McKay also hopes to start mending industry division to benefit brokers
After the monumental legislative victory in 2025 in getting the trigger lead ban bill signed into law, one might understand if the industry takes a deep breath and cruises into the end of the year.
Alas, there is still work to be done on the legislative front, so no rest for the weary. In addition to working to mitigate rising credit-reporting costs and sorting through LO comp reform, another piece of legislation is seeking widespread support.
The Mortgage Insurance Freedom Act, or HR 5508, aims to align FHA mortgage insurance with conventional mortgage insurance.
Brendan McKay (pictured top), chief advocacy officer and co-founder of the Broker Action Coalition (BAC), believes this issue, like the trigger lead ban, appeals to politicians on both sides of the aisle. Democratic Rep. Gregory Meeks and Republican Rep. Pete Sessions introduced the bill.
“It is bipartisan, and it would cause mortgage insurance to fall off during the life of the loan, just like a conventional loan does,” McKay told Mortgage Professional America. Mortgage insurance is essentially foreclosure insurance for low-equity loans. And it's why we're able to have low-down-payment loans in this country, and you're not able to in other countries with conventional loans.”
Aligning FHA with conventional
Right now, if a borrower is forced to add mortgage insurance to a conventional loan because their down payment is less than 20% of the home's value, it is automatically removed when the LTV drops to 78%.
However, with an FHA loan, the mortgage insurance never drops off the loan. So borrowers who use this program, who are often more financially disadvantaged than conventional loan customers, are forced to make these payments until the loan is satisfied.
“You put 3% down, and you pay your mortgage down, and it appreciates, and you have 25% equity, you can’t get the insurance removed on FHA loans. It's on for the life of the loan,” McKay said. “You've got people paying hundreds of dollars a month in mortgage insurance on a home that has no risk of foreclosure, because they would just sell the house.”
According to the BAC, the average insurance premium for an FHA loan is $181.69 per month, or $2,180.32 per year. Because affordability is such a huge topic in the country right now, McKay believes the timing for getting this legislation passed is perfect.
“What does everyone care about in this country politically?” he said. “Affordability is number one. Not just housing affordability, but affordability period. You’re looking at, on average, $181 in savings per month for those eligible. And we're not talking about millionaires. The average FHA borrower is a middle-class American. And that amount of lightening of their monthly budget is just massive. We’re hoping it will remain politically popular.”
Another reason the timing is right for this legislation is that the FHA is sitting on a massive surplus in its capital fund.
“As of last September, FHA was sitting on $173 billion in its capital reserve fund, which is 473% of its congressionally-mandated reserve fund,” McKay said. “And if the fund grew as much this year as it did last year, they will be at over $200 billion, and then they're over 500%. The FHA is sitting on too much money, and we think it's time to give some back to the American people, and we can't think of a better way to do it.”
Ending industry division
McKay said another major issue the BAC would like to help tackle in 2026 is ending the massive division in the mortgage industry.
“We're going to be looking to get the broker community united in a way that they never have been,” he said. “The broker community came together five or six years ago, and a real community was created in a way that didn't exist previously. But it existed with immediate division between which lender you worked with. I was part of this problem, and I fully accept my role. I don't like to think I made things worse, but I know I could have done more to make it better, and I didn't.
“We think that it's past time for that to come to an end, so we're going to be pushing and not just saying it. There are going to be some things that we're going to be doing to try to get the wholesale channel in the broker community to move in that direction. I'm really excited about it.”
Kimber White, President of the National Association of Mortgage Brokers, outlines how NAMB’s new Elevate mentorship program and ongoing advocacy on LO comp reform will strengthen broker education and collaboration across the industry.https://t.co/dTFOPVG7Cr
— Mortgage Professional America Magazine (@MPAMagazineUS) October 27, 2025
While there is camaraderie in the mortgage broker space that doesn’t exist in other parts of the industry, McKay believes that if the overarching division could be bridged, it would benefit both brokers and end customers.
“I'm more limited in what I can offer my customers as a result,” McKay said. “And that stinks, but even on a less transactional level, it creates such an unhealthy baseline for the way that we talk about things, whether you're a UWM broker or a Rocket broker. I own McKay Mortgage. I'm an independent mortgage broker. I don't fly any corporate flag other than my own, and we're losing that the longer this continues. I absolutely hate it.”
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