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MBA ADVOCACY UPDATE 

July 20, 2012

A bipartisan group of more than 100 members of the House of Representatives wrote to the CFPB this week to urge that the final "ability to repay" rule's qualified mortgage (QM) definition include a strong legal safe harbor. The letter was a key part of MBA's advocacy on Capitol Hill and was aided by the grassroots support of our members during the National Advocacy Conference in March and in subsequent calls to action by the Mortgage Action Alliance (MAA).

In this Issue:
MBA Member Alert on Eminent Domain
On Friday, July 20, 2012, MBA President Dave Stevens issued an alert to MBA members to provide information on an emerging issue in the county of San Bernardino, California that could have nationwide repercussions. The alert provides background on a plan being evaluated by the county to "condemn" mortgages of underwater borrowers, who are current on their payments, seize the mortgages under the power of "eminent domain," then restructure the loans to lower the borrowers' payments, and sell the new mortgages to other investors. For more information, please contact John Mechem, (202) 557-2924 or Mike Carrier, (202) 557-2870.

FHA Announces Expanded Sale of Troubled Mortgages
This past week, Acting Federal Housing Administration (FHA) Commissioner Carol Galante and FHA staff held conference calls addressing the Distressed Asset Stabilization Program (DASP) with servicers and investors. The DASP allows interested parties to purchase pools of severely distressed mortgages from FHA while homeowners receive relief in the form of temporary foreclosure forbearance. For more information, please see FHA's press release or contact Vicki Vidal, (202) 557-2861.

MBA Submits Comment Letter to HUD regarding ML 2012-11
On Wednesday, July 18, 2012, MBA submitted a letter to HUD about ML 2012-11 clarifying title approval at conveyance. The letter was developed by the MBA Loan Administration Committee Steering Committee and the MBA HUD Claims Working Group and details potential serious consequences from the revised policy direction in ML 2012-11. The letter requests that HUD engage with industry in discussions to minimize potential adverse effects and delay the August 1, 2012, effective date. For more information, please contact Vicki Vidal, (202) 557-2861 or Sandra Troutman, (202) 557-2858.

Representatives Sign Bipartisan Qualified Mortgage Letter Addressed to CFPB Director Cordray
On Thursday, July 12, 2012, Representative Shelley Moore Capito and Representative Brad Sherman sent their bipartisan letter concerning the definition of a qualified mortgage (QM) to Consumer Financial Protection Bureau Director Richard Cordray, which included the signatures of over 100 other House Members. The letter details the need for a strong legal safe harbor versus a rebuttable presumption in order to allow accessibility to mortgages for would-be borrowers. For more information, please contact Len Wolfson, (202) 557-2712 or Dion Spencer, (202) 557-2741.

Legislation to Protect Privileged Information Introduced in House
On Thursday, July 12, 2012, Reps. Jim Renacci (R-OH) and Ed Perlmutter (D-CO) introduced H.R. 6125, legislation that would protect privileged and confidential information provided to the CFPB and state regulators, and establish parity in the treatment of banks, credit unions and nonbank financial institutions with regard to the handling of such information. On July 19, 2012, MBA joined other trades in sending a letter to the Senate Banking Committee and House Financial Services Committee urging Congress to pass H.R. 6125. The bipartisan bill compliments separate legislation, which passed the House earlier this year, that protects privileged information shared with the CFPB by banks. H.R. 6125 would extend these important protections for non-depository firms under the CFPB's jurisdiction. For more information, please contact Len Wolfson, (202) 557-2712.

Industry Developments:
Federal Reserve Chairman Bernanke Presents Semiannual Monetary Policy Report
On Tuesday, July 17, 2012 and Wednesday July 18, 2012, Federal Reserve Chairman Ben Bernanke presented the Monetary Policy Report as a reference for all of Congress, testifying before both the Senate Committee on Banking, Housing and Urban Affair and the House Financial Services Committees. Bernanke warned of continuous "frustratingly slow" job growth that might necessitate further Federal Reserve action to stimulate faster recovery. The Fed Chairman cited "still-tight borrowing conditions for some businesses and households and... the restraining effects of fiscal policy and fiscal uncertainty" as obstacles to recovery, calling to attention the European financial crisis and the U.S. fiscal situation as the two greatest threats to economic improvement. For more information, please contact Brad Cheney, (202) 557-2913 or Meghan Sullivan (202) 557-2866.

House Financial Services Subcommittee on Financial Institutions and Consumer Credit Examines Dodd-Frank's Impact on Consumers
On Thursday, July 19, 2012, Deputy Director of the CFPB Raj Date testified before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit to address the Dodd Frank Act's impact on consumers. Date discussed the beneficial creation of the CFPB in allowing a single point of accountability for consumers and addressing issues of transparency, fairness, and financial incentives. The CFPB made it clear that it will continue to take its time in writing the definition of a qualified mortgage that supports the ability-to-repay provision of Dodd-Frank. For more information, please contact Len Wolfson, (202) 557-2712 or Dion Spencer, (202) 557-2741.

Congressional Hearings:


July:
24    House Financial Services Subcommittee on Financial Institutions andConsumer Credit: Examining Consumer Credit Access Concerns, New Products and Federal Regulations

House Financial Services Subcommittee on Insurance, Housing and
Community Opportunity: The Impact of Dodd-Frank's Insurance
Regulations on Consumers, Job Creators, and the Economy

25    House Financial Services Committee: The Annual Report of the Financial
Stability Oversight Council

26    House Financial Services Subcommittee on Capital Market and
Government Sponsored Enterprises: The 10th Anniversary of the
Sarbanes-Oxley Act

Senate Committee on Banking Housing and Urban Affairs: The Financial
Stability Oversight Council Annual Report to Congress

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