RESPRO and the banking lobby continue their efforts to push the Mortgage Choice Act in Congress. The bill now has 26 co-sponsors, the vast majority of which are Republicans, and RESPRO has succeeded in getting the Ranking Minority Member, Rep. Maxine Waters (D-CA) to take a neutral position on the measure, thereby guaranteeing that if the matter comes up for a vote in the House Financial Services Committee that she will not organize support to block it.
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 those affiliates from the 3% cap on points and fees for qualified mortgages. If the bill does not pass, the qualified mortgage provision will go into effect on January 10, 2014 thereby requiring all affiliate fees to count against the 3% cap.
Who is Fighting For H.R. 3211?
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 who are pushing members of Congress to sponsor and endorse H.R. 3211.
The argument in favor of H.R. 3211 is potently naive. Lenders and affiliates are telling Congress that without the bill they will not be able to lend to lower income Americans. Not to be outdone by the ridiculousness of the first argument, they are also telling them that consumers prefer affiliates because they are cheaper and faster than independent providers.
The rebuttal to that argument is elementary. First, lenders who cannot make money lending should not be lending in the first place. Not all lenders are equal and the pressure to be competitive to lend is a good thing, not a negative.
Second, there’s no reliable data that says consumers prefer affiliates. There’s also no proof that consumers who are locked into affiliate service providers are ever meaningfully advised of competitor pricing and services to actually compare them justly. Why would they? A loan originator who refers a consumer to an affiliate gets paid to do so. There’s no incentive to provide the choice to the consumer and there’s no reason to let an independent service provider into a sales opportunity that does not result in the loan originator or the lender getting paid.
Who is Fighting Against H.R. 3211?
NAILTA, the Center for Responsible Lending, the Consumer Federation of America, and public interest groups from around the country. Moreover, H.R. 3211’s predecessor bill known as H.R. 1077 was formally opposed by the Escrow Institute of California, the Indiana Land Title Association and the Louisiana Land Title Association.
The argument against H.R. 3211 is simple. Lenders need H.R. 3211 so they can perpetuate a bad business model. If they cannot make money lending, they should not be allowed to hide higher fees and charges through their affiliates in order to lend. That results in higher costs to consumers and a stifling of competition within the title insurance industry.
What Can You Do?
There are less than 12 days left in the Congressional Calendar for 2013. In that time, Congress must consider farm bills, milk pricing indexes, immigration matters, government’s role in the future of housing finance, whether to provide taxpayers with mortgage debt forgiveness exclusions and more. It does not appear that minor fixes to the Dodd Frank Act will pass on their own, which is great news for those opposed to H.R. 3211.
However, there is a distinct chance that H.R. 3211 and H.R. 1077 could be rolled into comprehensive end-of-the year legislation and passed at the 11th hour of the calendar. We cannot allow this to happen and we need you to, once again, pick up the phone, the fax and the letters and make sure that your member of Congress hears us on this important issue.
Call your congressional representative and tell them you do not support H.R. 3211. Here is a list of phone numbers for the House Financial Services Committee. Get on the phone and have your voice heard today!
We challenge each of you to make at least ten phone calls from the enclosed list and one call to your own congressional representative. Remember, if they do not hear from you, they do not know there’s a problem.
Click here for a copy of our HR3211_Member Letter 12-05-2013 correspondence.
Time is running out on H.R. 3211. Let us rally to defeat this bill and preserve a great victory for independent land title agents across the United States!