According to an MBA statement, legislative efforts this year will be centered on four broad goals: restoring confidence in the mortgage market; reforming the financial regulatory system; assisting borrowers; and promoting liquidity during the disruption of the commercial real estate market.
The centerpiece of the MBA's recommendations regarding federal support for the secondary market is to create a new type of mortgage-backed security (MBS). The new-form MBS would have two components: a security-level, federal government-guaranteed "wrap" (similar to that on a Ginnie Mae mortgage), and a loan-level guarantee provided by privately owned, government-chartered and -regulated mortgage credit guarantor entities.
On the same front, the MBA says it will support covered bonds, preserve current bankruptcy laws (i.e., prevent cramdowns) and work to enhance Federal Housing Administration (FHA) risk management policies. The group also calls for making the higher conforming loan limits permanent.
"This change will enable the [government-sponsored enterprises] and FHA to boost the availability of housing finance funding to the broadest spectrum of borrowers possible," the MBA says.
Regarding regulatory reforms, the MBA says it continues to advocate for the policies contained in the Mortgage Improvement and Regulation Act, which the MBA proposed last year. The MBA will continue opposing the creation of the Consumer Financial Protection Agency and supporting new risk-retention requirements.Â
Speaking directly on the reform bill passed by the House, the MBA says its advocacy efforts will "emphasize the more sensible, bipartisan securitization reform framework that was forged in H.R.1728."
Turning to borrowers, the MBA plans to encourage mortgage forbearances, as well as alter the Obama administration's Home Affordable Modification Program, whose "complexity and requirementsâ�¦continue to hinder its effectiveness." Broader use of forbearances will help unemployed borrowers facing foreclousre, the MBA says, adding that it will also push for interest-only modification options under HAMP.
For the commercial mortgage markets, the MBA will be advocating the extension of the Term Asset-Backed Loan Facility (TALF) program. Specifically, the MBA wants TALF to continue through the end of 2011, "at which point we anticipate the [commercial mortgage-backed securities] market will have receovered sufficiently to no longer warrant government support."
SOURCE: Mortgage Bankers Association