“We believe the progress that the conferees have made on risk retention and mortgage underwriting and home appraisals reflect an improved shift from what could have been much more harmful legislation,” said MBA Chairman Robert E. Story, Jr., CMB.  “Mortgage lending is going to change as a result of this legislation.   There will be increased costs associated and new regulatory burdens that will impact consumers and lenders.  As the regulators begin work on the details, during the coming year MBA will continue to push for improvements to ensure a balance is struck between ensuring a safe, robust US financial system, protecting consumers and avoiding negative impacts on credit availability.”

 “We have been saying for a while now that we support financial regulatory modernization, as long as it is done right and will not negatively impact borrowers or the system as a whole,” said Story.  “As we know the devil is in the details, there is still much work to be done through rule making and MBA will work on behalf of the real estate finance industry and consumers.”

The language approved today directs regulators to create an exemption from risk retention for qualified residential mortgages, a concept brought to the debate through an MBA-supported amendment to the Senate bill by Senators Landrieu, Hagan and Isakson.  MBA was instrumental in the inclusion of the provision from Senator Mike Crapo that would require regulators to consider alternate forms of risk retention that may be better suited for the commercial mortgage backed securities (CMBS) market.

The committee also improved the mortgage underwriting section (Title XIV) by adding language requiring separate points and fees cap consideration for low-balance loans and loans in rural areas and removing the ability to repay requirement for certain government-insured refinances.  And finally, the conference agreement preserves the ability for there to be a firewall between appraisers and loan officers, mortgage brokers and real estate agents and allows for improvement to the portability of appraisals to better enable borrowers to shop for their mortgages.

“MBA’s efforts working with legislators from both parties were instrumental in removing some of the most detrimental aspects of the legislation.  We look forward to working with the Administration and regulators to ensure that the implementation of the legislation does as much good, and as little harm, as possible.”

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.