Election season is in the air at MBA Annual

If you didn’t know it before, you’re likely to be reminded every day between now and Nov. 5 that this is a close election for the balance of power in Washington, D.C.

This theme persisted through the first full day at the Mortgage Bankers Association (MBA)’s Annual Convention and Expo in Denver this week. Programming material has been focused on the election and policy discussions were easy to find on the main stage, in the exhibit hall or among attendees throughout the Colorado Convention Center.

There is a lot riding on the election’s outcome at the top of the ticket. In his opening remarks, MBA president and CEO Bob Broeksmit talked about the association’s readiness to work with whomever is ultimately elected, and that they’re ready to stop “bad ideas” regardless of which candidate they come from.

Broeksmit also detailed that the trade group is preparing for a divided government scenario, where power in the executive and legislative branches are owned by different political parties.

The congressional races

At a stage event late in the day on Monday called “Election Jeopardy,” Bill Killmer, MBA’s senior vice president of legislative and political affairs, introduced two of the association’s legislative liaisons.

George Rogers, who primarily works with Senate Republicans, pointed out that the Senate race in West Virginia — where longtime Sen. Joe Manchin is retiring — is being closely watched as a pickup opportunity by Republicans and could help swing the upper chamber into their control. On top of that, the Senate race in Montana is showing incumbent Jon Tester, a Democrat, trailing in the polls.

Given the closeness of the majority, if the polls hold with these results, that’s enough to flip the Senate into Republican hands and give them key committee positions to pursue their legislative priorities, including those in housing.

On the other hand, Madisyn Rhone — the MBA’s legislative liaison for House Democrats — expressed confidence in the potential for that chamber flipping to Democratic control. Republicans are facing their own slim-majority perils, and Rhone and Rogers agreed that Democrats will be likely to confirm a speaker as soon as the new Congress is sworn in this January, should they win the majority.

The same can’t be said with the same level of confidence on the Republican side, where it was an unprecedented challenge to confirm Kevin McCarthy as speaker when the GOP took narrow control of the chamber in early 2023. And on top of that, the odyssey to replace McCarthy following his ouster as speaker roughly a year ago was notoriously arduous, placing more uncertainty over the chamber should Republicans hold onto control.

Of particular interest to the housing industry will be an emerging tax debate, Killmer explained. In 2025, key provisions from one of Donald Trump’s signature legislative achievements, the Tax Cuts and Jobs Act, will expire. This will likely lead to what Killmer called a “tax Super Bowl” of a debate to emerge in Congress next year.

The presidential race

That’s before you get to the presidential contest. Trump and Vice President Kamala Harris are down to their final days of duking it out in a handful of swing states for even a slight advantage that would translate into more electoral votes. Housing has emerged as a major issue of the campaign, but far from a dominant one, particularly as Harris and Trump are making their closing arguments to voters.

This all looks like a serious challenge for the nation, but at least on the housing front, there could be a hint of stability since housing itself is not often a very partisan political issue, according to Scott Olson, executive director of the Community Home Lenders of America (CHLA).

“Having been doing this stuff for 30 years, I think there are a few things that are less partisan than housing,” Olson told HousingWire in an interview. “So, that’s good. And I think divided government does tend to lend itself more to people in Washington compromising. I think that’s maybe a good thing; people could disagree about that. But obviously the biggest thing will be whether or not Donald Trump is elected.”

That’s because in a second Trump administration, there will likely be a host of agencies going in different leadership directions, many of which have extreme importance to the mortgage industry.

“There would be new leaders at the CFPB, FHFA, those who run HUD and FHA — all of those things will change if he’s elected,” Olson said. “And so, policies will change, so I think that’s the one thing to really pay attention to, more so than Congress.”

Control and continuity

Even considering all the partisan rancor happening in the House and Senate, each chamber has its own level of controls, institutional or otherwise. If Republicans sweep both chambers, for instance, the likelihood of a more pronounced majority in the House is slim.

This means the House will “have trouble doing big things or passing major changes,” Olson said.

In the Senate, which is also likely to be narrowly divided even if power changes hands, the filibuster often serves as a control to indefinitely stall the passage of a bill by preventing debate on it from ending.

“The major changes would come if there’s a change in administration [to Trump],” Olson said. “Now, if Vice President Harris gets elected, there might be some changes, but it’s going to be largely continuous [with the Biden administration].”

Harris has not yet signaled any potential cabinet picks. After the resignation of Marcia Fudge as HUD secretary earlier this year, Adrianne Todman has been in the position on an acting basis. And Sam Valverde has served as acting president of Ginnie Mae since shortly after the resignation of Alanna McCargo in April.

If elected, Harris could forward either Todman’s or Valverde’s name for full Senate confirmation, but it’s all conjecture until the results are tabulated and the next president fills out the incoming administration. And it’s difficult to envision today how that will go.

“Now, you’re probably thinking, ‘OK, Bob, but cut to the chase. Who do you actually think will win?’” Broeksmit said during his remarks on Monday morning. “Well, if I knew that, I wouldn’t be in Denver. I’d be in Vegas.”