[Congressional Record Volume 160, Number 88 (Monday, June 9, 2014)]
[House]
[Pages H5137-H5138]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      MORTGAGE CHOICE ACT OF 2013

  Mr. HUIZENGA of Michigan. Mr. Speaker, I move to suspend the rules 
and pass the bill (H.R. 3211) to amend the Truth in Lending Act to 
improve upon the definitions provided for points and fees in connection 
with a mortgage transaction.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3211

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Mortgage Choice Act of 
     2013''.

     SEC. 2. DEFINITION OF POINTS AND FEES.

       (a) Amendment to Section 103 of TILA.--Section 103(bb)(4) 
     of the Truth in Lending Act (15 U.S.C. 1602(bb)(4)) is 
     amended--
       (1) by striking ``paragraph (1)(B)'' and inserting 
     ``paragraph (1)(A) and section 129C'';
       (2) in subparagraph (C)--
       (A) by inserting ``and insurance'' after ``taxes'';
       (B) in clause (ii), by inserting ``, except as retained by 
     a creditor or its affiliate as a result of their 
     participation in an affiliated business arrangement (as 
     defined in section 2(7) of the Real Estate Settlement 
     Procedures Act of 1974 (12 U.S.C. 2602(7))'' after 
     ``compensation''; and
       (C) by striking clause (iii) and inserting the following:
       ``(iii) the charge is--

       ``(I) a bona fide third-party charge not retained by the 
     mortgage originator, creditor, or an affiliate of the 
     creditor or mortgage originator; or
       ``(II) a charge set forth in section 106(e)(1);''; and

       (3) in subparagraph (D)--
       (A) by striking ``accident,''; and
       (B) by striking ``or any payments'' and inserting ``and any 
     payments''.
       (b) Amendment to Section 129C of TILA.--Section 129C of the 
     Truth in Lending Act (15 U.S.C. 1639c) is amended--
       (1) in subsection (a)(5)(C), by striking ``103'' and all 
     that follows through ``or mortgage originator'' and inserting 
     ``103(bb)(4)''; and
       (2) in subsection (b)(2)(C)(i), by striking ``103'' and all 
     that follows through ``or mortgage originator)'' and 
     inserting ``103(bb)(4)''.

     SEC. 3. RULEMAKING.

       Not later than the end of the 90-day period beginning on 
     the date of the enactment of this Act, the Bureau of Consumer 
     Financial Protection shall issue final regulations to carry 
     out the amendments made by this Act, and such regulations 
     shall be effective upon issuance.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Michigan (Mr. Huizenga) and the gentleman from Georgia (Mr. David 
Scott) each will control 20 minutes.
  The Chair recognizes the gentleman from Michigan.


                             General Leave

  Mr. HUIZENGA of Michigan. Mr. Speaker, I ask unanimous consent that 
all Members have 5 legislative days within which to revise and extend 
their remarks and submit extraneous materials for the Record on H.R. 
3211, currently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  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

[[Page H5138]]

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.
  Mr. DAVID SCOTT of Georgia. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, it has been a pleasure to work with Representative 
Huizenga on this very, very important bill.
  This legislation is about two things: fairness and opportunity. My 
fellow cosponsors--both Democrats and Republicans--and I support H.R. 
3211, which is the Mortgage Choice Act, because of our shared concern 
about access; access to credit, yes, for all consumers, but especially 
for lower-income consumers and middle-income consumers, and to ensure 
that everybody in America that needs a home and wants a home, when 
securing a loan, that they have a choice in selecting both the mortgage 
and the title insurance providers of their choice.
  I urge my colleagues to support this needed legislation, and I yield 
back the balance of my time.
  Mr. HUIZENGA of Michigan. Mr. Speaker, I am prepared to close, but I, 
too, would like to thank my friend, Mr. Scott from Georgia, for working 
with Representative Meeks to bring this to the forefront. With that, I 
yield back the balance of my time.
  Mr. ROYCE. Mr. Speaker, today I rise to express my strong support for 
the Mortgage Choice Act. I thank the gentleman from Michigan for his 
leadership on this important bill.
  Owning a home has long been the cornerstone of the American Dream, 
but regulations are currently restricting consumer access to mortgage 
credit for low and moderate income homebuyers. The Mortgage Choice Act 
will ensure that potential homeowners can borrow funds for their home 
in a responsible manner while keeping intact consumer protections 
established by Dodd-Frank's ability to pay provisions.
  I urge passage of this bill today. This is a legislative initiative 
that merits strong bipartisan support.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Michigan (Mr. Huizenga) that the House suspend the rules 
and pass the bill, H.R. 3211.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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