Rep. Bill Huizenga (R-Mich.) yesterday reintroduced the Mortgage Choice Act, a bill supported by
ABIA and ABA in the previous Congress. The bill is identical to the once passed by the House last Congress but was not acted upon in the Senate.
The bill would make ABIA-supported changes to the way points and fees are calculated under the “qualified mortgage” (QM) definition in the Dodd-Frank Act, by exempting from the points and fees calculation affiliate title fees and premiums and escrow payments for insurance.
Under H.R. 3211 escrows for future payment of insurance would excluded from points and fees. Currently only escrow for taxes are excluded. Any insurance amount that is escrowed would benefit from the carve-out. If homeowners insurance is escrowed in a mortgage transaction, which it typically is, such insurance would not be included in the definition of "points and fees."
Fees or premiums for title examination, title insurance, or similar purposes paid to affiliates would be excluded from points and fees as long as the charge is reasonable and the creditor receives no direct or indirect compensation, except as retained by a creditor or affiliate as part of an affiliate business relationship (as defined in RESPA).
The ABIA has a Task Force of members that work on issues related to the points and fees in Qualified Mortgages. If you are an ABIA member and would like to learn more about ABIA's work on this issue or join our QM Task Force, please contact us and visit our website.