In a letter sent to Congress on Monday, the National Association of Realtors urged representatives to support the Mortgage Choice Act.
Last year, House Financial Services Committee Chairman Jeb Hensarling’s, R-Texas, Financial CHOICE Act, H.R. 10, was officially on its way to the Senate for a vote. However, as it only received partisan support, the bill died on the Senate floor.
Then in December, the Senate Banking Committee began its markup of a bill that would roll back the Dodd-Frank Act, the Economic Growth, Regulatory Relief and Consumer Protection Act. The Senate Banking Committee held its last hearing on this bill on January 30.
Now, NAR is urging Congress to support another regulator relief bill, the Mortgage Choice Act. The bill passed through the Committee on Financial Services late last year, and the bill is scheduled to be considered in the House Committee on Rules at 5 p.m. ET Monday.
The House Majority Leader indicated on Wednesday that the bill might be considered by the full House at some point this week.
The bill, H.R. 1153, is bipartisan legislation introduced by Rep. Bill Huizenga, R-Mich., Rep. Gregory Meeks, D-N.Y., Rep. Ed Royce, R-Calif., Rep. David Scott, D-Ga., Rep. Steve Stivers, R-Ohio, Rep. Mike Doyle, D-Penn., and Rep. David Joyce, R-Ohio.
The bill would adjust the Truth in Lending Act's, or TILA, definitions of points and fees under the Ability to Repay/Qualified Mortgage rule.
NAR claims the bill will enhance competition in the mortgage and title insurance markets, and ensure that consumers will be able to choose the lenders and title providers best suited for their home buying needs.
From NAR’s letter:
Currently, the QM rule discriminates against companies affiliated with real estate brokerages. For a mortgage to be a QM and receive safe harbor protections, the fees and points of the mortgage cannot exceed 3% of the loan amount. However, mortgage bankers and title companies affiliated with real estate brokerages are required to count more items towards the fees and points than large retail institutions. This puts these smaller firms at a competitive disadvantage.
NAR explained that the legislation does not create a special advantage for title insurance or other affiliates of a brokerage, saying the companies remain subject to the Real Estate Settlement Procedures Act, or RESPA, and other consumer protection laws which prevent steering, kickbacks and other unfair practices.d
“The 1.3 million members of the National Association of Realtors urge your support for this bill, as it will enhance the quality and efficiencies of the services provided by mortgage and settlement providers,” the association’s letter said, signed by NAR President Elizabeth Mendenhall.
Back in 2015, Huizenga first tried introducing the bill, H.R. 685, or also called the Mortgage Choice Act. When the bill was first introduced, most housing trade groups, including the Mortgage Bankers Association, the Mortgage Lenders Association, the Consumer Mortgage Coalition, the Credit Union National Association, the National Association of Federal Credit Unions, the National Association of Home Builders, the Real Estate Services Providers Council, the Realty Alliances and NAR, all voiced their support.