MBA Advocacy Update

Steve O'Connor; Bill Killmer

June 24, 2019

The House last week began consideration on a "minibus" spending bill that provides HUD with $50.1 billion for FY 2020. The Senate Banking Committee held its first in a planned series of hearings on terrorism risk insurance reauthorization. And the New York State Legislature passed legislation that amends current law and establishes required Dodd-Frank minimum standards for appraisal management companies.  

House Begins Consideration of Minibus that Includes Federal Housing Programs

Last week, the House began consideration of a minibus bill that provides HUD with $50.1 billion for fiscal year 2020. The bill provides $300 million for HUD's Cybersecurity and Information Technology Fund, including $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. An additional $60 million in housing counseling is included within the bill.

In anticipation of the floor vote, MBA sent a letter to congressional offices encouraging support for the spending bill (  

The House will continue consideration of this bill, and hundreds of amendments thereto, this week. A planned amendment to be offered by Reps. Juan Vargas, D-Calif., and Pete Aguilar, D-Calif., would restrict funds at FHA from being used to stop recipients of the Deferred Action for Childhood Arrivals program from participating in FHA's lending programs.  

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

Senate Banking Committee Begins Examination of Terrorism Risk Insurance

On Tuesday, the Senate Banking Committee held its first in a series of hearings on the Terrorism Risk Insurance Act. The hearing, Reauthorization of the Terrorism Risk Insurance Program, featured three witnesses who have evaluated and written extensively on TRIA: Tarique Nageer, Terrorism Placement Advisory and Leader with Marsh & McLennan; Howard Kunreuther, Co-Director of the Wharton Risk Management and Decision Processes Center; and Baird Webel, Specialist in Financial Economics with the Congressional Research Service.  

While the program is not set to expire until December 31, 2020, the Banking Committee has already started meeting with key stakeholders, including MBA, and is exploring whether there are additional reforms to improve the program and reduce taxpayer exposure without having a material negative effect on the cost and take-up rates for terrorism coverage.  

In his opening statement, Chairman Mike Crapo, R-Idaho, set out very specific goals for this hearing and the reauthorization process, "During this hearing, I look forward to hearing more about: specific considerations in evaluating the Program's effectiveness; how the Program has evolved over time; how the marketplace has responded to changes to the Program made by Congress in previous reauthorizations; what additional room exists to further reduce taxpayer exposure; and how different market participants may react to changes in different Program levers," he said.  

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

Homeownership for Dreamers Act Introduced in Senate

On Thursday, Senator Bob Menendez, D-N.J., along with 11 co-sponsors, introduced the Homeownership for Dreamers Act (S. 1929). The bill is the companion version of the Homeownership for Dreamers Act (H.R. 3154), which seeks to clarify that recipients of Deferred Action for Childhood Arrivals cannot be deemed ineligible for mortgage loans backed by FHA, Fannie Mae, Freddie Mac or the USDA solely on the basis of their status as DACA recipients.  

Last week, the House Financial Services Committee passed H.R. 3154 with a largely party-line vote of 33-25 with one Republican, Rep. Anthony Gonzalez of Ohio, voting in favor.  

MBA's letter ( encourages Congress to provide its members more certainty on whether they could lend to DACA recipients through the federal housing programs. Though the bill is likely to come to the House floor, it will probably languish in the Senate unless a larger immigration package is negotiated and it is included therein.  

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

House Subcommittee Discusses Disparity in Home Appraisals

The House Financial Services Subcommittee on Housing, Community Development and Insurance held a hearing on Thursday, "What's Your Home Worth? A Review of the Appraisal Industry," which was a follow-up to a recent hearing examining minority homeownership. Subcommittee Chairman Lacy Clay, D-Mo., held the hearing to discuss the de minimus threshold for federally related transactions; the role of modern technology in appraisals; and the impact of inaccurate appraisals, especially on communities of color.  

The Subcommittee heard from panelists representing trade associations and academics, including Andre Perry from the Brookings Institution. In his testimony, Perry presented data from his study, Know Your Price: The Devaluation of Residential Property in Black Neighborhoods. In his study, he found an undervaluation of homes in predominantly minority neighborhoods, amounting to $156 billion in cumulative undervaluation nationwide.  

Rep. Brad Sherman, D-Calif., discussed his legislation, The Homebuyer Assistance Act of 2019 (H.R. 2852), which seeks to more closely harmonize appraiser standards for FHA appraisals with those from Fannie Mae and Freddie Mae. Ranking Member Sean Duffy, R-Wis., further noted the lack of professional appraisers in rural areas, including his district in Wisconsin, and questioned the panel on the role of technology in appraisals.  

