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Government Affairs

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Successful Day on the Hill: February 24, 2010
We had a very successful day at the state Capitol on Wednesday, February 24, 2010. Approximately 50 VMLA members spent a well-invested three hours meeting with legislators and attending the opening of the House of Delegates. Special thanks to Delegate Bob Purkey of Virginia Beach for introducing our group while in the House Chambers. This year was a good year for the VMLA, as our voice was heard and accordingly, our legislative agenda for the year was a success.
 
HB547(Marshall)/SB240(Watkins) regarding the SAFE Act looks to be headed for passage thanks to the diligent work of Delegate Danny Marshall and Senator John Watkins. We expect this bill to pass without objection.
 
VMLA opposed two pieces of legislation:

• HB470(Watts)/SB411(Vogel); this legislation would have allowed property owner’s/condo associations to conduct foreclosure sales for unpaid assessments subject to the lien of first trust.
• HB1152(Scott, J.); placed a burden of disclosure on mortgage lenders when involved in the purchase of “affordable dwelling units.”

We believe that both of these bills will be defeated or stricken.
 

On February 24th, approximately 50 Mortgage Bankers went to Richmond for our Day on the Hill. We were able to go and discuss housing related issues with some key Congressional members, as well as watch a House Session and be recognized as a group by Delegate Purkey. It was so interesting to see the political process in action, but what really stuck out to me was that these people that we vote into office at the state level (and I'm sure that it is the same at the national level) hear so many bills that, if they have no other knowledge about the topic, just vote yes or no randomly with whoever they feel has given the most compelling argument.
 
This is quite scary to know that bills that affect our job and industry can be put into action without much knowledge about how they will truly affect an industry. I think that has been abundantly clear with several pieces of legislation that have been handed to us over the last year, and exactly the reason why our lobbyists are important. We need consistent input to our state legislators about what is going on in our industry, and one particular Delegate said it best, "What happens in Richmond affects your job every day." The State always has the ability to add to what the national laws are, which is exactly the reason why we need to continue the fight at the state level.
 
In fact, there was a bill that we helped to oppose and get killed; that was going to allow condo associations to foreclose for delinquent condo dues. They were also trying to impose additional Virginia requirements that would have made it harder for Virginia loans to be sold on the secondary market. These are hideous bills and luckily we have a great lobbyist up there that continues to be proactive to protect our interests.

2009 Overview

If 2008 was marked by the historic events on Wall Street, 2009 will be remembered for the unprecedented level of activity in Washington, DC.

January brought with it a new President, a new Congress, and a renewed zeal to address many of the factors that contributed to last year's market disruptions and the collapse of many industry leaders...as well as government intervention to rescue others. To ensure that all policymakers were aware of the key role MBA members play in the national economy, MBA produced new briefing materials (MBA's 2009 platform, a short primer on the real estate finance industry and a MBA resources page) and provided them to Congress and the new administration.

The year began with an invigorated push to permit bankruptcy judges to modify, or "cram down," residential mortgages. With larger majorities in both chambers of Congress and support from the President, passage of the legislation seemed inevitable during those early months. MBA and its industry partners never wavered in their staunch opposition, and while the House initially supported this legislation, the Senate sent it to a rousing defeat and it failed by a solid majority in a subsequent effort in the House late in the year.

In the area of financial services, Washington spent much of the year working on one of the most significant rewrites of financial regulation in decades, proposing sweeping changes to the Federal Reserve's powers, the establishment of a Consumer Financial Protection Agency, and other measures ranging from the regulation of derivatives to credit rating agencies to systemic risk.
The House completed its version of regulatory reform in early December, and, as we head into the New Year, the Senate is expected to start moving quickly on its separate regulatory reform bill. Throughout this process, MBA has been a non-stop presence on Capitol Hill, advocating for a level playing field for its member companies, as well as measures to stabilize the housing markets and help distressed homeowners. Outside of the regulatory reform debate, MBA also achieved significant victories, extending successful and popular programs like the expanded first-time homebuyer tax credit and the higher loan limits for the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac.

Looking ahead to 2010, activity on Capitol Hill will continue at a frenetic pace, as Congress and the Obama administration move towards finalizing legislation that is certain to affect every financial firm in the country. The outcome of this debate remains highly uncertain and likely will become more and more politicized during an election year. Along with working on the regulatory reform effort, MBA also will continue to drive the debate on the future of Fannie Mae and Freddie Mac, which remain in government conservatorship, and the best way to rebuild our secondary mortgage markets. We'll say more about out 2010 agenda in mid-January. 
On behalf of our entire team, we want to wish you a happy holiday season and thank you for your continued support of MBA's advocacy efforts. You can find information about everything we cover here at www.mortgagebankers.org/advocacy/. 

2009 Accomplishments Overview

In 2009, MBA testified 24 times before legislative bodies on behalf of its members: 12 in-person testimonies were given and 12 written statements were delivered. In addition, MBA wrote, either independently or with other groups, 60 letters to legislators and 45 regulatory comment letters, all of which can be viewed on MBA's Web page for testimony, comment letters and letters to legislators.

