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MBA ADVOCACY UPDATE 

June 29, 2012   


After more than a year of fits and starts, Congress today gave final approval to a five-year reauthorization of the National Flood Insurance Program. The deal, which came together earlier in the week, saw the expiring flood insurance provisions hitch a ride on a larger legislative package that includes highway funding and an extension of student loan interest rates. The House this week also passed the HUD funding bill and with it an MBA-supported amendment to block the department from finalizing its controversial rule that allows the use of "disparate impact" claims under the Fair Housing Act. With both the Senate and House in recess next week for Independence Day, we will not be sending an Advocacy Update on July 6.

In this Issue:

MBA Signs Industry Letter Opposing Local Effort in California to Use Eminent Domain to Restructure Mortgages
On Thursday, June 28, 2012, MBA joined 17 other federal and state trade associations on letters sent to officials in San Bernardino County and the cities of Fontana and Ontario in California. The letters express the industry's strong opposition to the implementation of the local governments' Joint Powers Agreement to create a program for seizing mortgages through eminent domain. The new Homeownership Protection Program would use private funding to refinance the mortgages of underwater borrowers to "fair market value." As currently planned, only mortgages held by private label securities would qualify. MBA and its industry partners believe the contemplated use of eminent domain raises serious legal and constitutional issues. Additionally, the letters state that while well intentioned, the effort would harm the residents it intends to help by continued access to affordable mortgage credit. For more information, please contact Michael Carrier (202) 557-2870 or William Kooper (202) 557-2737.

Industry Developments:

Congress Passes MBA-Supported Five-Year Extension of Flood Insurance Program
On Friday, June 29, 2012, Congress overwhelmingly voted to pass significant legislation that included a five-year reauthorization of the National Flood Insurance Program (NFIP). This comes as a welcome relief for many after years of uncertainty regarding the NFIP, when the program was subject to multiple short-term extensions and brief lapses in NFIP coverage. MBA worked alongside a coalition of industry representatives to achieve final passage of the legislation, which includes several important reforms that will encourage program participation and put the NFIP back on the path to sound financial footing. For more information, please contact Dion Spencer (202) 557-2741.

House Financial Services Subcommittee Holds Hearing on Appraisal Oversight
On Thursday, June 28, 2012, MBA was invited to submit written testimony to the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity for its hearing entitled "Appraisal Oversight: The Regulatory Impact on Consumers and Businesses." The subcommittee heard from several subject area experts from the federal government and the housing and valuation industry. MBA's statement reiterated its positions on appraisals. First, it said that clear, distinct firewalls should exist between the appraiser and those who will be compensated based on the outcome of the transaction for which the appraisal was prepared, including mortgage brokers, real estate sales personnel, and loan officers directly involved in the transaction. Second, it stated that if sufficient firewalls are established, lenders should be permitted the option of utilizing in-house appraisers, independent appraisers and/or appraisal management companies. For more information, please contact Tamara King (202) 557-2758

CFPB Issues Report to Congress on Reverse Mortgages
On Thursday, June 28, 2012, the Consumer Financial Protection Bureau (CFPB) released to Congress its reverse mortgage report as required by the Dodd-Frank Act. The five key findings of the report are: 1) reverse mortgages are complex products and difficult for consumers to understand; 2) borrowers are using the loans in different ways than in the past, which increase risks to consumers; 3) product features, market dynamics, and industry practices also create risks for consumers; 4) counseling, while designed to help consumers understand the risks associated with reverse mortgages, needs improvement in order to be able to meet these challenges; and 5) some risks to consumers appear to have been adequately addressed by regulation but remain a matter for supervision and enforcement, while other risks still require regulatory attention. Additionally, the CFPB issued a request for information on the reverse mortgage market. Comments will be due 60 days after publication in the Federal Register. For more information, please contact Tamara King, (202) 557-2758, or Andrew Szalay, (202) 557-2941.

House Approves FY 2013 HUD Funding Bill, Blocks "Disparate Impact" Rule
On Friday, June 29, 2012, the House passed H.R. 5972, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2013 by a vote of 261 to 163. The legislation contains critical funding for FHA's multifamily and residential programs, Ginnie Mae, and housing counseling. Earlier in the week, MBA sent a letter to Congress highlighting the important provisions in the legislation and urging its passage.

During consideration of the appropriations bill, MBA also endorsed an amendment offered by Representative Scott Garrett (R-NJ) to prevent HUD from finalizing its proposed rule that would permit "disparate impact" claims under the Fair Housing Act. MBA led a joint trade letter citing strong concerns with HUD's rule, noting that the Fair Housing Act does not provide a clear legal basis for such claims, the burden of proof in the proposal is inconsistent with Supreme Court case law, and the proposal fails to take into account current and forthcoming government requirements such as the "qualified mortgage" rulemaking. The Garrett amendment was approved on Wednesday by a voice vote. For more information, please contact Len Wolfson (202) 557-2712.

Congressional Hearings:

July:
First Week     Holiday, District Work Period  

 

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Mortgage Bankers Association of Metropolitan Washington

PO Box 1522, Olney, MD 20830-1522

(301)924-0633  fax (301)924-4124

[email protected] 

 www.mbamw.org  

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