In this Issue
State News & Events
Dear WMBA Members,
A few weeks ago, I had a conversation with a member of the WMBA “old guard.” This is a person that has been in the mortgage industry his entire career and has been an active member of the WMBA for as long as he can remember.
Among several different topics we discussed, a few points really stuck out. He talked about the prestige involved in being on the board of directors at both the state and chapter level, the contacts he has made and how those contacts have played a role in his career, and the important role that the WMBA plays in the mortgage industry.
The reason I am bringing this up is because this is the time of year that we decide on who is going to be on our board of directors moving forward. We had nominations open a few weeks ago for the open state board positions and we received a great response with a great group of leaders in the mortgage industry being nominated. Most of the nominees are people that have not served on the state board before. We have also opened nominations for the Treasurer position this week as well and we are looking forward to see who gets nominated. Nominations for the open Treasurer postion close on April 5, 2021. To nominate someone, click here.
Having the wealth of knowledge and experience of the old guard being involved with new people, new ideas, and new energy in our organization is what is going to keep the WMBA relevant, prestigious, and a source of knowledge for years to come.
WMBA President 2020-2021
Manager of Mortgage Lending
Waukesha State Bank
WMBA response to Mortgage Broker ChannelIn further response to the ongoing mortgage brooker channel issue, the WMBA has taken the steps to acknowledge our position with both the Wisconsin Attorney General and Department of Financial Institutions (DFI).
On March 23, 2021 the WMBA sent messages to both the Wisconsin Attorney General Josh Kaul and to Secretary Blumenfeld at the Wisconsin Department of Financial Institutions (DFI). The DFI - Division of Banking Adminstrator has responded that they have received our email and have taken steps to better understand the issue.
Below is the copy from the email sent to The Honorable Josh Kaul, Attorney General of Wisconsin.The same message/letter was sent to Secretary Blumenfeld at the DFI.
The Honorable Josh Kaul
Attorney General of Wisconsin
P.O. Box 7857
Madison, WI 53707
Re: Request for inquiry into United Wholesale Mortgage’s (UWM) broker amendment
Dear Attorney General Kaul,
The Wisconsin Mortgage Bankers Association (WMBA) is a statewide organization founded March 28, 1977, whose objectives include professional programs of continued education for its members, the encouragement of sound industry-related legislation, and promotion of public understanding of the mortgage lending industry. We represent 96 organizations with a total of 1003 members.
On behalf of our members, we would like you to be aware of a recent extreme and targeted “ultimatum” issued by United Wholesale Mortgage to independent mortgage brokers that could have an adverse impact on consumers in Wisconsin. UWM demanded that brokers using their service sign an agreement that they not do business with competing lenders Rocket Mortgage (Quicken Loan, Inc) or Fairway Independent Mortgage Corp. Fairway, a WMBA member, is of special relevance to Wisconsin due to their headquarters being in the state, and thus, their employment of hundreds of Wisconsin residents.
Failure to comply with this demand will result in UWM terminating its business relationship with these brokers, as well as a $50,000 penalty, or a fine of $5,000 per loan, whichever is greater. We are concerned that this will harm constituents across the state by restraining both access and choice by limiting the market. Consumers will be left with fewer options, resulting in higher costs and less access to financial products to meet their specific needs.
Additionally, UWM’s tactics are simply anti-competitive and contrary to the free and open market, which is critical to the independent mortgage broker community. UWM’s actions seemingly cross the line of anti-trust violations. UWM put on display their intent to use a dominant market position to directly disadvantage their principal competitors and further consolidate market power. Such consolidation and increased ability to control pricing and terms is extremely unethical, if not unlawful.
We urge you to use the full authority of your office to investigate UWM’s conduct against their independent broker partners, as well as any related impact to their current and future customers. If there is any additional information we can provide, please let us know. A pdf copy of this letter is attached.
Thank you for your consideration,
WMBA President 2020-2021
Manager of Mortgage Lending
Waukesha State Bank
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Last week, Treasury Department Secretary Janet Yellen and Federal Reserve Chair Jerome Powell appeared before Congress to give their quarterly CARES Act update. On Tuesday, HUD announced FHA’s temporary allowance of endorsement of loans in forbearance will not be renewed and will expire on March 31.
On Wednesday, the Consumer Financial Protection Bureau released its annual report on consumer complaints, which showed good results for mortgage industry performance during the pandemic. And last week also saw several notable developments with respect to the transition away from LIBOR.
