MBA's National Policy Conference 2010

Quality Mortgage Services made it a point to attend the Mortgage Bankers Association National Policy Conference 2010 because we felt it was important not only the industry but for America.  The conference had approximately 320 attendees.  I was personally impress with the turn out and the conference all only had standing room for those who came in late.  I was very much inspiredby Senator Bob Corker and what he had to say.  Senator Corker was the only senator that spoke that received several applause while speaking.

The next day was busy meeting with elected officials or their staff up on the Hill.  I posted the agenda of talking points below that was the primary focus of the national policy issues with the industry.

Summary of Current Legislative Issues

Financial Services Regulatory Modernization – Risk Retention

-      Residential lenders already have risk retention in the form of reps and warranties.

-      Commercial mortgage backed securities (CMBS) are business-to-business transactions that already have risk retention elements in their structures.

-      Congress should establish an exemption from risk retention for prudently underwritten mortgages with low risk characteristics.  Commercial mortgages should be exempt from further risk retention requirements.

Financial Services Regulatory Modernization – Generally

Eliminating the patchwork of state and federal regulation and creating a uniform national standard will provide more consistent regulation, better consumer protection and increase competition to lower costs.

-      Strengthened consumer protection responsibilities should be assigned to existing prudential regulatory bodies (not a separate agency) to ensure consumer protection is properly balanced with safety and soundness.

FHA/GINNIE MAE

-      Congress should appropriate the full $25 million annually for staffing and technology upgrades at FHA.

-      Congress should extend the current FHA maximum loan limit of $729,750 until the housing markets have stabilized.

-      Congress should support the FHA Reform Act of 2010 that will allow FHA to better manage its risk and stabilize the Mutual mortgage Insurance (MMI) Fund.

The current multifamily loan limit is too low to benefit many larger, urban markets where construction costs for elevator buildings are much higher.  Members of the Senate should pass the Multifamily Loan Limit Adjustment Act of 2009 (The House has already passed).

TAX

-      Restricting further the mortgage interest deduction (MID), mortgage insurance deduction and property tax deduction, as proposed by the President, would imperil fragile housing recovery.

-      Congress ought to, instead, offer the MID to those taxpayers who don’t itemize and should make the mortgage insurance deduction permanent.

-      Taxing carried interest as ordinary income (instead of capital gains) may result in reduced capital flow into the commercial real estate industry.

-      Congress should not pass legislation that would change the tax treatment of carried interest.

Secondary Market/GSES

-      The federal government must continue to play a role in the secondary mortgage market to ensure liquidity for residential, commercial and multifamily mortgages.

-      Congress should begin the reform process as soon as possible with input from MBA and all other stakeholders.