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MBA ADVOCACY UPDATE 

June 13, 2014

A productive week on Capitol Hill was largely overshadowed by the stunning defeat of House Majority Leader Eric Cantor to an unknown professor in a primary election. Cantor has announced he will step down from his leadership post at the end of July, and House Republicans will meet next Thursday to elect a new majority leader and whip.

On the legislative front, the House gave unanimous approval this week to the Mortgage Choice Act, a bill that would make needed changes to the way points and fees are calculated under the Qualified Mortgage rule. The legislation has been a priority for MBA and was a focus of this year's National Advocacy Conference in April, as well as grassroots campaigns by members of MBA's Mortgage Action Alliance. The House also approved the HUD appropriations bill on a close party-line vote, setting up a showdown with the Senate, which may take up its version of the legislation later this month.

Mortgage Choice Act Passes House
On Monday, the House of Representatives unanimously approved H.R. 3211, the Mortgage Choice Act. This bipartisan legislation would make important changes to the way points and fees are calculated under the Qualified Mortgage (QM) definition in the Dodd-Frank Act, in order to ensure greater consumer choice in mortgage and settlement services under the QM rule. Specifically, H.R. 3211 would remove affiliated title charges from the three percent cap on points and fees. House approval of this legislation is a significant victory for MBA, which advocated strongly for H.R. 3211. Additionally, members of the Mortgage Action Alliance provided their own support by urging their Representatives to vote for the bill. The next step for the Mortgage Choice Act will be a vote by the full Senate. For more information, please contact Dion Spencer, (202) 557-2741 or Len Wolfson, (202) 557-2712.

MBA Cautions Interagency Group on Proposed AMC Rule
MBA and the American Financial Services Association (AFSA) asked this week that the Federal Reserve, FDIC, FHFA, CFPB, NCUA, and OCC (the Agencies) reconsider a proposed rule which would establish minimum requirements for appraisal management companies (AMCs). The proposed rule would establish standards for both federally regulated and non-federally regulated AMCs. However, it does not require adoption of standards in those states that choose not to regulate non-federally regulated AMCs. Consequently, because these standards are required for AMCs to operate, non-federally regulated AMCs could be prevented from providing appraisal management services for many transactions in states where such AMC regulatory structures are not adopted. MBA and AFSA urged that the final rule require that states implement at least the minimum standards established by the Agencies. If the Agencies choose not to require that states implement the standards, MBA proposed that the rule provide that in states where standards are not adopted by a fixed date, the standards in the rule shall apply. In such states, MBA further urged that one of the Agencies act as the default registry for AMCs. This "backstop" would allow the Agencies to serve as a registry for non-federally regulated AMCs. For more information, please contact Ken Markison, (202) 557-2930; Tamara King, (202) 557-2758; or Joe Gormley, (202) 557-2870.

MBA Submits VA QM Comment Letter asking that all VA loans be Safe Harbor
On Monday, MBA submitted a comment letter on the VA's interim final QM rule, applauding the Department for defining the vast majority of VA loans as QM safe harbor loans. Under the interim final rule, the only VA loans that will be designated QM rebuttable presumption loans are certain Interest Rate Reduction Refinance Loans (IRRRLs) which do not provide substantive financial benefits to the borrower. As explained in the comment, MBA believes that rather than classify some loans as rebuttable presumption QMs, it would be more efficient if the VA changed its program guidelines to prohibit lenders from originating IRRRLs that do not provide a reasonable financial benefit to the borrower. MBA also urged that if the VA insists on making some IRRRLs rebuttable presumption QMs, then it should delay rule implementation for these loans to give lenders sufficient time to modify and test their systems. For more information, please contact Ken Markison, (202) 557-2930; Tamara King, (202) 557-2758; or Joe Gormley, (202) 557-2870.

