Richard Cordray Reconsidering Treatment of Affiliated Title Companies?
The Consumer Financial Protection Bureau is coming under pressure to reconsider its position regarding a provision in the qualified mortgage rule that penalizes title companies that are affiliated with lenders.
At a House Financial Services Committee hearing Thursday, Rep. Bill Huizenga, R-Mich., pressed CFPB director Richard Cordray about his decision to count affiliated title company fees towards the QM 3% limit on points and fees.
“Big and small companies are being pinched by this,” Huizenga said.
The CFPB director noted that Quicken Loans has also raised the affiliated title company issue with the consumer bureau.
Cordray testified that there have been abuses where consumers were steered to affiliated title companies in return for payments. In other cases, such affiliations can create “efficiency and synergy,” he added.
“We did our best to write the rule within an understanding of those polar opposition views of affiliates—both of which have some validity,” Cordray testified.
The Michigan congressman stressed that the QM rule currently penalizes companies that can deliver title insurance more efficiently.
The CFPB director indicated the bureau might “think further” about the issue and the fact that title insurance is regulated at the state level. “I have begun to talk with our staff,” he said, “about whether it is different because it is regulated.”
Huizenga has sponsored a bill (H.R. 1077) that would exempt affiliated title company fees from the 3% QM cap.