Legislation that will help low and middle-income families attain a qualified mortgage was passed by the House Financial Services Committee this week, 46-13.
The Mortgage Choice Act, sponsored by Reps. Bill Huizenga (R-MI) and Rep. Greg Meeks (D-NY), amends the Truth in Lending Act (TILA) by clarifying the definition of “points and fees” as it relates to determining whether a mortgage can be a qualified mortgage.
Specifically, the bill excludes insurance and taxes held in escrow as well as fees paid to affiliated companies due to their participation in a business arrangement from the calculation of points and fees. It also directs the Bureau of Consumer Financial Protection (CFPB) to amend its regulations related to qualified mortgages to reflect the new exclusions.
“The qualified mortgage represents the safest, best underwritten mortgage available on the market. It’s the gold standard. We should want more people getting qualified mortgages, not less,” Huizenga said.
He said these changes will promote access to affordable mortgage credit for low- and moderate-income families and first-time homeowners.
“Congress has the opportunity to help more Americans realize a portion of the American Dream,” Huizenga said. “Not by some grandiose law or decree, but by simply reforming a burdensome regulation. Homeownership has been a pillar of American life for generations. Today, we can reaffirm that pillar and reassert that homeownership can and should be an attainable goal.”