Newsletter: Manufactured Housing; Mortgages; Tax Deductions; Estate Taxes

Statement

Manufactured Housing

On Tuesday the House considered H.R. 650, Preserving Access to Manufactured Housing Act of 2015. This legislation weakens a provision of the Dodd Frank Act relating to owners of manufactured homes that gave them some of the same protections as traditional home owners, particularly in terms of mortgage interest rates. A manufactured home is a prefabricated dwelling assembled in a factory, such as a mobile home, and in general costs considerably less than a traditional home. H.R. 650 changes the definition of a high cost mortgage by raising the interest rates allowed for loans. For example, loans between $50,000 and $75,000 will have interest rates rise from 8.5% to 10%. The average manufactured home owner has just half the median income of traditional homeowners. The Administration has stated that H.R. 650 will be vetoed.

Mortgages

On Tuesday the House also considered H.R. 685, the Mortgage Choice Act of 2015. This legislation also seeks to undermine a provision of the Dodd Frank Act defining a "qualified mortgage". Under current law, creditors must perform due diligence in determining whether or not a borrower can repay the loan they are seeking. The Consumer Financial Protection Bureau (CFPB) has determined that "points and fees" are among the factors that must be considered in assessing a "qualified mortgage", which cannot be more than 3% of the total mortgage. Title insurance falls under the definition of a fee. Under H.R. 685, title insurance companies affiliated with realtors and lenders would be exempt from the 3% cap. The Dodd Frank Act sought to end the practice of title insurance companies being referred business from real estate entities they are affiliated with because that was found to significantly raise borrowing costs. H.R. 685 weakens that effort.

Tax Deductions

Yesterday the House considered H.R. 622, the State and Local Sales Tax Deduction Fairness Act. This legislation makes permanent a provision allowing the deduction for state and local sales taxes instead of state and local income taxes without offsetting its cost. Along with H.R. 1105 (detailed below), this legislation will add more than $300 billion to the deficit.

Estate Taxes

The House also considered H.R. 1105, the Estate Tax Repeal. This legislation repeals the estate tax permanently without offsetting its cost. Under current law, most estates are already exempt from this tax. According to the Joint Committee on Taxation, 99.8% of all estates are not subject to the tax. In addition to eliminating the estate tax, H.R. 1105 would provide an average tax cut of over $22 million to each estate valued at over $50 million.

What's Up Next

Next votes are scheduled for Tuesday April 21st. The House is expected to consider H.R. 1195, the Bureau of Consumer Financial Protection Advisory Boards Act and H.R. 1560, Protecting Cyber Networks Act.

Congressman Mike Capuano

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