Volume 4 | Issue 185 | Monday, September 26, 2005
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“It is condos and townhomes for sale. It is not like [they] are building a freeway here or a church. They are building another for-profit. The threat of taking my building, my business, is to give it to another for-profit. That is the irritating part of this whole Supreme Court ruling. The public good is a question mark here.”
--Michael Scacco, general manager at Alsco Linen, on an eminent domain ruling that threatens his business.
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Top National News
Residential Finance News
Hurricane Rita Causes Market Jitters
Q&A with DSI's Don Iannitti
MBA Membership Dues Dealine Oct. 1
Commercial/Multifamily Finance News
Eminent Domain Threatens Commercial Property Owners, Businesses
DealMaker of the Day
MBA News
Bankruptcy Law Audio Program Sept. 29
MBA State/Local Workshops Oct. 21-22
Path to Diversity Awards Seven New Scholarships
Spotlight: Washington
MBA Advocacy Update
Washington: The Week Ahead
Mortgage Guideline Writers' Challenge
American Banker (09/26/05; Davenport, Todd
Federal banking regulators are faced with the challenge of coming up with up new guidelines that stress safety and soundness in underwriting nontraditional mortgages such as interest-only and payment-option adjustable-rate loans without hurting the market for banks and while providing protection for consumers. These days, consumers are not as concerned about paying off their home loans, considering the Federal Reserve reports that the $8.1 trillion in single-family mortgages outstanding in 2004 was up 57 percent from four years ago; and banks want to offer the products because they get to obtain growth minus the cost of originating or purchasing a new loan. "Most people want to pay the minimum" because "they want to consume as much as possible and as fast as possible," explains Ohio State University finance professor Anthony Sanders, noting that the 30-year mortgage does not offer such flexibility. The guidelines that regulators are expected to issue by yearend are likely to address low- and no-documentation loans and piggyback home-equity lines as well and remind lenders of best practices to ensure that cracks in underwriting do not appear.
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Homeowners, Builders Face Formidable Obstacles
USA Today (09/26/05) P. 4B; Kirchhoff, Sue
Although Hurricane Rita largely spared the Gulf Coast the misery inflicted by Katrina, the two storms together are expected to strain resources as builders and homeowners alike gear up to rebuild. Some construction materials have spiked, and builders fret that--even with contractors pouring in from outside of the region--there will be too few electricians, heating and cooling experts and other specialists to man the massive rebuilding effort. The residential housing sector already was humming along at a record annual pace of more than 2 million units before Katrina and Rita; and government building permit offices are now overloaded. Added to that is the uncertainty over whether zoning and building codes will be revised; the pending status of homeowner insurance claims, which determine whether some owners will have the money to rebuild; and the inability of builders with finished product to sell those units because of insurance issues or because they are unable to procure the necessary documentation.
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Manufactured Homes: Fresh Look at Market
Tucson Citizen (AZ) (09/26/05); Kirchhoff, Sue
Manufactured homes offer an affordable alternative to traditional single-family dwellings--an average of $58,000 in price compared to $267,000--but the industry has encountered difficulties in recent years. In addition to a slew of delinquencies tied to high-cost loans, the sector also must contend with the fact that half of those residing in manufactured housing do not own the land. However, changes in the look of these properties and the ways in which they are delivered and financed could help remove the stigmas associated with manufactured housing. Some producers are teaming up with nonprofits to expand financing options, and officials in a number of states are amending zoning laws to allow manufactured housing.
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Freddie Portfolio Grows on Nonagency Boost
American Banker (09/26/05); Quinn, Matthew
Freddie Mac's retained portfolio grew at an annualized 32.2 percent to $677 billion in August, marking the fastest expansion rate since September 2003. Much of the gain can be attributed to the purchase of nonagency paper. Freddie Mac executive Patricia Cook predicted the retained portfolio will rise about 5 percent for all of 2005. Meanwhile, the government-sponsored enterprise watched its 30-year fixed-rate mortgage holdings rise 2.6 percent to $338.5 billion last month.
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Wachovia Increases Its Stake in CMBS Market
Puget Sound Business Journal (Seattle) (09/26/05); Freer, Jim
Commercial Mortgage Alert reports that Wachovia Corp. has emerged as the leading player in commercial mortgage-backed securities, ranking first nationwide with $6.9 billion in CMBS loans in the first six months of this year. The North Carolina-based company has been particularly aggressive in the South Florida market in the last couple of years, making construction loans to developers of everything from multifamily developments and office buildings to retail sites and industrial projects. Wachovia, which supplanted Bank of America as the top CMBS lender, follows the lead of other major financial firms that package their CMBS loans into securities and sell them to such institutional investors as money management companies and insurers. A borrower typically obtains a floating-rate or fixed-rate CMBS from Wachovia, which makes the loans attractive to owners who treat these properties as long-term investments.
