ACUMA ONpoint
ACUMA ONpoint
Shutdown Ends, Housing Policy Heats Up
A budget standoff ends, the lights come back on in Washington, and the housing world braces for what comes next. We examine the real consequences for lenders and borrowers when Congress relies on short-term fixes, including delayed hearings, stalled reauthorizations, and programs like flood insurance that are repeatedly pushed to the next deadline. With the continuing resolution in place, HUD and the CDFI Fund are back to full strength, which is good news for credit unions serving underserved communities. However, the timeline only stretches to January, and the policy stakes are rising.
Our conversation turns to the CFPB’s funding uncertainty after a new DOJ opinion argues the Bureau can only draw from Federal Reserve profits. With the Fed operating at a loss, future transfers are at risk, and rulemaking could slow just as the market debates bold affordability ideas. We break down FHFA’s high-profile float of 50-year mortgages along with portable and assumable loans, explaining how each tool targets different pain points. Lower payments help some buyers but slow equity growth; portability and assumability fight the rate lock that freezes inventory. The throughline is suitability and guardrails; product design must pair with strong underwriting and clear disclosures to avoid past mistakes.
We also chart the path of the ROAD to Housing Act, a rare bipartisan package that passed the Senate Banking Committee unanimously and may be included in the NDAA. Even a slimmer version could deliver practical wins for supply, program efficiency, and access, with standalone options if the defense bill route falters. Along the way, we separate the myths from the mechanics: affordability is as much about access to down payments as it is about monthly payments.
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Sponsored by Loan Vision.
The views and opinions expressed in this podcast do not necessarily reflect the views or positions of Acuma, its board of directors, its management staff, or its members. The podcast discussion presented is conversational in nature and for general information only.
SPEAKER_01:This is Aqua's On Point Podcast. On today's episode, we'll dive into four policy issues facing our members, ranging from the end of the shutdown to funding of the Bureau, and to the possibility of a 50-year mortgage. But before we get to our episode, just a quick word from our sponsor.
SPEAKER_00:This episode is being brought to you by Loan Vision. Is your credit union looking to turn your accounting department into a profit driver? Loan Vision can help. Our platform delivers real-time data, loan-level insights, and automations to streamline workflows and improve control over financial performance. Transform your cost centers into revenue generators by equipping your team with the tools needed to better serve your members. And don't miss our monthly webinar series where we share key strategies and best practices to help credit unions optimize their mortgage operations. Register today at www.lonevision.com under our upcoming events page.
SPEAKER_01:Hello, and welcome to Aquazon Point Podcast, a series focused on sharing the stories of people making a positive impact in the credit union mortgage industry. I'm your host, Peter Benjamin. Today I am joined by our resident expert, Anne Marie Convoy, policy advisor with Brownstein. AM, long time. How are you doing? And what's going on with you?
SPEAKER_06:I'm good. Thank you for having me back. I'm always excited to be on the pod. I will tell you I'm I'm very excited that the government is reopened for many reasons, but I uh I was a little worried that I was gonna come on the podcast and the shutdown would still be dragging on and we wouldn't have enough to talk about. But luckily the government is reopened and we have plenty of things to cover today.
SPEAKER_01:I think here's, you know, I was actually fully prepared to come on the, you know, during the shutdown. I was fully prepared to come on the next policy podcast. And for us just to really talk about nothing, we're really good about talking about nothing here over here at Acuma. Um, and so I was fully prepared to talk about absolutely nothing during this time. But you're right, here we are. Stuff to talk about to that point. Let's talk about that stuff we have to talk about. All right. So obviously, first up, end of the shutdown. Kind of walk us through, you know, obviously the the things that have transpired to kind of get us to that point of of ending the shutdown. Um, and I yeah, I depending on how how you take this, I might have one or two questions. So please, the shutdown.
