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On Tuesday, March 12, 2013, Representatives Bill Huizenga (R-MI) and David Scott (D-GA) reintroduced the Consumer Mortgage Choice Act, H.R.1077. The legislation addresses the definition of fees and points in a mortgage transaction under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The definition is critical to determine whether a mortgage is a Qualified Mortgage (QM) which requires that fees and point not exceed 3%.
Currently the definition would make perhaps hundreds of thousands or more borrowers ineligible for a QM because the fees and points include items that do not belong in the calculation. The QM is expected to be less costly to consumers because it builds in many protections for both borrowers and has reduced lender risks. H.R. 1077 addresses the problematic fees and points definition ensuring broad consumer choice and access to safe, affordable mortgages.
NAR is working to pass H.R. 1077 in the House of Representatives and seeking companion legislation in the U.S. Senate. The regulation implementing the QM rule goes into effect in January 2014, meaning legislation addressing this issue needs to be enacted this year.
Congressmen Huizenga and Scott were joined by Representatives Ed Royce (R-CA), Spencer Bachus (R-AL), Steve Stivers (R-OH), Wm. Lacy Clay (D-MO), Gregory Meeks (D-NY), and Gary Peters (D-MI) as initial sponsors of the legislation.