As ordered reported by the House Committee on Financial Services on July 24, 2018
Under current law, a “qualified mortgage” is a type of loan that prohibits certain terms and features and offers additional legal protections to lenders who issue them. One of those features is that some costs that are incidental to the loan and that are paid by the borrower—for example, title insurance fees, guarantee fees, and service charges—cannot exceed 3 percent of the total loan amount. Lenders offering “high-cost mortgages” (home mortgages with interest rates and fees that exceed certain thresholds) must make additional disclosures to borrowers and must comply with restrictions on the terms of those loans.
H.R. 2570 would change what costs are included in the points and fees calculation used to determine if a loan is a qualified mortgage or a high-cost mortgage. The bill would exclude compensation paid by a consumer or creditor to an individual who is employed by or has a contract with the mortgage originator. The bill also would exclude compensation that was accounted for in setting the mortgage’s interest rate but for which the consumer was not separately charged.
Using information from the Consumer Financial Protection Bureau, CBO estimates that enacting H.R. 2570 would increase direct spending by less than $500,000 for the agency to issue a rule to implement the changes to the points and fees calculation.
Because enacting H.R. 2570 would affect direct spending, pay-as-you-go procedures apply. Enacting the bill would not affect revenues.
CBO estimates that enacting H.R. 2570 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2029.
H.R. 2570 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.