1. Secretary Yellen, Fed Chair Powell Testify On COVID-19 Relief, Economy
Federal Reserve Board Chairman Jerome Powell and Treasury Secretary Janet Yellen appeared before the House and Senate last week to give a progress report on the pace of the COVID-19 relief efforts. During two days of hearings, each stressed that the U.S. economy has recovered from the pandemic faster than expected, but a full recovery is still in the distance. While Powell assured lawmakers that inflation will rise, but won’t spiral out of control, Yellen hinted at forthcoming tax hikes, especially a higher corporate tax rate. Members in the House and the Senate discussed several issues, including CECL/TDR matters, commercial real estate market concerns, Emergency Rental Assistance, infrastructure spending and inflationary pressures that could arise from additional government spending. A summary of the House hearing can be found here, and a summary of the Senate hearing can be found here.
Why it matters: Yellen and Powell agreed that additional spending is likely needed in certain areas of the economy to ensure an equitable recovery.
What’s next: Congress is working with the Administration to craft legislation on infrastructure, tax, and additional stimulus. MBA is monitoring these areas and providing input.
For more information, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866.
2. CFPB Releases Annual Consumer Complaint Report
On Wednesday, the Consumer Financial Protection Bureau released its annual report to Congress summarizing the consumer complaint data received in 2020. As expected, the COVID-19 pandemic contributed to a 54% increase in overall consumer complaints to the CFPB across all product and service types. However, the mortgage banking industry’s performance through the pandemic was exemplary, with mortgage-related complaints increasing only 7.5%, and mortgage servicing complaints actually declining 3.5% compared to 2019. The mortgage data are particularly remarkable, given the record spike in origination volume in 2020 and the passage of the CARES Act, which mandated a massive forbearance regime that was effective immediately. Those accomplishments came against the backdrop of migrating loan officers and mortgage servicing call centers to remote work environments.
Why it matters: The CFPB’s data suggests that the mortgage industry’s record of customer service through the pandemic has been strong.
What’s next: MBA will share this record of performance with policymakers to ensure fair treatment of the industry in any post-pandemic legislative and regulatory matters.
For more information, please contact Justin Wiseman at (202) 557-2854 or Sara Singhas at (202) 557-2826.
3. HUD Announces Expiration of FHA Endorsement of Loans in Early Forbearance
On Tuesday, HUD announced the Federal Housing Administration’s temporary allowance of endorsement of loans in forbearance will not be renewed, and will expire on March 31. HUD cited limited usage of the policy in its decision not to grant further extensions. A similar policy allowing purchases of loans in forbearance by Fannie Mae and Freddie Mac was sunset by the Federal Housing Finance Agency on December 31, 2020.
Why it matters: The ability to endorse loans for which borrowers requested forbearance shortly after closing, driven by MBA advocacy and first outlined in Mortgage Letter 2020-16, provided support for lenders concerned that properly-originated loans would later become ineligible for FHA insurance. The policy was in effect for nine months following its June 2020 implementation.
What’s next: MBA will continue to work with FHA and provide input on potential extensions of other pandemic-related temporary policies.
For more information, please contact Hanna Pitz at (202) 557-2796.
4. LIBOR Sunset Timelines Clarified; Industry-Supported Bills in New York, New Mexico Pass to Aid Transition
Last week, there were several notable developments with respect to the transition away from LIBOR. On Monday, Federal Reserve Vice Chair for Supervision Randal Quarles delivered a keynote address in which he stated that the revised timelines for the sunset of LIBOR are “definitive.” As a reminder, most tenors of U.S. Dollar LIBOR will cease to be published after June 30, 2023. Quarles went on to state that, “There is no scenario in which a panel-based U.S. Dollar LIBOR will continue past June 2023, and nobody should expect it to.” The Alternative Reference Rates Committee (ARRC) also clarified that market participants should not expect a term rate for the Secured Overnight Financing Rate (SOFR) this year, and therefore the transition away from LIBOR should be made “using the tools available now.”
At the state level, the New York legislature passed an ARRC-supported bill that would provide greater certainty for market participants as they transition existing contracts from LIBOR to a new index. MBA and the New York MBA supported the legislation in a letter sent to sponsors in February. Finally, the New Mexico state legislature passed a bill backed by MBA, the New Mexico Mortgage Lenders Association, and the Mortgage Action Alliance (MAA) to avoid complications for state-chartered institutions seeking to originate GSE-compliant loans indexed to SOFR – a significant advocacy achievement given the tight window in which passage was needed.
Why it matters: These developments provide more clarity for market participants on the details and timing of the LIBOR transition.
