Issues surrounding inflation concerns (exacerbated by supply chain shortages) and gun safety legislative efforts have captured the full attention of Congress in recent months. The upcoming November mid-term elections have made these issues heightened political priorities - with respective party leaders at odds over preferred solutions. These tense discussions have, in part, contributed to the delayed consideration of legislation more directly affecting housing and real estate finance, such as proposals that would alter the tax code to pay for certain domestic priorities (Build Back Better "3.0"), fund and/or improve important HUD/FHA residential programs, and/or shape standards related to appraisal reform.

Federal Reserve Chairman Jerome Powell acknowledged this month that the central bank's battle against high inflation could tip the U.S. economy into a recession.  Testifying before the House and the Senate in mid-June, the Fed chief conceded that the bank's ongoing series of interest rate hikes could slow the economy enough to halt job gains and economic growth. Powell's appearance before Congress comes amid growing concern over the outlook for the U.S. economy and the rising chances of a recession hitting the nation sometime within the next two years. In early June, the Federal Reserve issued a 0.75 percentage point interest rate hike - the largest since 1994 - after Labor Department data showed inflation continuing to rise in May.

Given this slew of activity, MBA's ongoing work to protect real estate finance provisions remains critical. 

1. Congress Introduces VA Appraisal Modernization Legislation; MBA Vice-Chairman Testifies In Support Of Bill

In May, House Committee on Veterans' Affairs Ranking Member Mike Bost (R-IL) and Senator Dan Sullivan (R-AK) introduced the bicameral Improving Access to the VA Home Loan Act. The legislation would require the Department of Veterans Affairs (VA) to revisit existing rules and regulations governing VA home appraisals. Specifically, the bill requires the VA to review appraisal certification requirements, encourage hybrid appraisals and benefits from emerging technologies, and to revisit policies on property inspection waivers, minimum property requirements, and comparable sales.  MBA Vice-Chairman Mark Jones, CEO and Co-Founder of Amerifirst Home Mortgage, testified before the House Veterans' Affairs Subcommittee on Economic Opportunity in support of the legislation. 

Mr. Jones was able to address a bipartisan group of subcommittee members and highlight for them how modernizing VA appraisal procedures could improve the process of purchasing a home for our nation's service members. He also reiterated MBA's opposition to legislation that increases VA funding fees to offset costs associated with new expenditures. Jones' full written statement can be found here.

2. Discussions Continue To Revive Budget Reconciliation Bill

While President Biden's signature tax and reconciliation proposal remains in legislative limbo, Democrats are hoping ongoing, quiet negotiations between the White House, Senate Majority Leader Chuck Schumer (D-NY), and Senator Joe Manchin (D-WV) can produce a revised, "slimmed-down" agreement to advance key elements of the administration's economic agenda later this summer.

While those conversations remain closely held, some expect a possible agreement to raise roughly $1 trillion in revenue and spend approximately $500-800 billion over ten years (with roughly half the new revenue dedicated toward reducing the deficit). Possible new spending may focus on tax incentives for reducing carbon emissions and an extension of subsidies for purchasing health insurance under the Affordable Care Act. It is less likely a deal would include MBA favored investments to expand and improve access to affordable housing.  As the top-line amount of revenue and spending in any politically viable package shrinks, the "pay-fors" may still include provisions such as a new 15% minimum book tax on the GAAP-declared profits of large companies (annual net income above $1 billion) and expanded funding for enforcement by the IRS (alleged to help net more taxes owed to the government). MBA continues to guard against the inclusion of any tax changes in a new reconciliation deal that would unduly harm the real estate finance sector, e.g., preserving current tax treatment of mortgage servicing rights (MSRs), unfavorably altering the treatment of provisions impacting "pass through"/partnership income, preserving current tax treatment on gain of sale, etc.

3. Senate Approves Fed Chair Jerome Powell And Key FHFA, FHA Nominees 

After months of procedural delays, the full Senate narrowly confirmed Julia Gordon to be HUD's Assistant Secretary for Housing and FHA Commissioner by a vote of 51-50 (Vice President Harris cast the tie breaking vote) on May 11. On May 25, Sandra Thompson was confirmed to be FHFA Director (for a potential five-year term) by a slightly bipartisan vote of 49-46. David Uejio, the former Acting CFPB Director nominated to be HUD's Assistant Secretary for Fair Housing, is still waiting for Senate leadership to schedule his final confirmation floor votes.

