Washington, February 7 – Representative. Maxin watersD-CaliforniaRanking democratic member House Financial Service CommitteeA statement of the following floor issued in protest against the Mortgage Options Act (HR 1153):
“Thank you Madam speakerI get up in protest against HR 1153 today, the so -called “mortgage option act 2017”. Unfortunately, this bill is another attempt to reduce strong consumer safety Democrat Dodd-Frank Wall Street Reform and Consumer Protection Act, takes us back on the days of subprime bubble.
“While some of my colleagues on the other side of the corridor have forgotten those days, I have not done. Whether the ability to repay.
“the last thing Congress The door should be opened for return to these frauds and harmful policies. And yet it is what HR 1153 will do. This bill seems like a technical fix-the title insurance and settlement service firms to allow the firms to be excluded from the 3 percent cap of the eligible mortgage rule and the fees paid by the borrowers. But do not make any mistake, nothing is technical about it. In fact, this bill would allow insurance companies to increase prices on borrowers and allow lenders to be otherwise illegal kickback. Under this bill, lenders, including a repeated criminals, such as Wells Fargo, will have new opportunities to get huge financial benefits at their customers’ expense, steering them in expensive title insurance policies who have no cap on fees.
“Before the Dod-Frank was enacted, the lenders were able to earn tremendous benefits through the attractive kickback paid by their colleagues. Real Estate Settlement Processions Act, or Respa, prohibit a” fee, kickback, or price related to a real estate settlement service. Loopol, some lenders have bought or created businesses to enable businesses to buy businesses.
,So dod-franc When they originate the loan, the borrowers established the responsible underwriting exercise of the lenders’ needs to verify the ability to repay. Dod-Frank also enabled lenders to achieve some legal protection when holding residential hostages, if those loans are considered a qualified mortgage or “QM”. To consider the QM, a loan must have terms and conditions that can be understood to the borrowers and does not include the hunter facilities considered inappropriate or misleading. For example, QM loan, cannot only have an interest-loan for more than 30 years, or a balloon payment. For the bill we are considering today, specific marks and the amount of fee on QM loan cannot exceed 3 percent of the total amount of loan. In short, QM debt is considered low risk, has been lower in a judicious manner, and is free from the types of hunter mortgage-related features that are implicated in borrowers in loans that they could not tolerate and this created a financial crisis.
“The marks and fees hats under the QM definition include the fees related to real estate, which are paid for services to the lender’s colleagues, such as property assessment, settlement services, and title insurance. The borrowers paid the fees paid to the lenders for maximum risks for the borrowers.
“Affiliated title insurance is particularly problematic. Title insurance industry is very opaque. Due to the lack of competition and easily available about conditions and pricing, consumers do not shop for title insurance as they may be for other products and services.
“And like Wales Fargo, Megabank has used title insurance to take advantage of consumers through illegal kickback schemes. Consumer bureau In 2015 against Wells Fargo, an enforcement action and JPMorgan ChaseOrder to pay more and more to these megabanks $ 24 million More and more in civilian punishment $ 11 million Consumers damaged their kickback plans with the actual title, which is now a one-more title company. At that time, Director Cordre said, “These banks allowed their debt officials to focus on their own illegal financial benefits rather than proper treatment of consumers. To address these practices today, our action should be served as a warning for all of them in the hostage market.”
,Madam speakerThese kickback plans continue despite Congress’ Efforts to close them, and the possibility will increase if HR 1153 is enacted. Because HR 1153 will remove the fees charged by the affiliated title insurance company of a lender from the QM fee cap, the bill directly encourages lenders to their colleagues to make borrowers once again to withdraw even more money from them.
“The supporters of the bill argue that, because individual states provide adequate regulation on the title insurance industry, it is unnecessary, they say, additional safety measures related to related title companies and fees of fees by them. National insurance commissioner union This indicates that the state laws, self, do not provide strong protection to consumers with title insurance. More than half of all states do not collect data from title agents. Some states have “no particular standard” to determine whether the title insurance rates are sufficient, and even a couple, such as Illinois And ArkansasDo not regulate the title insurance rates at all.
,Congress Prohibition on kickback should be strengthened, they should not weaken. We must be able to achieve the best price, terms and conditions on hostage loans rather than making more ways for megabanks such as Wells Fargo to gauge American consumers.
“When Congress This remedy is considered in the last period, Obama administration Issuing a veto threat, the bill “Risk (ED) erases consumer safety and returns to the hostage market in the days of lending that focuses on short -term profits.” Madam speakerThere is a possibility of buying a house that the largest purchases will ever be made at any time. For this reason alone, Congress Proposals such as HR 1153 must reject, which will allow residential mortgage lenders to take advantage of borrowers trying to achieve American dreams.
“Finally, a long list of groups, including civil rights groups, Naacp And this Leadership Conference on Civil and Human RightsAs well as consumer groups at national, state and local levels, like Americans for financial reforms, National consumer law center And Responsible credit centerAll the so -called mortgage opposes option.
“So for all these reasons, I urge my colleagues to urge them to join HR 1153. And, with it, I reserve my time balance.”
