VERMONT MORTGAGE BANKERS ASSOCIATION

Volume XII | Issue 10 | March 7, 2018

Yesterday, the Senate voted 67-32 to invoke cloture and begin debate on a broad bipartisan regulatory relief package. The bill, The Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) contains several MBA-supported priorities including transitional authority to originate (SAFE Act amendments), consumer protections tied to PACE loans, as well as TRID and HMDA fixes. Contents of a potential “Manager’s Amendment” and timing of the final Senate vote on passage are still developing.  

Meanwhile, Gary Cohn resigned as White House National Economic Council director, and the 2018 midterm elections officially kicked off in Texas. 

MBA Advocacy Spotlight

MBA’s National Advocacy Conference Early Bird Deadline Approaching
Register by Monday, March 12 to save $100 on MBA's National Advocacy Conference (NAC). In addition to saving on registration, you need to be registered for the conference to book a hotel room at the discounted conference rate. MAA Chairman Gene M. Lugat filmed a video encouraging MAA members to attend this year's NAC and speak up on Capitol Hill.

For more information about the National Advocacy Conference, and to register, please visit mba.org/NAC18 or contact Alden Knowlton at (202) 557-2816. 

Procedural Vote on Regulatory Relief Bill Passes  
As mentioned earlier, the Senate voted yesterday to begin debate on S. 2155, a broad bipartisan regulatory relief package. Thank you to the industry advocates across the country who contacted 94 Senators to urge them to vote to begin debate on – and then vote for final passage of – S. 2155. Your advocacy makes a difference!

MAA members will receive an update when additional information regarding a potential “Manager’s Amendment” and timing of the final Senate vote is available. Parallel action on the bill in the House remains a yet-to-be-defined process, but Chief GOP Deputy Whip (and House Financial Services Committee Vice-Chairman) Patrick McHenry (R-NC) stated last week the House could ratify an amended Senate bill by the August recess.

2017 Year-End MORPAC Report Released
Yesterday, MORPAC released its 2017 year-end report. This report covers fundraising metrics, outreach initiatives and recognition, including all of the individuals and companies who have been a part of our 2017-2018 campaign. In addition, you’ll find a summary of the legislative and political priorities and how MBA advocacy is staying at the forefront.

Key MBA Action

MBA Joins Letter Urging Senate to Confirm Montgomery as FHA Commissioner
MBA joined a letter signed by a broad cross-section of housing and community development groups calling on the Senate to confirm Brian D. Montgomery as the Assistant Secretary for Housing and Federal Housing Administration (FHA) Commissioner. On several occasions MBA has voiced its public support for Mr. Montgomery to serve as FHA Commissioner, a job he held from 2005 to 2009. The role of FHA Commissioner is a critical one for the housing industry, and we believe that having Mr. Montgomery in place will help move key housing policy efforts forward.

New Federal Reserve Bank Chairman Appears in House and Senate
Federal Reserve Chairman Jerome Powell testified before both the House and Senate last week. His testimony covered a wide range of topics including wage growth, unemployment, capital levels, SIFIs, the Volcker Rule and leverage capital ratios.

Notably, during the Q&A in the House, a number of Democratic members referenced a HMDA study by The Center for Investigative Reporting, which highlighted potential discriminatory practices within home lending. MBA President and CEO David Stevens drafted a blog post as well as issued a statement, rebuking the study for using flawed data.

NY Fed Study Finds FinTech Mortgages More Efficient, Less Risky
In February, the Federal Reserve Bank of New York (“NY Fed”) released its paper, “The Role of Technology in Mortgage Lending.” The study was conducted to analyze the growth of FinTech lenders in the US residential mortgage industry. Studying the effect of FinTech lending, the NY Fed’s hypothesized that FinTech lending models represented a technological innovation that reduced frictions in mortgage lending, e.g., lengthy loan processing, capacity constraints, inefficient refinancing, and limited access to finance for some borrowers.

