NAFCU letter urging support of H.R. 3211, the Mortgage Choice Act of 2013

Below is NAFCU Vice President of Legislative Affairs Brad Thaler's letter to U.S. House of Representatives Speaker John Boehner and Minority Leader Nancy Pelosi in support of H.R. 3211, the "Mortgage Choice Act of 2013." Members of the United States House of Representatives were copied on the letter.

In the letter, Thaler says this bipartisan legislation, introduced by Reps. Bill Huizenga (R-Mich.) and Gregory Meeks (D-N.Y.), would bring much needed relief to credit unions by altering the definition of points and fees under the Consumer Financial Protection Bureau’s “Qualified Mortgage” (QM) rule. He says NAFCU appreciates consideration of this measure on the House floor and urges its swift passage.

If you would like more information on this matter or would like to speak about this with Brad Thaler, please let me know.

Thank you.

Dana Kauffman
Communications Coordinator
National Association of Federal Credit Unions
3138 10th Street North
Arlington, VA 22201
Phone: 703-842-2235
Fax: 703-524-1082
dkauffman@nafcu.org

June 9, 2014

The Honorable John Boehner                                               The Honorable Nancy Pelosi

Speaker                                                                                Minority Leader

U.S. House of Representatives                                              U.S. House of Representatives

Washington, D.C. 20515                                                        Washington, D.C. 20515

Re: Support and Pass H.R. 3211, the Mortgage Choice Act of 2013

Dear Speaker Boehner and Leader Pelosi:

On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association exclusively representing our nation’s federal credit unions, I write today in support of the Mortgage Choice Act of 2013 (H.R. 3211). This bipartisan legislation, introduced by Representatives Huizenga and Meeks, would bring much needed relief to credit unions by altering the definition of points and fees under the Consumer Financial Protection Bureau’s “Qualified Mortgage” (QM) rule. On behalf of our nation’s credit unions and their 98 million members, we appreciate consideration of this measure on the House floor and urge its swift passage.

As currently defined by the QM rule, “points and fees” include, among other charges, fees paid to affiliated title companies, salaries paid to loan originators, amounts of insurance and taxes held in escrow, loan level price adjustments, and payments by lenders to correspondent banks, credit unions and mortgage brokers in wholesale transactions. What constitutes a “fee” or a “point” towards the 3 percent cap varies greatly.  If the borrower chooses a title insurance provider that is affiliated with the lender, the title insurance charges count toward the cap, whereas, if the insurance is purchased from an unaffiliated title agency, the title charges do not. Additionally, homeowners’ escrowed insurance premiums may count as “points and fees” due to ambiguous drafting in the law. The inclusion of either title insurance or homeowners’ escrowed premiums will cause many loans, including some for low- and moderate-income consumers, to fail the QM test. As a result, many otherwise qualified borrowers will not have access to safe and affordable mortgage credit.

The Mortgage Choice Act of 2013 would make important changes that would exclude title charges from the “points and fees” definition, and clarify that escrow charges should be excluded from any calculation of “points and fees.” These changes would greatly improve the definition of “points and fees” used to determine whether a loan meets the QM test, and would ensure that those with low and moderate means would continue to be able to obtain their mortgages from their credit union at a reasonable price. A more open and competitive market that will ensure consumers have greater access to mortgage credit and more choices in credit providers.

Thank you for your attention to this important matter. We appreciate the opportunity to voice our support for this bill and look forward to passage of the Mortgage Choice Act of 2013. Should you have any questions or need additional information, please do not hesitate to contact myself or NAFCU’s Director of Legislative Affairs, Jillian Pevo, at 703-842-2836 or jpevo@nafcu.org.

Sincerely,

Brad Thaler

Vice President of Legislative Affairs

cc:        Members of the United States House of Representatives