MBA Advocacy Update

Steve O'Connor; Bill Killmer 

February 19, 2019

Congressional leaders finalized a spending bill compromise Thursday that included a revised funding mix for border security--and nine Cabinet departments and dozens of other agencies, including HUD, through September 30. President Trump signed the legislation, which removes the immediate threat of another government shutdown.  

And the Senate Banking Committee held a nomination hearing for Mark Calabria to be the next Director of the Federal Housing Finance Agency.  

In his opening statement, Calabria noted that, if confirmed, he will carry out the clear intent of the law as Director of FHFA, despite his frustration with the current state of the housing finance system. Throughout the hearing, Calabria reaffirmed his commitment to follow the statutory authority of FHFA, the importance of the 30-year fixed rate mortgage and that Congress plays the fundamental role in any GSE reform effort.  

During his response to a question from Chairman Mike Crapo, R-Idaho, Calabria committed to working with Congress on reform efforts. He indicated strong alignment with Crapo's principles for reform, including maintaining a level playing field for lenders of all sizes. He said that it is possible to have a housing finance system that preserves the 30-year fixed rate mortgage and improves access to affordable housing.  

In response to a question from Sen. Bob Menendez, D-N.J., Calabria said the conservator does not have the regulatory authority to change the conforming loan limits and that power lies solely with Congress. He reassured Sen. Elizabeth Warren, D-Mass., that, as FHFA Director, he would commit to preserving the affordable housing goals as they are written within the confines of the statute. While both Crapo and ranking member Sherrod Brown, D-Ohio, stressed the importance of moving nominations quickly, the Committee has not announced a date to vote on the nomination. MBA sent a letter of support prior to the hearing.  

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

MBA Submits Recommendations to Deter VA Loan Churning
In comments submitted to VA Friday, MBA detailed a series of recommendations meant to strengthen an interim final rule that will govern VA cash-out refinances ( The new requirements apply to all non-streamlined VA refinances and took effect Feb. 15, though VA will consider public comments prior to finalizing the rule.  

Many of MBA's recommendations focus on discouraging serial refinancing of VA loans (or loan churning), including the need for net tangible benefit thresholds to close potential loopholes; a prohibition on the ability to finance fees that would put the borrower in an underwater position; an extension of the minimum loan seasoning period; and stronger market monitoring for improper solicitations.  

MBA also identified numerous implementation concerns with the VA proposal. In particular, the new borrower disclosures required for cash-out refinances would compel lenders to provide loan estimates not typically available through the information collected in a standard application. The 60-day implementation period for these disclosures has not allowed the necessary time for lenders and service providers to develop, automate, and test changes to their systems. MBA therefore strongly urged VA to postpone enforcement of these problematic portions of the interim final rule until after comments are considered and the rule is finalized.  

MBA is in regular communication with VA regarding these issues, and we remain committed to ending the practice of loan churning targeted at servicemembers, veterans and surviving spouses.  

For more information, see VA Circular 26-19-05 ( or please contact Dan Fichtler at (202) 557-2780  

House T-HUD Panel Questions FHA Commissioner Montgomery on Shutdown
On Feb. 12, Federal Housing Administration Commissioner and Acting HUD Deputy Secretary Brian Montgomery addressed the House Appropriations Subcommittee on Transportation, Housing and Urban Development in an oversight hearing on HUD's management of housing contracts during the shutdown. Because roughly 97 percent of HUD's workforce was furloughed, Montgomery stated that staff has been working overtime to ensure that all 1,175 rental assistance contracts affected during the 34-day shutdown were authorized for renewal.  

In response to a question from Rep. Steve Womack, R-Ark., on the biggest benefit of modernizing the 30-year-old information technology systems, Montgomery responded that knowing a status of the contracts at any time would greatly improve HUD's situation with or without a shutdown. Additionally, HUD CFO Irv Dennis, who also testified at the hearing, noted that IT is by far the biggest issue at HUD and that it is hard to overstate how antiquated its systems are. Dennis noted that modernizing the technology would improve processes and also eliminate overtime.  