MBA Provides Feedback on FHA's Proposed Supplemental Performance Metric
MBA provided feedback this week on FHA's proposed Supplemental Performance Metric, which would complement the current Compare Ratio by assessing lender performance based on a lender's default rate within three credit score bands and comparing it to an FHA target rate, rather than to the lender's peers. MBA has previously expressed concern that the Compare Ratio has created a "race to the top" in which lenders are forced in many cases to only lend to borrowers with stronger credit profiles for fear that the resulting performance of loans made to borrowers with weaker credit profiles will lead to FHA terminating their origination authority. MBA believes that it will be beneficial to FHA, lenders, and the public to compare a lender's performance to FHA's risk tolerance rather than to one's peers. However, MBA has concerns that credit score mix in the proposed Supplemental Performance Metric is too prescriptive and believes the objective should be to provide access to credit for all qualified borrowers - not to achieve a certain type of customer mix. For more information, please contact Tamara King, (202) 557-2758 or Joe Gormley, (202) 557-2870.

MBA-Supported Legislation to Fix New York's FHA Subprime Issue Approved by State Legislature
The New York Assembly approved SB 7224 on Thursday, a bipartisan bill to provide a permanent solution to the problem of FHA loans triggering the State's definition of "subprime" - the result of an FHA policy implemented in June 2013 requiring mortgage insurance premiums to be calculated for the life of these loans. The Assembly's early reporting of a 111-2 approval of SB 7224 follows the Senate's unanimous approval of the bill on Wednesday, and with strong legislative support the bill will now be transmitted to Governor Andrew Cuomo. If signed into law by the Governor, this legislation will codify a series of temporary emergency regulations issued by the New York Department of Financial Services that have increased by 75 basis points the calculation used to trigger the subprime definition for most FHA-insured loans. In order to stress the importance of this legislation for FHA lending in New York, MBA and six regional MBAs previously submitted a memorandum in support to all State legislators, and the group today urged speedy executive approval in a letter to the Governor. For more information, please contact William Kooper, (202) 557-2737 or Scott Nowak, (202) 557-2811.

MBA Compliance Essentials is Going on the Road with RESPA-TILA
This summer, MBA is coming to a city near you with a series of RESPA-TILA integration forums. The popular MBA Compliance Essentials program will be presenting one-day forums on RESPA-TILA integration, bringing leading legal and compliance experts on tour - starting in Dallas on June 24th. MBA Member registration starts as low as $500 a person, depending on the date of purchase. To view the full schedule, speaker lineup and to register, please click here.

June Congressional Hearings:

17     Senate Banking Committee, "Nomination Hearing" (The Honorable Julian Castro to be HUD Secretary, Ms. Laura Wertheimer to be FHFA Inspector General)

18    House Financial Services Committee, "The Semi-Annual Report of the Consumer Financial Protection Bureau"

18    House Financial Services Committee, Oversight and Investigations Subcommittee, "Allegations of Discrimination and Retaliation within the Consumer Financial Protection Bureau, Part Three"


Upcoming  MBA/MW Events
    
- Charity Happy Hour on June 19 (Residential) 
Location: Old Anglers Inn, Potomac, MD 
Register here for this free event.

- CREF Council's 3rd Annual 'Need a Summer Break' Charity Happy Hour  
on July 16 (Commercial) 
Location: RFD's Washington, DC
Register here by July 9 for the early bird rate. 
 
- Fundamentals of Mortgage Banking on July 22 & 23 (Residential)
Location: Herndon, VA 
Register here by July 15 for the early bird rate. 

 

- Mid Atlantic Lender Conference on October 9 (Residential) 
Location: Waterford at Fair Oaks  
Exhibitor and Sponsorship Registration is now open.  
Click here for details. 
 
Visit our website for additional details: www.mbamw.org 

Mortgage Bankers Association of Metropolitan Washington

PO Box 1522, Olney, MD 20830-1522

(301)924-0633  fax (888)834-9668

[email protected] 

 www.mbamw.org  

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