The study finds that recent innovations are improving the efficiency of the US mortgage market stating, “We find that FinTech lenders process mortgages more quickly without increasing loan risk.” Specifically, the study relays that, “FinTech lenders process loans 7.9 days faster than non-FinTech lenders.” In addition to greater efficiency in processing, the NY Fed found that default rates on FinTech mortgages were approximately 25% lower than those for traditional lenders, and that there was no significant difference in interest rates. The study ultimately rejects the idea that FinTech lenders have “lax screening” standards, suggesting that these innovative technologies actually help to attract and screen for less risky borrowers.

CSBS will Delay the Release of NMLS 2.0 to Q2 2019
The Conference of State Bank Supervisors (CSBS) recently announced they will delay the launch of NMLS 2.0 to the second quarter of 2019. The update to the National Multistate Licensing System (NMLS) was originally slated to launch in September 2018.

Tim Doyle, Vice President of Policy stated in the release, “As SRR staff has monitored the progress of NMLS 2.0 development, we determined there were too many risks to being able to confidently deliver a high-quality product by September 2018. As a result, the SRR Board of Managers decided on a new target for the launch of NMLS 2.0, to be sometime in the second quarter of 2019.”

The NMLS 2.0 delay will likely push back the scheduled update to the Mortgage Call Report (MCR). CSBS’ proposed changes to the MCR are currently out for public comment. The official request for public comment can be found on the NMLS Resource Center.

MBA Submits Comments on HUD’s Regulatory Review of Manufactured Housing Rules
On Monday, February 26, 2018 MBA submitted a comment letter to the U.S. Department of Housing and Urban Development (HUD) regarding its review of existing and planned manufactured housing rules. MBA encouraged HUD to focus on safely and appropriately expanding consumer eligibility, eliminating unnecessary industry burdens, and lowering costs for both lenders and consumers. MBA offered the following recommendations to further improve HUD’s manufactured housing requirements, with the objective of making these requirements more effective and sustainable:

• MBA recommends that HUD eliminate the one-time move restriction and replace it with a requirement for an inspection following a move.
• MBA recommends that the Tiered Pricing structure be eliminated and that lenders be allowed greater flexibility with respect to the Mortgage Charge Rate.
• MBA recommends that HUD streamline the process by which the engineer’s certification is obtained, thereby reducing costs for lenders and consumers.
• MBA recommends that HUD require all manufactured home title evidence to be completed at closing and make that process a condition of closing so that it is completed properly at that time.
• MBA recommends that flood elevation requirements on existing manufactured homes be harmonized with those of other types of existing construction.

MBA-Led Collaborative Releases Report on Opportunities to Create Homeownership through Housing Counseling
As a leader of the Homeownership Collaborative, MBA last week released the group’s first report, Creating Channels of Opportunity in Diverse & Emerging Homebuying Markets. The paper details steps that can be taken to increase the utilization of homeownership education and housing counseling services available nationwide. Announced in 2016, the Collaborative is a coalition of real estate trade associations and nonprofit housing counseling providers, including MBA, the National Housing Resource Center and the National Association of Realtors. The report is the result of lenders, real estate agents, and housing counselors working together, and with state mortgage banking associations, in four cities to increase homeownership opportunities in their markets: Cleveland, OH; San Antonio, TX; Richmond, CA; and, Brockton, MA.

MBA Education’s Webinar on Social Media & Digital Advertising Regulations
Join the MBA Education and the Compliance Essentials program on March 13^th for a conversation on the increasing use and application of social media and digital advertising platforms with regard to the mortgage finance industry and associated risks arising within that context. This webinar is complimentary to those that have purchased the Compliance Essentials Social Media & Digital Advertising Resource Guide which can be found here. To register for the webinar, please click here. 

2018 Elections Update

Senate

Florida:  Quinnipiac University surveyed the Florida electorate (2/23-26; 1,156 FL registered voters) and found consistent results with other firms who have recently asked ballot test questions for the impending US Senate contest between Sen. Bill Nelson (D) and Gov. Rick Scott (R).  According to the results, Sen. Nelson claims a 46-42% advantage.  Gov. Scott has not announced a campaign for the Senate, but an unconnected political action committee has been running extensive media spots in an effort to promote the Governor’s agenda and accomplishments in office.  He is expected to soon become an official candidate.
 