The committee memo on the hearing can be found at  

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

House Committee Approves Tax Extenders Legislation

The House Ways and Means Committee on Thursday advanced Democratic-sponsored legislation to extend through 2020 a host of expired and expiring tax breaks and to expand tax credits, including disaster tax relief. The Taxpayer Certainty and Disaster Relief Act of 2019 passed on a party-line vote, 25-17.  

MBA joined with the National Association of Realtors and National Association of Home Builders in a letter ( supporting extension of two specific provisions that have expired. The first prevents underwater homeowners from being taxed if their lender reduces the principal balance or a portion of their mortgage debt is forgiven in connection with a so-called short sale. The second extends the tax deduction for mortgage insurance premiums paid by homeowners. This provision will greatly benefit the large number of homeowners, particularly first-time homebuyers, who cannot afford a 20% or greater down payment and who use mortgage insurance in order to purchase a home.  

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

FHA Sends Policy Changes on Cash-Out Refis to OMB for Review

HUD sent a notice to the Office of Management and Budget for review that addresses FHA cash-out refinancing (  

FHA Commissioner Brian Montgomery and other FHA officials have been signaling for some time their concerns about the growing share and performance risks of the FHA's cash-out book of business. The transmittal to the OMB last week indicates that the policy is under review by the OMB Office of Information and Regulatory Affairs and could be released soon.  Submissions to OIRA are not available to the public, but the title of the submission suggests that FHA may be tightening maximum loan-to-value limits and combined LTV limits on cash-out refis.  

For more information, please contact Pete Mills at (202) 557-2878  

House Holds Hearing on Corporate and Federal Board Diversity

On June 19, the House Financial Services Committee held a hearing, "Diversity in the Boardroom: Examining Proposals to Increase the Diversity of America's Boards." The hearing focused on strategies to diversify the gender, racial and ethnic composition of corporate boards, the Federal Reserve Board of Governors, and government-sponsored enterprises including the Federal Home Loan Banks.  

Both Committee Democrats and Republicans explored best practices to promote diversity at the board level, while also delving into the need to foster an inclusive culture within boardrooms to encourage meaningful participation from diverse voices.  

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

Progress in Campaign for State AMC Minimum Standards

In unanimous votes in both the Assembly and Senate, the New York State Legislature passed legislation (AB-8024 to amend a law enacted last year to establish the required Dodd-Frank minimum standards for appraisal management companies. The current law was interpreted more narrowly than the Legislature had intended by the N.Y. Department of State, and as a result AMCs and lenders stopped using unlicensed individuals for non-appraiser services.  

If signed, the bills passed last week would clarify that an AMC may hire or contract with a person for property inspections or property evaluations if they are licensed as an appraiser, real estate broker, or home inspector, or a person for a broker price opinion if they are licensed as a real estate broker. The bills are awaiting submission to the governor, but would take effect immediately once signed.  

There were a pair of other AMC campaign developments this week. In Massachusetts, legislation (H.3904 to establish AMC minimum standards was approved by the full House. The bill, which MBA supports and which was a part of the Massachusetts MBA's Beacon Hill advocacy day agenda, is now awaiting action in the Senate.  

Additionally, MBA signed on to a coalition letter ( to Washington, D.C., Mayor Muriel Bowser (D), Council Chair Phil Mendelson and Council Chair Pro Tempore Kenyan McDuffie urging action on AMC minimum standards. The letter led to an industry coalition conference call with the Director of the Mayor's Office of Policy and Legislative Affairs, Alana Intrieri, where the need for urgent leadership was reiterated. MBA will continue to advocate for the enactment of minimum standards in both Massachusetts and Washington, D.C., which are the only jurisdictions that have not yet passed this Dodd-Frank requirement.  

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

MBA Education Webinar on Vendor Management Regulations June 25

Join MBA's Compliance Essentials on June 25 to learn about the latest scrutiny by regulators and application of statutory and regulatory vendor management requirements with regard to mortgage finance. Learn how to approach risk management--regulatory, compliance and reputational--with adoption of and adherence to strong, clear policies and procedures. Hear from legal experts about the safeguards that can and should be put in place. Submit questions ahead of time for consideration as part of the webinar.  

To register for this webinar, click  

For more information, please contact Lisa Volb at or 202/557-2919.

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