SPEAKER_06:So the government is reopen. And like you said, we have plenty to talk about, but the government being open came about kind of quickly in the end, for as long as the shutdown went on. It reopened on November 12th. They are gonna have to have this fight again in some form at the end of January, but they bought themselves through the holiday season to figure out what they want to do in terms of full year government funding. The kind of price, if you want to frame it that way, for a handful of Senate Democrats voting in favor of reopening the government was that they were guaranteed a vote on the issue that was kind of at the crux of this for Democrats, which was extending expiring, expanded Obamacare credits that were came to be during the COVID era. There is some bipartisan support for that. We've yet to see when that vote will happen, what it will look like. But on the funding piece, we are kind of squared away until the end of January. The National Flood Insurance Program was also reauthorized. It's the 34th short-term reauthorization since the program uh last had a long-term one back in 2017. But, you know, we we might be back in the same exact place in early February, where we are, there is the potential for another shutdown, but they are hoping to move individual funding bills or packages of individual funding bills, which we call minibuses for fun here in DC in the intervening two months. So we have some time to see how this all plays out. The holidays are a crazy time in DC. The House has been out of Washington for the majority of the fall, although the Senate has been here grinding away during the shutdown. So the shutdown, in addition to the disruptions that it brought across the country, also was, of course, very disruptive to legislative work in DC. There were any number of hearings, markups, activities that were planned or loosely planned to happen in September or October that were ultimately pushed until the government could reopen. We're now up against the end of the year here, where the House and Senate are out the week of Thanksgiving. They're out the week of Christmas. So we we have just a few weeks here before the end of the year to see what materializes.
SPEAKER_01:So, you know, a couple of things on you know, obviously the end of the shutdown and the the CR that was put in play. You know, I first want to start with flood, right? This is, you know, one of the cans that they always just seem to kick down the road. And you know, from your perspective, what is it about flood insurance and that program that is just it's just something that they cannot establish long-term funding for? And it might be a silly question, it might be a stupid question. Uh how are we going to frame it up? It's just it seems to be such a you know a vital thing for for for many communities. You know, obviously coming from you know in the mortgage industry, you know, you know, the idea that you know during the shutdown, lenders could basically originate a loan with TBD flood insurance, right? Just obviously it's putting the not just the homeowner at risk, but the the lender at risk and the communities at risk. What is it about flood insurance that we just can't get right? I don't know. Maybe that's not the right question, but what is it about flood insurance?
SPEAKER_06:Yeah, I I get where you're coming from, Peter. I would say unfortunately, flood is not unique in this sense. There is a huge bucket of programs of this nature that are, you know, largely bipartisan, non-controversial, but need, you know, unfortunately on a shorter term basis, reauthorizations. And by that I mean flood gets picked up, you know, it has aligned for quite some time now with the annual government funding process. There are some programs that have five-year authorizations, that have three-year authorizations, but flood typically it's one year, it's it's stuck on to government funding. And so it is really just stuck in this cycle of because that it's so rare for them to commit to full-year appropriations bills in the past few years that every time they resort to a short-term CR, almost everything else that is set to expire on that date, you know, September 30th, it all gets bumped to the end of the next CR. And so this cycle just continues. And there's so much pressure on figuring out the kind of top of the ticket, if you will, the the funding piece that they're not carving things off of the lower part of the ticket, you know, like the individual reauthorizations. They pretty much it almost seems like they will they are content to let the solution to those play out along time that the solution to the bigger government funding issue. And so until they're separated, which would really happen with a kind of a full reauthorization. And even then, it would be kind of a temporary separation because even if it were, you know, three or five years, it ultimately would likely end at the end of September for whatever year that term would expire on. Um, that it's just married to this government funding cycle that they can't seem to break.
SPEAKER_01:You know, to kind of obviously thank you for that. You know, another thing as part of the you know, the end of the shutdown was I don't want to say, you know, that they're at their back, but CDFIs are back, right? Um in many ways, that that's that's very much a good thing for our industry. Granted, creditants could always, you know, you know still partner with them and be CDFIs, but the staffing associated with the CDFIs are are really back in play, right?
