Legislation introduced by U.S. Rep. Andy Barr (R-KY) to promote affordable home financing and discourage the securitizing and sale of mortgages was recently passed by the House of Representatives.
The Portfolio Lending and Mortgage Access Act – H.R. 1210 – was passed by the House in a bipartisan 255 to 174 vote. The legislation would reform the Qualified Mortgage rule.
“The one-size-fits-all, top-down Qualified Mortgage rule is preventing creditworthy Americans from the dream of homeownership, holding our economy back, and contributing to consolidation and closures among community banks and credit unions,” Barr said. “My bill would expand access to credit as long as banks and credit unions do not sell the mortgages as securities. This reform would have the dual benefit of promoting responsible lending practices which will prevent future crises and bailouts, while encouraging economic growth through expanded homeownership.”
Approximately 73 percent of community bankers have reportedly completely stopped providing mortgage loans or decreased their mortgage business as a result of the expense of complying with the Qualified Mortgage regulation, the Independent Community Bankers Association said.
Barr’s legislation intends to stem the risky practices that led to the 2008 financial crisis and subsequent bailout of Fannie Mae, Freddie Mac and other systemically important financial institutions.