Mississippi: Both Mississippi Senate seats will be in play in November after Sen. Thad Cochran (R) announced his retirement last week. In the wake of Sen. Cochran's resignation, Mississippi Gov. Phil Bryant (R) will appoint a temporary senator to fill Cochran’s vacant seat, and a special election will be held in November.

Before Sen. Cochran's announcement, State Sen. Chris McDaniel (R-Ellisville) announced his primary challenge to Sen. Roger Wicker (R).  Mr. McDaniel, who came close to upending Sen. Cochran in the 2014 nomination process, faces an uphill battle as he enters the race with just over three months remaining.  If time is not his biggest problem, the resource imbalance may well be the greater obstacle.  Sen. Wicker already had over $4.12 million in the bank at the end of 2017, while Mr. McDaniel is just getting going and the likelihood of outside conservative Super PACs lending strong support to the challenger’s effort is much less now that former presidential advisor Steve Bannon is no longer much of an influential factor in active campaign circles.  The primary election is scheduled for June 5^th.
 
North Dakota:  A new Tarrance Group poll (2/18-20; 500 ND likely registered voters) finds at-large US Rep. Kevin Cramer (R-Bismarck) taking a lead over Sen. Heidi Heitkamp (D) by a 49-44% margin, a spread large enough to be just beyond the polling margin of error.  Mr. Cramer, after originally saying he would not run for the Senate and instead seek re-election, last month changed his mind and entered the race.  The Tarrance poll is the first publicly released data that shows Sen. Heitkamp in a state of vulnerability to this degree.  We can expect this race to now be rated as a pure toss-up campaign.
 
Tennessee:  Sen. Bob Corker (R) reiterated his retirement decision last week, and will leave office when his current terms ends.  With former US Rep. Stephen Fincher (R-Crockett County) withdrawing earlier, US Rep. Marsha Blackburn (R-Brentwood) appeared unopposed for the Republican nomination until businessman Darrell Lynn came forward pledging to spend $5 million to become the party standard bearer.  The eventual nominee faces former two-term Gov. Phil Bredesen (D) in the general election to replace the retiring Sen. Corker.

Texas: As expected, both Sen. Ted Cruz (R) and Rep. Beto O’Rourke (D-El Paso) easily captured their party nominations for the US Senate campaign. Sen. Cruz recorded an 85.3% vote total among Republicans, while 61.8% of Democrats chose Rep. O’Rourke. Since both men exceeded the 50% plus one vote majority figure, each advances to the general election.
 
House
 
GA-6:  Jon Ossoff (D), who made history in being the candidate for the country’s most expensive-ever congressional race (over $30 million through his campaign alone, not counting several more million in outside organization expenditures on his behalf) only to lose the June special election to current Rep. Karen Handel (R-Roswell), announced last Friday that he will not become a candidate in the regular election later this year.  With the candidate filing deadline approaching on March 9^th, it appears that former Atlanta TV anchorman Bobby Kaple, businessman Kevin Abel, and attorney Sam Levine will comprise the Democratic field. Considering the regular election voting history in this district, Ms. Handel begins her first re-election campaign as the favorite.
 
MN-1:  Republican Jim Hagedorn (R) lost the second-closest congressional race of 2016, falling to Rep. Tim Walz (D-Mankato), 50.3 – 49.6%.  He returns for his third consecutive congressional run, but this time in an open seat campaign.  Harper Polling, surveying for the Hagedorn Campaign (2/19-20; 412 MN-1 likely Republican primary voters), finds the previous Republican nominee leading state Sen. Carla Nelson (R-Rochester), 54-21%, in a hypothetical GOP primary vote.  Though Minnesota candidates typically abide by the state party endorsement convention results, Sen. Nelson recently said that she would take the race to an August 14^th primary should the convention delegates side with Mr. Hagedorn.  The seat is open because Rep. Walz is running for Governor.
 
