Bill Text: AZ SCM1001 | 2016 | Fifty-second Legislature 2nd Regular | Engrossed
Bill Title: Mortgage standards; urging federal government
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2016-05-05 - Introduced in House and read first time [SCM1001 Detail]
Download: Arizona-2016-SCM1001-Engrossed.html
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Senate Engrossed |
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State of Arizona Senate Fifty-second Legislature Second Regular Session 2016
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SENATE CONCURRENT MEMORIAL 1001 |
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A CONCURRENT MEMORIAL
urging the President of the United States, the Congress of the United States and the Consumer Financial Protection Bureau to modify the federal mortgage standards.
(TEXT OF BILL BEGINS ON NEXT PAGE)
To the President of the United States, the Congress of the United States and the Director of the Consumer Financial Protection Bureau:
Your memorialist respectfully represents:
Whereas, in January 2014, mortgage standards required by the federal Dodd-Frank law and set by the Consumer Financial Protection Bureau (CFPB) went into effect; and
Whereas, the CFPB rules create a qualified mortgage, which is an attempt to incentivize safer loans by offering lenders a safe harbor against liability in court; and
Whereas, consumers, small businesses, banks, realtors and mortgage lenders have expressed serious concerns with the current CFPB rules; and
Whereas, many commonsense lending practices are no longer allowed by the new rules; and
Whereas, these rules are too restrictive and have resulted in fewer lenders offering loans and make it harder for even low-risk consumers to buy houses, damaging the Arizona economy; and
Whereas, many small business owners who have excellent credit ratings and a great track record of paying their existing mortgages on time are being turned down for new mortgages or mortgage refinancing due to these restrictive federal regulations; and
Whereas, the new federal rules are resulting in the denial of loans to low-risk consumers who deserve loans, simply because they cannot prove adequate income on their Schedule C tax forms, regardless of mitigating circumstances; and
Whereas, prior to Dodd-Frank, commonsense mortgage lending practices for small business owners and self-employed people involving alternative methods to prove ability to repay historically resulted in some of the highest repayment rates of any loans on the market; and
Whereas, prior to Dodd-Frank, many small businesses obtained significant capital investment to grow their businesses by refinancing their personal homes, a source of capital now severely limited by Dodd-Frank; and
Whereas, since the enactment of Dodd-Frank, many potential homebuyers and those seeking to refinance existing home loans are unable to obtain any mortgage at any price, even if they have a long history of paying their debts and prior mortgages and are clearly able to repay the loan.
Wherefore your memorialist, the Senate of the State of Arizona, the House of Representatives concurring, prays:
1. That the Members of the Legislature urge the President, Congress and CFPB to broaden the qualified mortgage underwriting rules to enshrine commonsense lending practices including allowing individuals to demonstrate their ability to repay through methods other than income documentation, such as proof of a high credit rating, a long track record of paying monthly mortgages on time, liquid assets greater than the mortgage amount or significant business net worth or consumer net worth, or both.
2. That the Members of the Legislature urge the President, Congress and CFPB to allow lenders to exceed the 43% debt-to-income ratio ceiling and still maintain a safe harbor if the borrower meets other criteria that demonstrate an ability to pay.
3. That the Members of the Legislature urge the President, Congress and CFPB to create a fee schedule that allows lenders, within reason, to price loans according to risk instead of a flat 3% maximum fee.
4. That the Secretary of State of the State of Arizona transmit a copy of this Memorial to the President of the United States, the President of the United States Senate, the Speaker of the United States House of Representatives, each Member of Congress from the State of Arizona and the Director of the CFPB.
