On August 12, 2022, after eighteen months of negotiations, the full House passed H.R. 5376, the Inflation Reduction Act (IRA) of 2022, by a party-line vote of 220-207. Having passed the full Senate on August 7, the legislation was the culmination of a lengthy Fiscal Year (FY) 2022 budget "reconciliation" process that President Joe Biden signed into law on August 16. The revamped package contained a targeted set of administration priorities, including $386 billion in investments designed to mitigate climate change and $89 billion to preserve and expand health care coverage.  Highlights of MBA's advocacy efforts related to this bill are below.

With less than two weeks to go until Election Day, Republicans remain favored to take over the House in November, but momentum in the pitched battle for the Senate has seesawed back and forth as a multimillion-dollar avalanche of advertising has blanketed the top battleground states. Democrats hold the slimmest possible majority in the Senate, a reality that has often reined in several of President Joe Biden's domestic policy goals. Major partisan frictions regarding inflation, the economy, crime, and reproductive rights continue to drive individual campaign trail debates. Both parties are tailoring their message to reach suburban, independent voters, who are seen as the most prized and persuadable bloc in an increasingly polarized electorate. 

Very few "must-pass" legislative vehicles are likely to be considered prior to year's end, e.g., any consideration of a group of so-called "tax extenders" in an expected lame duck session of Congress is likely to depend on which party wins on election night, November 8. MBA continues to push for targeted housing proposals (e.g., expanding and improving the Low-Income Housing Tax Credit (LIHTC) and/or an LMI census tract-targeted single-family Neighborhood Homes Investment Act credit (for substantial rehabilitation or reconstruction) modeled after the LIHTC) that were not included within the enacted IRA.

Looking ahead, MBA's Mortgage Action Alliance (MAA) will remain essential to our robust efforts aiming to impact policy. The announcement of these proposals will quickly begin to emerge after November's elections, legislative and regulatory policy items where YOU will have an opportunity to have your voice heard.  

1. MBA Secures Key Wins for Mortgage Industry in the Inflation Reduction Act

Passage of the Inflation Reduction Act in early August embodied several guiding principles of the Biden administration's domestic "Build Back Better" agenda to reshape the U.S. economy.  The IRA statute is estimated to reduce the deficit by approximately $305 billion over the next decade. The new law's initiatives are paid for by: (1) imposing a 15% "minimum book tax" on any corporation with adjusted income in excess of $1 billion for any consecutive 3-year period; (2) implementing a new 1% excise tax on stock buybacks effective after December 31, 2022; (3) extending until 2029 the $250,000 per individual (indexed to inflation) excess business loss limitations rule for noncorporate taxpayers; (4) placing limits on prescription drug pricing; and, (5) realizing an increased amount of expected tax receipts from additional IRS enforcement. 

Importantly, the newly enacted corporate minimum "GAAP" tax incorporates MBA-supported language to effectively preserve the deferred tax treatment of mortgage servicing rights (MSRs).  Through MBA's direct lobbying efforts, several other real estate finance-related provisions of concern to both residential and commercial/multifamily MBA members (e.g., tax treatment on the gain on a home sale, Section 1031 "like-kind" exchanges, the Section 199(a) 20% "pass-through" deduction against Qualified Business Income (QBI), tax treatment of carried interest, an expansion of the 3.8% Net Investment Income Tax (NIIT), etc.) were considered over the course of the congressional debate, but not included in the final IRA package.

