411:(CFPB) for qualified mortgages, certain costs that are incidental to the loan amount and paid by the borrower—for example, title insurance fees, guarantee fees, and service charges—are limited to no more than 3 percent of the total loan amount. (A qualified mortgage must meet certain requirements with regard to the borrower’s ability to repay the loan and the loan terms.) H.R. 3211 would exclude insurance held in escrow and, under certain circumstances, fees paid to companies affiliated with the creditor from the costs that would be considered in calculating the 3 percent limitation. H.R. 3211 would direct the CFPB to amend its regulations related to qualified mortgages to reflect the new exclusions. Based on information from the agency, CBO does not expect that meeting the new requirement would have a significant effect on the agency’s workload.
35:
367:(An "affiliated business arrangement" is one in which: (1) a person who is in a position to refer business incident to or a part of a real estate settlement service involving a federally related mortgage loan, or an associate of such person, has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1% in a provider of settlement services; and (2) either of such persons directly or indirectly refers such business to that provider or affirmatively influences the provider's selection.)
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including subprime mortgages, widely held by financial firms globally, lost most of their value. Global investors also drastically reduced purchases of mortgage-backed debt and other securities as part of a decline in the capacity and willingness of the private financial system to support lending. Concerns about the soundness of U.S. credit and financial markets led to tightening credit around the world and slowing economic growth in the U.S. and Europe.
243:(CDO) initially offered attractive rates of return due to the higher interest rates on the mortgages; however, the lower credit quality ultimately caused massive defaults. While elements of the crisis first became more visible during 2007, several major financial institutions collapsed in September 2008, with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession.
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taxes, insurance, and assessments. Repeals the exception for bona fide third party charges not retained by the mortgage originator, creditor, or an affiliate from the requirement that total points and fees not exceed 3% of the total new loan amount. (Thus subjects such charges to the same 3% ceiling.)
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The bill would modify the conditions under which federal departments and agencies may exempt refinancings under a streamlined refinancing from an income verification requirement that, at the time a refinancing is consummated, the consumer has a reasonable ability to repay the loan and all applicable
370:
The bill would revise the additional requirement that such a reasonable charge be paid to a third party unaffiliated with the creditor. Requires the charge to be: (1) a bona fide third party charge not retained by the mortgage originator, creditor, or an affiliate; or (2) a fee or premium for title
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When U.S. home prices declined steeply after peaking in mid-2006, it became more difficult for borrowers to refinance their loans. As adjustable-rate mortgages began to reset at higher interest rates (causing higher monthly payments), mortgage delinquencies soared. Securities backed with mortgages,
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that currently results in many affiliated loans not qualifying as
Qualified Mortgages. According to the NAFCU, this leads to credit unions not offering such loans which causes consumers to "lose the ability to choose to take advantage of the convenience and market efficiencies offered by one-stop
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The bill would modify the criteria for exclusion from the computation of points and fees of certain reasonable charges elsewhere exempted from the computation of the finance charge in extensions of credit secured by an interest in real property. Excludes from points and fees any such reasonable
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There were many causes of the crisis, with commentators assigning different levels of blame to financial institutions, regulators, credit agencies, government housing policies, and consumers, among others. A proximate cause was the rise in subprime lending. The percentage of lower-quality
199:(CFPB) to amend its regulations related to qualified mortgages to reflect new exclusions made by this bill. The CFPB released new regulations regarding the definition of a Qualified Mortgage that took effect in January 2014, a definition that this bill would modify.
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transaction, or a transaction under an open end credit plan, when the total points and fees the consumer must pay at or before closing will exceed 8% of the total loan amount or $ 400, whichever is greater. (Such consumer credit transactions might include an
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originated during a given year rose from the historical 8% or lower range to approximately 20% from 2004 to 2006, with much higher ratios in some parts of the U.S. A high percentage of these subprime mortgages, over 90% in 2006 for example, were
93:
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charges even though a creditor receives compensation, but only in so far as the creditor or its affiliate retains the compensation as a result of their participation in an affiliated business arrangement.
