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MortgagePoint October 2024

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71 October 2024 J O U R N A L "A re-proposal is a smart move, and we commend FHFA for its receptiveness to our strong opposition to the initial proposal, which would have punished counterparties for potentially minor civil or administrative sanctions." —Bob Broeksmit, President and CEO, CMB, Mortgage Bankers Association ing more than two million low-income households—across the country have children less than six years of age facing one or more lead-based paint hazards, including more than two million low-in- come households. Based on data from the Centers for Disease Control and Prevention (CDC), this, unfortunately, results in more than one million children suffering from the irreversible impacts of lead poisoning, including reduced intelligence, behav- ioral and learning disabilities, and effects on many other body systems. Lead-con- taminated dust from chipped or peeling lead-based paint is one of the most common causes of elevated blood lead levels in children. Infants and children are especially vulnerable to lead paint exposure because their growing bodies absorb more lead than adults do, and their brains and nervous systems are more sensitive to the damaging effects of lead. Adults with exposure to lead can develop symptoms such as high blood pressure, memory loss, and reduced motor skills. "The negative effects of lead poison- ing can be irreversible, and cause learn- ing disabilities, reduced intelligence, and life-long health effects in children as well as grave health damage to adults," HUD Principal Deputy Assistant Secretary Richard J. Moochie said. "This funding will help to remediate housing units with potential lead exposure and protect families in the United States and their children—especially families with limit- ed resources in older homes—from lead poisoning and harmful exposure to other hazardous contaminants in their homes. The funding announced will also help PHAs prepare to comply with the National Standards for the Physical Inspection of Real Estate (NSPIRE). NSPIRE improves HUD's oversight by aligning and consolidating inspection regulations used to evaluate HUD hous- ing across multiple programs. NSPIRE strengthens HUD's physical condition standards, and fire safety, carbon monox- ide, mold and moisture, and lead-based paint are all standards that we enhanced with NSPIRE. FHFA RE- ISSUES RULE ON SUSPENDED COUNTERPARTY PROGRAM T he Federal Housing Finance Agency (FHFA) has announced that it will revisit its proposal to amend the Suspended Counterparty Program (SCP). The SCP regulation requires a regulated entity to report to FHFA if an individual or institution that it does busi- ness with has committed certain types of misconduct within the prior three years. It also authorizes FHFA to order its reg- ulated entities to cease doing business or refrain from entering into new business with certain counterparties. FHFA is publishing this re-proposal after considering issues that commenters had raised about the original proposed rule, issued in July 2023. This includes distinguishing between misconduct that poses a material risk to the safety and soundness of the regulated entities from behavior with de minimis impact. "Amending the Suspended Coun- terparty Program will help strengthen FHFA's ability to protect its regulated entities from risks presented by other businesses that engage in misconduct," FHFA Director Sandra L. Thompson said. "FHFA has carefully reviewed the feedback from stakeholders in develop- ing this re-proposal, which will better ensure the regulated entities' safety and soundness, so they continue to serve as a reliable and stable source of liquidity for the U.S. housing finance system." Specifically, the re-proposal would: • Authorize the suspension of business between a regulated entity and a counterparty whose misconduct resulted in a federal prohibition order or a civil money penalty above a specific threshold; and • Authorize the suspension of business between a regulated entity and a counterparty that has committed criminal or civil misconduct related to the management or ownership of real property. "A re-proposal is a smart move, and we commend FHFA for its receptiveness to our strong opposition to the initial proposal, which would have punished counterparties for potentially minor civil or administrative sanctions," Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit, CMB said. "The re-proposal appears to address some of MBA's significant concerns outlined in our joint comment letter. We are pleased to see the elimination of the proposed immediate suspension order, refinements that preserve due process, and a narrowing of the application of the SCP to violations of a certain magnitude or gravity."

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