Housing Finance, Dodd-Frank and CFPB Updates

Industry Assistance Still Needed on Manufactured Housing Legislation

On September 10th, Congress returned for a brief work session before it recesses for what is expected to be a lengthy lame duck session after the elections in November. Both the House and Senate are scheduled for only eight legislative days this month, which leaves little time to complete work on “must-pass” legislative measures. Congress is expected to finish work on a stop-gap continuing funding resolution (CR), which will fund government programs through March 2013. In addition, Congress may take up a bill that reauthorizes, for one year, federal farm and rural assistance programs of the Department of Agriculture.

MHI continues its work building support for legislation (H.R. 3849 & S. 3484) introduced in the House and Senate that would amend portions of the Dodd-Frank and SAFE Acts and provide some modest relief to the manufactured housing industry.

Assistance is needed from manufactured housing industry stakeholders to contact their U.S. Representatives and Senators and urge them to co-sponsor these bills. For more information, click here.

MHI Files Comments on HOEPA Proposed Rules

On September 7th, MHI filed comments in response to the Consumer Financial Protection Bureau’s (CFPB) proposed rule and request for comments on Dodd-Frank’s revisions of high-cost mortgage guidelines. Dodd-Frank amends the Truth in Lending Act by expanding the types of mortgage loans that are subject to the protections of the Home Ownership and Equity Protection Act (HOEPA), by revising and expanding the triggers for coverage under HOEPA, and by imposing additional restrictions on HOEPA mortgage loans, including a pre-loan counseling requirement. Due to fixed costs (such as servicing and origination) and lack of secondary market access, low-balance manufactured home loans are particularly susceptible to being classified as high-cost. Because of the liabilities associated with a high-cost/HOEPA mortgage, lenders will simply not originate these loans—potentially further stifling the availability of credit in the manufactured housing market. Click here to view the proposed rule.

A number of other national housing and financial services organizations, such as the American Bankers Association, Credit Union National Association, Independent Community Bankers Association, Mortgage Bankers Association, National Association of Home Builders, and National Council of State Housing Agencies, submitted comments expressing concern with the Bureau’s proposed rule—in particular, the specific APR and points and fees thresholds by which a loan would be considered high cost or essentially a predatory loan. Comments submitted also highlighted the disproportionate impact on smaller-balance loans.

Click here to view MHI’s comments.

Banking Groups Urge CFPB to Abandon “All-In” APR Proposal

On September 10th, the American Bankers Association (ABA) and 15 other national banking, housing finance, and real estate organizations sent a letter to CFPB urging that it shelf its proposal to create a new higher “all-in” annual percentage rate calculation that would include additional fees and charges. While redefining the APR is not a requirement of the Dodd-Frank Act, the CFPB undertook the rewrite of what could potentially be included in the APR as part of its required consolidation of TILA and RESPA disclosures into a new single disclosure document. Provisions of Dodd-Frank would trigger increased compliance requirements based on the APR. To view the letter on the ABA web site, click here.

House Approves FHA Overhaul Legislation

On September 11th, with near unanimous approval, the House approved legislation (H.R. 4264) sponsored by Rep. Judy Biggert (R-IL) that would improve the fiscal solvency of Federal Housing Administration (FHA) programs by allowing increased mortgage insurance premium caps and instituting other changes. Specifically, the measure would:

• Give the Department of Housing and Urban Development (HUD) authority to charge up to a maximum premium of 2.05 percent annually on mortgage insurance;

• Establish a minimum annual premium for mortgage insurance of 0.55 percent;

• Bar unscrupulous lenders from participating in the program;

• Require repayment of losses to FHA by lenders who committed fraud;

• Improve the FHA’s internal financial controls, transparency, and disclosure requirements; and

• Require the GAO to conduct an independent safety and soundness review of the FHA.

Click here for more information.

CFPB Appoints Advisory Council

On September 12th, the CFPB announced the selection of members to serve on its Consumer Advisory Council. The Council is a requirement of the Dodd-Frank Act and is tasked with acting in an advisory capacity on issues of concern before the CFPB. MHI, like a number of housing industry organizations, submitted recommendations from within the industry to serve on the panel. Unfortunately, candidates recommended by MHI were not selected to serve on the panel. The Bureau also named representatives to serve on a Community Banks Advisory Council and a Credit Union Advisory Council. Click here for more information.