National Conference, a resolution was withdrawn from consideration that suggested recently enacted laws in California resolve all issues apropos to PACE loans and should be emulated by other states in 2018.  

Ahead the Conference, MBA was joined by the American Bankers Association and the Credit Union National Association in writing to the members of two key committees to oppose the resolution as written (http://mba-pc.informz.net/mba-pc/data/images/AdvocacyDocuments/12 15 17 ABA-CUNA-MBA Opposition Letter to December 2017 CSG Resolution on PACE.PDF).  

The letter pointed out that PACE loans should be subject to federal consumer protection requirements and not dependent on a patchwork of limited or non-existent state and/or municipal laws that do not adequately protect homeowners. The letter urged CSG to replace the resolution with one that: supports bipartisan legislation (S. 2155) in Congress to provide all borrowers federal Truth-in-Lending and other Consumer Financial Protection Bureau protections; and, supports PACE obligations being recorded in proper lien priority--i.e. subordinate to all other prior recorded mortgages. MBA also alerted national consumer groups who worked with their California counterparts to also submit a letter in opposition to the resolution.  

For more information, please contact William Kooper (202) 557-2737 wkooper@mba.org; or Kobie Pruitt (202) 557-2870 kpruitt@mba.org.  

MBA Education 10 Things Your Company Must Do in 2018 Webinar

On January 17 MBA Education will host a webinar exploring the 10 things every mortgage lender should consider when starting a new year. This webinar will provide participants with a top ten list of strategic initiatives that all mortgage bankers should be implementing in 2018. These very specific and very actionable suggestions will help you and your team focus on what will increase revenues, control costs, and better manage risk, not only in 2018 but also every year thereafter. To register for the webinar or for more information, click https://www.mba.org/store/events/webinar/ten-things-your-mortgage-company-must-do-in-2018.    

For any questions, please contact Laura Vanegas at (202) 557-2785 lvanegas@mba.org.

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