Highlights from NCSHA’s MRBs and FMI Conference

HFA directors and staff, Administration officials, and industry partners came together last week for NCSHA's HFA Institute MRBs and Federal Mortgage Insurance conference.  For three days, attendees took advantage of the opportunity to network with their peers and receive top-notch education during more than a dozen sessions.

The conference began with two special workshop sessions with Administration officials and mortgage lending experts.  HFA staffers met with the Hardest-Hit Fund Program Director for the Department of Treasury, Mark McArdle, who answered questions and helped HFAs share important information regarding the program.  Representatives from Ginnie Mae, along with the Alabama Housing Finance Authority's Single-Family Administrator Mike King and FirstSouthwest Company's Senior Vice President Mike Awadis, presented a two-hour training seminar on the advantages and mechanics of participating in Ginnie Mae loan securitization programs.

Three Wednesday afternoon sessions dove into the "essentials" of MRB programs, loan servicing, and mortgage lending rules.  Program experts taught the basics of bond financing, including the role of ratings agencies, federal regulations, and bond issuance and structuring details.  Later, Paul Mondor, Senior Counsel and Special Advisor in the Office of Regulations for the Consumer Financial Protection Bureau (CFPB), gave a detailed presentation on the basics of legal issues regarding TILA and RESPA disclosure forms, the Qualified Mortgage rule, lender compensation, high-cost mortgage loans, servicing standards, and other changes brought about by the Dodd-Frank Act and other reform measures.

In Thursday's opening plenary session, HUD's Acting Assistant Secretary for Housing and Federal Housing Administration Commissioner Carol Galante told attendees that  HUD is considering how to implement the 10 basis point mortgage premium increase Congress recently required on all FHA mortgages, but HUD has not made any firm plans to date.  She said maintaining the solvency of the HFA Insurance Fund, increasing its capital ratio, managing risk, and strengthening lender enforcement are all top FHA priorities.  Later, USDA Rural Development (RD) Administrator for Housing and Community Facilities Tammye Trevino said USDA’s rural housing program funding was reduced in FY 2012, RD’s capacity has been adversely affected by staff reductions and field office closures, and RD is pursuing streamlining and process improvements. 

In the keynote economics presentation, National Association of Home Builders’ Chief Economist David Crowe said the economy is likely to remain in much the same state as it was in 2011, that some markets are showings signs of improvement, and that home sales and economic activity are likely to increase slightly in 2012 and more in 2013.

On the following panel, FHA, USDA, and Ginnie Mae staff discussed the status and outlook of their programs, likely regulatory changes, and how HFAs can expand their usage of these programs.  FHA staff also agreed to work with NCSHA and HFAs on clarifying down payment assistance options when operating mortgage-backed securities (MBS)-based homeownership programs.

Sarah Apsel, Senior Policy Advisor at Treasury, and Suzanne Schwartz, Vice President, Active Fixed Income, at State Street Global Advisors, Inc., gave an update on the New Issue Bond Program and the Temporary Credit and Liquidity Program extensions and took audience questions.  John Cross, Associate Tax Legislative Counsel for the Department of Treasury; Christopher Woodin, Lead Tax Law Special for Tax Exempt Bonds in the office of Compliance and Program Management at the IRS; and Rick Ballard, Partner and Ballard Spahr LLP gave updates on other bond-related legislation and regulations.

The state of the bond market and the future of HFA financing were recurring themes throughout the conference.  During sessions on all three days, representatives from several HFAs, underwriters, investment bankers, and investors described the outlook for the bond market and ways HFAs can finance their programs during 2012 through bond issuance, Fannie Mae’s new HFA Preferred programs, government-sponsored enterprise (GSE) programs, and the To-Be-Announced (TBA) market.