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The Mortgage Bankers Association, along with several of the mortgage industry’s largest trade groups, continue on their quest to make things better for consumers and mortgage lenders.
MBA, along with the others, are seeking a meeting with the new Attorney General, Jeff Sessions, to discuss issues related to enforcement actions against lenders under the False Claims Act.
These discussions would be related to required certifications made by lenders in connection with FHA insured loans.
The main concern involves the enforcement of the fair lending laws and the use of “disparate impact”.
The trade groups disagree with the previous administration’s application of the use of disparate impact and fear. Based on some recent decisions, the new Trump Administration may be headed down the same road.
The trade group’s letter states:
“Our members are committed to fair lending and expend substantial resources to ensure that credit decisions are based on a consumer’s qualifications for credit and without regard to factors such as race or national origin. The civil rights team of the previous Administration, however, sought to use the rulemaking and enforcement process to establish novel and overreaching requirements that contradict Supreme Court precedent.”
MBA and the others seek to have some conversation and input into the policies dealing with such fair lending issues going forward to ensure fair treatment of consumers and lenders alike.
MBA noted that risks associated with originating FHA insured loans have increased with DOJ using the FHA certifications as a basis for False Claims Act actions.
MBA believes these certifications hold lenders to a standard of near perfection causing many lenders to discontinue offering FHA loans. This harms consumers and lenders.
MBA also offered comment on FHA Servicing including:
- Amend the foreclosure timelines and debenture interest structure;
- Adoption of a direct conveyance model;
- Standardization of loss mitigation programs;
- Eliminate face to face requirements when servicing loans, and more.
MBA also provided comment on improvements to the FHA Multifamily program. A summary of what MBA submitted can be viewed HERE.
In times when every loan counts and loans are harder to come by, lenders cannot afford to miss lending opportunities because of uncertainties and fear of reprisal. The FHA loan programs have long been a benefit to both lenders and home buyers.
It is important to keep the dialogue open to discuss ways to improve these programs so more lenders and homebuyers may take advantage of these benefits.
We thank MBA for doing so.
