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TMC The Mortgage Collaborative

(WASHINGTON, D.C.) — NEWS: The Mortgage Collaborative (TMC) hosted its second Advocacy Committee trip to Washington, DC June 4-6, 2024, with 13 of its IMB and depository Lender Members meeting with key federal agencies, including the Consumer Financial Protection Bureau (CFPB), the U.S. Department of Housing and Urban Development (HUD), Ginnie Mae, Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac to discuss the impact of recent and upcoming policy changes on small to mid-size lenders.

Tom Sullivan, SVP, First Commonwealth Bank, speaking on the TMC webcast “Last Week in Mortgage Today,” shared insights from his experience in DC: “Being a part of both trips has shown me that repeating similar efforts yields better results. My favorite part was hearing how different regions impact each other. The sincere conversations we had with each agency will influence the industry in a phenomenal way.”

At TMC’s meeting with the Consumer Financial Protection Bureau (CFPB), TMC Lender Members asked about “junk fees” in response to the recent CFPB shift in focus to monitoring third-party transaction fees including credit bureau fees and appraisals and increases in soft pulls. Loan officer compensation was also discussed with attending lenders requesting greater flexibility in compensation regulations to improve margins on affordable lending products and market competition. The CFPB signaled it is open to solutions, and TMC will draft a follow-up response with member input. TMC also shared concerns about rising credit verification costs and their impact on consumers, with the CFPB committing to further investigation.

At TMC’s meeting with HUD, Lender Members talked about Federal Housing Administration (FHA) life of loan mortgage insurance premium (MIP), in follow-up to a recent TMC advocacy letter. Lenders expressed concerns over high APRs and the need for refinancing to remove MIP. HUD reiterated its stance on maintaining current policies but expressed its aims to reduce FHA loan costs. Lenders asked HUD if they were open to expanding FHA guidelines for 100% financing. HUD said they were open to exploring new programs, albeit requiring congressional approval.

TMC discussed repurchases with the FHFA, which promised to investigate the issue. FHFA announced they are creating an advocacy advisory committee in response to advocacy letters and visits like TMC’s. FHFA gave feedback on the Bi-merge credit model ensuring lenders do not have to process loans differently for various agencies. FHFA reiterated that the move to bi-merge credit is optional. Homeowners/Flood Insurance costs were also discussed with FHFA pointing to its ongoing efforts to address affordability and replacement costs, particularly in high-cost areas.

During its meeting with Ginnie Mae, TMC Lender Members discussed the impact of rising insurance costs and consumer credit card debt on delinquencies. Ginnie Mae is monitoring the situation and collaborating with other agencies for solutions.

In TMC’s respective meetings with Freddie Mac and Fannie Mae, those agencies committed to investigating the increase in appraisal-related repurchase requests and providing tools for appraisal certainty. Additionally, the discussions covered the rollout of the new credit model, with Freddie Mac confirming their preparedness for the transition to bi-merge credit and introduced the upcoming LPA Choice, which will offer clearer feedback on borrower assessments. They indicated that no major changes are anticipated in how their Automated Underwriting System (AUS) will assess credit during this transition. The TMC advocacy contingent also asked about second home pricing, to which Fannie Mae indicated, no new changes are expected for second home pricing variances.

About The Mortgage Collaborative:

The Mortgage Collaborative (TMC) is a membership-driven* organization dedicated to empowering mortgage lenders across the United States through networking, education, and advocacy. Our goal is to support the success of our members by fostering an environment of collaboration and innovation. For more information, visit https://www.mortgagecollaborative.com/

*TMC Lender Members, we want to hear from you! If you have seen an increase in repurchase requests, please send your data to Melissa Langdale so we can forward all feedback to our agency contacts. Your input is highly valued.

Related link: https://www.mortgagecollaborative.com

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