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May 11, 2012
Senators Bob Menendez and Barbara Boxer teamed up this week to propose new legislation that would make it easier for homeowners to refinance into more affordable interest rates. MBA has been actively engaged with senators on both sides of the aisle providing input on this evolving proposal, which would allow all borrowers with GSE-backed loans to refinance regardless of their debt-to-income ratios.
In this Issue:
CFPB Announces Mortgage Loan Origination Provisions are to be Presented to Small Business Review Panel and that Proposed Rule is Coming this Summer
The Consumer Financial Protection Bureau (CFPB) announced on Wednesday, May 10,2012, that it is convening a small business review panel to consider proposals to implement the mortgage loan origination compensation and qualification provisions of Dodd-Frank which will be contained in a proposed rule to be issued this summer. These provisions contain several components of particular interest to MBA members including requirements that: (1) there be a reduction in interest rate when a consumer pays discount points for a loan; (2) lenders offer consumers a no-discount point loan option when they are seeking a loan; (3) prohibit upfront origination charges that vary with the size of the loan; (4) would set qualification and screening standards, such as character and background checks, for federally registered originators; (5) prohibit steering incentives to mortgage loan originators. The CFPB indicated it also would clarify certain issues in the Federal Reserve's loan originator compensation rule that "have created industry confusion." MBA is analyzing an overview of the rules under consideration which can be found at: For more information, please contact Ken Markison, (202) 557-2930.
MBA Holds Successful National Secondary Market Conference and Expo
The MBA held its annual Secondary Conference in Manhattan this past week. MBA leaders such as Chairman Mike Young and President and CEO Dave Stevens were among notable speakers as well as Lew Ranieri, CFPB's Raj Date, and PIMCO's Scott Simon. The Expo and Trading Floor showcased the newest innovations in mortgage origination, tracking, and sales. For more information,please contact Michael Carrier, (202) 557-2870.
Mortgage Action Alliance Supports Industry Advocacy on Qualified Mortgage
On May 7, the Mortgage Action Alliance, Inc. ® issued a Call to Action concerning the proposed qualified mortgage (QM) rule. MAA members acted and wrote CFPBDirector Richard Cordray to raise concern about a narrow definition of QM, the need for safe harbor concerning the ability to repay, and the proposed three percent limit on points and fees. To take action click here. If you not already a member of MAA, you will first have to join here for free. For more information, please contact William Kooper, (202)557-2737.
MBA Meets With FASB on New Project: Accounting for Repurchase Agreements
On May 7, representatives of MBA's Financial Management Committee held a call with Financial Accounting Standards Board (FASB) members, Lawrence Smith and Harold Schroeder, and several representatives from FASB's technical staff to provide them information on how mortgage bankers use TBA's, repurchase agreements, and dollar roll transactions while banking. The call was part of FASB's outreach related to accounting for repurchase agreements. For more information, please contact Jim Gross, (202) 557-2860.
Industry Developments:
Senate Banking Committee Hearing Addresses "Expanding Refinancing Opportunities to Improve the Housing Market"
On May 8, the Senate Banking Committee held a hearing concerning the expansion of real estate refinance opportunities. HUD Secretary Shaun Donovan offered support for the administration's proposal that non-FHA and non-GSE loans should be allowed refinancing through FHA. Qualification criteria for this proposed program would include non-deliquency and a minimum credit score. Risk management measures would include capping the loan to value (LTV) ratio at 140. Secretary Donovan also promoted the improvement of existing options for there financing of GSE loans (Menendez/Boxer proposal). For more information, please contact Brad Cheney, (202) 557-2913.
Capitol Hill Takes on Flood Insurance
On May 9, a Senate Economic Policy Subcommittee hearing entitled "The National Flood Insurance Program: The Need for Long-Term Reauthorization and Reform," focused on the future and looming expiration of the National Flood Insurance Program (NFIP). The hearing showcased the desire of Senators and witnesses alike for a long-term reauthorization of the program as laid forth in S.1940, as offered by Senators Jon Tester (D-MT) and David Vitter (R-LA). The looming deadline already affects business procedures, as insurers must begin communication about NFIP's potential sunset at least 60 days before the program ends.
Throughout the week, MBA and fellow trade associations advocated on behalf of S. 1940 in a "Flood the Hill" campaign. The campaign featured letters to the Senate, meetings in person with key decision-makers, and media outreach. For more information, please contact Dion Spencer, (202) 557-2741.
House Subcommittee Examines Reverse Mortgages
On May 9, 2012, the House Financial Services Subcommittee on Insurance and Housing held an oversight hearing to examine the reverse mortgage industry and hear from FHA and outside groups. At the hearing, witnesses urged Congress to lift the current cap on the number of reverse mortgages (or HECMs) FHA can insure and establish a "qualified mortgage" rule for reverse mortgages. Rep. Michael Fitzpatrick (R-PA) has proposed legislation to abolish the HECM cap. For more information, please contact Len Wolfson, (202) 557-2712, or Tamara King, (202) 557-2758.
MBA Comment and Congressional Letter(s):
MBA Joins Fellow Trade Associations in Letters Encouraging Wider Access to USDA and VA Housing Programs
MBA joined the National Association of Realtors and the National Association of Home Builders in sending letters to Congress encouraging that the definition of "rural" communities be updated and endorsing H.R. 4482, legislation that would make permanent the VA's adjustable rate mortgage programs. Based on the results of the 2010 Census, many localities that currently qualify for USDA's rural housing programs would be declared ineligible. Updating the definition, which has not been amended since 1974, and grandfathering in existing communities will preserve access to these important programs for many communities. Meanwhile, H.R. 4482 is necessary because the VA's ARM programs expire on September 30, 2012. The ability to take out ARM loans is important for active duty military who are frequently given orders to relocate.
See attached. For more information, please contact Len Wolfson, (202) 557-2712, or Tamara King, (202) 557-2758.
Congressional Hearings:
May:
16 House Committee on Financial Services: "The Impact of the Dodd-Frank Act: What It Means to be a Systemically Important Financial Institution"
House Committee on Financial Services: "Increasing Market Access for U.S. Financial Firms in China: Update on Progress of the Strategic & Economic Dialogue"
House Committee on Financial Services: "Oversight of the Federal Deposit Insurance Corporation's Structured Transaction Program"
17 House Committee on Financial Services: "Examining the Settlement Practices of U.S. Financial Regulators"
House Committee on Financial Services: "U.S. Insurance Sector: International Competitiveness and Jobs"
Click here for Upcoming MBA Conferences and Events |
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Don't miss these great MBA/MW Events
- Spring Golf Outing on June 7 (Commercial & Residential) Location: 1757 Golf Club, 45120 WaxPool Road, Dulles, VA
- Charity Happy Hour on June 14 (Residential) Location: Old Anglers Inn in Potomac, MD
Details are being finalized and will be available soon.
- Mid-Atlantic Lender/Broker Conference on October 18 (Residential)
Location: Waterford at Fair Oaks, Fairfax, VA
Exhibitor and Sponsorship registration is now open. Click here for details.
-Mortgage Bankers Reunion on December 5 (Residential)
-Annual Meeting & Holiday Luncheon on December 14 (Commercial & Residential)
Details for these events are being finalized.
Visit our website for additional details and to register: www.mbamw.org
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Mortgage Bankers Association of Metropolitan Washington PO Box 1522, Olney, MD 20830-1522 (301)924-0633 fax (301)924-4124 info@mbamw.org www.mbamw.org   
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