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Opposition to H.R. 3971 - Community Institution Mortgage Relief Act of 2017

December 12, 2017
Mortgage Lending
Letters to Congress

The undersigned organizations oppose H.R. 3971, the so‐called “Community Institution Mortgage Relief Act of 2017.” This bill would create loopholes for abuse by rolling back essential consumer protections and inappropriately extending to larger institutions the carefully tailored exemptions that currently apply to community banks and other small institutions.

The bill expands an existing exemption from the Real Estate Settlement Procedures Act (RESPA) for small mortgage servicers from those servicing 5,000 loans held in portfolio or in that of the affiliate to those servicing 20,000 loans, whether or not held in portfolio. It also pries open the carefully tailored Truth in Lending Act rule that exempts small lenders from the obligation to establish escrow accounts for higher‐priced mortgages as long as they are held in portfolio for three years. Lenders with up to $10 billion in assets would be exempt, a significant increase from the current $2 billion threshold.