MReport August 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 33 FEATURE Anywhere. Anytime. Bringing Today's Lending Headlines into Focus, MReport Digital Puts Mortgage Banking News at Your Fingertips Experts you trust. People you know. News you want. MReport is putting essential mortgage market news at your fingertips with our new digital edition, now available online via your smartphone, tablet, or computer. Enjoy the magazine at your desk, and tap into MReport Digital's easily accessible platform anywhere, anytime. Committed to giving originators, servicers, and all lending professionals access to smarter perspectives, MReport believes it's time to think differently about the mortgage industry. Because the American Dream is evolving . . . are you? VP for Policy Development at Enterprise Community Partners and former senior advisor at HUD, criticized the arrangement for separating lending to LMI bor- rowers from the normal course of the housing finance business ("Understanding the Latest Housing Finance Reform Outline," February 6, 2019, available at enterprisecom- Jakabovics argued that "the housing finance system should be designed from the start to serve eligible borrowers of modest and mid-priced homes in the normal course of business and without special programs[.]" Jakabovics would maintain DTS- style requirements on the future Fannie and Freddie, and any other guarantors who enter into competition with them. Other concerns were ex- pressed when the Senate Banking, Housing & Urban Affairs Committee held hearings on Crapo's proposal on March 26-27. In her opening statement, Carrie Hunt of The National Association of Federally-Insured Credit Unions expressed that the current housing finance system is working for credit unions, so any changes need to be made cau- tiously. While not directly critical of the Crapo plan in her prepared statement, she urged any new system of housing finance needs to maintain DTS' specific con- cerns for manufactured housing, affordable housing preservation, and rural markets. Hilary Shelton, Director to the NAACP's Washington Bureau and SVP for Policy and Advocacy, was also critical in his opening statement before the committee. He worried that without DTS provisions that "most, if not all, housing capital will go to the 'cream of the crop' mortgages," while ignoring LMI borrowers. Shelton undoubtedly was referring to the MAF as envisioned in the Crapo plan when he stated that authorization of money to allevi- ate housing problems is insuf- ficient because "even when money is appropriated it can easily be slated to be taken away." Upon questioning from Senator (and presidential candidate) Elizabeth Warren, Shelton asserted that LMI borrowers would be worse off under the Crapo plan. The Next Step O ver the years, there have been various plans discussed and proposed, and yet there has not been a consensus as to what the next step should be with the conservatorship. The next devel- opment in the saga of GSE reform may be the release of Treasury's housing finance reform plan, to be guided by the President's memo- randum released last March. That memorandum was silent as to the retention of DTS or the creation of a MAF. Regardless, the introduction of the Crapo plan has at least reig- nited the conversation, but given the various opinions on the topic, and the nature of the political the- atre in this day and age, it seems unlikely that reform is in the near future. However, what does seem clear is that any new reform plan will have to address the DTS requirement and the extent to which future participants in the secondary mortgage market make lending to underserved markets a central component of their business, or leave such tasks to direct government involvement and spending through a Market Access Fund or something similar. Both sides have compelling argu- ments for replacing or enhancing the duty to serve requirement. BRIAN YOHO serves as Senior Attorney in Foreclosure and Title at Schneiderman & Sherman, P.C. Yoho has spent his legal career in the area of mortgage default, with experience in bankruptcy, loss mitigation, consumer finance regulation, and litigation, as well as foreclosure and title. He is admitted to practice in the Eastern and Western Districts of Michigan. Yoho obtained his juris doctorate in 2003 from the Ave Maria School of Law and his Bachelor of Arts from Erskine College in 1996.

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