Rep. Bill Huizenga (R-Mich.) has introduced the Mortgage Choice Act of 2017 (H.R. 1153), “to amend the Truth in Lending Act to improve upon the definitions provided for points and fees in connection with a mortgage transaction.”
The bill would adjust the TILA mortgage rules by exempting from the qualified mortgage cap on points and fees any affiliated title charges and escrow charges for taxes and insurance.
Additionally, the bill would strike the following language from Section 1602(bb)(4): “the credit transaction documents permit the creditor to charge or collect prepayment fees or penalties more than 36 months after the transaction closing or such fees or penalties exceed, in the aggregate, more than 2 percent of the amount prepaid.”
In its place, the bill would insert the following language: “the charge is (I) a bona fide third-party charge not retained by the mortgage originator, creditor or an affiliate of the creditor or mortgage originator; or (II) a charge set forth in Section 106(e)(1).”
The bill also would amend the following language in sub-paragraph D: “premiums or other charges payable at or before closing for any credit life, credit disability, credit unemployment, or credit property insurance, or any other accident, loss-of-income, life or health insurance, or any payments directly or indirectly for any debt cancellation or suspension agreement or contract, except that insurance premiums or debt cancellation or suspension fees calculated and paid in full on a monthly basis shall not be considered financed by the creditor.”
The amendment would strike “accident” and would replace “or any payments” with “and any payments.”
The bill, which has been referred to the House Financial Services Committee, was co-sponsored by Reps. Ed Royce (R-Calif.), David Scott (D-Ga.), Steve Stivers (R-Ohio), Gregory Meeks (D-N.Y.) and David Joyce (R-Ohio).
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