Don’t let RESPRO and others determine your fate?

This is another important update on the pending legislation known as the Mortgage Choice Act and efforts by the affiliated business lobby to decrease your efforts to compete for settlement business and to raise the cost of closings for American consumers. Members of NAILTA were in Washington DC on February 24th to meet with members of the House Financial Services Committee and the Senate Banking Committee to discuss potential bill alternatives to H.R. 3211, H.R. 1077 and S. 949. Our Policy and Legislative Affairs team will be back in Washington DC on March 11, 2014 to meet with more members of Congress to continue the fight against RESPRO and the banking lobby’s efforts to modify Dodd-Frank to favor their affiliated business arrangements. Our all-volunteer contingent of independent settlement professionals have over 40 meetings scheduled in one day with members of the House and Senate concerning the issues important to you and your livelihood. No other trade organization is working this hard for your interests. The Mortgage Choice Act is the pro-affiliated business arrangement bill that is designed to modify the Dodd-Frank Act’s qualified mortgage provision and exempt all points and fees charged by lender affiliates from the 3% cap on points and fees for qualified mortgages. It was introduced in the House as H.R. 3211 and in the Senate as S. 949. NAILTA opposes both pieces of legislation. Who is Fighting For the Affiliates? RESPRO, the National Association of Realtors, the Mortgage Bankers Association, the National Association of Credit Unions, Quicken Loans, and others linked to the lending industry. Each of these trade organizations has an army of lobbyists...

H.R. 1077 is Dead; Replaced with H.R. 3211

Never underestimate a determined opponent. On September 28, 2013, shortly before Congress shut down, a bipartisan group of representatives from the House Financial Services Committee introduced a RESPRO-sponsored piece of legislation known as H.R. 3211, the Mortgage Choice Act. Instead of proceeding on H.R. 1077, known as the Consumer Mortgage Choice Act, the new bill strips out the provisions regarding lender-paid compensation to mortgage brokers and loan level price adjustments charged by Fannie Mae and Freddie Mac and focuses solely on the naked attempt by the affiliated business arrangement lobby to except affiliated service charges from the 3% qualified mortgage cap.  H.R. 1077 is effectively dead, but in its place is proof that the affiliate provider’s efforts were never about the American consumer — but rather only for the benefit of banks and affiliated service providers supported by RESPRO. RESPRO and the banking lobby are now “all-in” on trying to find a way to raise the cost of residential real estate closings because on the affiliate provider side of a residential real estate mortgage transaction they can hide referral payments and kickbacks from consumers without running afoul of the 3% QM cap.  It is a desperate effort to profiteer at the consumer’s unsuspecting expense. H.R. 3211 is no longer teasing lawmakers with the idea that it helps American consumers, either.  It is an “all-out” assault against lower-priced and more qualified independent service providers.  Fortunately, there is still time to act. Independent land title agents defeated H.R. 4323 and H.R. 1077.  We can do the same to H.R. 3211.  We need your help. Enclosed here is a list of all of the current members of the...

Why Congress Should Oppose H.R. 1077 and S. 949, the Consumer Mortgage Choice Act

H.R. 1077 and S. 949 will raise the settlement cost of every residential mortgage loan transaction in the United States, thereby harming American mortgage consumers. The Consumer Mortgage Choice Act is designed solely to provide lenders, who would otherwise be prohibited from profiting from higher points and fees, to use their exempt affiliate service providers to do the same act without penalty. It does this by allowing those lenders with affiliated service providers to skirt the CFPB’s qualified mortgage (QM) rule, which places a 3% cap on points and fees paid to affiliates, and allows them to simply collect additional and potentially unlimited consumer charges from their affiliates back to the lenders in the form of shared profits. Consumers rarely participate in the selection of their service provider prior to closing because title insurance is marketed in a reverse competition environment meaning that the lender, real estate agent, mortgage broker and homebuilder actually select the title service provider for the consumer.[1] Because consumers do not participate in the selection of their title service provider, affiliates are uniquely situated to take advantage of the lender referral and block out all meaningful price competition, even with RESPA disclosure rules and anti-kickback policies. Without meaningful competition between affiliates and independent providers, prices for title insurance and related services rise.[2] Since affiliated providers first appeared in the title insurance industry in the last thirty years, the price of title insurance has steadily increased[3] even though the claims-loss ratio for the industry remained relatively stable at 3% to 5%.[4] The resulting rise in prices will harm consumers. H.R. 1077 and S. 949 would sanction...

Pro-CBA Forces Reintroduce Harmful Pro-Affiliate Bill H.R. 1077

Never in the history of independent land title insurance agents has the choice between action and inaction become so clear and the need for urgent advocacy been so important. If you are an independent land title agent, you need to pay close attention to the following: H.R. 1077, the So-Called “Consumer Mortgage Choice Act”: On March 12, 2013, Representative Bill Huizenga (R-MI) introduced the ironically titled “Consumer Mortgage Choice Act of 2013” as H.R. 1077. The bill, which can be found by clicking here, is the second attempt in as many years to modify the Dodd-Frank Act’s definition of permissible “points and fees” under the recently promulgated qualified mortgage rule (QM) which would exempt the fees charged by affiliated service providers from the rule. Last year, Representative Huizenga introduced the same bill which was then known as H.R. 4323. That bill died in the House Financial Services Committee in July of 2012 with the help of NAILTA’s advocacy efforts. The ironic re-titling of the newly proposed bill is meant to shield the measure from public understanding of what the bill actually does. The proposed bill has little to do with consumer choice and everything to do with helping referral sources, such as banks, find alternative ways to raise revenue for making mortgage loans.   Who is Behind the Bill and Why?: The new bill is being proposed by the banking and referral source lobbies in an effort to provide those groups with a vital source of revenue — the title insurance premiums and fees generated by those entities. The proponents of H.R. 1077 incorrectly argue that, without the amendment,...