What’s next: Market participants should benefit from an extension of the publication of most tenors of U.S. Dollar LIBOR (from December 31, 2021 to June 30, 2023) to address servicing issues associated with existing LIBOR-indexed loans. New loan production should transition away from the use of LIBOR as soon as possible.
For more information, please contact Dan Fichtler at (202) 557-2780 or William Kooper on state matters at (202) 557-2737.
5. MBA Works with Wyoming on RON Rules
On Monday, MBA and the American Land Title Association met with staff from the Office of the Wyoming Secretary of State to provide technical guidance to assist with implementation of the state’s recently enacted remote online notarization law. The Secretary of State requested the meeting in response to a MBA-ALTA joint letter.
Why it matters: Although the Wyoming law enables the use of RON consistent with the national standard for implementation, it also allows for the use of RIN that do not meet the same standards for protecting consumer information and providing legal certainty.
What’s next: MBA will work with the Buchanan’s team to ensure the final rules are consistent with the national consensus for RON adoption. For more information, please visit MBA’s RON resource center.
For more information, please contact Kobie Pruitt at (202) 557-2870.
6. MBA Hosts California Consumer Privacy Act Webinar
On Tuesday, Kobie Pruitt, MBA Associate Director of State Government Affairs, moderated a discussion on the California Consumer Privacy Act. He was joined by Joseph Lynyak, partner at Dorsey and Whitney, and Sanford Shatz, counsel at McGlinchey Stafford, to provide an update on CCPA and the compliance issues related to the state data privacy law. MBA members can access the recording of the webinar here .
Why it matters: CCPA has had a pronounced effect on the data privacy landscape nationwide. Recent enacted amendments in the California Privacy Rights Act will influence how other states approach data privacy legislation.
What’s next: MBA will continue to monitor issues related to data privacy and advocate for exemptions for institutions that are compliant with the Gramm-Leach Bliley data protection requirements.
For more information, please contact Kobie Pruitt at (202) 557-2870.
7. MBA-Supported Remote Work Legislation Headed to Governor in Washington
On Thursday, SB 5077 was approved unanimously by the Washington State House of Representatives. The bill provides authority to companies to allow licensed mortgage loan originators the ability to work from their residences without the company licensing the residence as a branch office. The bill cleared the Senate without opposition in early February.
Why it matters: MBA and the Washington MBA supported this legislation, which is consistent with MBA’s model bill to modernize licensing laws for the real estate finance industry. For more information on MBA’s State Licensing Flexibility Campaign, please visit our resource center.
What’s next: MBA will monitor the bill and inform members when Governor Jay Inslee (D) approves it, as expected.
For more information, please contact William Kooper (202) 557-2737 or Kobie Pruitt at (202) 557-2870.
8. Register Today: MBA Spring Conference & Expo 2021 – April 20-22
MBA’s Spring Conference & Expo 2021, taking place via MBA Live, will feature several must-see sessions, including remarks from HUD Secretary Marcia Fudge and FHFA Director Mark Calabria and other prominent Washington policymakers and stakeholders.
Why it matters: MBA President and CEO Bob Broeksmit, CMB, will share an update on MBA’s work in Washington, and then interview Fudge. Calabria will discuss the various policy issues at FHFA.
What’s next: To register for the conference, click here.
For more information, please contact Dawn Williams at (202) 557-2877.
9. Register Today: MBA National Advocacy Conference – May 11-12
Registration is now open for the MBA National Advocacy Conference May 11-12. NAC allows you to connect directly with elected officials online from your home or office.
Why it matters: NAC will provide a great opportunity for our industry to advocate for reasonable changes to the regulations and laws that are increasing costs or preventing you from doing business.
What’s next: Share your experiences, your voice, and your passion for our industry May 11-12! Register today at mba.org/nac and take advantage of the $99 early bird rate.
For more information, please contact Alden Knowlton at (202) 557-2816.
10. Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family and commercial/multifamily programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming webinars – which are complimentary to MBA members:
The QM Delay and What To Do Now – March 30
Renter Counseling to Mitigate Evictions and Reduce Operational Costs – March 31
The Location of Affordable & Subsidized Rental Housing Across and Within the Largest Cities in the United States – April 8
Key TCPA Compliance Issues – April 15
Practical Use Cases for Intelligent Automation and RPA in Mortgage Processing – April 15
Construction Loan Considerations During the COVID-19 Pandemic – April 28
Male vs. Female: An Uneven Playing FieldMarch 26, 2021