O’Connor, Steve
The Dodd-Frank Wall Street Reform and Consumer Protection Act crossed the finish line Wednesday morning when President Obama, surrounded by jubilant lawmakers, signed the 2,300-page bill into law.

The effort now enters a lengthy implementation phase, as federal agencies begin the arduous task of promulgating hundreds of new rules called for in the bill, as well as establishment of an independent Consumer Financial Protection Bureau to be housed within the Federal Reserve.

Congress, meanwhile, shifted its focus to some of the unfinished items on its agenda, including an extension of FHA and GSE loan limits, action on covered bond legislation and potential autumn slate of hearings on the future of Fannie Mae and Freddie Mac.

Obama Signs Financial Regulatory Reform into Law
On July 21, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. (http://www.whitehouse.gov/blog/2010/07/21/president-obama-signs-wall-street-reform-no-easy-task).

During his remarks before signing the 2,300-page law, Obama noted that "the financial industry is central to our nation's ability to grow, to prosper, to compete and to innovate. There are a lot of banks that understand and fulfill this vital role, and there are a whole lot of bankers who want to do right--and do right--by their customers."

However, he went on to say that "with this law, we'll crack down on abusive practices in the mortgage industry. We'll make sure that contracts are simpler--putting an end to many hidden penalties and fees in complex mortgages--so folks know what they're signing."

To visit MBA's Financial Regulatory Reform Resource Center, which includes MBA's summary of the new law, click http://www.mortgagebankers.org/IndustryResources/ResourceCenters/MIRAResourceCenter.htm.
 
For more information, please contact Bill Killmer (202) 557-2736 bkillmer@mortgagebankers.org. 

MBA Meets with FHFA on Appraisal Standards
On July 19, MBA staff met with Federal Housing Finance Agency staff, representatives from Fannie Mae, Freddie Mac and other trade associations to discuss MBA's views concerning what appraisal requirements the GSEs should maintain following the expiration of the Home Valuation Code of Conduct.

MBA indicated that the lending industry had generally adjusted to HVCC and its restrictions against loan production personnel ordering appraisals, and the HVCC requirements should remain. MBA emphasized that, while there are specific changes to the policy that the association would want to implement, we support the spirit and intention of HVCC. MBA will continue to work with FHFA, Fannie Mae and Freddie Mac on upcoming appraisal issues. 

For more information, please contact Tamara King (202) 557-2758 tking@mortgagebankers.org or Mike Carrier (202) 557-2870 mcarrier@mortgagebankers.org. 

MBA Continues Work on Overtime Ruling
Last week MBA staff consulted with a task force of MBA members and representatives of other financial services trade associations concerning the March 24 Department of Labor Administrative Interpretation. This spring, DOL withdrew an earlier DOL opinion and held that the "administrative exemption" from overtime requirements under the Fair Labor Standards Act would not be available to loan officers performing "typical" loan officer duties. 

Earlier this month, MBA met with Department of Labor staff to express its concerns regarding the decision. These meetings are part of MBA's efforts to evaluate options to best serve its members.

For more information, please contact Ken Markison (202) 557-2930 kmarkison@mortgagebankers.org.

MBA Comments on Housing Goals, Future of the Secondary Market
On July 21, MBA submitted a letter to HUD and Treasury to supplement its earlier comments from June 17 on the role of housing goals in the new future secondary market structure. This letter is in reaction to suggestions voiced in the public debate on whether affordable housing goals, or some variant, ought to be employed through the next-generation Fannie Mae and Freddie Mac. 

The letter asserts MBA's position that a return to the type of housing goals required of Fannie Mae and Freddie Mac would be efficient and potentially an obstacle to achieving the required safety and soundness in the system. The letter continues to explain how affordable housing goals are a conceptually flawed policy and explains how the MBA proposal for a Mortgage Credit Guarantee Entity would function and where such a mission appropriately belongs. 

For more information, please contact Michael Carrier (202) 557-2870 mcarrier@mortgagebankers.org.

MBA Files Comments on Fannie Mae and Freddie Mac's Duty to Serve Underserved Markets
On July 19, MBA filed comments with the Federal Housing Finance Agency on proposed regulations imposing on Fannie Mae and Freddie Mac a duty to serve the underserved markets of manufactured housing, rural housing and affordable housing preservation. The new "duty to serve" is required by the Housing and Economic Recovery Act of 2008. 

MBA's letter expressed support for the FHFA not requiring the GSEs to undertake new business or activities while in conservatorship. MBA also expressed support for FHFA's proposed categorical rating system of "compliance" or "noncompliance" instead of a rating system that would require specific levels of activity. 

MBA also suggested that the mission obligations of the government sponsored enterprises are best considered in the broader context of reform of the entire secondary market.

For more information, please contact Michael Carrier at (202) 557-2870 mcarrier@mortgagebankers.org.
 
MBA Submits Comments to USDA on Loan Program Interest Rates and Indemnification
On July 19, MBA submitted a comment letter in response to the Department of Agriculture's proposed changes to its Single-Family Housing Guaranteed Loan Program. 

The letter addresses the two proposed changes. The first proposed rule change would eliminate the  published Veterans' Administration rate for first mortgage loans with no discount points as an option for a maximum interest rate on USDA loans. Lenders would be required to use the Fannie Mae index. The second proposed rule change would allow the USDA secretary to seek indemnification from the originating lender, under certain circumstances. 

MBA supports the required use Fannie Mae index. MBA also supports indemnification, but only if the policy is fair, clear, transparent and allows lenders opportunities to appeal. 

