WASHINGTON (2/4/15)--The Mortgage Choice Act, a Credit Union National Association-supported piece of legislation, was re-introduced by Rep. Bill Huizenga (R-Mich.) Tuesday. The bill is identical to a version introduced in the 113th Congress.
"The Mortgage Choice Act addresses concerns that we raised with the Financial Services Committee during our June 2013 testimony examining how the Dodd-Frank Act hampers home ownership," said Ryan Donovan, CUNA's chief advocacy officer.
"We have sent several letters of support for this legislation as it has made its way through the legislative process, and we will continue to push for its passage."
The bill was approved by voice vote in the U.S. House last June, and CUNA urged the Senate in November to consider the bill before adjourning. However, the Senate did not act on the legislation and, therefore, the bill must be re-introduced for consideration in both chambers this year.
The bill would adjust the definition of fees and points in the Truth in Lending Act to ensure greater consumer choice in mortgage and settlement services.
Under the current Ability to Repay/Qualified Mortgage rule, points and fees may not exceed 3% of the loan amount. What currently constitutes a "fee" and a "point" toward the cap varies depends on who makes the loan, and what arrangement the borrower makes to obtain title insurance.
The bill would clarify those definitions, as well as exclude title insurance and escrowed homeowner insurance premiums from points and fees, making sure those amounts are not counted toward the 3%.