The House of Representatives has approved legislation that would exclude some fees from the maximum fee calculation on Qualified Mortgages.
H.R. 3211, the Mortgage Choice Act of 2013, was introduced last year by Rep. Bill Huizenga (R-Mich.) and Rep. Gregory Meeks (D-N.Y.)
The bill addresses the 3 percent fee cap for QM loans based on the rule issued by the Consumer Financial Protection Bureau.
Currently, title insurance fees, guarantee fees, and service charges are counted in the calculation of the 3 percent.
But if the bill were to become law, then insurance held in escrow would be excluded from the 3 percent, as would all title charges — even it they are earned by an affiliate of the lender — as long as they are bona fide and reasonable.
“H.R. 3211 would direct the CFPB to amend its regulations related to qualified mortgages to reflect the new exclusions,” the Congressional Budge Office said in a report last week.
National Association of Federal Credit Unions Vice President of Legislative Affairs Brad Thaler noted in a letter to House leaders that the bill would bring much needed relief to credit unions by reducing the number of loan that aren’t designated as QM.
“These changes would greatly improve the definition of ‘points and fees’ used to determine whether a loan meets the QM test, and would ensure that those with low and moderate means would continue to be able to obtain their mortgages from their credit union at a reasonable price,” the letter stated. “A more open and competitive market that will ensure consumers have greater access to mortgage credit and more choices in credit providers.”
On Monday, the House approved the legislation — a move that was quickly praised by Mortgage Bankers Association President and Chief Executive Officer David H. Stevens.
“Proper implementation of the ability to repay and QM requirements is crucial to allowing credit-worthy consumers to purchase or refinance a home at affordable rates,” Stevens said in a written statement. “MBA looks forward to continuing to work closely with lawmakers as the bill moves to the Senate for consideration.”
