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North American Title Insurance Company is a seasoned title insurance underwriter that has been helping customers achieve the American dream of homeownership for more than 50 years. In the past several years, we have become known as the “underwriter next door,� because our associates are always easy to reach and our processes are, at all times, quick and straightforward. Our agency application process is fast and transparent for qualified agents. NATIC offers a one-hour underwriting response guarantee that is unparallelled in our industry. In addition, we value our agents based on their title industry knowledge and experience, not just on profits alone.


QM Points and Fees

Overview

Under Section 1412 of the Dodd-Frank Act, in order for a loan to be eligible for an "Ability-to-Repay" (ATR) safe harbor and be considered a "Qualified Mortgage" (QM), the loan must follow certain criteria. One requirement is that the total points and fees payable in connection with the loan do not exceed 3% of the total loan amount, and title fees are included in this calculation if they are paid to an affiliate of the originator.

The Mortgage Choice Act amends the Ability-to-Repay/Qualified Mortgage provision (Section 1412) in the Dodd-Frank Act to exclude title and certain escrow charges if they are paid to an affiliate of the originator from the law's calculation for the three-percent cap for points and fees.

Impact to the Industry

If title and certain escrow charges are paid to an affiliate of the originator, they are included under the law's three-percent cap on points and fees. Although title fees paid to a non-affiliated title company are not included in the three-percent cap on points and fees, the Mortgage Choice Act has prompted debate about title insurance.

ALTA Policy Statement

Since ALTA has some members that have affiliated relationships and other members who do not have affiliations, we are not advocating for or against the Mortgage Choice Act.

However, it is appropriate that ALTA respond to requests from our members about how they can advocate on the legislation to ensure Congress has accurate information about title insurance.

ALTA Advocacy

March 25, 2015 Myth vs. Fact on title insurance

January 14, 2014 Statement for the Record on House Financial Services Committee Hearing entitled “How Prospective and Current Homeowners Will Be Harmed by the CFPB’s Qualified Mortgage Rule”

October 24, 2013 ALTA response to consumer organizations letter to Senators and Representatives on H.R. 3211

May 21, 2013 ALTA Statement for the Record on House Financial Services Committee Hearing entitled "Qualified Mortgages: Examining the Impact of the Ability to Repay Rule."

March 18, 2013 Joint trades letter regarding H.R 1077
April 27, 2012 Joint Trades letter to Richard Cordray regarding Qualified Mortgages

June 21, 2011 Letter by ALTA President Anne Anastasi regarding Qualified Mortgages

News about QM Points and Fees

Democrats Push New Bill Allowing Community Banks to Exceed QM Rule
HousingWire | June 4, 2015
The leading Democrats on both the Senate Banking Committee and the House Financial Services Committee are pushing a new bill designed to provide regulatory relief to community banks and increase consumer protections.

House Committee Grills Cordray on QM, Mortgage Regulations
HousingWire | March 3, 2015
Consumer Financial Protection Bureau Director Richard Cordray appeared before the House Financial Services Committee on Tuesday afternoon for his semi-annual report to Congress

A Bruised Cordray Opens Up About Internal CFPB Scrap Over Easing QM
Credit Union Journal | February 11, 2015
In unusually expansive comments, Consumer Financial Protection Bureau Director Richard Cordray provided new details Tuesday about proposals due soon from the agency while offering insights into an internal battle over easing a key mortgage rule.

CFPB Issues Final Points and Fees Error Resolution Rule
DS News | October 22, 2014
The Consumer Financial Protection Bureau (CFPB) finalized minor changes to its mortgage rules designed to ensure expanded credit access, which has been a hot topic in recent weeks. The adjustments were proposed in April and include changes that will allow some non-profits to provide mortgage credit and servicing to populations that are underserved, and allow lenders to refund the excess amount plus interest to consumers when they exceed the points and fees cap – and still have the loan be considered a qualified mortgage (QM).

QM Rules Cause Lenders to Expect Tougher Environment
DS News | August 15, 2014
While regulatory guidelines introduced this year have had little effect on lenders' strategies so far, most still anticipate a tougher operating environment ahead, according to an analysis of responses in a recent Fannie Mae survey. Earlier this year, the Consumer Financial Protection Bureau (CFPB) implemented the Qualified Mortgage (QM) and ability-to-repay rules, which restrict certain loan features and require lenders to take greater steps to ensure a borrower's ability to repay their mortgage.

Fannie Mae: 80% of Lenders Won't Enter Non-QM Space
HousingWire | August 14, 2014
For more than half a year, the mortgage finance industry grew to accommodate to the Consumer Financial Protection Bureau’s new Qualified Mortgage and Ability-to-Repay rules. And so far, most lenders indicate that QM rules have had little impact on their business strategies, according to a new study conducted by Fannie Mae.

More Lenders Join Non-QM Market
HousingWire | August 6, 2014
Alamo, California based RPM Mortgage is following suit with the industry and entering the newly chartered territory of non-Qualified Mortgage lending.

Community Bankers: CFPB Must Modify QM Rule
Mortgage Professional America | July 23, 2014
Community bankers are urging the Consumer Financial Protection Bureau to revise the current qualified mortgage rule. In a letter to CFPB Director Richard Cordray, the Independent Community Bankers of America say that the rule must be revised to ensure that community banks can continue to serve local mortgage markets without being crushed by compliance costs.

Is Non-QM Lending the Future of Housing?
HousingWire | July 9, 2014
Lenders are starting to look into the unchartered territory of non-QM lending, seeing that it’s been over six months since the CFPB Qualified Mortgage requirements went into effect. And while it’s not vast, there is a definite demand.

House Expands QM Mortgage Definition, Industry Praises Change
Reverse Mortgage Daily | June 10, 2014
Mortgage industry groups are praising a bill approved this week by the U.S. House of Representatives that would clarify certain aspects of the Qualified Mortgage rule, providing a limited “cure” provision that intends to help banks ensure compliance and manage liability more effectively. Bill H.R. 3211—or The Mortgage Choice Act—was proposed last month by the Consumer Financial Protection Bureau (CFPB) as an amendment to the ability-to-repay rule for the points and fees limit that apply to qualified mortgages.



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