2004 in Review
Pfotenhauer, Kurt, Mortgage Banking
SINCE THE MORTGAGE BANKERS ASSOCIAtion (MBA) last gathered, at our 90th annual convention in San Diego in 2003, MBA's government affairs department has secured several significant legislative and regulatory victories and has laid substantial groundwork for continued success in 2005.
After our October convention, MBA closed out 2003 with three legislative successes tied up in a bundle in the American Dream Downpayment Act, signed by President George W. Bush on Dec. 16, 2003. MBA aggressively lobbied for the act, which provides $200 million in new grant funds for low-income, first-time homebuyers across the United States, increases the Federal Housing Administration (FHA) multifamily loan limit in high-cost areas and changes the initial interest rate adjustment on FHA's 5/1 hybrid adjustable-rate mortgage (ARM). President Bush also signed the Fair and Accurate Credit Transactions Act in December, providing for another of MBA's top priorities: permanent reauthorization of the Fair Credit Reporting Act.
Congress began the second year of its 109th Session in January 2004 with a lot on its plate. A presidential election alone disrupts the legislative agenda by reducing the number of days real business can get done and intensifying the political polarization. Add to this environment the pressures of a country at war, struggling to steady its economy, and you have legislators with a lot on their mind besides real estate finance. Nonetheless, it has been a productive year for MBA's agenda.
On March 22, the Department of Housing and Urban Development (HUD) withdrew its proposed Real Estate Settlement Procedures Act (RESPA) reform rule, which MBA had been urging HUD to reconsider for several months. Nearly a month later, on April 20, the Department of Labor finalized its proposed regulations that modernize the Fair Labor Standards Act and clarify, as urged by MBA, that loan officers are exempt from certain overtime provisions of the act. The new regulations took effect on Aug. 23, 2004.
On June 18, Treasury Secretary John Snow extended the "make-available" provisions of the Terrorism Risk Insurance Act (TRIA) through the end of 2005. This action was an important victory for MBA's commercial real estate advocacy agenda, because the "make-available" provisions have ensured the continued availability of terrorism insurance for commercial borrowers. MBA worked hard with its industry allies to deliver the message about the need for TRIA extension. MBA's efforts helped to generate two critical letters from members of Congress to Secretary Snow, which contributed greatly to making our case for the extension of the "make-available" provision.
MBA also had an important win in mid-May when it persuaded the Financial Accounting Standards Board (FASB) to consider permitting mortgage servicers to account for their mortgage servicing rights at fair value or under current generally accepted accounting principles. And at the end of June, on the day the program was due to expire, the president signed an MBA-supported bill reauthorizing the National Flood Insurance Program for four more years. …