The Mortgage Choice Act of 2013 cleared a major hurdle, passing in the House despite reservations from critics who say it may reopen the door to irresponsible lending. Introduced last year by a bipartisan group of representatives, the bill would amend the Truth in Lending Act to exempt fees from affiliated title companies from counting toward the 3 percent point and fee threshold established in the Qualified Mortgage rule. The bill would also clarify the treatment of insurance and taxes held in escrow.
However, not everyone agrees with the bill's approach. In a statement released Monday, the Center for Responsible Lending said H.R. 3211 could "upset the careful balance struck by the Consumer Financial Protection Bureau" in its creation of mortgage rules designed to protect consumers. Still, Monday's news garnered praise from industry groups, including the National Association of Realtors, the National Association of Federal Credit Unions, and the Mortgage Bankers Association, among others.
A study released by the Service Contract Industry Council found that homes covered by a protection plan sell faster and for more money than those without one. According to the group's most recent look at nationwide home sale prices, homes sold with a protection plan spend, on average, 11 fewer days on the market. SCIC's findings also show that homes on average sold for about $2,300 more when covered by a plan, and the ability to transfer a home warranty to new owners creates added incentives for buyers.