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1. House of Representatives advances several housing-related bills in committee and on House floor. Last week, the House Financial Services Committee held a markup and passed multiple bills, while the full House passed two FHA-related pieces of legislation. At the committee markup, the list of legislation advanced included, among others, bills that would overturn the Supreme Court ruling on Obduskey V. McCarthy & Holthus LLP, create a Real Estate Valuation Task Force to encourage diversity in the appraisal industry, and make certain data elements related to diversity and inclusion reporting mandatory. A link to MBA's letter to the Committee can be found here. Meanwhile, the full House passed H.R. 1395, the Housing Financial Literacy Act of 2021, and H.R. 1532, the Improving FHA Support for Small-Dollar Mortgages Act of 2021. H.R. 1395 provides a mortgage insurance premium discount for first-time buyers, and H.R. 1532 requires the U.S. Department of Housing and Urban Development (HUD) to produce a report on the barriers for small-dollar Federal Housing Administration (FHA) mortgages, specifically loans of $70,000 and less. MBA sent a letter to the House on these bills, which can be found here. - Why it matters: MBA has been working with the House and the Senate to provide suggestions on how to improve the legislation without creating undue and burdensome obligations on industry stakeholders.
- What's next: The bills marked up in committee are likely to advance to the full House for a vote before potentially being taken up by the Senate. Senate Banking Committee Chairman Sherrod Brown (D-OH) has publicly stated his intention to focus on all aspects of housing, especially issues related to affordability.
2. Biden Administration Releases FY 22 "Skinny Budget" Earlier this month, the Biden administration released the top-line framework for the President's Fiscal Year 2022 budget proposal. As is typical in a Presidential transition year, the administration has submitted a "skinny budget" - a broad outline of the new administration's budget priorities provided in time for the start of the Congressional budget process. The FY22 request includes key investments in K-12 education, medical research, climate change, housing, civil rights, and other priorities that have been a consistent part of the Biden-Harris agenda since January. On housing, the budget requests significant increases in funding for housing vouchers, homeless assistance grants, energy retrofitting for public housing, and expanded support for Community Development Financial Institutions (CDFIs). The proposal also cites support for the Federal Housing Administration (FHA) as a crucial source of mortgage financing for first-time and minority homebuyers. It promotes FHA's role in providing urgent relief through expanded and streamlined loss mitigation programs to homeowners experiencing COVID-19-related hardships. Finally, a significant increase in funding is requested for fair housing enforcement organizations and investment in U.S. Department of Housing and Urban Development (HUD) staff and operations' capacity to support President Biden's fair housing executive order. The overall HUD Budget requests nearly $69 billion in funding, $9 billion more than the current year - a 15% increase. - Why it matters: The President's budget proposal is a blueprint of the administration's priorities provided to Congress as it begins its budget and appropriations' process.
- What's next: The Congressional budget process begins shortly, starting with efforts to pass a budget resolution, and then followed by work on 13 different appropriations bills. Later in May, the Biden administration can be expected to provide a more detailed budget request outlining specific policy priorities.
3. MBA Responds to CFPB's Proposed Rule to Delay the Mandatory Compliance Date for General QM Final Rule On April 5th, MBA filed comments opposing the CFPB's proposed rule seeking to delay the mandatory compliance date of the General Qualified Mortgage (QM) final rule. MBA's comments express strong support for the price-based QM standard, which, compared to the alternatives considered by the Bureau, strikes the best balance between ensuring consumers' ability to repay and providing broad access to responsible, affordable mortgage credit. As MBA's comments explain, delaying the mandatory compliance date would not meaningfully expand access to QM loans beyond what would be available under the new General QM rule (i.e., the price-based QM standard). This fact undermines the Bureau's justification for pursuing a delay. - Why it matters: The proposed rule has caused unnecessary uncertainty by making it unclear how long the price-based QM will remain in effect and, if it is replaced, what alternative the Bureau ultimately will adopt. In addition, the proposal to extend the GSE Patch has also created confusion, given the GSEs themselves will only purchase loans pursuant to the recently finalized General QM definition, which no longer includes the GSE Patch (see item below for more detail).
- What's next: On April 27th, following crucial industry advocacy on Capitol Hill, Senators Mark Warner (D-VA) and Tim Scott (R-SC) sent a bipartisan letter to CFPB asking the Bureau to reconsider its delay in implementing the General QM Final Rule. A copy of the letter can be found here. MBA will continue to work with a broad coalition of stakeholders to preserve the price-based QM standard, even if the Bureau chooses to extend the mandatory effective date.
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