HPC supports the creation of a new private sector mortgage finance system that sustains the 30-year fixed rate mortgage while requiring private capital to back mortgage risk to protect the American taxpayer. This new system should include the responsible wind-down of the government sponsored enterprises Fannie Mae and Freddie Mac and the establishment of an independent housing finance regulator who would oversee the private guarantors of MBS securities. Multiple layers of private capital would stand in front of a government backstop.
- GSE Reform Subgroups: Federal Housing Finance Agency (FHFA) and GSE Current Issues – HPC continues to engage FHFA and the GSEs on key current and transitional secondary mortgage market issues including: GSE representations and warranties standards, GSE data disclosure, a new securitization platform and a single security.
HPC continues to advocate its members’ views on the development and implementation of mortgage origination and servicing regulations required by the Dodd-Frank Act, including Qualified Mortgage (QM), Qualified Residential Mortgage (QRM) and Mortgage Servicing.
Mortgage Regulation Subgroups:
- QM – In January 2013 the CFPB issued a final rule requiring a creditor to make a reasonable, good faith determination that the consumer has a reasonable ability to repay the loan (ATR test). This rule is effective January 10, 2014. HPC supports the Ability to Repay standard, but has urged CFPB to clarify aspects of the rule to ensure lenders have clear standards to evaluate borrowers.
- QRM – The rule has been reproposed by the joint agencies to use the QM underwriting standards for loans that would be exempt from QRM requirements.. For loans that don’t meet the QRM definition, a lender would have to retain some of the risk that it will default when selling the mortgage to investors.
- TILA-RESPA – The CFPB has proposed integrated mortgage disclosure forms under TIILA and RESPA. The forms will be finalized and accompanied by regulations in late 2013 or early 2014.
- Mortgage Servicing – The CFPB issued two final rules on mortgage servicing, including provisions under TILA on monthly mortgage statements and notices for ARM adjustments, and under RESPA. Those rules cover error resolution and information requests, force-placed insurance, requirement for a single point of contact for certain borrowers and loss mitigation procedures, including a prohibition of dual tracking of foreclosures and loss mitigation. The rules are effective January 2014.
HPC supports reforms to the Federal Housing Administration’s single family mortgage program to ensure its solvency and return it to a more appropriate role and size in the mortgage market with clear, objective standards for FHA lenders. FHA played an important role in helping to stabilize the housing market during the recent crisis, but reforms are needed to strengthen its Mortgage Insurance Fund (MMI) and focus it on first-time and under-served homebuyers.
HPC is a founder and member of the voluntary industry non-profit HOPE NOW Alliance to reduce foreclosures through outreach to borrowers in financial distress, including members of the military. HOPE NOW conducts outreach events for homeowners around the country. Members of the alliance report data on loan modifications and other foreclosure alternatives. HPC actively assists HOPE NOW through staff, administrative and policy support.
Since 2011, the FSR and HPC Servicemember Affairs Working Group has helped to strengthen industry compliance with the Servicemembers Civil Relief Act (SCRA). FSR and HPC members are addressing the unique financial services challenges facing military customers and improving financial education and readiness.
Military Servicemember Affairs Subgroups:
- Project Patriotism: In June 2013, the HPC and the HOPE NOW Alliance released our Project Patriotism Homes for Veterans white paper which captures the efforts by mortgage lenders to transfer refurbished, distressed properties to non-profit partners that help to place veterans, wounded warriors and military families in these homes. Efforts continue to expand these initiatives to a larger national scale in conjunction with military non-profit organizations, government partners and additional key industry stakeholders.