5 developments in Washington D.C. impacting the mortgage industry

June 13, 2023 10:29 AM

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Two Republican-sponsored bills are seeking to reverse recent FHFA adjustments to mortgage fees on the grounds that the Biden-appointed director of the FHFA is penalizing financially responsible borrowers.

In contrast, a bipartisan bill aims to reinstate the tax deduction on mortgage insurance premiums claimed by millions of middle-class homeowners prior to its expiration at the end of the 2021 tax year.

Read more about these and other stories in our roundup of political news in the industry.

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FHFA mortgage fee updates draw Republican fire

Republican lawmakers have moved to reverse GSE mortgage fee updates, which they believe favor borrowers with lower credit scores to the detriment of those with better financial histories.

"The FHFA — led by a President Biden-appointed director — is punishing financially responsible mortgage borrowers," said Rep. Andy Biggs, R.-Ariz., the sponsor of one of two Republican-led bills.

FHFA director Sandra Thompson counters that the policy is well established in the agencies' remit and makes the distinction that it is aiding borrowers with lower incomes, not with lower credit scores.

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Bills seek to roll back recent change to mortgage pricing

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Bill to stop trigger leads gets mortgage industry backing

Recently introduced legislation to stop the barrage of marketing calls, emails and texts received by unsuspecting homebuyers is gaining support from the National Association of Mortgage Brokers and Mortgage Bankers Associations among others.

The so-called trigger leads, generated when a credit report is run on a potential borrower, are frequently sold on by credit bureaus unbeknownst to the applicant, who may then be overwhelmed by marketing calls.

Scott Olson, executive director of the Community Home Lenders of America, called trigger leads "incredibly annoying to consumers," while NAMB President Ernest Jones Jr expressed his gratitude for the proposed bill "that would deliver long-needed relief to consumers and the mortgage marketplace by ending this dangerous practice."

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Trade groups cheer bill that could upend trigger leads

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MBA sets its agenda for policy change

The Mortgage Bankers Association continues to take steps to push for legislative reform that could drive the industry forward.

With a history of recent wins under its belt, the trade group met in Washington this spring to discuss its legislative and policy priorities for the months ahead.

Among the key initiatives are legalizing remote online notarization and calling for more clarity in CFPB guidelines.

Read more:

MBA's biggest legislative priorities this year

Affordable housing groups seek to rectify flaw in Build America, Buy America Act

The noble intentions of the Build America, Buy America Act to stimulate the nation's economy by requiring infrastructure projects to use materials made in the US are being undermined by a gap in the legislation's wording that is penalizing public housing programs.

Housing advocates led by the National Housing Coalition have petitioned President Biden to ensure that the Office of Management and Budget's guidance does not inadvertently negatively impact single-family and multifamily properties.

"As currently written, the proposed guidance would increase the cost of building affordable housing," said David Dworkin, president and CEO of the NHC. "OMB must ensure that the important work of the Biden administration addressing the nation's housing affordability crisis is not undercut."

Read more:

Biden asked to exempt housing programs from Buy America rule

Bipartisan bill seeks to make mortgage insurance deduction permanent

Middle-class homeowners have been able to deduct mortgage insurance premiums on their tax returns since 2007, but since the deduction expired after 2021, lawmakers have put forward a bill pushing for it to be reinstated.

"As affordability remains a persistent barrier to homeownership across the country, particularly for first-time homebuyers, the need for this legislation is even more urgent today than when the deduction was first enacted," said Seth Appleton, President of U.S. Mortgage Insurers.

Congress will now consider a bipartisan bill to make the deduction permanent, which prior to its expiration, was claimed by 3.3 million borrowers on average per year at an average of $1,427.

Read more:

New bill calls for restoring mortgage insurance tax deduction