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| Hurricane Rita Causes Market Jitters |
MBA (9/26/2005) Velz, Orawin
 Despite the 11th quarter-point increase in the federal funds rate, long-term interest rates finished slightly lower last week. Yields initially dropped on concerns that Hurricane Rita could cause another spike in energy prices and could derail economic growth.
Without any major economic reports, the financial markets focused on the path and intensity of Rita and its impact on the energy market. Yields later rebounded as Rita weakened and shifted course away from the main refining region, easing crude oil prices.
In addition, in its very gradual shift towards full currency convertibility, the Chinese central bank widened the band in which the yuan trades against the non-dollar currencies from 1.5 percent to 3.0 percent. Long-term yields moved higher as the markets anticipated that China could curb its purchases of U.S. Treasuries. China has bought U.S. Treasuries with dollar proceeds from its trade surplus to hold down the value of the yuan.
Meanwhile the economy has started to feel the impact of Katrina. The Bureau of Labor Statistics estimated that Katrina has pushed up initial jobless claims by 214,000 over the past three weeks. While Katrina will slow economic growth in the near term, it has lifted the overall inflation, increasing concerns that rising energy prices would feed into the underlying inflation.
In its post-meeting statement, the Federal Open Market Committee changed its characterization of inflation expectations to “contained” from “well contained.” The change in the language—the first since November 2004—was a response to signs of a pick-up in inflation expectations. Specifically, post-Katrina regional manufacturing surveys showed that prices that manufacturers paid for the input increased sharply, and the University of Michigan Survey of Consumer Sentiment also indicated that consumers’ expectation of inflation increased significantly.
At the start of last week, the yield on the 10-year Treasury notes surpassed its pre-Katrina level in anticipation of the Fed’s interest rate hike and remained high following the FOMC meeting. Yields were volatile later on, following Rita’s development. The 10-year yield stayed around 4.24 percent by mid-Friday afternoon, compared with 4.26 percent on the previous Friday.
This week, the financial markets will focus on the impact of Rita. Following the surges in the price paid components in a couple of regional manufacturing surveys released earlier, the Richmond Fed (Tuesday) and the Kansas City Fed (Wednesday) manufacturing surveys for September should garner a great deal of attention.
The markets will also be eager to hear from Fed Chairman Alan Greenspan on the economy (Tuesday). Also of interest to the housing sector are August existing and new home sales (Monday and Tuesday, respectively). We expect to see some moderate cooling in both markets
(Orawin Velz is director of economic forecasting in the Mortgage Bankers Association’s economics and research department. She provides commentary and analysis on key monthly economic indicators. She can be reached at ovelz@mortgagebankers.org.)
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| Q&A with DSI's Don Iannitti |
MBA (9/26/2005) MBA Staff
 Don Iannitti is founder and CEO of Carson, Calif.-based Document Systems Inc., a provider of compliant mortgage closing document packages. MBA NewsLink spoke to Iannitti about how DSI performs this function.
MBA NewsLink: What are the key success metrics you use to ensure the quality of your customer service?
Iannitti: First of all, when a phone call comes in, we want to connect them with the person best able to answer their question. So we measure how the call is passed around.
In the vast majority of cases, probably close to 90 percent of the time, we want to solve the client's problem while we have them on the call. So we track how many times we have to call a customer back.
We don’t want a customer waiting on hold and we don't want to push them off to another customer service person. In our office, when a person takes a call, they own it. So, when faced with a question they can't answer, our representatives will go seek out the answer so they can solve the problem while the customer is on the line.
We have always built our customer service around the concept that when someone asks for something you have to give it to them, right then and there, without making them wait. That's huge. If you can do that, you'll beat most of your competition. As problems are solved, the answers are shared within the department.
MBA NewsLink: How do you structure your department to ensure that the calls all get handled correctly? How many people does it take?
Iannitti: You have to resist the urge to staff with computers. Even though we have the technology, the automated attendants and computer systems, the key is having a human being pick up that phone–within the first 15 seconds. That means never having the phone ring more than three times.
You want the call routed as quickly as possible, but to the right person. That means that the person answering your phones has to understand the needs of your customers and the capabilities of your customer support staff.
Once the call is routed into the queue, we monitor it in real time so that we have an exact measure of the wait time.
MBA NewsLink: How often does a call get passed around before a solution is provided?
Iannitti: You don't really want to transfer that call more than once. In some cases, highly technical support may require the call to go to another department, but it always comes back to the person that owns that call for final resolution. Only very rarely do we transfer a call more than two times.
MBA NewsLink: How do you ensure that the support you provide will keep your customers in compliance with the many laws that affect them?
