House marking up key mortgage, regulatory reform bills

These could have serious impact on housing finance, mortgage lending

A hard slog of a markup day continues Wednesday into early afternoon as the House Financial Services Committee moves ahead with the often tedious work of marking up 11 key regulatory relief bills, of which several could have a big impact on mortgage lending and mortgage finance.

Among the bills under discussion are, first and foremost for the industry, H.R. 685, the Mortgage Choice Act of 2015; H.R. 1408, the Mortgage Servicing Asset Capital Requirements Act of 2015; H.R. 1529, the Community Institution Mortgage Relief Act of 2015, and H.R. 1195, the Bureau of Consumer Financial Protection Advisory Boards Act.

Reintroduced earlier this year after dying in the last Congress despite bipartisan support, the Mortgage Choice Act of 2015 by U.S. Rep. Bill Huizenga, R-Mich., would amend and clarify the qualified mortgage definition in the Dodd-Frank Act thereby improving access to credit and qualified mortgages for low and moderate income borrowers while protecting consumers from bad loans.

The Mortgage Choice Act would adjust the Truth in Lending Act definition of fees and points by exempting points and fees any affiliated title charges and escrow charges for taxes and insurance from the qualified mortgage cap on points and fees.

Last Congress, the bill died in the Senate.

"The goal … is to help low and middle income borrowers as well as prospective first-time homeowners realize a portion of the American Dream: owning their own home," Huizenga said. "This legislation is narrowly focused to promote access to affordable mortgage credit without overturning the important consumer protections and sound underwriting required under Dodd-Frank's 'ability to repay' provisions. I am glad to see this bipartisan effort garner unanimous support in committee and I am hopeful this legislation will see action before the entire House in a timely manner."

Most housing financial and housing trade groups support the Mortgage Choice Act, including the Mortgage Bankers Association, the National Association of federal Credit Unions, the Mortgage Lenders Association, theConsumer Mortgage Coalition, the Credit Union National Association, the National Association of Home Builders, the Real Estate Services Providers Council, the Realty Alliance and the National Association of Realtors.

House Financial Service Committee Chairman Jeb Hensarling, R-Texas, said he hoped the regulatory relief bills would pass the markup stage without a fight, but that wasn’t happening.

“These bills – all of them, again, sponsored and co-sponsored by Republicans and Democrats alike – either passed the House or this committee during the previous Congress.  In fact, 9 of these 11 bills we will consider today passed the House or this committee without any opposing vote at all.  In other words, no Member voted against them.  So it is difficult, perhaps even impossible, to be more bipartisan or less controversial than these 11 bills that we consider today,” Hensarling said in opening remarks.

“Which means because they are bipartisan, they are modest. Although they are modest, they are not insignificant to our fellow citizens back home or to the community banks and credits unions that our fellow citizens depend on,” he said. “Every time a community bank or credit union dies, so, too, do the dreams of many of our fellow citizens – hardworking taxpayers – who rely upon their hometown banks and credit unions to perhaps buy a pickup truck in order to go to work. Maybe they’re helping fund their very first child in their family’s history to go to college or to start a small business that they have labored so many years to finally begin.”

But Ranking Committee Democrat Maxine Waters, D-Calif., said many of the bills were problematic.

“Countless times last year, our members worked with you on proposals that would provide relief for community banks, make technical fixes to Dodd-Frank and reauthorize important programs,” Waters said.“But we have ended up seeing little real legislative progress — progress that requires thoughtful negotiations, open communication, and a willingness to compromise so that legislation can actually be signed into law.

“I must say you did work with us to garner bipartisan support for smaller bills — only to orchestrate their failure by packaging them with toxic measures that are simply unacceptable special interest giveaways,” Waters said. 

Watch the opening remarks here.

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