MBA Advocacy Update

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

June 10, 2019


Last Thursday, President Trump signed into law H.R. 2157, the Additional Supplemental Appropriations for Disaster Relief Act, 2019, a $19.1 billion disaster aid bill that sends funds to states and territories impacted by recent floods, wildfires, hurricanes and other natural disasters.

Importantly, this legislation includes a four-month extension of the National Flood Insurance Program until September 30. While this is the 11th short-term extension of the NFIP since 2017, the House is expected to introduce legislation this week that will provide longer-term funding as well as reforms to the program.

For more information, contact Dan Grattan at (202) 557-2712 or Ernie Jolly at (202) 557-2736.

House Appropriations Committee Passes Spending Bill for Federal Housing Programs
Last Tuesday, the full House Appropriations Committee passed its Transportation, Housing and Urban Development spending bill that would provide HUD $50.1 billion for fiscal year 2020. The bill provides $300 million for HUD's Cybersecurity and Information Technology Fund and importantly, includes a specified $20 million for FHA's single-family IT infrastructure.

The bill also includes $30 billion in commitment authority for the General Insurance and Special Risk Insurance Fund, as well as adequate funding for rental assistance. Also included within the bill is $60 million in housing counseling. In anticipation of the Committee's vote, MBA sent a letter to the panel's members highlighting the industry's priorities within the proposal.

Despite the spending bill's general bipartisan appeal, the bill passed by a party line vote due to Republican opposition to a transportation policy provision and other policy riders.

For more information, contact Ernie Jolly at (202) 557-2741 or Dan Grattan at (202) 557-2712.

Senate Passes S.1749: Protect Affordable Mortgages for Veterans Act of 2019
Last Wednesday, Senators Kyrsten Sinema, D-Ariz., and Thom Tillis, R-N.C. introduced and the Senate passed S.1749, the Protect Affordable Mortgages for Veterans Act of 2019, by unanimous consent. The bill will now be sent to the full House of Representatives, where it is expected to be considered under "suspension"--the process reserved for passing non-controversial measures.

Companion legislation (H.R. 1988) was passed unanimously last month by both the House Financial Services and Veterans' Affairs Committees. The full text of MBA's recent letter to the Senate Banking Committee and Veterans' Affairs Committees can be found here. 

The bipartisan bill would correct a legislative drafting error that prevented VA-guaranteed "orphaned loans" from being eligible for Ginnie Mae pooling. The legislation would also provide a go-forward fix by changing the start date of the 210-day seasoning period from the date on which the first payment was made to the date on which the first payment was due, which would provide greater clarity for lenders. The legislative fix would promote liquidity and enable impacted VA lenders to provide more mortgage credit to veterans.

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

Senators Introduce Bipartisan Legislation on FHA Appraisals
Last Wednesday, Senators John Thune, R-S.D., and Jon Tester, D-Mont., introduced S. 1722, the Federal Housing Administration Appraiser Eligibility Expansion Act.

The bipartisan legislation would update the law to once again give licensed residential appraisers the ability to conduct appraisals on FHA properties. Under current law, unlike their certified appraiser counterparts, licensed residential appraisers are prohibited from performing otherwise permitted appraisals on FHA properties.

While this bill would increase the pool of appraisers who are eligible to conduct appraisals on FHA properties, it would not place additional education, training, or competency requirements on any appraiser who is currently conducting FHA appraisals, nor would it place additional requirements on appraisers not wishing to conduct FHA appraisals. In addition to Senators Thune and Tester, S. 1722 is also cosponsored by Senators John Hoeven, R-N.D., Angus King, I-Maine., Mike Rounds, R-S.D. and Tina Smith, D-Minn.

A copy of MBA's support letter can be found here.

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

Hearings on Financial Data Privacy Continue in Senate Banking Committee
On Tuesday, June 11, at 10 a.m., the Senate Committee on Banking, Housing and Urban Affairs will hold a full committee hearing entitled, "Data Brokers and the Impact on Financial Data Privacy, Credit, Insurance, Employment and Housing." Witnesses will be Alicia P. Cackley, Director, Financial Markets and Community Investment, Government Accountability Office; and Pam Dixon, Executive Director, World Privacy Forum.

This will be the Senate's second hearing on this topic in the 116th Congress. On February 13, in a rare bipartisan request, Chairman Mike Crapo, R-Idaho, and Ranking Member Sherrod Brown, D-Ohio, invited feedback from the public on the collection, use and protection of sensitive information by financial regulators and private companies.

MBA submitted its feedback and supports efforts to ensure that no consumer is unwittingly exposed to harm by unintentionally providing his or her personal data to unscrupulous actors. However, MBA suggested not preventing the careful use of data to improve the efficiency of mortgage origination. The full text of MBA's letter to the Banking Committee can be found here.