Iannitti: When ever a call becomes even marginally complex, it goes into the legal department. In our company, that's a requirement because in our business compliance is so critical.
First and foremost, our legal department tries to make it as painless as possible. Every day one of our attorneys is designated to take customer service calls. There is always at least one of our three legal experts available to solve problems.
If at any time during a call, a compliance issue comes up that the customer service representative hasn't already encountered, the attorney intercedes so the client receives support from somebody that knows precisely what they are experiencing and what can be done about it.
MBA NewsLink: Is it hard to keep good customer service people? How do you limit employee turnover?
Iannitti: That's a serious problem in every industry. With us, it’s the process of bringing quality people in and making them knowledgeable and comfortable with the products and the company.
It's about the culture. All of our managers get to know their employees. We are much more like a family business than you would think just from looking at our revenue. We try to just do all the things you’d do if we were a small mom-and-pop shop, the exact same things you would do there, we do here.
Good people are hard to find and you need to pay them and we do pay competitively. Our employee appraisal process is very dynamic. It happens often and employees are acknowledged for what they do, as well as their initiative. We take very good care of our employees and they know we care about them so our turnover tends to be very, very low.
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| MBA Membership Dues Dealine Oct. 1 |
MBA (9/26/2005) Logan, Leah
Membership renewal information was mailed to all members in mid-August. Mortgage Bankers Association membership expires on October 1, and MBA requests that all member companies submit their 2006 membership renewal by that date.
If you have not yet renewed, please have your membership coordinator go to http://www.mortgagebankers.org/membership to download the appropriate renewal form.
We appreciate your continued interest and support. And, we look forward to another year of serving you, our valued member. If you have any questions, please contact Leah Logan, senior director of membership, at (202) 557-2752 or via email at llogan@mortgagebankers.org.
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| Eminent Domain Threatens Commercial Property Owners, Businesses |
MBA (9/26/2005) Murray, Michael
The Supreme Court’s ruling in June on eminent domain allowed local governments the right to seize private property with just compensation for the public good. However, while one commercial property owner lost a shopping center development to eminent domain, another retail property could stand to lose millions.
In Pittsburg, Kan., the city seized a shopping center owned by Darrell Trent, who was out of the country working as an Ambassador to Iraq. “It was a shopping center that was in development. It carried itself, it was profitable, it was in the process of development,” Trent told MBA NewsLink . “I was in Iraq running the transportation system as a U.S. Ambassador and, while I was gone, they took my property.”
Trent did not believe the city of Pittsburg provided enough funds to make up for the property value. “It was less than half the value of the property in my opinion,” Trent said.
In July, Centre City Development Corp. (CCDC), downtown San Diego’s redevelopment agency, told Michael Scacco, general manager at Alsco Linen, that the office plant needed to move from its current Little Italy location to make room for a retail and condominium complex.
CLB Partners, Solana Beach, Calif., wanted to purchase Alsco’s land since 2000, developer Patrick Rhamey told the San Diego Union-Tribune in July. He said CCDC’s involvement could help CLB Partners. "The stick, the fire to create a sense of urgency for Alsco to take action is the threat of eminent domain," Rhamey said in the article.
“ED [eminent domain] has not been levied on us, it is being threatened to,” Scacco said. “The CCDC here in San Diego would prefer us to amicably sell our property, buy something else and just move away rather than just impose eminent domain. It is totally selfish because if they impose eminent domain, they have to pay for our [relocation] costs.”
Despite the CCDC not actually stating it would use eminent domain, the concern for Scacco is that the potential threat is still there. “It legitimately could be used based on the Supreme Court ruling,” Scacco said. “Whether that makes it right or not is irrelevant.”
CLB Partners did not return phone calls and CCDC did not respond to the question of eminent domain as a potential threat.
There is no compensation on the table for Alsco but the company contracted a “large real estate firm” to find sites for moving. Few places, however, are able to accommodate the necessary requirement of water discharge needed for Alsco’s linen service. Moving Alsco Linen’s office would be more like moving an industrial facility and increases time and costs, according to Scacco. “If we found a site today, it would take two to five years to move this facility,” he said. “To retrofit a site for our plant would take that long.”
Scacco also noted that the cost to move Alsco Linen would be “millions of dollars just to [relocate] the business.”
In San Diego, the CCDC requires a certain percentage of retail space for public use when it puts up a condominium structure. “It is condos and townhomes for sale,” Scacco said. “It is not like [they] are building a freeway here or a church. They are building another for-profit. The threat of taking my building, my business, is to give it to another for-profit. That is the irritating part of this whole Supreme Court ruling. The public good is a question mark here.”