For more information, please contact Tamara King (202) 557-2758 tking@mortgagebankers.org. 

MBA and FBETC Submit Letter on H.R. 5297
On July 19, MBA joined other members of the Family Business Estate Tax Coalition in a letter to urge passage of the bipartisan Lincoln-Kyl proposal to the Small Business Lending bill (H.R. 5297) to provide additional permanent relief from the estate tax.

Family businesses and farms need resolution now because at the end of 2010 the top rate will be increased to 55 percent and exemption amount reduced to $1 million. The bipartisan proposal would increase the exemption level to $5 million and reduce the rate to 35 percent, both phased-in over 10 years. The Lincoln-Kyl proposal also ensures that any relief related to the exemption is tied to inflation and that stepped-up basis is included.

For more information, please contact Jim Gross (202) 557-2860 jgross@mortgagebankers.org. 

Senate Passes War Funding, Jettisons Additional Multifamily Commitment Authority, Extends Rural Housing Program
On July 22, the Senate rejected by a 46-51 vote a House supplemental appropriations bill that would have given the Federal Housing Administration an additional $5 billion in multifamily commitment authority. 

The emergency spending bill, which funds the wars in Iraq and Afghanistan, included a number of domestic measures that met resistance from senators concerned about the rising budget deficit. The Senate then approved a smaller spending bill, identical to one it passed in May, that did not include the increase in multifamily commitment authority. MBA remains focused on securing passage of this provision, which is necessary to avert an FHA shutdown in mid-August that will put many rental projects in jeopardy.

The Senate bill also includes an MBA-supported provision that will allow the Department of Agriculture's Single-Family Guaranteed Rural Housing Loan Program to continue operating for the remainder of the fiscal year. It provides USDA with additional loan commitment authority and also permits the Department to charge a higher upfront guarantee fee and institute a new annual fee.

MBA's free grassroots program, the Mortgage Action Alliance, has been waging a campaign to support the increase in multifamily commitment authority. All MAA members are strongly encouraged to take action. Click http://www.mortgagebankers.org/Advocacy/MortgageActionAlliance to take action. If you are not a MAA member, and want to take action, click http://www.mortgagebankers.org/Advocacy/MortgageActionAlliance/MAASignup.htm first to join the Alliance.

For more information, please contact Len Wolfson at lwolfson@mortgagebankers.org.

House Appropriations Committee Marks Up HUD Budget, Extends Higher Loan Limits, Funds HECMs
On July 21, the House Appropriations Committee approved (http://appropriations.house.gov/images/stories/pdf/tranurb/THUD_FY11_FC_SUMMARY_Final_as_amended_-_7.20.10.pdf) the Transportation, HUD and Related Agencies Appropriations Act for Fiscal Year 2011. 

Included in the legislation is a top MBA priority: extension of higher loan limits for FHA, Fannie Mae and Freddie Mac. These limits for high-cost areas, capped at $729,750 and enacted as part of the 2008 economic stimulus bill, are set to expire on December 31. The legislation would extend them through September 30, 2011.

The HUD Appropriations bill also includes a $150 million subsidy for FHA's Home Equity Conversation Mortgage program, which is considered to be sufficient to cover the expected re-estimated volume for the next fiscal year.

For more information, contact Tamara King tking@mortgagebankers.org (202) 557-2758 or Len Wolfson lwolfson@mortgagebankers.org (202) 557-2712.

MBA Attends Public Hearing on CRA in Virginia
On July 19, MBA staff attended a Community Reinvestment Act public hearing put on by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve, Federal Deposit Insurance Corp. and the Office of Thrift Supervision. This was the first public hearing that will be held by the agencies in four cities across the country to receive comments on the agencies' regulations governing procedures for assessing a financial institution's performance under CRA.

The agencies are particularly interested in receiving comments on eight specific topic areas including geographic coverage; CRA performance tests; asset thresholds and designations; affiliate activities; small business and consumer lending evaluations and data; access to banking services; community development; rating and incentives; effect of evidence of discriminatory or other illegal credit practices on CRA performance evaluations; and CRA disclosure and performance evaluations.

Comments offered at the first public hearing focused on several specific areas. First, it was stated that bank branches remain important, but the general belief is that CRA should apply to broader geographic areas, including electronic banking opportunities. Additionally, witnesses shared that affiliate activities should be required to be included in a CRA exam; it should no longer be an option to include these activities. Another topic raised during the hearing was that credit should be granted for community development activities, possibly consolidated into a common test.

For information about upcoming hearings, click http://www.occ.gov/cdd/commfoc.htm or contact Sandra Troutman (202) 557-2858 stroutman@mortgagebankers.org. 

CampusMBA to Host LIVE Online Workshops on Title XIV of the Regulatory Reform Bill
On Tuesday, July 27, CampusMBA will hold the second of three currently scheduled LIVE Online Workshops to provide industry professionals with the information necessary to understand the provisions of the Dodd-Frank regulatory reform bill. This session will address Title XIV, the Mortgage Reform and Anti-Predatory Lending Act, which includes the establishment of a duty of care for originators and loan officer compensation and duty of care provisions, minimum standards underwriting, HOEPA expansion, new appraisal independence standards, as well as remedies and penalties. 

The third session is planned for August 10 to discuss servicing and secondary market provisions. These 90-minute workshops give mortgage professionals a glimpse into the future of the industry.

Click http://www.campusmba.org/products/default.aspx?product_code=E2001716AM/REGIS for more information or to register, or contact Faith Cooper fcooper@mortgagebankers.org (202) 557-2873.