HousingWireHousingWire
The Mortgage Bankers Association (MBA) highlighted the deregulatory efforts of the Trump administration at its Secondary and Capital Markets Conference in New York this week, including work at the CFPB. But on the topic of releasing the government-sponsored enterprises (GSEs) from conservatorship, MBA president and CEO Bob Broeksmit said he isn’t expecting action anytime soon.
“I don’t have to tell you that releasing Fannie and Freddie has been the elephant in the room for 15 years. It will continue to be that way for the immediate future because, in both private meetings and public comments, the administration has said that while it’s on their radar, it’s not a priority,” said Broeksmit on Monday.
Meanwhile, the current administration has worked to return federal agencies and enterprises to their statutory mandates, as established by federal law, Broeksmit said. This has happened amid mass workforce reduction efforts.
“Many MBA members have asked me why the GSEs and regulators are letting go of so many staff. I think it’s fair to say that not all the cuts have been necessary. But as we’re hearing from those inside the administration, smaller teams will help keep agencies focused on doing their statutorily-mandated jobs — and giving you the space to do your job. Whether it’s despite these cuts or because of them, the GSEs are moving in the right direction.”
The MBA has also been working closely with the Consumer Financial Protection Bureau (CFPB), a frequent target of the group’s criticism during Rohit Chopra’s leadership. Mark Calabria, former director of the Federal Housing Finance Agency (FHFA), is overseeing operations until a new director is confirmed by the Senate.
“The CFPB is listening, which is clear in its recent decision to repeal the duplicative and unnecessary nonbank registry,” Broeksmit said. “When the Bureau recently reversed most of the guidance it had issued during previous administrations, it retained the ones we had identified as being helpful in your efforts to comply with the rules.”
Optimistic about the new administration, Broeksmit said that “while many pundits are saying that the sky is falling, we’re actually seeing some critical reforms that will lift the industry. According to him, “this White House understands housing and real estate finance — and their policies reflect it.” That’s why the MBA has fewer worries of “overregulation and policy proposals that hurt the industry and ultimately increase borrower costs.”
Regarding deregulation in housing, Broeksmit said the U.S. Department of Housing and Urban Development (HUD) has waived the implementation of its floodplain rule and delayed by at least six months the adoption of new energy standards for homes built with FHA and USDA financing. He said the MBA believes both initiatives would raise costs amid affordability challenges and is still pushing for their full repeal.
On the consumer protection front, the FHFA rescinded a bulletin that directed Fannie and Freddie to conduct Unfair or Deceptive Acts or Practices (UDAP) compliance reviews on their customers. According to the MBA, the GSEs do not have the authority to enforce those laws —the Federal Trade Commission does.
Banks are also in focus on the regulatory front. The MBA’s main goal is to make it easier and less costly for banks to retain loans on their balance sheets and to securitize mortgages outside the Fannie and Freddie lending parameters, including easing capital standards.
“In the last administration, we helped prevent the imposition of Basel III, and this administration is receptive to ending other punitive treatment of banks,” Broeksmit said. ”We need to restore a flourishing private market to complement the government-supported market.”