SPEAKER_06:Yes. The CR that they passed reversed the rifts that came out, the reductions in force that were issued during the shutdown. So it was about 500 HUD employees who were brought back to work, and the the staff at the CDFI fund were fully restored as well. We'll see how long the CDFI fund kind of goes without further efforts to scale back its its staffing. But for now, it is back at full capacity.
SPEAKER_01:Okay, awesome, awesome, awesome. Now something that ties in with the with the shutdown is obviously funding of the Bureau and the the drama that goes along with the CFPB.
SPEAKER_03:Walk us through that.
SPEAKER_06:So there is a fair bit of kind of legal process involved in this one, unfortunately. So I will try and keep it as top line as possible because I am not a lawyer and I don't want to get crosswise with any of my legal colleagues. But the CFPB is is fighting a lawsuit right now and has been for several months on acting director Vaught's efforts to fire a large number of CFPB staff that has been waging back and forth for essentially the entire year at this point. Last week or so early, early November, the CFPB filed in that case a new opinion from DOJ that says the CFPB actually can't draw money from the Federal Reserve because statutorily, under the Dodd-Frank Act, the CFPB can only get money from the Federal Reserve when it's a transfer from the combined earnings of the Federal Reserve system. And DOJ is now saying that combined earnings means profit. So the CFPB can only receive transfers of the Federal Reserve's profits. And the Federal Reserve has operated at a loss for several years now. And so the conclusion from DOJ being that the Fed cannot transfer any money to the CFPB because the Fed has no profits, and therefore there is no eligible pool of money from which the CFPB can draw on. So the CFPB in this case would only be able to draw from you know profits that right now don't exist or from the appropriations process. And right now, the CFPB is not receiving funds through the appropriations process. That, of course, since the Bureau's inception has been an issue that's been kind of ping-ponged on Capitol Hill. Um, the CFPB, in this filing to the court, citing DOJ's legal opinion, and specifically from DOJ's Office of Legal Counsel, says that they will have enough money to fund the current CFPB operations through the end of the year, at least, potentially into early 2026. This kind of whole legal theory has not yet been tested in court. So there are a lot of things that will likely happen between now and this potential funding cliff that will impact the way this all plays out. And we're very early in that process right now, but it is a new and and substantial threat to the CFPB's funding structure yet again.
SPEAKER_03:Okay.
SPEAKER_01:Thank you. Thank you for that. All right, so moving on, something that I I I know is is I was at an event last, I guess a couple weeks ago, and I I jokingly talked about this once this this news broke, not about the CPV funding, but the idea that a 50-year mortgage and the idea that what what the administration and and FHFA are calling portable mortgages, i.e. assumable mortgages. What's going on over at the FHFA?
SPEAKER_06:So the FHFA is having quite a November. And I'm I'm sure by the time this airs, even more things will have developed, but it's already been quite a packed month for them. So, yes, Peter, you're referencing that Colte tweeted that the FHFA is working on the 50-year mortgage. Um, there was a lot of reporting around this and uh his presentation of the idea to the president and that the president's take on it. There's kind of a couple pieces at play here, right? So lenders could offer non-QM 50-year mortgages, but to offer 50-year mortgages eligible as QMs, the CFPB would need to undertake a rulemaking to change the the current rule cap on loan terms, which is right now 30 years. So this kind of ties back to the CFPB because if the CFPB has no funding in a few months, they won't be able to undertake a rulemaking like that. So that's kind of where that stands right now. I think there's a lot of debate about the benefits and downsides of a 50-year mortgage. You know, of course, stretch over a longer term, lower monthly payments, higher interest rate compared to a 30-year, most likely. And you're going to accrue equity in your home at a lower rate. But I'll I'll leave the pontificating on the benefits or the downsides of mortgages to the other experts that you have on this podcast. Fulty's also working, you mentioned on assumable and portable mortgages. Portable, as the name suggests, would let folks transfer their existing mortgage loan to a new property. The assumable would let you take on an existing mortgage on a home that you're purchasing. The lender would have to approve, whatnot. But these are all kind of in the early stages. But they are, I don't think, things that will go away quickly. I think we'll continue to hear about them in the coming months, especially as this larger debate about housing affordability is really center stage at the moment.