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

Uniform Mortgage-Backed Security Issuance Begins
Fannie Mae and Freddie Mac began issuance of the new Uniform Mortgage-Backed Security last week. The UMBS launch occurred smoothly with no major market disruptions. Both GSEs now use the Common Securitization Platform to issue UMBS, as well as "Supers," which are similar to today's Fannie Mae Megas and Freddie Mac Giants and which allow for commingling of Fannie Mae and Freddie Mac UMBS. 

This transition was the result of years of dedicated work by the GSEs, FHFA, Common Securitization Solutions and many industry representatives. MBA has long supported this effort, which should lead to greater secondary market liquidity and reduce trading disparities across securities issued by each GSE.

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

FHA Grants Extension for Comments Regarding Defect Taxonomy
The Federal Housing Administration on Monday announced it will extend the public feedback period to June 30 on its proposed revisions to the Defect Taxonomy posted on the Single Family Housing Drafting Tablewhich were previously announced in FHA INFO 19-18 on May 9. The original end date for public comment was June 8.

On May 30, the feedback deadline for the loan-level certification was also extended to June 30, as announced in FHA INFO 19-27.

FHA is extending the feedback period to give interested parties additional time to review and submit feedback on the proposed changes. The feedback deadline for the Annual Lender Certifications - also posted on the Drafting Table - remains the same, and ends on June 8.

For more information, contact Dan Fichtler at (202) 557-2780 or Fran Mordi at (202) 557-2860.

MBA Publishes Consumer Disclosure Template Ahead of LIBOR Sunset
Last Thursday, MBA released a newly developed template for a disclosure that lenders can use to alert potential adjustable-rate mortgage borrowers about the likely discontinuation of the London Interbank Offered Rate, or LIBOR. Most single-family adjustable-rate mortgages base their resets on LIBOR, though regulators have confirmed that LIBOR is expected to sunset at or near the end of 2021.

Ahead of this transition, the mortgage industry is placing greater focus on the preparations that will be needed. As a leader in these efforts, MBA convened its LIBOR Working Group to help create and refine this disclosure template, which is intended to educate consumers seeking new adjustable-rate products that are indexed to LIBOR.

In the coming months, MBA plans to publish a similar disclosure template intended for customers with existing LIBOR-based loans. In addition, MBA continues to participate in efforts coordinated by the Alternative Reference Rates Committee--the group convened by the Federal Reserve to facilitate the transition--on issues ranging from new product design to contract fallback language to communications with borrowers.

For more information, visit the MBA LIBOR issue page or contact Dan Fichtler at (202) 557-2780.

Bob Broeksmit Blog on FHFA Progress Report
MBA President and CEO Bob Broeksmit's latest blog post discusses FHFA's 2018 Scorecard Progress Report for Fannie Mae and Freddie Mac. Specifically, he discusses the important changes that have occurred at the GSEs since being placed into conservatorship and what Congress now must do to ensure a stable, liquid secondary mortgage market

For more information, contact Rob Van Raaphorst at (202) 557-2799.

Nebraska Enacts RON Legislation; Florida Sends RON Bill to Governor for Signature
Late on May 31, it was announced that Nebraska Governor Pete Ricketts had signed LB186 into law, which will enable the use of remote online notarization in the state. Nebraska becomes the 11th state in 2019 to enact RON legislation and the 21st state to establish RON as a permissible method of performing notarizations.

Following closely on the heels of that announcement, last Wednesday the Florida legislature sent HB409 to Governor Ron DeSantis for his signature to allow the use of audio-video technology to complete notarial acts. The statutory language of LB186 and HB409 is consistent with the MBA-American Land Title Association (ALTA) model state RON bill and the developing national consensus on how to safely implement RON.

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

DCRA Convenes Meeting to Receive Feedback on AMC Regulation
Last Thursday, the Washington, D.C. Department of Consumer & Regulatory Affairs held a public meeting to receive feedback on the regulation of appraisal management companies. Washington, D.C., has until August 10 to implement provisions of Dodd-Frank that require states and the District to establish minimum standards for licensing and regulating AMCs.

Massachusetts and Washington, D.C., remain the only jurisdictions that have not enacted law or promulgated rules to begin licensing of AMCs in a manner compliant with federal minimum standards. Failure to do so by the deadline will prevent lenders from using AMCs to facilitate federally regulated transactions in Washington.

MBA staff and member companies attended the meeting to express to the DCRA the importance these cost-saving entities have to the lending process and how they provide consumers with access to affordable credit.

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

Compliance Essentials Webinar on UDAAP Activity and Regulations
Join MBA Education and the Compliance Essentials program on June 12 for the latest developments on the Unfair, Deceptive, or Abusive Acts or Practices Rule.

Hear from leading legal experts as to why this rule continues to be a cause for concern for lenders and compliance professionals throughout the industry. Panelists will speak to the enforcement actions that have taken place in recent months and what steps you can take to avoid compliance issues. This interactive webinar will be a great opportunity to get your questions answered and hear from your peers.

To register for this webinar, click here.

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

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