NH-1:  Levi Sanders, the 48-year old son of Vermont Senator and former presidential candidate Bernie Sanders (I-VT), declared his candidacy for the eastern New Hampshire congressional seat from which Rep. Carol Shea-Porter (D-Rochester) is retiring after four non-consecutive terms.

Mr. Sanders, however, lives in the state’s 2^nd District, which could become an issue in parochial New Hampshire.  Seven Democrats are already in the race, including Executive Councilor Chris Pappas, former NH state AFL-CIO president and state Rep. Mark MacKenzie (D-Bedford), and Rochester City Attorney Terence O’Rourke.   The general election is likely to become yet another toss-up campaign in a district that has unseated more incumbents than any CD in the nation.
 
NM-2:  The open 2^nd District (Rep. Steve Pearce (R-Hobbs) running for Governor) now has an official party endorsed candidate.  Republicans met in convention and awarded the New Mexico Republican Party primary endorsement to state Rep. Yvette Herrell (R-Alamogordo).  The move was a bit of a surprise because the convention delegates eschewed their former state chairman, Marty Newman.  Rep. Herrell received a whopping 69% of the GOP delegates’ support.  Candidate filing closed on February 6^th, which yielded only two Democrats declaring themselves, surprising for an open seat.  College professor Madeline Hildebrandt and attorney Xochitl Torres-Small will square off for the party nomination.  This race begins as a Lean R campaign.
 
PA-8:  Venture capitalist John Chrin (R) announced that he will continue to challenge Rep. Matt Cartwright (D-Moosic/Scranton) in the upcoming election.  Since the new Pennsylvania redistricting plan radically changed Rep. Cartwright’s 17^th District, there had been some question as to whether Mr. Chrin, who has over $914,000 in his campaign account thanks largely to his $700,000 personal loan, would remain in the new 8^th District or battle for the open 7^th CD.  The latter seat houses the Lehigh Valley area where Mr. Chrin was raised, but the new 8^th’s Republican numbers are stronger.  The new PA-8 is the only current Democratic district that now becomes competitive under the new plan. 

TX-2: In Rep. Ted Poe’s (R-Atascocita) open district, a surprise occurred in the GOP primary. Though spending over $5 million of her own money, GOP activist Kathaleen Wall failed to qualify for the run-off by a slight 145-vote margin.  State Rep. Kevin Roberts (R-Houston) placed first with 33% and will face retired Naval officer Dan Crenshaw (27.4%) in the May 22^nd Republican run-off.  The winner will have the inside track toward replacing the retiring seven-term incumbent in the general election.

TX-3:  In retiring Rep. Sam Johnson’s (R-Plano) north Texas 3^rd District, state Sen. Van Taylor (R-Plano), as expected, easily captured the Republican nomination (84.7%) and he will go onto win the general election. 

TX-5: A run-off will occur in retiring Rep. Jeb Hensarling’s (R-Dallas) 5^th District.  State Rep. Lance Gooden (R-Terrell) advances to the run-off against political fundraiser Bunni Pounds.  Mr. Gooden’s advantage in the primary vote was 29-22% over Ms. Pounds.  Former Terrell City Councilman Dan Wood was unopposed for the Democratic nomination.

TX-6: Tarrant County Tax Assessor and former congressional chief of staff Ron Wright came within five percentage points of clinching the Republican nomination in retiring Rep. Joe Barton’s (R-Ennis) north Texas’ 6^th District.  He becomes a heavy favorite to dispatch airline pilot and Afghanistan War veteran Jake Ellzey (21.7%) in the run-off election.  Mr. Wright will likely succeed the retiring 17-term Congressman.

TX-7: Rep. John Culberson (R-Houston) was easily re-nominated with 76.1% while attorney Lizzie Pannill Fletcher (29.3%) and author Laura Moser (24.3%) advance to a run-off. 

