MHI Week In Review – November 11, 2011

MHI joins Business Coalition in Support of the Extension of Expiring Tax Credits

Once again, a number of important temporary tax incentives, frequently called “tax extenders” are scheduled to expire on December 31st, clearing the way for a tax increase on millions of U.S. taxpayers, businesses, and organizations that benefit from these provisions. Because of the importance of the New Energy Efficiency Home Tax Credit which is included in the “tax extenders” package, MHI joined more than 2,000 other companies and organizations on a letter to all Members of Congress urging them to act quickly to extend these pro-growth, pro-job provisions.

Currently, manufacturers who build ENERGY STAR homes are eligible to receive a $1,000 tax credit while modular home builders are eligible to receive a $2,000 tax credit by exceeding the International Energy Conservation Code (IECC) by 50 percent. The “tax extenders” package has an impact on a wide range of activities that help spur economic growth, job creation, and job retention. Despite bicameral, bipartisan support for these provisions, Congress has yet to extend them beyond 2011.

While many in Congress focus on much-needed tax reform, the letter makes a strong case for why these “extenders” can’t wait until negotiators agree on how to revamp the tax code. Click here for the letter. The lack of timely congressional action to extend these provisions would inject more instability and uncertainty into the economy and further weaken confidence in the marketplace.

MHI members can contact Rae Ann Bevington at 703-558-0675

MHI Urges Congress to Eliminate Duplicative Enforcement of Manufactured Housing Standards

The Energy Independence and Security Act of 2007 (EISA) contains provisions requiring the Department of Energy (DOE) to establish, implement and enforce energy efficiency standards for manufactured housing (Sec. 413). The legislation moves HUD’s statutory responsibility for manufactured home energy standards to DOE.

DOE has initiated the drafting of proposed amendments to the energy requirements of the HUD-Code as directed by EISA 2007. MHI staff continues to work with Congressional staff to modify language in Section 413 of the Energy Independence and Security Act of 2007. The modified language would better direct DOE’s efforts in developing new energy standards for manufactured homes. Click here to view the issue paper.

MHI members can contact Rae Ann Bevington at 703-558-0675

First GSE Reform Bill Unveiled in Senate

On November 9, Sen. Bob Corker (R-TN) introduced legislation (currently unnumbered) to eliminate Fannie Mae and Freddie Mac, as well as spur the development of a private mortgage-backed securities market.

The bill, known as the Mortgage Market Privatization and Standardization Act, would gradually reduce the portfolio of mortgage-related assets guaranteed by Fannie Mae and Freddie Mac and take steps to bring uniformity and transparency to the housing market. This includes:

Winding Down of Fannie Mae and Freddie Mac: Reduces each year the percentage of newly issued mortgage-backed securities’ (MBS) principal that is guaranteed by Fannie Mae and Freddie Mac. The percentage guaranteed must be reduced to zero within 10 years, at which point MBS will be wholly privatized.

Mortgage Market Transparency: Creates an industry-financed database that makes uniform performance and origination data on mortgages available to the public through the Federal Housing Finance Agency.

Creation of a new TBA Market: Initiates a process for creating deliverability rules and technology necessary for the “to-be-announced” (TBA) futures market with no government guarantee.

Monetization of Business Assets: Directs the sale of any technology, home price indices, and systems currently owned by the GSEs to private investors.

Uniform Underwriting Standards: Replaces the Qualified Residential Mortgage and risk retention with a five percent minimum down payment and full documentation requirement.

Residential Mortgage Market Uniformity: Creates a uniform pooling and servicing agreement (PSA) and a new electronic registration system (MERS 2) where all loans are transferred under one system regulated by the FHFA and instructs federal regulators to develop uniform practices and streamline mortgage regulations.

For more information including a copy of the bill text, click here.

MHI members can contact Jason Boehlert at 703-558-0660

CFPB Unveils Latest Mortgage Disclosure Form

On November 8, the Consumer Financial Protection Bureau (CFPB) unveiled the latest prototype of consolidated mortgage disclosure forms. The draft forms, which were required under the Dodd-Frank Act, consolidate the existing TILA and RESPA disclosure forms into a single document.

The CFPB is continuing its process of soliciting feedback from the industry and consumers. To view the latest drafts and provide input, click here.

MHI members can contact Jason Boehlert at 703-558-0660

Bipartisan Covered Bonds Legislation Introduced in Senate

On November 9, Sens. Kay Hagan (D-NC) and Bob Corker (R-TN) introduced legislation (S. 1835), cosponsored by Sens. Mike Crapo (R-ID) and Charles Schumer (D-NY), that would support the development of a covered bond market in the United States. The bill is similar to legislation introduced (H.R. 940) in the House by Reps. Scott Garrett (R-NJ) and Carolyn Maloney (D-NY) and was approved by that chamber’s Financial Services Committee in June.

Covered bonds are debt securities backed by cash flows from mortgages or public sector loans. They are similar in many ways to asset-backed securities created in securitization, but covered bond assets remain on the issuer’s consolidated balance sheet.

The legislation, which has been endorsed by the American Bankers Association (ABA) and the Securities Industry and Financial Markets Association (SIFMA), would create a uniform standard and framework for the issuance and collateralization of covered bonds.

Supporters of covered bonds have argued that they have been used extensively throughout Europe as a long-term financing tool and could be a valuable source of private financing in America, particularly in securitizing residential mortgages.

For more information, click here. To view information on the House measure, click here.

MHI members can contact Jason Boehlert at 703-558-0660

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