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| DealMaker of the Day |
MBA (9/26/2005) Murray, Michael
HEI Hospitality, Norwalk, Conn., a rapidly growing hotel ownership and operating company, today announced that it has acquired the 174-room historic Algonquin Hotel in New York City for more than $74 million from Denver-based Miller Global Properties LLC, a partnership between Miller Properties Group and Global Holdings, Inc. Merritt Hospitality, a wholly owned subsidiary of HEI, will operate the hotel.
HEI Hospitality neither confirmed nor denied the $74 million amount but said the purchase was in cash from the HEI Hospitality Fund I. Cushman & Wakefield, New York, acted as the broker in the transaction. The hotel will not succumb to the current trend of hotel-to-condo conversions. The property includes 4,000 square feet of renovated meeting space capable of holding groups of up to 200 people.
The Algonquin Hotel re-opened in September 2004 after a $3-million renovation by Miller Properties Group and led to the property's closing for the first time in its history. The landmark hotel, which opened in 1902, refurbished all public spaces and guestrooms. The renovation financing piggybacked on a five-year, $5 million project at the hotel, which brought the total amount expended on refurbishments to $8 million.
"The hotel has received more than $11 million in upgrades since 1998 and is in excellent physical condition. We plan to continue to enhance upon its current high quality with approximately $3.5 million of additional improvements over the next several years," said Gary Mendell, CEO of HEI Hospitality. "The Algonquin is our first Manhattan property, and marks our fourth acquisition in 2005, with several more pending.”
The hotel also provides a state-of-the-art fitness center and a business center. It was home of The Algonquin Roundtable in the 1920s and played host to many writers and personalities. William Faulkner drafted his Nobel Prize acceptance speech at the hotel, Alan Jay Lerner and Frederick Lowe wrote "My Fair Lady" in Lerner's suite and it is considered to be the birthplace of New Yorker magazine. The renovated Roundtable Room serves retro dishes from the legendary room's past. The Blue Bar serves its famous $10,000 martini. "The Algonquin is an extraordinary hotel, and our goal is to live up to its past and further enhance its legend," Mendell said.
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| Bankruptcy Law Audio Program Sept. 29 |
MBA (9/26/2005) Sabol, Krista
CampusMBA, the education arm of the Mortgage Bankers Association, presents an Audio Program, “Understanding the New Bankruptcy Law,” this Thursday, September 29, from 3:00 – 4:30 p.m. EDT.
The Bankruptcy Reform Act of 2005 makes sweeping changes to the Bankruptcy Code. While a number of the changes are favorable to lenders, other changes are favorable to other parties of interest, such as utility companies, landlords, and unsecured creditors. These changes alter how a secured lender assesses the outcome of a Chapter 11 bankruptcy.
The risk of bankruptcy is an inherent part of credit analysis and the collection process; the 2005 changes are sweeping in scope and are important to understand and apply in the day to day credit analysis and collection process.
With regards to deadlines associated with the new law, homestead changes are also in effect at this time; the bulk of the changes go into effect on October 17.
Hear industry experts Marc Albert and Mark Shaiken discuss how the important changes of the Bankruptcy Code will affect your daily business. This program is designed for any party that is involved in lending or credit risk and analysis.
Listeners will learn:
• How the changes to the Bankruptcy Code will affect your daily business ;
• How the changes affect secured lenders ;
• How to apply the Bankruptcy Code changes to your day-to-day credit analysis and collection processes;
• How to avoid pitfalls with reaffirmation agreements under the changes to the Bankruptcy Code;
• How to maximize the benefit from changes to seeking relief from the automatic stay and new exceptions to the automatic stay; and
• How to protect and retain security interests in bankruptcy.
Albert is a partner with Stinson Morrison Hecker LLP. His practice includes a mix of work, primarily in the bankruptcy area. He has been a trustee in Bankruptcy for the District of Columbia for more than 20 years; he also handles a multitude of substantial asset bankruptcy cases from the U.S. Trustee's Office.
Albert serves as a Chapter 11 trustee or examiner and represents Chapter 11 debtors-in-possession in bankruptcy, mainly centering on real estate owners and developer clients. He also serves as counsel in a variety of bankruptcy and non bankruptcy matters, including representing numerous taxpayers who have tax problems with the Internal Revenue Service or state tax authorities.
Prior to joining Stinson Morrison Hecker LLP, Albert was litigation counsel with the Tax Division of the Department of Justice. With three other attorneys, Albert and colleagues started a boutique bankruptcy law firm that grew to become one of the leading bankruptcy firms in Northern Virginia. He maintains an AV rating from Martindale-Hubbell. He is a co-chairman of the firm's Bankruptcy and Creditors' Rights Division.