Significantly, the Biden administration's attempt to recast the Federal Reserve Board of Governors has moved closer to completion. On May 12, Jay Powell secured a second four-year term as Fed Chair through 2026 (his term as a "rank and file" member of the Fed Board expires in 2028) by a vote of 80-19. Three of the President's four other Fed nominees, Lael Brainard (full Fed Vice Chair), and Philip Jefferson and Lisa Cook (Fed Board Governors) were also confirmed by the full Senate on April 26 and May 11, respectively. Michael Barr, a former key Obama Treasury official, was nominated to be the Fed's Vice Chair of Supervision after Sarah Bloom Raskin withdrew her name from consideration for that post. Barr was favorably reported (approved by a bipartisan vote of 17-7) before the Senate Banking Committee on June 8. Majority Leader Schumer scheduled a process vote, which will likely lead to a final confirmation vote, the week of July 11th, after the two week Congressional recess for July 4th.
 

MAA Action Week Recap

Thank you to everyone who participated in MAA Action Week, a national, industry-wide campaign aimed at growing MAA membership and activating real estate finance professionals in key states and congressional districts. This year over 100 companies and organizations participated, and through concurrent campaigns, generated 5,400 new MAA sign-ups and 14,500 MAA renewals. This tremendous effort resulted in MAA maintaining a strong network of active members who stand ready to contact elected officials on key issues impacting our industry. 

If you are interested in learning more about how to run a campaign within your company or organization, or if you would like to request a report of your company's or state's involvement, please contact Rachel Kelley at rkelley@mba.org.

MBA's National Advocacy Conference Highlights

MBA's National Advocacy Conference (NAC) was back in-person April 26-27 in Washington, DC. Over 400 MBA members from 36 states participated in 246 Capitol Hill meetings to discuss key industry priorities. This premiere advocacy conference played host to a slate of congressional speakers including, Senate Banking, Housing, and Urban Affairs Committee Chairman Sherrod Brown (D-OH), House Democratic Caucus Chair Hakeem Jeffries (D-NY), Senate Republican Whip John Thune (R-SD), CBS News' Face the Nation host Margaret Brennan, National Republican Congressional Committee Chairman Tom Emmer (R-MN), and Congresswomen Mad Dean (D-PA) and Young Kim (R-CA) who participated in a spirited, bipartisan mPower panel.

This conference presented a critical opportunity for industry advocates to hear from - and educate - key congressional leaders and staff about the importance of many urgent and developing issues impacting our members and the economy. Save the date for NAC 2023: April 17-19!

Other Conference Highlights

In addition to a successful National Advocacy Conference, MBA's Advocacy team held a series of fundraising events and receptions at MBA conferences throughout May and June. During MBA's Secondary and Capital Markets Conference in New York City, MORPAC hosted a VIP Leadership reception in MBA Chair Kristy Fercho's suite, which raised $30,000 with a little help from our special guest, "Frank Sinatra." Concurrently, MAA cohosted an event with MBA membership and mPact at MBA's Commercial Multifamily Servicing and Technology Conference (CMST) in Los Angeles. The following week, MORPAC hosted a yacht fundraiser during MBA's Legal Issues and Regulatory Conference (LIRC) in Miami, FL, where supporters sailed the Biscayne Bay at sunset as a thank you for their support. And lastly, MORPAC raised a record-breaking $140,000 in personal contributions from leaders attending MBA's Chairman's Conference in Carlsbad, CA. A special thank you to our corporate sponsors for generously supporting MBA's fundraising and grassroots efforts.

We look forward to again hosting our MBA Advocacy reception and activation area in the fall at MBA's Annual Conference and Expo, October 23-26, in Nashville, TN. We are also excited to announce two upcoming advocacy roadshow events taking place in Southern California and Northern Texas later this year. More information will follow regarding both of these events. 

MORPAC Action Week Recap

This month, MORPAC hosted its 5th annual MORPAC Action Week, an industry-wide campaign dedicated to strengthening the only federal political action committee (PAC) representing the entire real estate finance industry. MORPAC serves as a pivotal program to champion our voice in Washington, DC by building and maintaining bipartisan relationships between our industry and key elected officials. 

Over twenty professional organizations participated in the annual fundraising challenge, that resulted in more than 380 supporters raising nearly $150,000 (pledged/collected) to MORPAC. To date, MORPAC has raised $1,040,000 in 2022, which maintains our industry status as a nationally ranked "top 5" trade association PAC and assists in MORPAC's ambitious goal of $3 million raised in the 2021-2022 fundraising cycle. 

Company campaigns play a crucial role in helping MORPAC to achieve success. The MBA staff make campaigns as easy as possible by providing successful guidance on goals, tactics, and execution. If you, or someone on your team, is willing to run a MORPAC campaign on behalf of your organization, please email morpac@mba.org or call 202-557-2777 to learn more.