TX-16: In Rep. O’Rourke’s El Paso-anchored 16^th District, the El Paso County Judge (Executive), Veronica Escobar, recorded a 61.4% win over five opponents and will easily win the succeeding general election. 

TX-21: In the 18-candidate 21^st District Republican primary to succeed veteran Rep. Lamar Smith (R-San Antonio), former Ted Cruz chief of staff Chip Roy placed first (27%), and will face frequent candidate Matt McCall (17%) in the run-off election.  Mr. McCall, who has previously challenged Rep. Smith, may have benefitted from name confusion since this seat is adjacent to Rep. Michael McCaul’s (R-Austin) 10^th District.  Mr. Roy now becomes the favorite to win the run-off and the general election to follow the retiring incumbent.

TX-23: Rep. Hurd was easily re-nominated (80.3%), while the Democrats must go to a run-off.  Former US Trade official Gina Ortiz Jones ran strongly in the Democratic primary (41.3%), but must face former San Antonio City Council candidate Rick Trevino (17.5%) on May 22^nd.  The Democratic establishment’s favored candidate, attorney Jay Huling’s (15%), failed to qualify.  The succeeding general election here will be competitive in what is the state’s lone swing district.
 
TX-27: In the Corpus Christi area, former Water Development Board chairman Bech Bruun (36.1%) placed a close first in the Republican primary over former Victoria County Republican Party chairman Michael Cloud (34.9%), and the two will battle again in late May.  The likely Republican nominee will replace retiring Rep. Blake Farenthold (R-Corpus Christi).

TX-29: In Houston, state Sen. Sylvia Garcia (D-Houston), also as expected, notched a 63.2% win against six Democratic opponents, and she will replace retiring Rep. Gene Green (D-Houston) in the 29^th CD. 
  
TX-32: In Dallas, Rep. Pete Sessions (R-Dallas) won a 79.3% re-nomination victory, while ex-NFL player Colin Allred (38.5%) and former US Agriculture Department official Lillian Salerno (18.3%) will battle in the May 22^nd Democratic run-off election.
 
UT-4:  Local Salt Lake City pollster Dan Jones & Associates (2/9-21; 404 UT-4 registered voters) released another survey in their ongoing testing of the impending campaign between Rep. Mia Love (R-Saratoga Springs) and Salt Lake County Mayor Ben McAdams (D).  As has been the case in previous polls, Rep. Love maintains a lead but the results are close.  According to their February release, the Congresswoman leads Mr. McAdams, 49-43%, which is almost identical to the group’s January survey that found Rep. Love up 47-42%.
 
Governor 
 
California:  In early January, former US Rep. Doug Ose (R-Sacramento) announced that he would enter the open 2018 Governor’s campaign.  Now, less than two months later, he’s dropping out.  Republicans need a strong candidate just to qualify for the November ballot in the state’s top-two jungle primary format and Mr. Ose was thought to be such.  Again having two Democrats run against each other in the Governor’s general election will ostensibly make it more difficult for Republicans to turn out their voters for the down ballot campaigns, especially when not fielding a Senate candidate, either. 
 
Georgia:  A new Georgia statewide poll from Mason-Dixon Polling & Research (2/20-23; 625 GA registered voters with an over-sample of 500 GA likely Republican primary voters and 500 GA likely Democratic primary voters) tested both the open GOP and Democratic gubernatorial primaries.  According to the survey results, Lt. Gov. Casey Cagle has a 27-13-12-11% Republican primary advantage over Secretary of State Brian Kemp, Iraq War veteran Clay Tippins, and former state Sen. Hunter Hill, respectively.  For the Democrats, in a battle of Stacey’s, former state House Minority Leader Stacey Abrams leads ex-state Rep. Stacey Evans, 29-17%. 
 
