Published: October 2014

Mortgage Choice Act of 2014 protects lenders - leaves homebuyers out in the cold

The Mortgage Choice Act of 2014 (H.R. 3211) contains certain provisions that would both increase fees for homebuyers and provide additional legal protections for lenders who make riskier loans. The passage of this bill may deter consumers seeking to purchase a home or refinance their current mortgage. As the housing market continues to recover, Consumer Action joins consumer advocates in urging Congress to oppose H.R. 3211 in order to protect basic, existing, consumer safeguards.

The Mortgage Choice Act of 2014 (H.R. 3211) modifies the definition of points and fees under the Truth in Lending Act. The bill, which passed the House of Representatives last summer, specifically exempts fees paid to businesses affiliated with the mortgage lender, such as title companies, from the computation of points and fees under the Qualified Mortgage cap.

Advocates argue that title insurance fees are grossly inflated and add $1,000 or more to the upfront costs of many mortgages. This bill, which is misleadingly named the Mortgage Choice Act, leaves the door open for abuses that were typical in the recent subprime crisis. During the subprime lending boom, borrowers often paid excessive origination costs; Dodd-Frank's Qualified Mortgage provisions aim to restore a fair market.

As the housing market continues to recover, Consumer Action and coalition advocates warn senators that undermining basic consumer safeguards by allowing for an unnecessary spike in fees will deter borrowers and slow the recovery.

Lead Organization

Center for Responsible Lending (CRL)

Other Organizations

Action for the Common Good | AFL-CIO | Alliance for a Just Society | Americans for Financial Reform | Center for Economic Justice | Center for Popular Democracy | Center for Responsible Lending | Connecticut Fair Housing Center | Consumer Action | Consumer Federation of America | Consumers Union | Empire Justice Center | Home Defenders League | The Leadership Conference on Civil and Human Rights | NAACP | National Association of Consumer Advocates | National Consumer Law Center (on behalf of its low income clients) | National Council of La Raza | National Fair Housing Alliance | New Economic Project | New Jersey Citizen Action | Public Citizen | Woodstock Institute

More Information

For more information, please visit CRL's website.

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Mortgage Choice Act of 2014 protects lenders - leaves homebuyers out in the cold   (OpposetheMortgageActof2014--HR3211.pdf)