SPEAKER_01:No, and I appreciate how housing affordability is kind of taking center stage. You know, you and I have talked about this numerous times, that you know, obviously it was a big topic, you know, during the election. It seems to be a priority for a lot on the hill. And all of these ideas are always thrown out, but nothing ever really moves on them, right? On the idea of affordability. You know, these, you know, outside of assumptions, assumptions have been around for a while, right? Having an assumable mortgage, that's that's been around for a while. Some lenders do it, some lenders don't. Um, but the idea of a portable mortgage, this is not a new concept. It's just, I don't want to call it radical, but it's definitely far-fetched, right? I mean, I I can't even imagine how they'd even structure it to make that even work. But the one that's the most interesting to me is the 50-year mortgage, right? You know, thinking back to you know, pre-2007, 2008, I mean, 40 years were popping up everywhere, right? W why why why not just bring those back? Why skip over 40 and go straight to 50? Um I mean, let's be honest. I mean that's 50 year mortgage is a long, long time. I mean, 30 years is a long, long time. But 50 years, I mean, that is you would uh essentially have to buy a house and that would be your little forever home. I mean, to the point where if the average age of a of the first-time homebuyer nowadays is what, uh 36, I think. I mean, you're going to be 86 when that that house or that loan fully matures. I mean, that is ridiculous.
SPEAKER_02:Absolutely ridiculous.
SPEAKER_06:If you bought your house when you were 21, by the time you paid off your mortgage, you would also, I believe, be on both Social Security and Medicare. It would really span a huge chunk of your your essentially your entire adult life.
SPEAKER_01:Right. But the thing is, how many 21-year-olds in today's society, today's economy have enough for a down payment on a house nowadays, right? Almost no 21 years.
SPEAKER_06:I would imagine the the percentage is extremely small.
SPEAKER_01:Right. So, okay, let's say you you you start getting enough for a down payment when you turn 24, 25, right? That's when you probably have your first job and you probably have the ability to maybe start saving up, right? But again, I mean, how many 24-year-olds have enough for a down payment on a house in the DC area, right? Maybe in Oklahoma City, maybe in I don't know, somewhere in South Dakota, but here in like high cost area, I mean it's it's next to impossible. I don't think payments are the actual issue. Yes, maybe payment yes, payments are part of the issue, which a 30-year mortgage, sorry, a 50-year mortgage would help solve the that monthly payment issue. Down payment and access, that's that's the real heart of all these things. Assumability solves the access, but and maybe portable portable doesn't a little bit, but the real heart of the issue is access to that down payment and being able to actually purchase. I mean would 100% financing be a better path? Maybe. I don't know. I digress. I could go onto this argument. Moral of the story is, and this is my opinion, and I know I'm I'm kind of going off on a tangent right now. I'm all down for portable mortgages, I'm all down for for assumable. The 50-year mortgage is interesting because if it's done properly, it could possibly be a good loan.
SPEAKER_03:I'll just say that.
SPEAKER_01:The problem is let's look back to the hybrid arms or the pick-a-pay arms that really led to the financial crisis, right? You give the the you give the power to you know some random mortgage broker, they're probably gonna abuse that power, right? They're gonna put the wrong person to a fifth-year mortgage and it's become gonna become a bad loan. So for the right person, it could be a good loan, but we have to be able to prudently underwrite it. Uh again, I'm going off a tangent.
SPEAKER_06:No, I think that's a great frame for the kind of the set of three that we've just been discussing.
SPEAKER_01:Great. Thank you for thank you for humoring me. All right, let's let's wrap up. Let's wrap up with the update on the road to housing. Um, you know, for me, I absolutely love this. Uh, I love the idea of the road to housing, but what's going on with that?