Shaiken is a partner with Stinson Morrison Hecker LLP. His practice includes bankruptcy cases, workouts, collection, secured transactions litigation and loan transactions. He has been certified by the American Bankruptcy Board of Certification in business bankruptcy since 1994.
Shaiken served as law clerk to Judge James Pusateri of the United States Bankruptcy Judge for the District of Kansas from 1981 to 1984. He has taught bankruptcy and advanced bankruptcy law at the University of Kansas since 1996.
CampusMBA Audio Programs are a timely, convenient, and cost-effective way to train your entire staff on the latest topics. Why register for an Audio Program?
• Inexpensive —$225 MBA members/$325 Nonmember per site;
• Timely topics —regulatory and sales strategy issues brought directly to your speakerphone and conference room;
• Quality Program —program and presentation materials developed by industry experts;
• Simple —just use your speaker phone; and
• Current —latest topics brought to you in a timely way.
To register online, go to http://store.mortgagebankers.org/ProductDetail.aspx?product_code=E2502518J/REGIS . For more information, call (800) 348-8653 or email CampusMBA at cbuzolich@mortgagebankers.org.
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| MBA State/Local Workshops Oct. 21-22 |
MBA (9/26/2005) Rawak, Melissa
Join Mortgage Bankers Association and leading state and local association executives for MBA's 2005 State & Local Workshop October 21-22 in Orlando (Kissimmee), Fla.
The Workshop takes place at The Gaylord Palms Resort and Convention Center preceding MBA's 92nd Annual Convention & Expo. Program topics cover some familiar areas with a fresh approach for the perennial attendees. For detailed information, view the Workshop brochure.
To date, workshop registration stands at nearly 100 individuals representing 32 states and two local associations. Take this opportunity to join your peers for this meaningful exchange of ideas.
The Workshop features valuable sessions, such as "Innovative Membership Strategies," "Legislative and Regulatory Highlights" and "Non-Dues Revenue Solutions." All aim to provide new ways to remedy old challenges. New to the program is a session, "Building for the Future," which addresses changing industry demographics and the need to stay relevant through diversification of members and employees. Also, MBA's public affairs staff presents "Managing Media Relations," using Home Mortgage Disclosure Act (HMDA) data and resulting reports as a test case.
On October 21, working group breakouts are followed by an integrated recap session. On October 22, executives and managers have the opportunity to interact with their peers and hear from Doug Duncan, MBA's chief economist, who offers an economic forecast and a discussion on trends and their impact on the industry.
Renew acquaintances or make new contacts at the Welcoming Reception, and enjoy the Chairman-Elect Luncheon featuring Regina Lowrie, CMB, the first woman to chair MBA.
Click here to register online. If you have any questions contact Lisa Hazell at lhazell@mortgagebankers.org or (202) 557-2761.
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| Path to Diversity Awards Seven New Scholarships |
MBA (9/26/2005) Schofield, Teresa
The Mortgage Bankers Association announced that seven mortgage professionals were awarded Path to Diversity scholarships for the third quarter. Each of the scholars will receive a $2,495 voucher to use on residential and commercial real estate finance distance-learning and classroom-based courses, audio programs, resources and publications offered by CampusMBA, the educational arm of MBA.
The scholars for the third quarter are:
• Guillermo Caldelas, Irwin Mortgage, Fishers, Ind.;
• Debbie Dever, Colonial Savings, Fort Worth, Texas;
• Latitita Downing, Cenlar, Ewing, N.Jj;
• Angela Gibson, Cenlar, Trenton, N.Jj;
• Ron Jauregui, Congressional Hispanic Caucus, Washington, D.C.;
• Juan Ordaz, Colonial Savings, Fort Worth, Texas; and
• Michael Tano, CRO, ARU, Weichert Financial, Walton Beach, Fla.
Developed to increase cultural diversity throughout the industry, Path to Diversity is available to all employees of MBA's 2,900 member companies.
"By seeking additional professional education opportunities, industry professionals ensure that they are up to date on the latest developments in the industry, which helps the industry better serve our customers," said Larry Gilmore, AMP, chair of MBA's Diversity Task Force and vice president of government, housing and industry relations with Option One Mortgage Corp.’s Washington, D.C. office. "The Path to Diversity scholarships help mortgage professionals obtain the training they desire to help enhance their careers, while ensuring that the industry meets the needs of the diverse communities we serve."
The candidates were selected as part of an outreach program to increase diversity in the real estate finance industry. Through the CampusMBA program, education scholarships are awarded to members to help individuals continue their professional development and advance in their careers.