2. MBA Participates in White House Meeting on Housing Supply and Affordability 

On September 21, MBA President and CEO Bob Broeksmit, CMB, joined a small group of industry and affordable housing leaders at the White House for a constructive meeting with HUD Secretary Marcia Fudge, Federal Housing Finance Agency (FHFA) Director Sandra Thompson, and National Economic Council (NEC) Director Brian Deese.  The group assembled discussed legislative, administrative, private sector, and state/local solutions to address housing supply and affordability challenges across the country.  Bob's remarks at the meeting focused on many of MBA's top multifamily and single-family priorities, including: support for a reduction of single-family Federal Housing Administration (FHA) mortgage insurance premiums; a reconsideration of a risk-based capital requirement in Ginnie Mae's recently finalized capital and liquidity standards; increasing Area Median Income (AMI) limits for the GSEs' low down payment programs; FHA multifamily loan limit and statutory loan changes; enhancements to environmental reviews; support for the GSEs' proposed multifamily housing goals; and, support for state programs that have successfully produced affordable rental housing. To follow up on the discussion, MBA sent a letter  addressed to the principals at the meeting reiterating MBA's recommendations.  

3. Congress Passes Short-Term Funding Bill; Prospects For Year-End Omnibus Bill Remain Uncertain

Just prior to the end of fiscal year, Congress reached an agreement to keep the federal government operating through December 16, dropping controversial provisions from a stopgap funding bill to win bipartisan support.  The stopgap measure, known as a continuing resolution (CR), keeps agencies - such as HUD - funded at their current levels and extends several expiring authorizations that were addressed in the FY 2022 omnibus appropriations bill, including the National Flood Insurance Program (NFIP).  As of this writing, Congress has seven weeks to come up with full-year appropriations or approve another short-term continuing resolution.  Democrats and Republicans remain sharply divided on the top-line funding levels for defense and non-defense agencies, which indicates multiple stopgap funding bills may be necessary to avoid a government shutdown.

Support Veteran Home Buyers

Earlier this month, MAA launched a call to action urging U.S. Senators to support S. 4208, which would streamline the appraisal process for the Veteran Affairs Home Loan program. Appraisals would be more readily available and less burdensome for both buyers and lenders. 

Join the over 1,200 MAA members who have sent messages to their U.S. Senators. Act now and ask your Senator to support veteran home buyers in an effort to move this proposal prior to the end of the 117th Congress! 

MAA members and MORPAC supporters joined MORPAC for a four-part Speaker Series with the executive directors of the national political campaign committees (Democratic Congressional Campaign Committee, Democratic Senatorial Campaign Committee, National Republican Congressional Committee, and National Republican Senatorial Committee) earlier this month. These meetings highlighted both Republican and Democratic perspectives on the state of play in key House and Senate races throughout the country. To learn more about the MORPAC Speaker Series, a donor benefit program, click here. 

MBA on the Hill 

Bob Broeksmit, CMB, President & CEO of MBA and Bill Killmer, MBA's Chief Lobbyist with Senator Angus King (I-ME). MBA met with Senator King on July 27 and discussed current industry priorities, including the Inflation Reduction Act and the need to lower the level of FHA's Mortgage Insurance Premium.  

On September 20, the Senate Banking Committee's Subcommittee on Housing, Transportation, and Community Development held a hearing on rural lending. RESBOG member David Battany, Capital Markets Executive Vice President at Guild Mortgage, testified on behalf of MBA. His testimony (written and oral) highlighted the need for the Rural Housing Service (RHS) program to have better workflow, technology, and loan products to support lenders, mortgage servicers, and consumers. Senators are working to develop a bipartisan package of RHS lending reforms that could potentially be considered after the November 2022 midterm elections.

Advocacy in August

MBA's Advocacy in August program connects MBA members with federal elected officials and senior staff to enable you to tell your story and strengthen relationships. MBA's Legislative Affairs team coordinated meetings which took place in the elected official's home state or district during the congressional recess (from August through Labor Day). Below are a few of the meetings held during this recess period. 

Congresswoman Young Kim (R-CA-39) met with MBA members Jeff Flory, CMB, AMP, Partner, Baker Tilly, and Nema Daghbandan, Partner, Geraci LLP, at her district office in Placentia, CA, on September 1. 