256:. These two changes were part of a broader trend of lowered lending standards and higher-risk mortgage products. Further, U.S. households had become increasingly indebted, with the ratio of debt to
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with respect to requirements for disclosure to a consumer of points and fees information about a consumer credit transaction, secured by the consumer's principal dwelling, but which is not a
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454:(NAFCU) supported the bill calling it "bipartisan commonsense legislation." According to the NAFCU, the bill would make changes to a "troublesome definition" found in the
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procedures apply. However, we expect those effects would be insignificant. Enacting H.R. 3211 would not affect revenues or discretionary spending.
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To amend the Truth in
Lending Act to improve upon the definitions provided for points and fees in connection with a mortgage transaction.
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The U.S. subprime mortgage crisis was a nationwide banking emergency that triggered the recession of 2008, through
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mortgage delinquencies and foreclosures, resulting in the devaluation of the attendant securities.
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rising from 77% in 1990 to 127% at the end of 2007, much of this increase mortgage-related.
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H.R. 3211 contains no intergovernmental or private-sector mandates as defined in the
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400:(CBO) estimates that enacting H.R. 3211 would affect direct spending; therefore,
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Harvard
University-The State of the Nation's Housing-2008-See Figure 4-Page 4
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275:(which the subprime mortgage crisis was a major part of) and the subsequent
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536:"NAFCU letter in support of the Mortgage Choice Act of 2013 (H.R. 3211)"
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The bill would exclude from the computation of such points and fees any
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and would impose no costs on state, local, or tribal governments.
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Financial
Inquiry Commission-Final Report-Retrieved February 2013
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Michael Burry-Vanderbilt
Magazine-Missteps to Mayhem-Summer 2011
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This summary is based largely on the summary provided by the
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This summary is based largely on the summary provided by the
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Dodd–Frank Wall Street Reform and
Consumer Protection Act
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Dodd–Frank Wall Street Reform and
Consumer Protection Act
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Proposed legislation of the 113th United States
Congress
438:. The House voted on June 9, 2014 to pass the bill in a
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The
Mortgage Choice Act of 2013 was introduced into the
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to which consumer purchases or leases may be charged.)
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was passed in 2010 was a legislative response to the
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Mortgage Choice Act of 2013 (H.R. 3211; 113 Congress)
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United States House
Committee on Financial Services
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United States House Committee on Financial Services
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620:Competition and Crisis in Mortgage Securitization
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336:The Mortgage Choice Act of 2013 would amend the
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677:"Warning Shot On Financial Protection"
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428:United States House of Representatives
204:United States House of Representatives
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810:from websites or documents of the
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407:Under new rules issued by the
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791:WashingtonWatch.com H.R. 3211
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432:Rep. Bill Huizenga (R, MI-2)
416:Unfunded Mandates Reform Act
295:. Its jurisdiction includes
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157:Rep. Bill Huizenga (R, MI-2)
67:Rep. Bill Huizenga (R, MI-2)
55:113th United States Congress
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776:beta.congress.gov H.R. 3211
479:Financial crisis of 2007–08
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786:OpenCongress.org H.R. 3211
558:Mortgage-Backed Securities
258:disposable personal income
237:mortgage-backed securities
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746:"H.R. 3211 - All Actions"
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220:Subprime mortgage crisis
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682:The Wall Street Journal
657:. Economist. 2008-10-30
655:"The End of the Affair"
163:Committee consideration
808:public domain material
538:. Credit Union Insight
319:Provisions of the bill
174:on June 9, 2014 (
781:GovTrack.us H.R. 3211
719:"H.R. 3211 - Summary"
446:Debate and discussion
159:on September 28, 2013
73:Number of co-sponsors
837:Mortgage legislation
575:Zandi, Mark (2010).
342:residential mortgage
338:Truth in Lending Act
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140:Legislative history
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617:Michael Simkovic,
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249:subprime mortgages
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590:978-0-13-701663-1
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283:(CFPB), an
206:during the
124:§ 1602
116:§ 2602
821:Categories
688:2011-02-10
661:2009-02-27
485:References
440:voice vote
239:(MBS) and
214:Background
176:voice vote
149:Introduced
42:Long title
463:See also
230:subprime
542:10 June
392:source.
332:source.
291:in the
752:9 June
725:9 June
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514:9 June
358:escrow
235:These
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297:banks
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727:2014
585:ISBN
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450:The
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Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.
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