The U.S. House of Representatives recently passed the Mortgage Choice Act of 2017, which now heads to the Senate for consideration. If passed and signed into law, this new legislation would adjust TILA’s definitions of points and fees that are found under the Ability to Repay/Qualified Mortgage rule.
Under the new bill, Qualified Mortgages would not be able to have points and fees with a value of more than 3% of the loan amount. In addition, the legislation would also remove the following from the points and fees calculation:
- Title insurance that’s purchased from a company affiliated with the lender (purchases from a non-affiliated title insurer do not currently count against points and fees).
- Escrowed homeowners insurance premiums.
The idea behind this bipartisan bill is to preserve consumer choice and potentially help more Americans achieve the dream of homeownership – specifically those with low-to-moderate incomes and first-time homebuyers. It is also designed to help enhance competition in the mortgage and title insurance markets by further ensuring that consumers are able to choose the lender and title provider that best suit their needs.
The Mortgage Choice Act was sponsored by Representatives Bill Huizenga (R-MI), Gregory Meeks (D-NY), Ed Royce (R-CA), David Scott (D-GA), Steve Stivers (R-OH), Mike Doyle (D-PA), and David Joyce (R-OH).
For more information, including the bill’s full text, click here.