• Key Insight: How the Mortgage Bankers Association plans to reshape mortgage origination rules and bring buyers back to the housing market.
• What's at Stake: Homebuyers and lenders face escalating costs if redundant paperwork, regulatory friction and outdated rules persist.
• Expert Quote: "MBA and its members are continuously working with policymakers to advance solutions that lower housing costs. This paper builds on that advocacy by laying out focused steps policymakers can take now." – MBA President and CEO Bob Broeksmit. 

Overview bullets generated by AI with editorial review.

The Mortgage Bankers Association is recommending a set of administrative and regulatory policy changes with the goal of lowering costs and bringing more business to lenders.

The trade association released "Affordability in Action: A Policy Roadmap to Lower the Cost of Financing a Home to Own or Rent," at its annual convention in Chicago Wednesday. The plan outlines suggestions across five areas: lowering mortgage costs, expanding credit access for qualified borrowers, reducing rental housing costs, growing the affordable housing supply and strengthening the housing financing system.

Housing affordability has worsened, but it's not solely a result of supply and demand imbalances. Outdated rules, redundant paperwork and regulatory friction have increased expenses without making the housing finance system safer, the MBA said.

Mortgage lenders have a direct interest in solving this problem, as every unnecessary cost in the origination process ultimately falls back on the homebuyer, whether that be through fees at the closing table or a higher interest rate over the life of the loan. Lowering those charges improves a lender's ability to serve borrowers, according to the paper.

"MBA and its members are continuously working with policymakers to advance solutions that lower housing costs," President and CEO Bob Broeksmit said in a press release. "This paper builds on that advocacy by laying out focused steps policymakers can take now."

The roadmap focuses on changes that can be implemented without legislative overhauls. The recommendations intend to preserve the safety and soundness of the housing finance system while lowering unnecessary costs, according to the release.

Some suggestions for reducing expenses include eliminating the tri-merge credit report mandate in favor of a single-file report for high-credit borrowers, lowering the government-sponsored enterprises' loan-level price adjustments for home purchases and modernizing title insurance.

The MBA also recommended updating loan originator compensation rules to help lenders bring a competing offer to the table, creating a streamlined refinance option for qualified GSE borrowers and simplifying Truth in Lending Act and Real Estate Settlement Procedures Act disclosure requirements.

In order to grow the affordable housing supply, the MBA called for expanding condominium and new-construction financing, revamping Federal Housing Administration 203(k) rehabilitation loans to allow unused contingency funds to cover mortgage payments and tailoring Davis-Bacon prevailing wage rules to appropriate federal projects.

The association's plan for strengthening the housing finance system in the long-term included aligning bank capital rules with mortgage risk to open up lending capacity and reviving the private-label mortgage securities market to broaden funding and encourage competition.

"The goal is straightforward: strip away unnecessary costs and complexity that ultimately show up in a higher mortgage rate, excessive closing costs, or a higher rent," said Owen Lee, 2027 MBA chairman and CEO at Success Mortgage Partners, in the release. "These are practical, achievable steps that can help make housing more affordable while maintaining responsible lending standards and supporting a stronger housing supply."