Home Mortgages: Safe Harbor for Loans Held in Portfolio (H.R. 2673)
Do you support or oppose this bill?
What is H.R. 2673?
(Updated July 18, 2017)
This bill deals with residential mortgage loans held in a portfolio. It would change the Truth in Lending Act to state that any residential loans held in portfolio by the loan originator automatically attain the qualified mortgage (QM) safe harbor designation.
According to the Mortgage Almanac,
a portfolio lender is a bank or other lending institution that makes mortgage loans with the intention of holding the loans in their investment portfolios. Portfolio lenders can often offer consumers greater flexibility in the loan granting process, as well as down the road, than lenders who make mortgage loans with the intention of selling them - either immediately or at some time during the term.
Today, portfolio lenders are more likely to be smaller community banks-often privately held-that have more discretion in the way they do business than larger, stockholder-driven institutions. These banks can make lending decisions based on the intangibles as well as the tangibles of a transaction. For example, a long term banking relationship with a customer might influence a positive loan decision, even in a situation where there had been a period of poor credit.
Argument in favor
Would improve access to home financing for low-income borrowers by looking at tangible and intangibles, in regard to the borrower’s finances.
Argument opposed
Opens the door for smaller, community banks to offer predatory loans similar to those that derailed the economy in 2007.
Impact
The bill impacts those seeking a mortgage from lenders who hold such mortgages in their lending portfolio.
Cost of H.R. 2673
A CBO cost is currently unavailable.
Additional Info
Media:
- H.R. 4200, the "SBIC Advisers Relief Act of 2014"
- H.R. 4521, the "Community Institution Mortgage Relief Act"
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H.R. 4554, the "Restricted Securities Relief Act of 2014"
- H.R. 4568, the "Small Business Freedom to Grow Act of 2014"
- H.R. 4569, the "Disclosure Modernization and Simplification Act of 2014"
- H.R. 4570, the "Private Placement Improvement Act of 2014"
- H.R. 4571, to direct the Securities and Exchange Commission to revise its rules so as to increase the threshold amount for requiring issuers to provide certain disclosures relating to compensatory benefit plan
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H.R. 4565, the "Startup Capital Modernization Act of 2014"
- H.R. 4564, the "Equity Crowdfunding Improvement Act of 2014"
- H.R. 1779, the "Preserving Access to Manufactured Housing Act of 2013"
- H.R. 2629, the "Fostering Innovation Act of 2013"
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H.R. 3211, the "Mortgage Choice Act of 2013"
- H.R. 4466, the "Financial Regulatory Clarity Act of 2014"
(Photo Credit: Flickr/Book Mama)
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