SPEAKER_06:So we've talked about the road to housing for many months now on the podcast, and it always is making important progress through Congress. As we know, it was marked up over the summer by the Senate Banking Committee, got unanimous support. It's very bipartisan package. There's a lot of good policy in there. And there has been a play for several months now to include all or some of this package in the annual defense bill, National Defense Authorization Act. If there is one thing in Congress that will pass every single year, it is the NDAA. And so in recent years, some years, folks have been able to tack on bipartisan policy priorities outside of the defense space into the package. And that's what the push has been with the Road Act is saying, hey, this is an important policy priority. It's very bipartisan. Let's see if we can get it into the bill. So the Senate sponsors are pushing for that. Um, the House side, there has been an effort with Mike Flood and Emmanuel Cleaver, who are the leadership of the housing subcommittee in financial services, to put together their own package. Uh, theirs is focused more on reauthorizing the home investment partnership over at HUD. They were hoping to kind of marry that with the Road to Housing Act potentially. The NDAA negotiations are kind of coming down to their last stage here. So we'll know in the next few weeks whether or not the Road Act or pieces of it make it into the final version of the NDAA. But given how bipartisan it is, the indicators are positive right now that at least some of it will be included in the final version of the package. This is always kind of a December process that it's considered on the House and Senate floor. But right now it looks like it'll be on the House floor the second week of December, which means the Senate could take it up either later that week or early the third week of December. But nothing's final until the the bill text is voted on. So we're we're in the end game now, but we'll we'll know soon.
SPEAKER_01:So in in your opinion and from what you've heard, uh obviously, you know, road passed Senate banking unanimously, unanimously, and then it passed obviously the Senate floor. What type of revisions are do you anticipate? Are they gonna be major revisions of the road now that the House is really looking at it in flood, or do you think the spirit and essence of the Senate bill is still gonna be there?
SPEAKER_06:I think the spirit and essence of the Senate bill would still be there. I would be surprised if they were making major substantive changes to the package for NDAA consideration, only because the the package is so bipartisan. I think you could see, you know, pieces coming out and a narrower version of it in the bill. Uh there's always the potential for some changes, you know, if if the House is asking for some things, but I would not expect it to be a sub a substantively different version of the package. Just perhaps smaller.
SPEAKER_01:Yeah, I mean, so I think you and I can agree. I mean, it had a lot of great components in it that actually goes back to the affordability issue that we were talking about just a second ago with FHFA, right? It had a lot of components that actually would help with affordability. And so it it's, I think all eyes are on this and all eyes are on the house to see what they do with this.
SPEAKER_06:Um and if there are pieces that, you know, if part of road makes it in and part of it doesn't, you could see those pieces that don't kind of marry up with this legislative effort that they are working on in the house.
unknown:Okay.
SPEAKER_03:Um, do you have any concerns that it won't be attached to the NDAA?
SPEAKER_05:There's always a risk.
SPEAKER_06:You know, things fall out during this process all the time. Uh and I won't know for sure until the text is final.
SPEAKER_01:Right. I mean, so I mean, let's let's let's I mean you know, put the cards on the table, even if it doesn't go through this year, right? Because, like you said, it is so bipartisan. And I kind of relate this almost to like the the the trigger leads, right? Trigger leads very bi bipartisan. It it tried to get attached to the NDAA, it didn't, but eventually, because of how favored it was and how bipartisan it was, it did eventually go through. So no matter what, I mean, even if it doesn't go through the NDAA now, it it it more than likely will at some point go through absolutely and it could go standalone as well.
SPEAKER_06:There's right, you know, it since it's already been through the Senate, if the House wanted to take it up quickly, they could. Um, if they wanted to send a modified version back to the Senate, they could. The traditional legislative pathways are very much open for this package in the event that it was not sticky to NDA in the end.
SPEAKER_01:So it in the moral story is if not today, tomorrow. But this this one's looking pretty good.
SPEAKER_06:Yes, I'm cautiously optimistic.
unknown:Okay.
