3% Cap Bill Introduced in the Senate

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A bill crucial to maintaining affordable mortgage financing by addressing a problem in regulators’ Qualified Mortgage (QM) rule was introduced in the Senate last week. “The Consumer Mortgage Choice Act,” s. 949, by Sens. Joe Manchin (D-W.V.) and Mike Johanns (R-Neb.), would address the 3 percent cap on points and fees in the QM rule’s “ability-to-repay” provisions. A companion bill was earlier introduced in the House. The legislation is particularly important to real estate firms with affiliates and small and mid-sized lenders and mortgage brokers. Without it, up to half of the loans lenders make would not meet the qualified mortgage test and would either not be made or would have to be made by large lenders who do not have to count the same items in their fees and points calculations under the test.

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