House Financial Services Committee Approves Points-and-Fees Bill, To Vote Soon on Other Measures

Mortgage Origination Mortgage Servicing U.S. House

On May 7, the House Financial Services Committee passed by voice vote H.R. 3211, which would remove additional items from TILA’s definition of “points and fees” for purposes of the CFPB’s “Ability to Repay” and HOEPA rules. The legislation would exclude from the definition insurance as well as taxes (which are excluded under current law) held in impound accounts and would also exclude amounts received by affiliated companies as a result of their participation in an affiliated business arrangement. The committee agreed to hold recorded votes on numerous other bills the week of May 19, 2014, including (i) H.R. 1779, which would amend TILA’s definition of a “mortgage originator” to exclude manufactured housing sales representatives, set higher HOEPA APR triggers and a minimum HOEPA points and fees trigger of the greater of 5% of the transaction amount or $3,000 for loans under $75,000 secured by personal property; (ii) H.R. 2673, which would provide that loans retained on an institution’s balance sheet automatically qualify for qualified mortgage (QM) treatment under the Ability-to-Repay rule; and (iii) H.R. 4521, which would exempt loans secured by a first lien on a consumer’s principal dwelling that are held in portfolio by creditors with assets of $10 billion or less from mandatory escrow requirements, and would instruct the CFPB to provide regulatory relief for mortgage servicers that annually service 20,000 or fewer mortgage loans. The Committee did not hold a planned vote on the issuance of document subpoenas to Treasury and the DOJ regarding prosecution of financial institutions, agreeing instead to first work to obtain the requested information through other means.