[Congressional Record Volume 161, Number 54 (Wednesday, April 15, 2015)]
[Extensions of Remarks]
[Page E495]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      MORTGAGE CHOICE ACT OF 2015

                                 ______
                                 

                               speech of

                        HON. ELIJAH E. CUMMINGS

                              of maryland

                    in the house of representatives

                        Tuesday, April 14, 2015

  Mr. CUMMINGS. Mr. Speaker, in the wake of the 2008 financial crisis, 
the Dodd-Frank Wall Street Reform and Consumer Protection Act included 
provisions that prohibited mortgage lenders from using their title 
insurance affiliates to gouge consumers.
  Dodd-Frank created a new category of mortgages called Qualified 
Mortgages (QM). Lenders that issue these mortgages are granted special 
legal protection in exchange for keeping costs for consumers below a 
certain threshold. The costs considered under the QM standard encompass 
all compensation a mortgage lender receives--including title insurance 
costs a consumer pays to a company affiliated with a lender.
  These provisions recognized an unfortunate reality: many lenders use 
their title insurance affiliates to charge consumers unnecessarily high 
fees. According to a 2007 report issued by the Government 
Accountability Office (GAO), for example, 70 cents of every dollar paid 
for title fees go toward lining the pockets of agents--not covering 
losses for the lender.
  And the nature of the title insurance market has also opened the door 
to fraud against homeowners. Just recently in my home state of 
Maryland, the Consumer Financial Protection Bureau and the Maryland 
Attorney General negotiated a $35.7 million settlement against Wells 
Fargo and JPMorgan Chase after finding that loan officers at these 
banks received illegal kickbacks to steer customers to a Maryland-based 
title company.
  Americans seeking to purchase a home deserve better from the title 
insurance market. And by including affiliated insurance fees in its 
definition of costs, the QM standard represents an important first step 
in protecting consumers from collusion and price-gouging.
  Rather than strengthen these protections, however, H.R. 685 would 
create loopholes to exempt affiliated insurance fees from the QM cost 
definition and allow lenders to hit borrowers with hundreds and even 
thousands of dollars in unnecessary mortgage costs.
  By rolling back protections for borrowers and raising mortgage costs, 
H.R. 685 would hurt homebuyers just as our housing sector is beginning 
to stabilize from the consequences of a financial crisis caused by 
unscrupulous and abusive practices. I urge my colleagues to reject this 
destructive bill.

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