Mortgage Action Alliance Newsletter for November 12, 2007
| House Financial Services Committee Approves Mortgage Reform Bill
On Tuesday, November 6, the House Financial Services Committee approved H.R. 3915, the “Mortgage Reform and Anti-Predatory Lending Act of 2007,” by a vote of 45-19. If enacted, the bill would reform mortgage practices in several areas: establish a federal duty of care in offering mortgage products; require licensing of all mortgage originators; prohibit steering; create an ability to repay standard; and would attach limited liability to secondary market securitizers. On Monday, November 5, MBA sent a letter expressing concerns with the legislation. This bill is expected to go to the House floor next week for consideration and MBA will continue to work with Congress to improve this legislation. House Judiciary Committee Approves Bankruptcy Legislation On Wednesday, November 7, the House Judiciary Committee held a markup of H.R. 3609, the “Emergency Home Ownership and Mortgage Equity Protection Act of 2007,” that would give bankruptcy judges the authority to modify or render loans unsecured during a bankruptcy. As the Committee began debate on H.R. 3609, they decided to postpone further discussion on this issue. MBA sent a letter and worked closely with industry allies to express strong opposition to this legislation. We remain concerned that giving judges this authority will increase the costs of mortgages, reduce secondary market participants and ultimately decrease liquidity in the mortgage markets. MBA will continue to work with Congress on this issue. To contact your Representative on this important issue, please click here. MBA Participates in Senate Foreclosure Prevention Forum MBA Chairman-Elect David Kittle, CMB, represented MBA at a Democratic Steering and Outreach Committee roundtable discussion on foreclosure prevention. The discussion, chaired by Senate Majority Leader Harry Reid (D-NV) and Senator Debbie Stabenow (D-MI), with consumer groups, such as the National Consumer Law Center, Leadership Conference on Civil Rights, Center for Responsible Lending, and NeighborWorks, focused on ways to help financially distressed homeowners. The meeting was attended by Senators Richard Durbin (D-IL), Carl Levin (D-MI), Jack Reed (D-RI), Amy Klobuchar (D-MN), Robert Casey (D-PA) and Patty Murray (D-WA). MBA continues to work with Congress, consumer groups and interested parties to help struggling homeowners. House Passes Federal Disaster Insurance Legislation On Thursday, November 8, the House passed H.R. 3355, the “Homeowners Defense Act of 2007″ If enacted, H.R. 3355 would allow state-sponsored insurance funds to pool their catastrophic risk with one another and transfer this risk to the private markets through bonds and reinsurance contracts. This legislation also includes the National Homeowners Insurance Stabilization program that would provide low interest federal loans to states impacted by severe natural disasters. Earlier, on Tuesday, November 6, MBA sent a letter to House Majority Leader Steny Hoyer (D-MD) and Minority Leader John Boehner (R-OH) supporting H.R. 3355 and reiterating our belief that it will help address some of the insurance availability and affordability issues that property owners are facing. IRS Releases Proposed Regulations on REMIC Loan Modifications On Thursday, November 08, the Internal Revenue Service (IRS) released proposed regulations on Real Estate Mortgage Investment Conduit (REMIC) loan modifications. The proposed regulations would expand the list of permitted loan modifications to include certain modifications of commercial mortgages. The IRS believes that changes to current regulations are necessary to better accommodate evolving commercial mortgage industry practices, and would affect lenders, borrowers, servicers, and sponsors of securitizations of mortgages in REMICs. All comments on these proposals are due on February 7, 2008. MBA Releases Policy Paper on Appraisal Issues This week, MBA released a policy position paper entitled, “The Importance of Accurate Appraisals Performed by Independent Appraisers.” The paper outlines MBA positions with respect to maintaining appraiser independence and recommends that lenders, brokers, borrowers and appraisers are best served by ensuring that the existing principles of the Uniform Standards of Professional Appraisal Practice are obeyed, rather than creating new laws that would expose lenders to additional liability and expense. MBA remains committed to combating fraud in the mortgage process and encouraging accurate appraisals. IRS Releases 1040 Instructions for 2007 On Thursday, November 8, the Internal Revenue Service (IRS) released the Taxpayer 1040 Instructions for 2007. Some borrowers may be able to deduct qualified mortgage insurance premiums (MIPs) for this filing season. The mortgage insurance qualifies if provided by the Department of Veterans Affairs (VA), the Federal Housing Administration (FHA), the Rural Housing Service (RHS), and certain private mortgage insurance defined in the Homeowners Protection Act of 1998. If the mortgage insurance premiums are more than $109,000, they cannot be deducted. For more information visit the IRS website at www.irs.gov. SEC Releases New SAB 109 Reflecting MBA Recommendations On Monday, November 5, the Securities and Exchange Commission (SEC) released a new Staff Accounting Bulletin (SAB) 109, Written Loan Commitments Recorded at Fair Value Through Earnings, that revises and rescinds portions of SAB 105, Application of Accounting Principles to Loan Commitments. Specifically, the SAB revises the SEC views on incorporating expected net future cash flows related to loan servicing activities in the fair value measurement of a written loan commitment. The SAB retains the views on incorporating expected net future cash flows related to internally-developed intangible assets in the fair value measurement of a written loan commitment. This release reflects the recommendations made by MBA in a letter in opposition to SAB 105 sent in July to the SEC. MBA Responds to Ohio Governors Compact Proposal On Tuesday, November 6, MBA met with Ohio Governor Ted Strickland’s staff to discuss MBA concerns about the proposed Ohio Compact to Preserve Homeownership. MBA developed an alternative proposal for the Governor to consider, as a result of discussions with his staff and servicers who were asked to join the Compact. This alternative contains best practices of borrower assistance, loss mitigation, foreclosure prevention and homeownership preservation options that are being used nationwide by servicers to help troubled borrowers including those located in Ohio. Governor Strickland rejected MBA’s alternative at a Thursday, November 8 press conference, stating that “the HOPE NOW and the MBA/OMBA proposal were not enough.” The Governor went on to say that he doesn’t want to deal with trade associations but he wants to deal with “our licensees” though he failed to recognize that many of the entities asked to sign the compact were federal chartered entities and not Ohio licensees. |
| Please direct comments or questions to AFromm@mortgagebankers.org. |
