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In this Issue |
March 2021 Edition |
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State News & EventsLegislative Update |
 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. Best wishes, Rob Helvey  Rob Helvey WMBA President 2020-2021 Vice President Manager of Mortgage Lending Waukesha State Bank rhelvey@waukeshabank.com 262-549-8527 |
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Registration closes on May 28, 2021
For chapter updates, go to the Madison Chapter page.
MBA: MBA Advocacy Update
March 29, 2021
Bill Killmer bkillmer@mba.org; Pete Mills pmills@mba.org.
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.
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Why it matters: Yellen and Powell agreed that additional spending is likely needed in certain areas of the economy to ensure an equitable recovery.
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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.
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Why it matters: The CFPB’s data suggests that the mortgage industry’s record of customer service through the pandemic has been strong.
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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.
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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.
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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.
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Why it matters: These developments provide more clarity for market participants on the details and timing of the LIBOR transition.
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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.
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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.
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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 .
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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:
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The QM Delay and What To Do Now – March 30
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Renter Counseling to Mitigate Evictions and Reduce Operational Costs – March 31
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The Location of Affordable & Subsidized Rental Housing Across and Within the Largest Cities in the United States – April 8
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Key TCPA Compliance Issues – April 15
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Practical Use Cases for Intelligent Automation and RPA in Mortgage Processing – April 15
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Construction Loan Considerations During the COVID-19 Pandemic – April 28
MBA members can register for any of the above events and view recent webinar recordings by clicking here. For more information, please contact David Upbin at (202) 557-2890.
MBA: The Housing Scene
By Lew SichelmanMale vs. Female: An Uneven Playing Field
March 26, 2021The pandemic has hit women harder than men -- you might call it a “she-cession.” To be sure, more women have lost their jobs during this time. Even so, more women are buying houses.
The Redfin brokerage chain says single women purchased 8.7% more homes in the fourth quarter of 2020 than in the same period a year earlier. That’s a larger increase than single men, who purchased 4.6% more homes in the fourth quarter than a year earlier.
Overall, single women accounted for 15.7% of all home purchases nationwide in the fourth quarter of 2020, Redfin reports.
None of this should come as a surprise. LendingTree says single women have long owned more homes than their male counterparts. But while women continue to widen the gap, they are paying a steep price to do so.
According to a recent study from the Yale School of Management, single women pay 2% more than single men for the very same house. And when the time comes to move, they sell for 2% less.
On a $300,000 house, that combined 4% swing equals $12,000 if there is no appreciation. But if their houses rise in value, as many are doing right now, the difference could be much larger.
And when you consider that by LendingTree’s count, unmarried women own nearly 1.6 million more houses than men in the nation’s 50 largest markets -- the company could not find a single one of the top 50 markets where single men own more homes than single women -- that’s a lot of money single women are missing out on.
Indeed, according to the Yale study’s authors, Kelly Shue and Paul Goldsmith-Pinkham, single women are losing about $1,370 per year relative to men because they tend to buy high and sell low. And that, they say, is a conservative estimate.
Shue and Goldsmith-Pinkham, both of whom are finance professors at Yale, base their findings on 9 million transactions throughout the country for which they could identify gender, the initial purchase price and the eventual sales price. The data stretches from 1991 to 2017.
If their research is on target, the amount of dollars women everywhere are losing is staggering. Overall, because Americans invest more in the housing market than in the stock market, the gender gap in housing is responsible for 30% of the gender gap in wealth accumulation at retirement, the authors argue.
The Yale study says the gender gap is “primarily explained” by market timing. But even when both sexes buy and sell in the same ZIP code, during the same month and year, women still net nearly 1% less than men.
Another factor is what happens between purchase and sale. Men tend to invest more in upgrades and maintenance, and they are inclined to invest in riskier properties that normally earn higher returns. Also, men tend to hold their houses longer.
But more importantly, say Shue and Goldsmith-Pinkham, women did not seem to negotiate as successfully as men. The authors discovered that male buyers and female sellers were associated with the largest negotiated discounts relative to list price. At the same time, male sellers and female buyers are associated with the smallest discounts.
The professors caution that they are “not necessarily” implying that women make bargaining mistakes or have lower negotiation skills. Indeed, they point out that previous research has found that women can experience more negative outcomes when they bargain aggressively.
But women search for their homes differently then men. “Women may equal men in negotiation ability,” the professors say, “(but) they care more about purchasing a particular home or derive greater utility from a fast, low-risk or nonconfrontational negotiation process.”
So what can women do to avoid losing money? When buying, they should align themselves with a so-called “buyer broker” -- an agent who works solely on a buyer’s behalf and never, ever works with sellers. These agents will negotiate for you, securing the best deal possible.
Don’t be fooled by agents who say they will act as a buyer broker in your case, but who also represent sellers in other instances. True buyer brokers say you can’t wear two hats, and maintain that it takes an entirely different mindset to represent buyers than sellers.
If you are a seller, look for an agent who is a top producer in your market. There’s a reason some agents consistently sell more houses than others. Beware your Aunt Tina, who just earned her real estate license. Sure, rookies have to start somewhere. But leave that to other clients.
Agents vary in skill and may not perfectly share the interests of their clients, the Yale economists point out. While the gender gap is not driven by women systematically choosing the worst agents, they say, it is possible the same agents offer different advice to men and women, or that the sexes follow the advice -- good or bad -- differently.
Beyond choosing the right agent, make sure you receive a market analysis showing the direction of prices as well as “comps,” which are details about the most recent sales of nearby, similar houses. Try to get a handle on the market before jumping in.
