Earlier this week, the House of Representatives passed a bill to amend the TILA definition of “points and fees” that is used to determine whether a loan is a high-cost mortgage or, for purposes of TILA’s ability to repay provisions, a qualified mortgage.

The “Mortgage Choice Act,” H.R. 685, would amend the points and fees definition to exclude amounts escrowed for insurance and amounts for title charges (such as title examination and title insurance) paid to an affiliate of the creditor or mortgage originator.

The amendment regarding insurance escrows is viewed as a technical amendment.  The amendment regarding title charges would conform the treatment of such charges for points and fees purposes regardless of whether the charges are received by an affiliate or non-affiliate.  Currently title charges paid to a non-affiliate are excluded from points and fees.