2015: Schweikert Voted To Weaken Dodd-Frank's Standards For Qualified Mortgages. In November 2015, Schweikert voted for a bill that would have, according to Congressional Quarterly, "create[d] a safe harbor from the penalties under the Dodd-Frank Act for banks that originate non-qualified mortgages that do not comply with the ability-to-repay requirements, as long as the bank retains the mortgage in its own portfolio. The bill would [have] also create[d] safe harbor for mortgage originators (brokers) if the mortgage lender is a depository institution and intends to hold the mortgage for the life of the loan, and the originator tells the consumer that the lender will hold the mortgage for the life of the loan. The bill would [have] also require[d] that prepayment penalties comply with current statutory requirements. Further, the bill would [have] provide[d] safe harbor to balloon payment loans, as long as these loans meet all other qualified mortgage requirements. As amended, the bill would [have] clarify[ied] that systemically important financial institutions (SIFIs) are excluded from the safe harbor provisions under the bill." The vote was on passage. The House passed the bill by a vote of 255 to 174. The Senate took no substantive action on the legislation. [House Vote 636, 11/18/15; Congressional Quarterly, 11/18/15; Congressional Actions, H.R. 1210]
Statement Of Administration Policy: The Consumer Financial Protection Bureau's Qualified Mortgage Rule "Requires A Lender To Make A Good Faith Effort" To Determine A Borrower's Ability To Repay "And That The Loan Does Not" Have "Excessive Upfront Points And Fees." According to a Statement of Administration Policy, "Among other protections, the Consumer Financial Protection Bureau's Qualified Mortgage (QM) rule requires a lender to make a good faith effort to determine that a borrower has the ability to repay a mortgage, and that the loan does not include excessive upfront points and fees. The final rule also contains special provisions and exemptions that are available only to small lenders or to small lenders that operate predominantly in rural or underserved areas." [Statement of Administration Policy, 11/17/15]
Statement Of Administration Policy: The Legislation Broadens The Definition Of Qualified Mortgage And Would Thus "Open The Door To Risky Lending By Allowing Balloon Loans Made In Any Geographic Area To Qualify For The Safe Harbor As Long As They Are Held In Portfolio." According to a Statement of Administration Policy, "H.R. 1210 would broaden the definition of qualified mortgages -- those that qualify for the safe harbor -- to include all mortgages held on a lender's balance sheet. Under the bill, depository institutions that hold a loan in portfolio would receive a legal safe harbor even if the loan contains terms and features that are abusive and harmful to consumers. The bill would limit the right of borrowers to file claims against holders of such loans and against mortgage originators who directed them to the loans. H.R. 1210 also would open the door to risky lending by allowing balloon loans made in any geographic area to qualify for the safe harbor as long as they are held in portfolio. The Administration strongly opposes this bill because it would undermine critical consumer protections by exempting all depository financial institutions, large and small, from QM standards---including very basic standards like verifying a consumer's income---as long as the mortgage loans in question are held in portfolio by the institution. This bill would undermine the essential protections provided under the Qualified Mortgage rule." [Statement of Administration Policy, 11/17/15]