Path to Diversity scholarships are awarded on a regular basis, based on essays and letters of recommendation. Applications are reviewed by the Scholarship Award Task Force, composed of industry leaders. The Path to Diversity program continues through a sponsorship provided by the Research Institute for Housing America (RIHA), a trust fund subsidiary of MBA. The following companies have also provided scholarship funds: Irwin Mortgage, Option One Mortgage, SunTrust Mortgage and Wells Fargo Home Mortgage.
Companies can participate in the Path to Diversity program by enrolling as a participating company or by sponsoring 10 or more scholarships. Additionally, member firms providing internships to qualified college students are eligible to receive free distance-learning courses for each intern through CampusMBA.
To date, 155 scholarships have been awarded since the program's inception in 2001. The next scholarship application deadline is October 15. To learn how to apply for a scholarship, visit MBA's Web site at www.mortgagebankers.org/pathtodiversity/ or call 202/557-2835. You can also download the application at http://www.mortgagebankers.org/PathToDiversity/empschol/Application.htm , or email Joanna Truitt at jtruitt@mortgagebankers.org.
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| MBA Advocacy Update |
MBA (9/26/2005) Pfotenhauer, Kurt
MBA Continues Katrina Relief Efforts
.jpg) Mortgage Bankers Association staff continues to work on legislative and regulatory proposals designed to help victims of Hurricane Katrina, but which may prove problematic for servicers.
MBA is also promoting various legislative changes that will assist servicers of loans in affected areas, including re-enacting FEMA's mortgage assistance program, decoupling GNMA P&I loan program from the default requirement. We are also working with HUD and VA on amending certain policies that will otherwise negatively affect servicers and planning a coalition meeting of financial services trade associations.
On September 23, MBA staff participated in a conference call held by the White House. On the call, Kirstjen Nielsen, special assistant to the president who serves on the White House Homeland Security Council, provided an update on the status of Hurricane Katrina relief efforts as well as an update on the status of Hurricane Rita. The call also provided MBA with an opportunity to report on the efforts that it and its members have undertaken in response to the hurricanes.
For more information, please contact Vicki Vidal at (202) 557-2861 (vvidal@mortgagebankers.org).
Congress Passes Hurricane Katrina Tax Relief
On September 21, the Senate unanimously approved "The Katrina Emergency Tax Relief Act of 2005,” which provides tax relief to victims of Hurricane Katrina. The bill, which is a compromise of House and Senate bills that passed last week, passed the House on Wednesday by a vote of 422-0. The bill will now go to President Bush for his signature.
Among other provisions, the bill allows penalty-free withdrawal from Individual Retirement Accounts for disaster expenses and includes provisions expanding the Work Opportunity Tax Credit to employers hiring workers displaced by the storm.
On a related note, MBA staff continues to examine the effect of the hurricane on CMBS pools that are comprised of properties in the disaster area. It is possible that commercial properties with securitized mortgage debt may face additional hurdles to reconstruction and renovation because of existing rules that govern Real Estate Mortgage Investment Conduits. MBA supports legislation that has been introduced in both the House and Senate (H.R. 1010 and S. 580 ), which would correct this potential problem. Should these potential hurdles develop into genuine problems, MBA will advocate that this legislation be attached to a future tax bill to provide relief to the victims of Hurricane Katrina.
For more information, please contact Erick Gustafson at (202) 557-2913 (egustafson@mortgagebankers.org).
Senate Holds Hearing on Identity Theft; MBA to Submit Statement
The Senate Banking Committee held a hearing on September 22 on "Examining the Financial Services Industry's Responsibilities and Role in Preventing Identity Theft and Protecting Sensitive Financial Information."
During the hearing, the Committee heard testimony from Sen. Mark Pryor, D-Ark., as well as representatives of the Consumer Data Industry Association, the U.S. Public Interest Research Group, the Securities Industry Association, and law firms Schwartz & Ballen LLP and Morrison and Foerster. MBA plans to submit a statement for the record of the hearing.
For more information, please contact Rachel Voss at (202) 557-2865 (rvoss@mortgagebankers.org).
MBA to Testify on Title V of H.R. 1295
MBA will testify on Title V of H.R. 1295 , the Responsible Lending Act of 2005, before the House Financial Services Subcommittee on Housing and Community Opportunity next Thursday, September 29. Title V mandates that states implement broker licensing laws within three years that meet certain minimum requirements. Additionally, Title V would create a national database with information about licensed brokers and any disciplinary action taken against them that would be available to regulators, lenders, and the public.
Since January, MBA's State Licensing Task Force has been meeting to discuss issues concerning state licensing laws, including laws that require the licensing of individual mortgage banker and broker loan officers. The Task Force is looking at a number of steps to help educate lawmakers on the differences between mortgage bankers and mortgage brokers and the need for different licensing regimes.
A full copy of MBA's testimony will be available on MBA's Web site this Thursday.