Mike Olden, Washington State MBA Emeritus Board Director and Vice President of Sales and Education, American Reporting Company; Rose Marie David, Executive Vice President of Retail Lending, HomeBridge Financial Services; Andy McDonough, Senior Vice President of Production, Upwell Mortgage; Lorraine Stewart, Senior Vice President of Mortgage Lending at Boeing Employees' Credit Union; and Ethan Saxon, MBA's lead Senate Democratic lobbyist (AVP for Legislative Affairs), met virtually on August 30 with Senator Maria Cantwell (D-WA)'s Legislative Assistant Jordan Smith to discuss housing tax credits.

Mike Olden, Washington State MBA Emeritus Board Director and Vice President of Sales and Education at American Reporting Company, and MBA's lead House Democratic lobbyist (AVP for Legislative Affairs) Alden Knowlton, met on August 16 with Congressman Derek Kilmer (WA-D-06) in Seattle while supporting his re-election efforts. 

David Houser AMP, West Virginia Market Manager for Prime Lending, met with Senator Shelley Moore Capito (R-WV) on September 19 at one of her district offices to discuss remote online notarization (RON) legislation, CFBP's broad regulatory agenda, and the status of West Virginia's mortgage market.

Advocacy Roadshow

Together with the California Mortgage Bankers Association (CMBA), MBA's Advocacy team hosted a "roadshow" in Newport Beach, CA, on September 15, where attendees had the opportunity to hear current legislative and regulatory issues impacting their business, best practices for running company campaigns for MAA and MORPAC, and how to get their employees more politically engaged. Thank you to our event sponsors: Berkadia, CMG Financial, Consolidated Analytics, Freedom Financial Funds, LLC, Gantry, New American Funding, and Northmarq.

The team will be partnering next month with the Texas MBA on a roadshow event in North Dallas on Tuesday, November 15, from 10:30 - noon CDT. Thank you to the firm of Black, Mann, & Graham L.L.P., for sponsoring this upcoming event! If you'd like to attend, please email Erin Reilly by Thursday, November 10.

MBA Advocacy "Turned It Up" at MBA's Annual Convention & Expo in Nashville, TN, this week. Attendees had the opportunity to get involved in several ways, including our Tennessee-inspired pedal pub activation area for a happy hour, at the MBA booth to get #VoteReady, and learn more about how MBA gives real estate professionals a platform and a voice through MAA and MORPAC. 

During our Advocacy Reception at Luke's 32 Bridge, we raised $44,715 to MORPAC - surpassing our $3 million fundraising cycle goal. Congratulations to Tom Black, AMP, Esq. from Black, Mann Gramm, L.L.P for winning the Tennessee basket door prize donated by the Tennessee MBA and Valerie Schratz, Partner, at Hall Griffin LLP, who won the signed basketball by Duke University's legendary long-time coach, Mike "Coach K" Krzyzewski.

Left: 2021-2022 MORPAC Chairman, Jeff Taylor, Founder and Managing Director of Digital Risk LLC, presented 2022 MBA Chair and CEO of Wells Fargo Home Lending, Kristy Fercho with the outstanding fundraiser award. 

Right: Aimee Macilveen, AMP, Secretary/Treasurer of TNMBA and Loan Officer of First Community Mortgage, Inc., Todd Brown, President-Elect of TNMBA and Area Manager of Mortgage Investors Group (MIG), and Debbie Gadberry, CMB, President of TNMBA and VP, Director of TPO Sales of First Federal Bank. Special thanks to the entire TNMBA Leadership for their partnership and the wonderful door prize.

Thank you to our advocacy sponsors at #MBAAnnual22:

Get out the vote! November 8th is right around the corner. If you haven't made your plan to vote early, mail in your ballot or vote on election day, visit our Get #VoteReady page to find your polling place, or look up information on candidates. MBA was proud to partner again with the National Voter Registration Day organization.

Your vote is a vote for our industry. MAKE IT COUNT!