MBA State Relations Committee Update Highlights

News and information from the latest issue of MBA State Relations Committee Update.

Senate Passes Budget; Paves Way for Tax Reform
By a vote of 51-49, the Senate passed the FY2018 Budget resolution that serves as the first step toward passing comprehensive tax reform legislation. The budget resolution is a non-binding framework that merely lays out spending priorities. However, its passage allows the Senate to move legislation, such as tax reform, through the chamber on a simple majority vote using a tool called reconciliation. Absent reconciliation, tax reform would be subject to a much-steeper 60-vote supermajority threshold. The version that passed the Senate paves the way for swift passage in the House as soon as next week. The White House continues to remain optimistic that tax reform will be signed into law later this year.  

FHFA Releases Annual Report on GSE Guarantee Fees
The report details the guarantee fees (g-fees) charged by Fannie Mae and Freddie Mac over the past year. Data provided by FHFA indicate that average g-fees across all GSE loans fell 2 basis points in 2016, but remain well above their 2012 levels. The small decline in average g-fees in 2016 was primarily a function of competitive GSE pricing-not the credit risk of the loans acquired. MBA put out a statement on the report and will continue to work towards developing and sustaining policies that ensure a level playing field across lenders of all sizes and business models, including codifying such policies in comprehensive, legislative GSE reform.

VA, Ginnie Mae Create Task Force to Address Mortgage Refinancing Issues
Ginnie Mae and VA announced the formation of the "Joint Ginnie Mae - VA Refinance Loan Task Force." The VA Refinance Loan Task Force will help both agencies continue to analyze monthly Interest Rate Reduction Refinance Loan program (IRRRL) data, keep policy makers informed, and potentially provide additional policy steps to limit this practice. MBA has taken a strong stance against abuse of the VA IRRRLs program. Known as "churning," borrowers are repeatedly refinanced again and again, against their own financial interest. 

OCC Issues Temporary Exceptions to FIRREA Appraisal Requirements
The OCC, the Board of Governors of the Federal Reserve System, the FDIC, and the National Credit Union Administration (collectively, the agencies) issued a bulletin exempting real estate-related transactions in Presidential major disaster areas from the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) appraisal requirements. For a three-year period after the date when the disaster was declared, exemptions to FIRREA statutory and regulatory requirements apply. Exemptions apply provided certain criteria are met. Documentation of the location, transaction date, and value of the real property should be kept. 

MBA Supports Montgomery Nomination
MBA sent a letter to the Senate Banking Committee in support of Brian Montgomery's nomination to be Assistant Secretary for Housing and Federal Housing Administration (FHA) Commissioner at the U.S. Department of Housing and Urban Development (HUD). If confirmed, this would be Montgomery's second tour as FHA Commissioner. MBA notes in its letter that his past government service combined with his recent private sector experience provide him with a unique perspective that will help guide FHA as it tackles critical management priorities, including enhancing efficiency and technology deployment, clarifying existing lender guidance, and ensuring the long-term financial stability of the FHA program. 

Senate Banking Committee Hearing on Equifax Breach
In the wake of the Equifax data security breach, the Senate Banking Committee held a hearing on consumer data security and the credit bureaus. Testifying at the hearing were representatives from trade associations representing the credit bureaus as well as academics. In the hearing there was bipartisan concern over the steps the credit reporting industry has taken to protect consumer's data from similar breaches as well as what possible steps Congress can take in wake of the Equifax breach. To watch the hearing webcast, please click here.

MBA Comments on Know Before You Owe Rule
The rule proposes eliminating the four-day business limit on sending out certain Closing Disclosure (CD) forms that have created what the industry commonly refers to as the "black hole" when the creditor cannot reset tolerances using a CD. MBA's comments strongly supported the amendments to resolve the black hole issue by eliminating the four-business day limit and allowing creditors to reset tolerances using a CD, regardless of how many days there are between the date the CD is issued and consummation. Resolving the black hole issue will benefit consumers and the mortgage industry alike by providing clarity, leaving choice in consumers' hands, and keeping costs down.  

HUD Secretary Ben Carson Testifies Before House Financial Services Committee
In his testimony, the Secretary described his "Forward Initiative" as a series of reforms to "reimagine how HUD works, restore the American dream, and rethink American communities."  Questions from members of the committee covered topics as varied as affordable rental housing, proposed budget cuts to the CDBG and HOME programs, the prospects for GSE and FHA reform, the potential impact of PACE loans and the current HECM program on FHA's single-family Mutual Mortgage Insurance Fund, and hurricane relief efforts.  Notably, Carson was also asked about the Department of Justice's ongoing use of the Civil War-era False Claims Act (FCA) against mortgage lenders with reference to MBA President and CEO Dave Stevens' recent column in HousingWire regarding the need for FCA reforms during his exchange with the Secretary. In both instances, Secretary Carson said he is engaged with Attorney General Jeff Sessions and that his "...staff and DOJ's staff are already working on this issue and [that ] he is committed to getting it resolved."  

Ginnie Mae Issues Guidance for Disaster Pass-Through Assistance, Delinquency Ratio Exemptions for Qualifying Portfolios
GNMA issued an All Participants Memorandum (APM) clarifying the terms of its disaster assistance programs and adjusting its long-standing requirement that 5% of an issuers' book needs to be in a disaster affected area in order to qualify for short-term liquidity assistance to allow issues to aggregate eligible loans in all Hurricane-disaster areas. Under the APM guidance, Ginnie Mae will use two major considerations when reviewing requests: whether the request constitutes a last resort and whether there are sufficient grounds to expect repayment within the 90 days allowed. The decision is at Ginnie Mae's sole discretion. Ginnie Mae will accept applications under these two programs through October 2018 for the monthly reporting periods between September 2017 and September 2018.