more options for more competitive mortgage interest rates
WASHINGTON, D.C. – The House Financial Services Committee approved Congressman Bill Posey’s (R-Rockledge) Mortgage Fairness Act, legislation to provide home buyers with more options for more competitive mortgage interest rates.
“The Consumer Financial Protection Bureau’s application of the qualified mortgage rule has distorted the wholesale lender market and caused confusion for consumers and mortgage providers,” said Congressman Posey.
“The Mortgage Fairness Act adds clarity to the qualified mortgage rule by eliminating this market distortion to provide more options for homebuyers, particularly benefiting low and middle-income consumers.”
Specifically, the qualified mortgage rule includes a 3 percent cap on costs for most mortgages and this feature of the rule has created unintended consequences.
By including lender-paid compensation in the fees and points cap, the CFPB’s application of the rule imposes a double-penalty on lenders who offer services through mortgage broker companies and pay the mortgage fees via inclusion in the mortgage rate.
The Mortgage Fairness Act removes the CFPB’s cap on items already accounted for in the interest rate.
Posey noted that the rule harms the wholesale lender market by restricting competition in the geographic areas of the United States with lower loan amounts.
“It is alarming to me that some veterans who utilize their Department of Veterans Affairs mortgage benefits must pay a higher price for their mortgage, and in some cases, cannot even use their earned benefits – that’s unacceptable,” said Posey.
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