Search

"Mortgage Choice Act" passes House

by devteam June 11th, 2014 | Share

A bill modifying the definition ofrnpoints and fees under the Truth in Lending Act passed the House ofrnRepresentatives yesterday on a voice vote. rnHR 3211, the Mortgage Choice Act of 2013, exempts from the Qualified Mortgagern(QA) cap on points and fees any affiliated title charges and escrow charges forrntaxes and insurance.  The bill wasrnintroduced by Bill Huizenga (R-MI) and Gregory Meeks (D-NY).</p

The bill specifically exempts fees paidrnto businesses affiliated with the lender, such as title companies, from therncomputation of points and fees under the QM cap.  Fees paid to unaffiliated businesses werernalready exempt. </p

Passage of the bill had been stronglyrnadvocated by the National Association of Federal Credit Unions (NAFCU) and thernMortgage Bankers Association (MBA) among others and opposed by consumerrnadvocacy organizations such as the Center for Responsible Lending (CRL) and thernConsumer Federation of America (CFA).  </p

NAFCU vice president of legislativernaffairs Brad Thaler sent a letter to House leaders prior to the vote saying thernchanges made by the bill “would greatly improve the definition of ‘points andrnfees’ used to determine whether a loan meets the QM test, and would ensure thatrnthose with low and moderate means would continue to be able to obtain theirrnmortgages from their credit union at a reasonable price.”</p

In a letter sent to members of Congress earlier in the bill’srnhistory, 19 consumer groups including CRL and CFA charged that title insurance fees are grosslyrninflated and add $1,000 or more to the upfrontrncosts of many mortgages.  “The approach taken in this bill, which is misleadingly named the MortgagernChoice Act, leaves the door open for abuses that were typicalrnin the recent subprime crisis.rnDuring the subprimernlending boom, borrowersrnoften paid excessive origination costs; Dodd-Frank’s Qualified Mortgage provisions aim at restoringrna fair market.”  The letter said that passage of HR 3211 wouldrnallow lenders to continue to steer borrowers toward title insurance atrnunaffordable rates.</p

David H Stevens, President  andrnCEO of MBA commended the House for approving the legislation.  In a statement on behalf of the AssociationrnStevens said, “Proper implementation of the ability to repay and QMrnrequirements is crucial to allowing credit-worthy consumers to purchase orrnrefinance a home at affordable rates.”

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.

About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

See all blogs
Share

Comments

Leave a Comment

Leave a Reply

Latest Articles

Real Estate Investors Skip Paying Loans While Raising Billions

By John Gittelsohn August 24, 2020, 4:00 AM PDT Some of the largest real estate investors are walking away from Read More...

Late-Stage Delinquencies are Surging

Aug 21 2020, 11:59AM Like the report from Black Knight earlier today, the second quarter National Delinquency Survey from the Read More...

Published by the Federal Reserve Bank of San Francisco

It was recently published by the Federal Reserve Bank of San Francisco, which is about as official as you can Read More...