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Weekly update from the National Housing Conference
News from Washington I By Quinn Mulholland
Supreme Court to hear cases on FHFA, GSE profit sweep

The Supreme Court recently agreed to take up two cases in its upcoming fall term that could have big implications for housing. The first case is a review of a 2019 ruling by a lower court that shareholders of Fannie Mae and Freddie Mac could pursue a challenge to the 2012 agreement between the Federal Housing Finance Agency (FHFA) and the Treasury Department that required the government-sponsored enterprises (GSEs) to pass along their profits to the Treasury. The Trump administration has argued the shareholders do not have the grounds to bring the claim, which could disrupt the administration’s efforts to release the GSEs from conservatorship. The second case the Supreme Court will take up is a challenge to the leadership structure of the FHFA. This case comes in the wake of the Supreme Court’s recent ruling overturning the leadership structure of the Consumer Financial Protection Bureau (CFPB), which is structured similarly to the FHFA.
Housing industry groups call on HUD to withdraw disparate impact rule

Last week, several lenders and housing industry groups, including the National Association of REALTORS® (NAR) and Quicken Loans, called on HUD to withdraw its proposed rule to water down the disparate impact standard under the Fair Housing Act. In a letter to HUD Secretary Ben Carson, NAR President Vince Malta wrote, “While there is debate… as to whether additional clarity is needed with respect to disparate impact claims, there is broad consensus across the country that now is not the time to issue a regulation that could hinder further progress toward addressing ongoing systemic racism.” Politico reported on Tuesday that HUD is resisting these calls from lenders and industry groups, with Deputy HUD Secretary Brian Montgomery reaffirming the agency’s plans to issue a final rule on the disparate impact standard later this year in a letter to Bank of America Vice Chairman Anne Finucane.
House subcommittee holds hearing on protecting homeowners during the pandemic

On Thursday, the House Financial Services Subcommittee on Oversight and Investigations held a virtual oversight hearing on mortgage servicers’ implementation of the CARES Act. Among the witnesses who testified at the hearing were Donnell Williams, president of the National Association of Real Estate Brokers, and Ed DeMarco, president of the Housing Policy Council. In his opening remarks, Subcommittee Chairman Al Green (D-Texas) said that the largest 11 mortgage servicers approved over 2 million forbearance requests between March 27 and June 30, but that “often servicers fail to provide the borrowers with the 180-day forbearance that has been set in the CARES Act, and too often, borrowers were given but 90 days.” In his testimony, Williams said that the COVID-19 pandemic is disproportionately hurting Black homeowners, citing statistics showing that there is a 13% gap between Black and White homeowners receiving forbearance under the CARES Act. Williams called on Congress to take several steps, including allocating specific funds targeted to the preservation of Black homeownership and requiring the Federal Housing Administration (FHA) and mortgage servicers to notify borrowers of their rights to apply for forbearance.
HUD announces proposed streamlined single-family servicing policies

On Tuesday, the Department of Housing and Urban Development (HUD) announced that FHA published proposed revisions to its single-family servicing policies to reduce burdens on homeowners and mortgage servicers. The revisions include changing the standard servicing loss mitigation home retention waterfall, eliminating unnecessary and time-consuming borrower documentation requirements for Trial Payment Plans, and modifying servicing and operational policies like the allowable fee structures. “Our proposed policy changes will strengthen servicers’ ability to keep families experiencing financial challenges in their homes. They reduce the unnecessary barriers that often impede the delivery of timely borrower assistance,” said Acting Federal Housing Commissioner Len Wolfson in a statement.
FSOC announces review of secondary mortgage market

On Tuesday, the Financial Stability Oversight Council (FSOC) announced that it will begin an activities-based review of the secondary mortgage market. The review, which was announced at the FSOC’s Principals Meeting, will focus on the risk that various activities in the secondary mortgage market pose to the stability of the financial system as a whole and possible ways to mitigate that risk. The announcement comes after the FSOC said it would pivot to focus on activities rather than companies in December 2019. FHFA Director Mark Calabria issued a statement applauding the review, saying “As demonstrated by the 2008 financial crisis and again by COVID-19, Fannie Mae and Freddie Mac must be well capitalized in order to support the mortgage market during a stressed environment.”
House Appropriations Committee approves FY 2021 T-HUD funding bill

On Tuesday, the full House Appropriations Committee approved the FY 2021 funding bill for Transportation, Housing and Urban Development (T-HUD), following its approval by the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies last week. Overall, the bill allocates $50.6 billion for HUD, a $13.3 billion increase over President Trump’s FY 2021 budget request for the agency and a $1.5 billion increase over HUD’s FY 2020 enacted levels. Appropriations Committee Ranking Member Kay Grander (R-Texas) raised several objections to the T-HUD spending bill during the full committee markup, including the $75 billion in new emergency spending, which Granger argued reflected a lack of bipartisan input into the bill.
CFPB releases COVID-19 consumer complaint data

On Thursday, the CFPB issued an updated Complaint Bulletin with information about the over 8,000 consumer complaints it received from January through May 2020 that specifically mention COVID-19 or related terms. According to the CFPB’s analysis, mortgage, credit card and credit reporting complaints were the most common type of consumer complaints filed during this time period. In over half of the mortgage complaints identified by the CFPB, consumers identified struggling to pay the mortgage as the issue. The public can view the complaints by state and key word at the Consumer Complaint Database.
Chart of the Week
Nearly half of renters in families who lost work because of the pandemic are worried about paying rent in the next month

In a recent blog post for the Urban Institute, Mary Cunningham, Abby Boshart and Ananya Hariharan cited data showing that almost half of renters in families who lost work because of the pandemic were worried about their ability to pay rent or utility bills in the next month. In the blog post, the authors proposed four ways to keep renters from falling off the eviction cliff, including extending unemployment benefits and funding more rental assistance.
What we're reading
The National Low Income Housing Coalition released its annual Out of Reach report on Tuesday, showing that even before the COVID-19 pandemic, millions of Americans were struggling with housing costs. Overall, the national average hourly wage of renters in the U.S., according to the report, is $18.22, $5.74 less than what would be needed to afford the average two-bedroom apartment. Read the full report here.

A ProPublica article published on Monday found that the Office of the Comptroller of the Currency halted or stalled at least six investigations into discriminatory mortgage lending. The stalled investigations included one into Bank of America for offering fewer loans to homebuyers of color in Philadelphia than White homebuyers. Read the article here.

The radio program 1A covered a new study finding that Black homeowners pay 10% to 13% more in property taxes than similar White homeowners in a recent segment. The segment focused on Prince George’s County in Maryland, where this disparity in property taxes persists and a new proposal could push property taxes even higher. Listen to the report here.

New York Housing Conference Executive Director Rachel Fee and National Low Income Housing Coalition President and CEO Diane Yentel wrote a joint op-ed for the New York Daily News calling on Congress to protect renters impacted by the COVID-19 crisis to avoid displacement and eviction. "During this pandemic, the very least Congress must do is ensure everyone is stably housed. This is not just an economic necessity, but a moral and health imperative," they wrote. Read the op-ed here.
The week ahead
The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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