Mortgage Choice Act of 2013

Floor Speech

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Mr. HUIZENGA of Michigan. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in support of H.R. 3211, the Mortgage Choice Act. As someone who worked in the housing industry for a number of years, this is a very important issue to me, and, more importantly, to my constituents in Michigan as well as, frankly, all of our constituents across the country.

Earlier this year, the Qualified Mortgage, also known as the (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:

One, fees paid to affiliated, but not unaffiliated, title companies; two, salaries paid to loan originators; three, amounts of insurance and taxes held in escrow; four, loan level price adjustments; and number five, payments by lenders to corresponding banks as they interact with them, credit unions, and mortgage brokers in wholesale transactions--not in any kind of retail transaction.

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 made available at much higher rates due to heightened liability risks. Consumers would lose the ability to take advantage of the convenience and the market efficiencies offered by one-stop shopping.

I, along with Representative Gregory Meeks, introduced H.R. 3211, a strong, bipartisan bill that would modify and clarify the ways points and fees are calculated. I should note, Mr. Speaker, that of our nine original cosponsors, two of them were Republicans, seven of them were Democrats, and we are very pleased that this has seen wide and broad support.

This legislation is narrowly focused to promote access to affordable mortgage credit without overturning the important consumer protections and sound underwriting required under Dodd-Frank's ``ability to repay'' provisions.

Specifically, my bill, H.R. 3211, would provide equal treatment for affiliated title fees compared with unaffiliated title fees. What that means is, for companies that are owned and integrated in, those same requirements and same designations would apply to those who are totally separate and independent companies. It also would clarify the treatment of insurance and taxes held in escrow. Now think about that. We are talking about taxes that no one makes a profit off of, that just literally get sent to the government, being counted in this points and fees definition. That, to me, just seems fundamentally unfair. And only--again, I might add--if they are an affiliated company versus an unaffiliated company.

These commonsense changes will promote access to affordable mortgage credit for low and moderate-income families and first-time home buyers by ensuring that safer, properly underwritten mortgages pass the QM test.

I would like to thank my colleague, Representative Meeks, along with many others, who have worked tirelessly to help fix this flawed provision currently being implemented.

Mr. Speaker, this evening, Congress has the opportunity to help more Americans realize a portion of the American Dream, not by some grandiose law or decree or something that is going to be big, but by simply reforming a burdensome regulation. Homeownership has been a pillar in American life for generations. Tonight, we can reaffirm that pillar and reassert that homeownership can and should be an attainable goal.

I urge my colleagues to vote in support of H.R. 3211 and make the dreams of so many Americans a reality by ensuring that all consumers have greater access to mortgage credit and more choices to credit providers. I reserve the balance of my time.

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