On February 8, 2018 the United States House of Representatives passed The Mortgage Choice Act, H.R. 1153, to revise the definition of “points and fees” for purposes of the Regulation Z ability to repay/qualified mortgage requirements and high-cost mortgage loan requirements. Although a voice vote was held on February 7, Chairman of the House Financial Services Committee Jeb Hensarling demanded a roll call vote. The roll call vote was 280 to 131.
The Act would amend the definition of “points and fees” for purposes of the requirements to exclude charges for title examinations, title insurance or similar purposes regardless of whether the title company is affiliated with the creditor. Currently for such charges to be excluded from points and fees the title company must not be an affiliate of the creditor. The Act also would make a conforming change to exclude escrowed amounts for insurance from points and fees. Currently escrowed amounts for taxes are excluded from points and fees.
As we reported previously, last year the House passed the Financial CHOICE Act. The Act included the same amendments to the “points and fees” definition, but was never enacted into law. Prior bills including the same amendments have suffered the same fate.
The focus now shifts to the Senate. Because the Mortgage Choice Act would amend Dodd-Frank provisions, that can pose difficulty for Senate passage. With 52 Democrats joining with Republicans to pass the Act, this may indicate that the Act has a greater chance of success than Financial CHOICE Act. No Democrats voted for the Financial CHOICE Act, and that Act included more sweeping Dodd-Frank changes than the narrow changes included in the Mortgage Choice Act.