Illinois:  The Paul Simon Public Policy Institute of Southern Illinois University conducted a survey for the state’s upcoming March 20^thprimary election.  According to the data (2/19-25; 1,001 IL registered voters; 472 likely Democratic voters; 259 likely Republican primary voters), the results appear consistent with other recent research studies.  The Simon Poll finds venture capitalist J.B. Pritzker, who has already spent $56 million for his campaign, leading state Sen. Daniel Biss (D-Chicago) and businessman Chris Kennedy, son of the late Attorney General and US Senator Robert F. Kennedy, 31-21-17%, respectively. 
 
Maine:  Two Democrats announced last week that they are withdrawing from the open Governor’s race, even before the campaign officially begins.  Former Bangor Mayor Sean Faircloth, who contemplated for a long while before announcing his candidacy, has quickly backtracked and will exit.  The same for ex-state Sen. James Boyle (D-Scarborough).  The departing pair still leaves the Democrats with a dozen candidates including Attorney General Janet Mills, former state House Speaker Mark Eves (D-North Berwick), and state Sen. Mark Dion (D-Westbrook).  The candidate filing deadline is March 15^th for the June 12^th primary. Gov. Paul LePage (R) is ineligible to run for a third term.
 
Maryland:  Mason-Dixon Polling & Research looked at the developing Maryland gubernatorial campaign.  Here, despite representing one of the most loyal of Democratic states, Republican Gov. Larry Hogan maintains excellent job approval ratings.  According to this latest poll (2/20-22; 625 MD registered voters), the Governor’s favorability index is 63:26% positive to negative. 

The approval rating also translates into substantial leads for him in the ballot test.  Against Prince George’s County Executive Rushern Baker, who leads in Democratic primary polling, Gov. Hogan scores a 51-36% margin.  If Baltimore County Executive Kevin Kamenetz were the Democratic nominee, the Governor’s margin would be a similar 49-34%.  Should NAACP president Ben Jealous advance to the general election, Gov. Hogan’s preference rating is 50-33%. 
 
Michigan:  Public Opinion Strategies, surveying for the Bill Schuette for Governor campaign (2/10-13; 800 MI previous Republican primary voters), finds the Attorney General in strong shape to capture the open GOP gubernatorial nomination.  According to the results, Mr. Schuette leads Lt. Gov. Brian Calley, 42-15%, with state Sen. Patrick Colbeck (R-East Lansing) tallying only 5% support.  The Michigan primary isn’t until August 7^th, so much time remains for change.  Former state House Minority Leader Gretchen Whitmer appears to be the leading Democratic candidate.  Gov. Rick Snyder (R) is ineligible to seek a third term.

Texas: Gov. Greg Abbott (R) racked up a 90.4% win in the GOP primary, while Dallas County Sheriff Lupe Valdez (42.9%) and businessman Andrew White (27.4%) must now duel in a May 22^nd run-off election to decide the Democratic nomination.

Advocacy Resources

Download the MAA App
The MAA App is designed to make standing up for the real estate finance industry easier than ever. On the MAA App, you can: 

• Receive updates on bills affecting the real estate finance industry
• Let your elected officials know how those bills will impact you directly
• Research bills that MBA is watching
• Find contact information for your members of Congress
• Learn about MORPAC, MBA's political action committee 

To download the MAA App, text MAA to "31-31-31" or search the App Store or Google Play for "Mortgage Action Alliance". For more information about the MAA App, visit mba.org/MAAapp.

Help Us Strengthen the Industry's Voice
The most effective way for us to grow MAA membership is through peer-to-peer outreach from industry professionals like you. We have developed a MAA Campaign Toolkit that includes all the resources you need to run a MAA enrollment campaign at your company and get your colleagues signed up. 

You can also share this animated video with your colleagues, which outlines MBA's advocacy programs and the importance of getting involved! If you have any questions, please contact Peter Shapiro at pshapiro@mba.org or (202) 557-2933.

By responding to a Call to Action alert from MAA, opening an email from MAA, registering for an MBA conference or contributing to MBA’s political action committee (MORPAC), you are agreeing to renew your membership in MAA for one year (365 days) from the date of your action. Please note that you may terminate your membership at any time by emailing maa@mba.org. There are no membership dues.