For more information, please contact Tim Doyle at (202) 557-2860 (tdoyle@mortgagebankers.org).
MBA Sponsors Congressional Black Caucus Foundation Homeownership Breakfast
On September 23, MBA staff attended the annual Homeownership Breakfast of the Congressional Black Caucus Foundation's With Ownership, Wealth (WOW) Initiative. MBA, along with several MBA members, sponsored the event.
Attending the breakfast were a number of members of Congress for whom the WOW initiative is a priority: Reps. Bobby Rush, D-Ill.; Mel Watt, D-N.C.; Barbara Lee, D-Calif.; William "Lacy" Clay Jr., D-Mo.; William Jefferson, D-La.; Elijah Cummings, D-Md.; Danny Davis, D-Ill.; and Donna Christian-Christianson, D-Virgin Islands.
The WOW initiative was created in 2001 and is designed to help consumers obtain and retain homes through credit counseling, homebuyer education, financial literacy and other resources. The efforts are provided via WOW programs located within the districts of members of Congressional Black Caucus. Each local WOW program directs consumers to assistance and stays with them through home purchase. MBA has been a part of the initiative since its inception, and continues to provide financial and other support.
For more information contact Paul Richman at (202) 557-2899 (prichman@mortgagebankers.org).
House Subcommittee Holds Hearing on Regulatory Relief
On September 22, the House Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing on H.R. 3505 , the Financial Services Regulatory Relief Act of 2005.
H.R. 3505 would reduce the regulatory burden on insured depository institutions by freeing banks, thrifts, and credit unions from outdated and burdensome regulations in order to enhance their ability to meet the credit needs of their communities.
During the hearing, the Subcommittee heard testimony from representatives of the Financial Crimes Enforcement Network, the Federal Reserve System, the Office of the Comptroller of the Currency, the FDIC, the Office of Thrift Supervision, the National Credit Union Administration, the Conference of State Bank Supervisors and the National Association of State Credit Union Supervisors.
For more information, please contact Erick Gustafson at (202) 557-2913 (egustafson@mortgagebankers.org).
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| Washington: The Week Ahead |
MBA (9/26/2005) Sorohan, Mike
The House Financial Service Committee holds two hearings of note this week. The first, on Wednesday September 28, examines "Private Sector Priorities for Basel Reform." The hearing by the subcommittee on financial institutions and consumer credit begins at 10:00 a.m. EDT in room 2128 of the Rayburn House Office Building.
The second hearing, by the subcommittee on housing and community opportunity, looks at “Licensing and Registration in the Mortgage Industry.” That hearing takes place on Thursday, September 29, at 10:00 a.m. EDT in 2128 Rayburn.
The Senate Banking Committee is scheduled to mark up the nominations of a number of personnel on September 29 at 10:00 a.m. EDT in Room 538 of the Dirksen Senate Office Building.
Nominations to be considered include:
• Emil Henry Jr., assistant secretary for financial institutions with the Treasury Department;
• Patrick O’Brien, assistant secretary for terrorist financing with Treasury;
• Franklin Lavin, under secretary of Commerce for export administration;
• Israel Hernandez, assistant secretary of Commerce and director general of the U.S. and Foreign Commercial Service;
• David McCormick, under secretary of Commerce for export administration;
• Keith Gottfried, general counsel at HUD;
• Kim Hendrick, assistant secretary at HUD;
• Keith Nelson, assistant secretary at HUD; and
• Darlene Williams, assistant secretary at HUD.
Senate hearings can be accessed live over the Internet at www.capitolhearings.org; House Financial Services Committee hearings can be viewed live over the Web at http://financialservices.house.gov/.
