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House Authorizes Technical Adjustments to TILA
The House of Representatives has passed a bill which wouldrnamend the Truth in Lending Act (TILA) in respect to the way lenders compute andrndisclose points and fees information in a mortgage transaction. The computation is used to determine if arnmortgage is high cost or considered a qualified mortgage under ability to repayrnprovisions. </p
The legislation, HR 685, would exempt from the computationrnof points and fees any escrow taken at closing for future payment of insurance. It would also modify the criteria forrnexclusion of “certain reasonable charges elsewhere exempted from the computation.”rn</p
According to the sponsor’s summary of the bill it “Excludes from points andrnfees any such reasonable charges even though a creditor receives compensation,rnbut only in so far as the creditor or its affiliate retains the compensation asrna result of their participation in an affiliated business arrangement.”</p
In an analysis of HR 685 on Ballard and Spahr’s CFPB Monitor Blog, RichardrnJ. Andreano, Jr. classified the change to the insurance escrow computation as “arntechnical amendment.” The other change wouldrnbring amounts for title charges received by the lender’s affiliates into line withrncurrent rules regarding those changes paid to non-affiliates which are alreadyrnexcluded from points and fees under existing legislation.</p
The bill, sponsored by Representative Bill Huizenga (R-MI),rnwas referred on Wednesday to the Senate Committee on Banking, Housing, andrnUrban Affairs. It has 37 co-sponsors.
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