Huizenga’s Bipartisan Qualified Mortgage Legislation Passes House Unanimously
|Targeted News Service|
Remarks as Prepared:
As someone who worked in the housing industry, this is a very important issue to me and more importantly, to my constituents in
Earlier this year, the Qualified Mortgage (QM)/Ability to Repay Rule as mandated by the Dodd-Frank Wall Street Reform Act went into effect. The QM rule is the primary means for mortgage lenders to satisfy their "ability to repay" requirements. Additionally, Dodd-Frank provides that a QM may not have points and fees in excess of 3 percent of the loan amount. As currently defined, "points and fees" include (among other charges): (i) fees paid to affiliated (but not unaffiliated) title companies, (ii) salaries paid to loan originators, (iii) amounts of insurance and taxes held in escrow, (iv) loan level price adjustments, and (v) payments by lenders to correspondent banks, credit unions and mortgage brokers in wholesale transactions. As a result of this confusing and problematic definition, many affiliated loans, particularly those made to low- and moderate-income borrowers, would not qualify as QMs and would be unlikely to be made or would only be available at higher rates due to heightened liability risks. Consumers would lose the ability to take advantage of the convenience and market efficiencies offered by one-stop shopping.
I, along with Rep.
Specifically, H.R. 3211 would:
* Provide equal treatment for affiliated title fees compared to unaffiliated title fees
* Clarify the treatment of insurance and taxes held in escrow.
These common-sense changes will promote access to affordable mortgage credit for low and moderate income families and first-time homeowners by ensuring that safer, properly underwritten mortgages pass the QM test.
I'd like to thank my colleague, Rep. Meeks, along with the many others who have worked tirelessly to help fix this flawed provision currently being implemented.
TNS 30TacordaCheng-140610-4761173 30TacordaCheng
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