MBA State Relations Committee Update Federal Highlights

MBA Supports Full HVAC Partial Claim Authority Bill Passage: Last Tuesday, the full House Veterans’ Affairs Committee (HVAC) advanced H.R. 1815, the VA Home Loan Program Reform Act, with bipartisan support. The bill creates permanent authority for the VA to offer partial claims, bringing the program into alignment with the Federal Housing Administration’s (FHA) and Fannie Mae and Freddie Mac’s loss mitigation servicing options. MBA’s Chief Lobbyist Bill Killmer sent a letter in advance of the markup in support of the adoption of a permanent partial claim option for the VA Home Loan program. A VA partial claim program is needed now more than ever to help veterans avoid foreclosure and maintain homeownership stability following the recent winddown of the Veterans Affairs Servicing Purchase Program (VASP) program. A full summary of the markup may be found here. The Committee adopted a bipartisan amendment from Chairman Mike Bost (R-IL) and Ranking Member Mark Takano (D-CA) to refine the partial claims framework and included the following improvements recommended by MBA: Clarifying that a partial claim shall not diminish the guaranty on an existing VA loan; Eliminating the proposed charging of interest on the partial claim balance; Ensuring alignment with FHA and GSE program structures that treat partial claims or loan deferrals as non-interest-bearing junior liens; Replacing the fixed sunset date with a rolling five-year period post-enactment, which increases predictability for servicers and allows more borrowers to benefit from the program; and, Increasing the maximum claim amount from 25% to 30% of the unpaid principal balance, providing parity with FHA and a broader safety net for distressed borrowers. A separate amendment proposing a foreclosure moratorium during program rollout was defeated on a party-line vote. MBA will continue to advocate for a permanent partial claim solution as H.R. 1815 heads to the House floor for further consideration – as well as the introduction and consideration of a companion Senate bill. 

CFPB Rescinds Dozens of Guidance Documents: Last Friday, the Consumer Financial Protection Bureau (CFPB or the Bureau) announced that it is withdrawing a total of 67 guidance documents, including 13 advisory opinions (AOs), eight policy statements, and seven interpretative rules. The CFPB said its leadership conducted a review and determined it will withdraw guidance materials to “afford staff an opportunity to review and consider (1) whether the guidance is statutorily prescribed, (2) whether the interpretation therein is consistent with the relevant statute or regulation, and (3) whether it imposes or decreases compliance burdens.” The Bureau also stated that it’s withdrawing guidance because of President Trump’s directives to deregulate and streamline bureaucracy, and therefore not having a pressing need for interpretive guidance to remain in effect. The Bureau noted that “while some guidance might be reissued in the future, the Bureau does not intend to prioritize the enforcement of such guidance against parties that do not conform to the guidance during the pendency of any withdrawal.” Following the CFPB’s April 11 memorandum announcing a comprehensive review and rescission process (which MBA supported), MBA shared a compilation of existing policy statements, interpretative rules, advisory opinions, and other guidance materials that should be retained with respect to the mortgage industry. It appears that all of those items were retained. A list of all guidance documents withdrawn can be found starting on page four, including several pertinent to real estate finance. MBA will conduct a more exhaustive review of the announcement and will share its analysis.

Republicans Inch Closer to Reconciliation/Tax Policy Debate: Lawmakers on the House Energy and Commerce (E&C), Ways and Means, and Agriculture Committees meet today for their highly-anticipated budget reconciliation markups in a sign that GOP leaders may be making headway on some of the last remaining disagreements delaying work on a major congressional tax, national security, energy, and border security package. Among the issues that still need to be resolved is the expiring $10,000 cap on the deduction for state and local taxes (SALT). Republicans in New York, California, and New Jersey have been adamant about raising the $10,000 threshold as the GOP looks to renew the expiring Tax Cuts and Jobs Act (TCJA) before year's end. Meanwhile, discussions regarding reduced Medicaid spending (and other public benefit programs) are expected to continue through the weekend ahead of the E&C and Agriculture markups next week. The Ways and Means proposal will mark the first public reveal of the House GOP’s blueprint for extending major portions of the TCJA prior to year’s end – and which “revenue raisers” will be included in the package to (at least partially) cover some of the cost of extending key provisions.  MBA and other real estate coalition partners have been fighting to preserve current tax code elements that help maintain an appetite for investment in real estate – both commercial/multifamily and residential. President Trump (and his key economic advisors) have been in close contact with GOP leaders the last few days.  Once the remaining House committee actions conclude, leaders will pursue their goal to debate – and pass – a combined package of spending and tax provisions prior to Memorial Day. The Senate will follow suit and craft its own version of a reconciliation package – should House leaders muster the majority needed to move a bill forward. MBA staff (with guidance from the association’s Board-appointed Tax Task Force) will continue to engage with lawmakers and their key staff to advocate for our industry’s tax priorities throughout the remainder of the debate.

