February 10, 2012 After months of tense negotiations, state attorneys general and federal regulators forged a $25 billion settlement agreement with the nation's five largest servicers. The announcement concludes an oftentimes arduous journey that produced rumors and speculation, but may now lead to a period of more certainty in the housing markets.
In this Issue:
MBA Reacts to Servicer Settlement
On Thursday, February 9, 2012, MBA released a statement from MBA's Chairman-elect Debra Still, CMB and President and CEO David H. Stevens following news of a settlement between state and federal officials and five large residential mortgage servicers. More on the settlement can be found here. For more information, please contact Vicki Vidal (202) 557-2861.
MBA Promotes Transitional Licensing to State Regulators
MBA staff attended the National Mortgage Licensing System (NMLS) Ombudsman Meeting on Monday, February 6, 2012, in Arizona to give the nearly 100 state mortgage regulators attending an update on MBA's efforts to enact Transitional Licensing for mortgage loan originators. Staff briefed the attendees on the proposal, why it is necessary, efforts in the states, coordination with the federal licensing regulator, the Bureau of Consumer Financial Protection (CFPB), and to discussed issues of implementation and support. For more information, please contact Andrew Szalay (202) 557-2941.
MBA Expresses Concern Regarding Proposed Risk-Based Capital Rule
On Friday, February 3, 2012, MBA sent a letter to the banking regulators expressing its strong concern about the proposed rule for market risk, risk-based capital (market risk RBC). Section 939A of the Dodd-Frank Act, that removes ratings from federal regulations. The rule's proposes is to replace the ratings-based approach for market risk RBC with the simplified supervisory formula approach (SSFA). The SSFA is a simplified version of the Basel II Advanced Approach. The SSFA would result in higher market risk RBC for banks and would be applied to their holdings of securitizations, including CMBS and RMBS. The letter is focused on high-level policy concerns with the SSFA. The principal concerns raised in the letter regarding the SSFA include: (1) hinder the return of private capital to the securitization market; (2) create the potential for regulatory arbitrage; (3) hinder the efficient allocation of capital within banks; (4) punitive for banks that cannot adopt the SSFA; and (5) the Dodd-Frank was not intended to raise market risk RBC for banks.
MBA's 2012 National Advocacy Conference
MBA's annual legislative lobbying event on Capitol Hill will feature remarks from Washington insiders who will address the participants at this year's National Advocacy Conference. The conference is your opportunity to speak directly with law- and policymakers who are deciding the future of the real estate finance industry. It has never been more important for you to attend the conference and be personally involved in the industry's free grassroots advocacy efforts, the Mortgage Action Alliance, Inc. (MAA). Our success in the weeks and months ahead will only come with strong participation from you. It is crucial that you bring the industry's message to Capitol Hill by attending the conference on April 18-19, 2012. To visit the Conference Web site, click here. For more information, please contact William Kooper wkooper@mortgagebankers.org (202) 557-3737. To enroll in MAA, click here.
Industry Developments:
House Passes STOCK Act, GSE Bonus Restrictions
On Thursday, February 9, 2012, the House overwhelmingly passed the STOCK Act by a vote of 417 to 2. The bill would clarify that current SEC prohibitions on insider trading extend to lawmakers and congressional staff. It also would step up disclosure, requiring lawmakers and congressional aides who already file annual financial disclosure statements to report stock and bond transactions within 30 days of the transaction.
Of note to MBA members, the bill contains the McCain amendment - passed last week by the Senate in its version of the bill (S. 2038) - that would bar bonus payments to senior executives at Fannie Mae and Freddie Mac while the companies are in conservatorship. The House and Senate versions must now be reconciled before the bill is sent to President Obama. For more information, please contact Dion Spencer (202) 557-2741.
House Passes Budget Reform Bill
On Tuesday, February 7, 2012, the House passed H.R. 3581, the Budget and Accounting Transparency Act, by a vote of 245 to 180. Introduced by Representative Scott Garrett (R-NJ), who chairs a key subcommittee that will consider housing finance reform, the bill would change the way costs of federal loans and loan guarantees (like FHA) are calculated for budget purposes. The legislation would require costs of federal credit programs to be measured on a "fair-value basis," meaning determining their costs if offered in a competitive market. It would also require the budgets of Fannie Mae and Freddie Mac to be incorporated in the federal budget. While a companion bill in the Senate has 21 cosponsors its prospects in that chamber are uncertain. For more information, please contact Len Wolfson (202) 557-2712.
Housing Subcommittee Approves FHA Bill
On Tuesday, February 7, 2012, the House Financial Services Subcommittee on Housing and Insurance approved the FHA Emergency Fiscal Solvency Act by a voice vote. MBA sent a letter to the subcommittee endorsing the bill, which gives FHA additional flexibility in setting annual premiums and allows Direct Endorsement lenders to "table fund" mortgages, and commending the subcommittee for removing more controversial provisions that would have lowered loan limits for much of the country and raised down payment requirements. MBA also worked to secure passage of an amendment, offered by Rep. Steve Stivers (R-OH) that improved the bill's indemnification provisions by limiting them to "serious and material" violations of HUD regulations and creating a process for lenders to appeal indemnification decisions. For more information, please contact Len Wolfson (202) 557-2712.
Congressional Hearings:
February
15 House Committee on Financial Services: Hearing entitled "Budget Hearing-Consumer Financial Protection Bureau"
15 Senate Committee on Banking, Housing & Urban Affairs: Pay for Performance: Incentive Compensation at Large Financial Institutions
16 Senate Committee on Banking, Housing & Urban Affairs: Examining the European Debt Crisis and its Implications
|