Congress and President Trump reached an agreement regarding the seven remaining appropriations bills to fund the government for Fiscal Year (FY) 2019. The Transportation, Housing and Urban Development (THUD) appropriations provisions included $280 million in Technology Funding for HUD. This funding level is identical to the Senate FY 2019 THUD bill from last Congress and $20 million more than the President's budget request. Early reports indicated that $20 million of the funds would be allocated to FHA IT upgrades, but this has not been confirmed. MBA staff will continue to monitor the allocations as more information becomes available.  

In addition to technology funding, the appropriations package included $50 million for housing counseling, $27 million for administration of Ginnie Mae, $130 million for FHA administrative expenses, $3.365 billion for Community Development Block Grants, of which $65 million is allocated for American Indian tribes, and $1.25 billion for the HOME program. The bill also included prohibitions against the use of eminent domain to restructure mortgages and the use of funds for physical needs assessments.  

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

MBA Comments on CFPB's revised No-Action Letter Policy and Product Sandbox
Last week, MBA submitted a comment letter in response to the Consumer Financial Protection Bureau's proposed policy on No-Action Letters and Product Sandbox. The proposal is strongly aligned with MBA's prior recommendations for changes to the Bureau's NAL policy and for a regulatory sandbox. The CFPB's proposed revisions seek to streamline the application process, expand benefits available to participants, establish procedures for extending relief from liability, and providing coordination with other regulators. The Product Sandbox provides exemptions under statutory safe harbor provisions.    

In its letter, MBA urges the Bureau to further clarify the types of applications that could be submitted to the respective programs to ensure the NAL policy was not as restrictive as the original 2016 policy. To encourage streamlined participation, MBA suggests that the Bureau track similar applications to allow more entities to benefit from approved products.  

For more information, please contact Justin Wiseman at (202) 557-2854; Blake Chavis at (202) 557-2930; or Sheraz Syed at (202) 557-2941  

Ginnie Mae Announces Re-Evaluation of MBS Guide Waivers
In an All Participant Memorandum released Feb. 13 (, Ginnie Mae confirmed it will examine all existing waivers to its MBS Guide to evaluate which ones may still be needed, and to sunset those that are not. Ginnie Mae requested that any parties with waivers submit the following information:  

--A PDF copy of the waiver;

--The company name and Ginnie Mae ID; and

--A brief narrative describing the continued need (if any) for the waiver.  

This information should be e-mailed to by 5:00 pm ET on March 15. It is critical that institutions supply this information in a timely manner, as no waivers will remain in effect beyond May 1, unless they are affirmatively re-issued by Ginnie Mae.  

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

MBA Supports Uniform Law Commission's Model State Law for Remote Online Notarization
Last week, MBA sent a letter to the Chair of the Uniform Law Commission's Revised Uniform Law on Notarial Acts Task Force. The letter expresses support for the ULC's recently approved language to update RULONA which if enacted provides a states the ability to permit remote online notarization.  

MBA believes RULONA's updates are consistent with core principles of the MBA-American Land Title Association model RON bill released in 2017. As a result of the Task Force's important work over the last year, states now have two paths to RON adoption. MBA will continue to support the MBA-ALTA model law, but in the states which have already adopted RULONA, but not yet authorized RON, their legislators and governors can now look to the new ULC language to update their laws. This this may be a more effective way for these states to achieve consistency with the RON laws of other states.  

In related legislative developments, as many as 20 bills have already been introduced in states this year to authorize RON. While Utah's HB-52 ( has already passed both chambers and will soon be considered by Governor Gary Herbert, bills are moving in other states. Thanks to the work of industry volunteers and state associations, Arizona's SB-1030 (, Hawaii's HB-77 ( and Nebraska's LB-186 ( cleared committee votes last week and are making progress.  

To keep track of these developments, MBA's State Government Affairs team launched a bi-weekly RON bill tracker ( and continues to keep the MBA's RON Campaign Resource Center updated with the most recent news (  

For more information, contact William Kooper; or Kobie Pruitt

MBA Education Webinar Feb. 27 on 'What the Heck do I do Now?'
Join MBA Education on February 27, 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, click  

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

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