White House FY 2026 “Skinny Budget” Released: Friday, May 2, the Trump administration released an outline of its Fiscal Year 2026 (FY26) budget proposal. Each year, the President’s budget request, otherwise known as its “wish list,” provides a blueprint for the Administration’s priorities as Congress traditionally kicks off its appropriations process for the new fiscal year. As expected, the budget highlights several spending reductions and program terminations, including: Reducing non-defense discretionary spending by $163 billion (23 percent) from the 2025 enacted level, savings come from eliminating DEI and climate initiatives, and “moving programs that are better suited for States and localities to provide," and defense spending would increase by 13 percent, and appropriations for DHS would increase by nearly 65 percent to focus on border security matters. Of note, the Administration is requesting a significant, $43.5-billion cut (43.6 percent) in discretionary budget authority for the Department of Housing and Urban Development (HUD), including moving housing vouchers to a state-budget based formula, requiring a two-year limit on rental assistance, and zeroing out the CDBG and HOME programs. The Budget Proposal would also cut $721 million from Rural Development, including eliminating rural housing vouchers. The particularly high-level budget proposal contained no references to homeownership or information on FHA, Veterans Affairs (VA), and Ginnie Mae commitment authorities or administrative initiatives. MBA is engaging with the Administration, Congress, and leaders at the federal housing agencies on FY 2026 appropriations and has been encouraged by their receptiveness and commitment to maintaining and/or promoting new effective solutions that bolster housing supply, improve affordability for both renters and borrowers, increase access to sustainable homeownership, and lead to positive outcomes for MBA members and their businesses. Additional details, as well as key supplemental materials – such as the “Analytical Perspectives” report that often contains discussions of longer-term policy priorities – should be released in the weeks ahead.  MBA will report on additional budget details as they become available.  

Senate Banking Committee Advances HUD Nominees Hughes, Woll; Fed Vice Chair Nominee Bowman: Last Tuesday, the Senate Banking Committee advanced the nominations of Andrew Hughes to be HUD Deputy Secretary and David Woll to be HUD General Counsel. The Committee also advanced the nomination of Michelle Bowman to be Federal Reserve Vice Chair. All three nominees were reported on party-line votes (13-11). Chairman Tim Scott (R-SC) noted Hughes’ “strong track record of operational leadership that will be instrumental in strengthening HUD’s efficiency and effectiveness in serving American families.” Chairman Scott also praised Woll’s “decades of legal and policy experience in housing” and said Bowman will bring “accountability and transparency to the Fed.” Ranking Member Elizabeth Warren (D-MA) said the Trump administration is “in desperate need of serious officials who will serve the American people . . . . That is why I am so concerned about the nominees we are voting on today.” She noted that Bowman “signaled more Wall Street deregulation is on the way” . . . while saying that Hughes and Woll “seem unwilling to stand up against cuts that will undermine fair housing and make it harder to tackle skyrocketing housing costs.” Committee Chairman Scott will work with Senate Majority Leader John Thune (R-SD) to schedule confirmation votes for all three nominees by the full Senate in the foreseeable future.

Federal Reserve Keeps Rates Unchanged: The Federal Reserve held the federal funds rate at a target range of 4.25%-4.50% at its latest meeting last Wednesday. The Committee’s statement said that “it will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals.” The statement also said that the Committee's assessments “will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.” In a press statement, MBA’s SVP and Chief Economist Mike Fratantoni said, “The FOMC held the federal funds rate target steady at its May meeting, dismissing the negative first-quarter GDP reading as solely due to volatility in international trade flows but noting that risks to its inflation and employment targets have increased given the heightened policy uncertainties.” Fratantoni added, “MBA forecasts that the risks to growth and the job market will wind up being the bigger concern this year, which will lead the Fed to resume cutting short-term rates in the second half of the year.”