Upcoming Report/Events:
Sept. 26 : Existing Home Sales, National Association of Realtors
Sept. 27 : Revised Building Permits, Commerce Department
Sept. 27 : New Residential Sales, Commerce Department/HUD
Sept. 27 : Consumer Confidence, The Conference Board
Sept. 28 : MBA Weekly Application Survey
Sept. 28 : Advance Durable Goods, Commerce Deparment
Sept. 29 : Gross Domestic Product, Bureau of Economic Analysis
Oct. 3 : Construction in Place, Bureau of the Census
Oct. 3 : ISM Index, Institute for Supply Management
Oct. 4 : Manufacturers Shipments, Inventories and Orders, Commerce Department
Oct. 5: ISM Services, Institute for Supply Management
Oct. 5 : MBA Weekly Application Survey
Oct. 6-7 : CampusMBA: The Next Step in Combating Mortgage Fraud, San Antonio, Texas
Oct. 6-7 : CampusMBA: Best Practices – Loan Administration Workshop, San Antonio, Texas
Oct. 7 : Employment, Labor Department
Oct. 7 : Joint Economic Committee Statement
Oct. 7 : Wholesale Trade, Commerce Department
Oct. 7: Consumer Credit, Federal Reserve Board
Oct. 10: Columbus Day holiday
Oct. 12: MBA Weekly Application Survey
Oct. 13: Trade Balance, Commerce Department
Oct. 13: Import/Exports, Commerce Department
Oct. 13: Treasury Department Monthly Statement
Oct. 14: Real Earnings, Labor Department
Oct. 14: Consumer Price Index, Labor Department
Oct. 14: Advance Retail Sales, Commerce Department
Oct. 14: Industrial Production and Capacity Utilization, Commerce Department
Oct. 14: Business Inventories, Commerce Department
Oct. 18: Producer Price Index, Labor Department
Oct. 18: Housing Market Index, National Association of Home Builders
Oct. 19: MBA Weekly Application Survey
Oct. 19: New Residential Construction, Commerce Department
Oct. 19: Beige Book, Federal Reserve Board
Oct. 20 : Composite Indexes, The Conference Board
Oct. 21-22 : MBA State & Local Workshop, Orlando
Oct. 23-26: MBA Annual Convention & Expo, Orlando
Oct. 24: Housing Vacancies and Home Ownership, Commerce Department
Oct. 25: Existing Home Sales, National Association of Realtors
Oct. 25: Consumer Confidence, The Conference Board
Oct. 26: MBA Weekly Application Survey
Oct. 27: Revised Building Permits, Commerce Department
Oct. 27: Advance Durable Goods, Bureau of the Census
Oct. 27: New Residential Sales, Commerce Department/HUD
Oct. 28: Gross Domestic Product, Labor Department
Oct. 28: Employment Cost Index (3rd Quarter), Labor Department
Oct. 31 : Personal Income, Labor Department
Nov. 1 : Federal Open Market Committee
Nov. 1-2 : CampusMBA: Real Estate Appraisal for Mortgage Lenders Workshop, Chicago
Nov. 3-4 : CampusMBA SPeRS and MISMO Workshop, Washington, D.C.
Nov. 6-11 : CampusMBA School of Mortgage Banking Course I, Tampa, Fla.
Nov. 7-9 : MBA Accounting, Tax & Financial Analysis Conference, Boca Raton, Fla.
Nov. 8-9 : CampusMBA: The Executive Institute: Market Analysis Workshop, Washington, DC
Nov. 8-11 : CampusMBA Regulatory Compliance Institute, Denver
Nov. 10-11 : MBA Residential Underwriting Conference, Coronado, Calif.
Nov. 24 : Thanksgiving Holiday
Nov. 30 MBA Legal Issues in Mortgage Technology Conference, San Diego
Dec. 4-9 : CampusMBA School of Mortgage Banking Course II, Las Vegas
Dec. 7-9 : CampusMBA eMortgage Workshop, Las Vegas
Dec. 7-9 : CampusMBA Underwriting University, Miami
Dec. 13 : Federal Open Market Committee
Dec. 25 : Christmas Holiday (official)
Dec. 26 : Christmas Holiday (observed)
2006
Jan. 1 : New Years Holiday (official)
Jan. 2 : New Years Holiday (observed)
Jan. 8-13 : CampusMBA School of Mortgage Banking I, Dallas
Jan. 22-27 : CampusMBA School of Mortgage Banking III, San Francisco
Jan. 29-Feb. 3 : CampusMBA School of Mortgage Banking II, Phoenix
Jan. 31 : Federal Open Market Committee
Feb: 5-8 : MBA Commercial Real Estate Finance/Multifamily Housing Convention & Expo, Orlando
Feb. 7-8 : CampusMBA Executive Institute--Valuation Issues Workshop, Miami
Feb: 14-17 : Servicing Management Workshop, Phoenix
Feb: 14-17 : MBA National Mortgage Servicing Conference & Expo, Phoenix
March 21-22 : MBA National Policy Conference, Washington, D.C.
March 29-April 1 : MBA National Technology in Mortgage Banking Conference, San Diego
April 30-May 5 : CampusMBA School of Mortgage Banking Course II, Long Beach, Calif.
May 7-10 : MBA National Secondary Market Conference, Chicago
May 16-19 : MBA Commercial Asset Administration Conference, New Orleans
June 11-14 : MBA Presidents Conference, Half Moon Bay, Calif.
June 20-21 : CampusMBA Executive Institute--Mortgage Business Professional Issues, TBD
Sept. 17-19 : MBA Document Custody Conference, Seattle
Sept. 26-27 : MBA Quality Assurance Conference, Coronado, Calif.
Information about MBA Events can be found at the MBA Web site,www.mortgagebankers.org; and at the CampusMBA Web site, www.campusmba.org.
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