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Mortgage

Houses passes Mortgage Choice Act of 2015 by 286-140

Bipartisan bill would reform mortgage regulations

A bill to reform mortgage industry regulations was approved by the House of Representatives late Tuesday afternoon.

House members from both parties voted 286-140 to pass H.R. 685, the Mortgage Choice Act of 2015, which was reintroduced earlier this year after dying in the last Congress despite bipartisan support.

"The American dream for so many low- and moderate-income Americans is that one day they can achieve financial independence,” said House Financial Services Committee Chairman Jeb Hensarling, R-Texas. “We are trying to ensure that low- and moderate-income Americans have convenience, that they have choice, that they have lower prices.”

The Mortgage Choice Act of 2015 by U.S. Rep. Bill Huizenga, R-Mich., — like the Mortgage Choice Act of 2014 — would amend and clarify the qualified mortgage definition in the the Dodd-Frank Wall Street Reform and Consumer Protection Act, thereby improving access to credit and qualified mortgages for low- and moderate-income borrowers while protecting consumers from bad loans. 

 “A qualified mortgage is the gold standard of home loans. Hardworking families should not be denied access to a qualified mortgage because of technicalities that are largely out of their control," Huizenga said after the passage. "The Mortgage Choice Act enacts commonsense reforms to Dodd Frank making it possible for low- and middle-income families to achieve a portion of the American Dream. I am glad to see strong bipartisan support for the effort to make homeownership an attainable goal.”

The Mortgage Choice Act of 2015 would also adjust the Truth in Lending Act definition of fees and points by exempting points and fees on any affiliated title charges and escrow charges for taxes and insurance from the qualified mortgage cap on points and fees.

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, the Consumer 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.

Supporters say that by amending the definition of points and fees in this manner, the legislation will:

  • promote the availability of safe and affordable mortgage credit;
  • maintain a competitive marketplace,
  • prevent higher prices or the withdrawal of affiliated title service providers in low- and moderate-income marketplaces; and
  • preserve the ability of consumers to choose the benefits of one-stop shopping when they purchase or refinance their home.

The measure now goes to the Senate, where it will likely get a warmer reception than the version passed last year.

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