This year, approximately 2,100 industry professionals joined the Mortgage Action Alliance (MAA). Since inception, nearly 15,000 people have joined. Currently, there are more than 8,500 "active" members. This year, MAA members participated in 22 Calls to Action (including two state calls in Ohio and New Mexico). Nearly 6,500 letters to lawmakers were sent from these Calls to Action. Also, MAA was incorporated this year, and MAA assisted the Kentucky MBA on its Capitol Day.
As of December 22nd, MORPAC had raised and received contributions and pledges in excess of $515,000 for the 2009-2010 election cycle. Nearly $44,000 in MORPAC Administrative funds has been raised. MORPAC has received 11 PAC to PAC contributions this year, totaling $38,500. More than 650 individuals have given to MORPAC this year. 

Also this year, MORPAC launched a new low donor campaign initiative and in support of this exciting effort, MBA created a new secure Web site to allow members of the Mortgage Action Alliance to easily contribute to MORAPC online. This new program has already brought in over $8,000 for MORPAC.

MBA appreciates the members that have joined MAA, given to MORPAC, participated in its policy-making committees and attended its National Policy Conference. 

2009 Critical Successes

• House Passed H.R. 4173 - The House passed H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009, which has been described as the most sweeping overhaul of the nation's financial regulatory system since the Great Depression.

• Risk Retention Exemptions - When the House of Representatives proposed requiring the mortgage industry to retain a greater portion of the risk on the loans it makes, MBA successfully rolled back these onerous requirements. On both H.R. 1728, a predatory lending bill passed earlier this year, and later H.R. 4173, MBA fought for amendments that would empower federal banking regulators to allow exceptions for safer mortgage products, such as conforming, prime, and FHA loans. MBA was able to make significant improvements to these provisions.
• Requiring Coordination on RESPA-TILA Disclosures - H.R. 1728 also included MBA-supported language requiring the Federal Reserve and HUD to coordinate on reform of RESPA and TILA disclosures.
• Limit "Plain Vanilla" Products - Under the original version of H.R. 4173, the proposed Consumer Financial Protection Agency would have been empowered to require lenders to offer "plain vanilla" products like 30-year fixed-rate mortgages. After thorough discussions with the House and the Treasury Department, this provision was dropped from the legislation.

• House and Senate Reject Bankruptcy Reform Legislation - Once again, MBA was successful in fending off legislation that would have allowed bankruptcy judges to unilaterally change the terms of mortgage contracts. In April, the Senate defeated a mortgage cram down amendment that fell 15 votes short of the 60 votes required for adoption. In December, MBA helped defeat a similar amendment to the House regulatory reform bill. This was a tremendous victory, and the first time that such an amendment was defeated on the House floor.
• House Passed H.R. 3146, the 21st Century FHA Housing Act, and H.R. 3527, the Multifamily Loan Limit Act-

• H.R. 3146, the 21st Century FHA Housing Act, provides FHA with more resources to hire additional staff, upgrade its technology, and review loan performance to mitigate risk. It also expresses congressional concern with the decline in warehouse lending and urges the Treasury, HUD, and FHFA to provide financial support and assistance.
• H.R. 3527, the FHA Multifamily Loan Limit Adjustment Act, increases FHA's multifamily loan limits for elevator buildings and would allow more affordable housing units to be built and rehabilitated in urban areas by creating a 50 percent differential between non-elevator and elevator loan limits in each FHA multifamily program.

• California Reverse Lending Legislation - California Governor Arnold Schwarzenegger signed a version of MBA's model bill into law on October 11, 2009. MBA's model bill was a product of MBA's Executive Task Force on Reverse Mortgage Lending. 
• MBA Leads the Way on GSE Reform - Through the Council on Ensuring Mortgage Liquidity, MBA has been the thought leader on the future of the secondary mortgage market. MBA developed a white paper and recommendations, including a set of reform principles and a proposed model for the future of the secondary mortgage market, months ahead of other industry groups and academics. MBA held numerous meetings with congressional offices and administration officials to discuss its proposal.
• Congress Extends Higher Loan Limits for Fannie, Freddie, FHA - MBA led the charge on urging Congress to extend the higher loan limits for Fannie Mae, Freddie Mac, and the Federal Housing Authority. Those limits, which were set to expire on December 31, 2009, were extended until December 31, 2010. MBA worked diligently with congressional leadership and key members to ensure this issue was addressed well in advance of any potential market disruptions.
• Congress Extends and Expands Homebuyer Tax Credit - Responding to urging from MBA and others, Congress approved H.R. 3548, the Unemployment Compensation Extension Act, which contained provisions expanding the homebuyer tax credit. The bill extends the $8,000 first-time homebuyer tax credit through April 30, 2010, and allows for a $6,500 tax credit for "move-up" buyers who have lived in their current residence for five or more years.

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