House Passes H.R. 1210, the Portfolio Lending and Mortgage Access Act

Press Release

Congressman Kevin Cramer joined a majority of the U.S. House of Representatives to pass H.R. 1210, the Portfolio Lending and Mortgage Access Act. The bill would amend the Truth in Lending Act to ease the Qualified Mortgage Rule to provide creditors protection from legal action for failure to comply with federally mandated mortgage terms if the creditor holds the mortgage in its own portfolio, rather than selling it or securitizing it. Cramer is a co-sponsor of the bill.

"Overregulation hurts the average American's ability to purchase a home," said Cramer. "Many North Dakotans struggle to find affordable housing as property prices have increased in certain areas of the state. Reducing burdensome federal regulations will allow local financial institutions to more effectively assist consumers in responsibly buying a home. Mortgage decisions should be made by local lenders with their customers rather than by bureaucrats in Washington."

Under Dodd-Frank, substantial changes have been made to the mortgage lending marketplace, requiring increased underwriting standards set by the federal government through an ability to repay requirement. Dodd-Frank also provided a legal safe harbor for certain loans called Qualified Mortgages to avoid frivolous lawsuits. However, this safe harbor did not include mortgages which originating banks and credit unions continue to hold within their own portfolio. Failures during the financial crisis were largely attributed to mortgages which originators later sold or securitized so they weren't subject to the risk of default. If a loan is later moved off portfolio or is securitized, it loses this access to safe harbor.

Critics claim the Qualified Mortgage rule make it more difficult for credit-worthy Americans to achieve the American dream of buying a home. The Independent Community Bankers Association reports that 73% of community banks have decreased their mortgage business or completely stopped providing mortgage loans due to the expense of complying with the regulatory burden.

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