MBA-Supported Trigger Leads Bill Noticed in House Subcommittee Hearing: On Tuesday, April 29, the House Financial Services Committee’s (HFSC) Subcommittee on Financial Institutions (FI) held a hearing titled, “Regulatory Overreach: The Price Tag on American Prosperity,” where MBA's supported legislation (H.R. 2808, the Homebuyers Privacy Protection Act of 2025) to curb the abusive use of trigger leads was “noticed” and discussed by a witness and several members of Congress in attendance. Find the full summary here; watch the hearing here. The legislation has again been offered (and re-crafted) by Reps. John Rose (R-TN) and Ritchie Torres (D-NY) and Senators Bill Hagerty (R-TN) and Jack Reed (D-RI) – the same bipartisan/bicameral combination of champions who introduced companion legislation during the last Congress. A substantially similar bill passed the full Senate last year by Unanimous Consent. Following a process known as “regular order,” H.R. 2808 was “noticed” (identified as one of several bills pertinent to the hearing’s subject matter). Several HFSC members from both sides of the political aisle, namely FI Subcommittee Ranking Member Bill Foster (D-IL), lead bill sponsor Representative John Rose (R-TN), Representative William Timmons (R-SC), and Representative Joyce Beatty (D-OH). The Homebuyers Privacy Protection Act is expected to be considered during an HFSC markup session in late May. MBA will continue to push for the bill’s advancement – as reintroduced in the 119th Congress – in both the House and Senate as soon as possible. Join the Mortgage Action Alliance (MAA) call to action and tell your elected officials to co-sponsor – and push for swift action on – H.R. 2808 and S. 1467.

CFPB Files Joint Stipulation to Dismiss Appeal of Update to Examination Manual: On Wednesday, April 30, the CFPB filed a joint stipulation to dismiss its appeal with several banking trade groups in a case over whether the CFPB could reinstate a 2022 policy that expanded the scope of the agency's anti-discrimination oversight in its Examination Manual. The motion asked the Fifth Circuit Court of Appeals to dismiss the appeal with prejudice, with both sides covering their own attorney fees and legal costs. This announcement is part of a wider trend of the CFPB reversing its position on Biden-era enforcement and regulatory actions. Previously, the CFPB announced that it is seeking to vacate and set aside a $105,000 judgment against Townstone Financial, a Chicago mortgage broker accused of redlining. MBA will continue to monitor news about the CFPB’s existing enforcement actions and keep members informed about any changes.

VA Delays PPM System Deadline for Lender Validations and Renewals: In late April, the Department of Veterans Affairs (VA) agreed to a request by MBA to delay the April 30, 2025, deadline for lenders and third-party originators to complete their annual validation or renewal through the Program Participant Management (PPM) system. The delay applies to supervised and non-supervised lenders without automatic authority (validation) as well as non-supervised lenders with automatic authority (renewal). Due to ongoing technical issues experienced by some users, the VA has clarified that lenders and agents will not be deactivated if they fall past due. Furthermore, all renewal due dates previously set before September 1, 2025, will be reset to that date within the PPM system. Originally announced in September 2024, the new PPM system is designed as a self-service platform that allows lenders to manage their profile information, fulfill annual renewal requirements, submit requests such as applications for automatic authority, underwriter nominations, and agent recognition requests, and pay associated fees. MBA will continue to engage with the VA to monitor the situation and provide further updates, as released.

Ginnie Mae Makes Temporary Changes to Buydown and High Balance Loan Eligibility for Multiple Issuer Pools: On Thursday, May 1, Ginnie Mae released an All Participants Memo (APM 25-02) outlining temporary changes to buydown and high balance loan requirements for multiple issuer pools (MIP). Effective May 19, 2025, to ensure buydown loans do not make up greater than 10% of the aggregate original principal balance of the MIP, Ginnie Mae is temporarily revising requirements to apply the 10% limit at the loan package level. In addition, high balance loans may not exceed 10% of the aggregate original principal balance of the loan package, and loans that are both buydowns and high balance will be included in the calculation for both limits. Ginnie Mae is also correcting the eligibility requirements for buydown mortgage pools (C BD and X BD) to reflect that high balance loans are eligible collateral. Ginnie Mae states that this is in response to recent market conditions, which have led to an increase in buydown loans. MBA has raised concerns that applying these limits on the individual issuer level (in multi-issuer pools) with less than three weeks of lead time could cause issues for some members. The effective date does not allow for adequate pipeline protection and while this is a temporary change, it may cause liquidity constraints for smaller issuers. Ginnie Mae expects this policy to be in effect for 6-9 months and also plans to release additional guidance on buydown limits for non-standard buydowns. MBA continues to evaluate the effects of these changes and will remain engaged with Ginnie Mae to minimize any negative impacts to the industry.