June 22, 2023

NAFCU working group reviews recent housing finance issues

home loanNAFCU’s Housing Finance Working Group met Wednesday to discuss recent updates from the CFPB, Federal Housing Finance Agency (FHFA), and other regulators.

There are two interagency proposals, which include the NCUA, currently open for comment:

  • Automated valuation models (AVMs): The proposed rule would require certain institutions to ensure AVMs used for determining the value of mortgage collateral follow quality control standards and protect the data from manipulation. NAFCU Regulatory Compliance Counsel Aminah Moore has a new Compliance Blog detailing the AVM proposed rule and what it would mean for credit unions that originate mortgages. NAFCU noted the proposed rule published in the Federal Register Wednesday and it is open for comment for 60 days.
  • Reconsideration of value (ROV): The proposed guidance would highlight best practices for ROV processes, compliance controls, and ways to incorporate them into existing risk management programs used to help identify and mitigate unlawful discrimination.

The working group also discussed the CFPB’s proposed rule related to property assessed clean energy (PACE) financing, and what impact PACE loans have had on credit unions’ mortgage lending.

From the FHFA, the group reviewed the agency’s single-family mortgage pricing framework for the government-sponsored enterprises (GSEs), as well as new credit report and credit score requirements. NAFCU reviewed the implementation timeline and sought to understand challenges and what assistance is needed from the FHFA and GSEs to comply with the credit reporting changes.

NAFCU also reminded credit unions of the FHFA’s upcoming Velocity TechSprint, happening July 10-13. Credit unions can still apply as an observer to watch the sprint virtually.

The working group will next meet in September. Additional details on proposed rules and guidance can be found online via NAFCU’s Regulatory Alerts.