MBA Advocacy Update

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

March 25, 2019

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 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.  

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 housing finance reform outline. MBA President and CEO Bob Broeksmit, CMB, testified at the Wednesday hearing, alongside other housing finance representatives from 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. Crapo, R-Idaho, emphasized numerous times that GSE reform remains one of his top priorities, and he appeared energized by both hearings. You can access MBA's testimony (https://www.mba.org/2019-press-releases/march/mbas-ceo-broeksmit-testifies-on-housing-finance-reform) and a summary of the hearing (http://mba-pc.informz.net/mba-pc/data/images/AdvocacyDocuments/3-27%20Senate%20Banking%20hearing%20on%20housing%20reform.pdf).  

For more information, please contact Tallman Johnson at (202) 557-2866 tjohnson@mba.org; or Bill Killmer at (202) 557-2736 bkillmer@mba.org.  

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, CMB, issued a statement commending the memoranda (https://www.mba.org/2019-press-releases/march/statement-of-bob-broeksmit-on-presidential-memorandum-initiating-housing-reform).  

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 dfichtler@mba.org.  

MBA National Advocacy Conference Apr. 2-3
This year's MBA National Advocacy Conference will take place April 2-3 at the Capital Hilton in Washington, D.C. (https://www.mba.org/conferences-and-education/event-mini-sites/national-advocacy-conference-x241593).  

The NAC is an annual tradition that enables MBA members to speak directly to their elected officials as advocates for our industry. Speakers at NAC include HUD Secretary Ben Carson, Senate Banking Committee Member Doug Jones, D-Ala., House Financial Services Committee member Gregory Meeks, D-N.Y.; House "Problem Solvers" Caucus Co-Chairs Josh Gottheimer, D-N.J., and Tom Reed, R-N.Y., House Ways and Means Vice Chair Terri Sewell, D-Ala., and Fox News Anchor Chris Wallace, in addition to a memorable reception with elected officials in the Great Hall at the Library of Congress.  

Commercial/multifamily members will hear directly on April 3 from speakers that include Senate Banking Committee and Senate Finance Committee member Tim Scott, R-S.C., House Appropriations Committee member Tom Graves, R-Ga., and House Ways and Means Committee member John Larson, D-Conn., along with key staff from the office of House Speaker Nancy Pelosi, D-Calif., the Senate Appropriations Committee, and the Senate Health, Education, Labor and Pensions Committee.  

Register today to be a part of our industry's largest advocacy event of the year (https://www.mba.org/conferences-and-education/event-mini-sites/national-advocacy-conference/pricing-x241605?utm_source=Informz&utm_medium=Email&utm_campaign=mba%2Eorg&_zs=mB8cN1&_zl=EItt4).  

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

Ginnie Mae Issues Guidance on Seasoning Provisions for VA Refinances
On Friday, Ginnie Mae issued APM 19-03 (https://www.ginniemae.gov/issuers/program_guidelines/Lists/MBSGuideAPMsLib/Attachments/97/APM_19-03.pdf), 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 (https://www.ginniemae.gov/issuers/program_guidelines/Lists/MBSGuideAPMsLib/Attachments/87/APM_18-04.pdf).  

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 dfichtler@mba.org.  

House Financial Services Committee Holds First Markup
Last week, over the course of several days, the House Financial Services Committee considered a wide-ranging series of bills--including legislation focused on cannabis, the Consumer Financial Protection Bureau and homelessness--as part of Chairwoman Maxine Waters' initial legislative markup.  

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 32-26 vote. 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 committee 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 dgrattan@mba.org; or Bill Killmer at (202) 557-2736 bkillmer@mba.org.  

Fannie Mae Releases Guidance on Non-Citizen Borrower Eligibility
Last week, Fannie Mae released guidance clarifying the eligibility criteria for non-citizen borrowers (https://www.fanniemae.com/content/fact_sheet/non-citizen-borrower-eligibility.pdf).  

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 or Individual Taxpayer Identification Number; AND 

--he/she has current, verified status, which may be documented by a valid employment authorization document 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 jjospeh@mba.org; or Andrea Oh at (202) 557-2922 aoh@mba.org.  

Idaho, Kentucky, Utah Enact Remote Online Notarization Laws as MBA Nationwide Campaign Gains Momentum
Late last week, Idaho Governor Brad Little signed legislation (SB 1111) to enact remote online notarization 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, 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 about the RON legislative campaign, visit the MBA RON Resource Center (https://www.mba.org/audience/state-legislative-and-regulatory-resource-center/remote-online-notarization) or contact William Kooper at (202) 557-2737 wkooper@mba.org; or Kobie Pruitt at (202) 557-2870 kpruitt@mba.org.  

MBA Education Webinar on UMBS Readiness and Best Practices Apr. 10
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 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, click https://www.mba.org/store/events/webinar/umbs-and-your-business-best-practices-for-readiness.  

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

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