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Portfolio Lending and Mortgage Access Act
This bill amends the Truth in Lending Act to modify provisions related to residential mortgage loans. In general, a creditor that is a depository institution shall not be subject to suit for violating specified ability-to-pay requirements with respect to a residential mortgage loan if: (1) the creditor has consistently held the loan on its balance sheet, and (2) prepayment penalties associated with the loan comply with specified limitations. Similarly, a mortgage originator shall not be subject to suit for such a violation if: (1) the creditor is a depository institution; and (2) the creditor informs the mortgage originator, which informs the consumer, that the creditor intends to hold the loan on its balance sheet for the life of the loan.
Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs
To amend the Truth in Lending Act to provide a safe harbor from certain requirements related to qualified mortgages for residential mortgage loans held on an originating depository institution’s portfolio, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the “Portfolio Lending and Mortgage Access Act”.
Section 129C(b) of the Truth in Lending Act (15 U.S.C. 1639c(b)) is amended by adding at the end the following:
“(i) is originated by, and continuously retained in the portfolio of, a covered institution;
“(ii) is in compliance with the limitations with respect to prepayment penalties described in subsections (c)(1) and (c)(3);
“(iii) is in compliance with the requirements related to points and fees under paragraph (2)(A)(vii);
“(iv) does not have negative amortization terms or interest-only terms; and
“(v) is a loan for which the covered institution considers, documents, and verifies the debt, income, and financial resources of the consumer in accordance with subparagraph (C).
“(B) EXCEPTION FOR CERTAIN TRANSFERS.—Subparagraph (A) shall not apply to a residential mortgage loan if the legal title to such residential mortgage loan is sold, assigned, or otherwise transferred to another person unless the legal title to such residential mortgage loan is sold, assigned, or otherwise transferred—
“(i) to another person by reason of the bankruptcy or failure of the covered institution that originated such loan;
“(ii) to an insured depository institution or insured credit union that has less than $10,000,000,000 in total consolidated assets on the date of such sale, assignment, or transfer, if the loan is retained in portfolio by such insured depository institution or insured credit union;
“(iii) pursuant to a merger of the covered institution that originated such loan with another person or the acquisition of a the covered institution that originated such loan by another person or of another person by a covered institution, if the loan is retained in portfolio by the person to whom the loan is sold, assigned, or otherwise transferred; or
“(iv) to a wholly owned subsidiary of the covered institution that originated such loan if the loan is considered to be an asset of such covered institution for regulatory accounting purposes.
“(i) not be construed to require compliance with, or documentation in accordance with, appendix Q to part 1026 of title 12, Code of Federal Regulations, or any successor regulation; and
“(ii) be construed to permit multiple methods of documentation.
“(i) the term ‘covered institution’ means an insured depository institution or an insured credit union that, together with its affiliates, has less than $10,000,000,000 in total consolidated assets on the date on the origination of a residential mortgage loan;
“(ii) the term ‘insured credit union’ has the meaning given the term in section 101 of the Federal Credit Union Act (12 U.S.C. 1752);
“(iii) the term ‘insured depository institution’ has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);
“(iv) the term ‘interest-only term’ means a term of a residential mortgage loan that allows one or more of the periodic payments made under the loan to be applied solely to accrued interest and not to the principal of the loan; and
“(v) the term ‘negative amortization term’ means a term of a residential mortgage loan under which the payment of periodic payments will result in an increase in the principal of the loan.”.
Passed the House of Representatives March 6, 2018.
|Attest:||karen l. haas,|