SPEAKER_01:Well, well, Ann, thank you so much for kind of walking us through all that stuff. Really do appreciate it. Now, before we go, I know you have some fun facts that you want to share with us.
SPEAKER_06:Thanks, Peter.
SPEAKER_01:You're welcome.
SPEAKER_02:My pleasure.
SPEAKER_06:I just figured in the spirit of the holiday that I would bring a couple facts about Thanksgiving at the White House to uh kind of lighten the mood here at the end. So I'm sure everyone is familiar with the turkey pardoning. I did a little research on this ahead of the podcast, and it turns out that the turkey pardoning actually wasn't common at the White House until the mid to late 1900s. There has been a turkey presentation ceremony since it seems the late 1800s, but it wasn't until Ronald Reagan and then George H.W. Bush that the actual pardoning of the turkey became an annual tradition. But what kind of kicked off this whole thing was when Ulysses Grant was president in 1873, the poultry king of Rhode Island sent him a turkey to the White House. Uh, he provided turkeys for 40 years after that. And then in the 1920s, Woodrow Wilson, so 1920, Woodrow Wilson receives two turkeys at the White House. He doesn't know which turkey to have for Thanksgiving dinner. So he has them fight on the White House lawn to select a winner. Um, the turkeys who came to the White House during the 20s, they they kind of traveled in style. I wish I had a picture to share, but they came in elaborate cages and these boxes with very elaborate designs on them in 1921. The turkey that year, his name was Supreme Two. There's no mention of Supreme One. I looked, I'm not sure what happened to that turkey. But Supreme Two arrived at the White House wearing an aviation helmet and goggles and clad in black and gold sweater held on by a pink bow. And they tried to fly the turkey to the White House, but it got air sick. So they had to land the plane to save the turkey. And then the next year, Supreme Three was traveled in a car 800 miles to avoid the air sickness situation. And it was wearing a specially made motorcoat to protect the turkey. And it was in a special cage suspended on springs so it didn't get too shaken up during the drive. And then Calvin Coolidge, he decided he didn't want to deal with the turkeys. He decided to shop local. That only lasted for like a year or two. And then 1925, everyone's sending him all kinds of animals again to the White House. He doesn't really know what to do with them. 1926. Someone sends him a raccoon. He doesn't want to cook the raccoon. So he and his wife adopt it as a pet and they name her Rebecca. And she lives at the White House with them for the duration of his presidency. And she has an embroidered collar that says White House Raccoon. So I have to say, if you have any interest in the White House Thanksgiving traditions, the White House Historical Association has some fantastic materials out there about this, including some photo evidence of the things I've described here today. But I hope everyone listening has a fantastic Thanksgiving and that no one receives a live raccoon as a gift unless they, you know, sought to do so.
SPEAKER_01:I've always wanted a raccoon as a pet.
SPEAKER_06:You and you and Mrs. Coolidge, it seems.
SPEAKER_01:And unfortunately, I live in Maryland where it's illegal to own a raccoon as a pet.
SPEAKER_06:Oh, well, you you had that fact ready to go, Peter.
SPEAKER_01:I sure did. Hey, yeah, you gotta do research on this, AM. You gotta know where you live. Um, well, AM, thank you so much. As always, appreciate your support that that you and the rest of the Brown scene team do for us. Uh enjoyed the conversation today. Um, I hope you have a uh wonderful holiday season. If I don't see you before the end of the year, uh so thank you very much.
SPEAKER_06:Thank you for having me, and same to you and yours as well.
SPEAKER_01:Appreciate that. And to close out, thank you again to Lone Vision for sponsoring today's episode. And to all of you, we know your time is valuable. Thank you for tuning in to the latest episode of Acuma's On Point Podcast. We hope you enjoyed it. Until next time, be well, my friends.
SPEAKER_04:Thanks for listening. We'll see you next time at the Acuma on Point Podcast. If not already, be sure to subscribe and give us a five star rating. For more great episodes and information, be sure to visit us online at Acuma.org. And to get the latest updates, head over to our LinkedIn page.
