Congressman Wm. Lacy Clay (D) Missouri, a senior member of the House Financial Services Committee and Ranking Member of the Subcommittee on Domestic & International Monetary Policy and Technology is cosponsoring H.R. 1077, the Consumer Mortgage Choice Act. The bipartisan bill would amend the historic Dodd-Frank Act to amend the definition of a Qualified Mortgage (QM). "Our bill will promote access to affordable mortgages for qualified borrowers without weakening the strong safeguards that were included in the original Dodd-Frank legislation," said the Congressman.
Currently, under Dodd-Frank, a qualified mortgage cannot have "points & fees" in excess of three percent of the total amount of the loan. H.R. 1077 makes certain clarifications as to how that threshold is calculated, in order to expand access to affordable mortgages for moderate income and underserved borrowers.
H.R. 1077 would modify how "points & fess" are calculated. Specially, the bill would exclude from that (QM) calculation:
(1)Fees paid to affiliated title companies
(2)Salaries paid to loan originators
(3)Insurance and taxes held in escrow
(4)Loan level pricing adjustments
(5)Lender-paid compensation to mortgage brokers
These common sense changes will promote access to affordable mortgages for qualified buyers by ensuring that more properly underwritten loans meet the qualified mortgage standard.