Congressman Andy Barr (KY-06) today reintroduced H.R. 2226, the Portfolio Lending and Mortgage Access Act.  The bill promotes affordable home financing and discourages the practices that led to the 2008 financial crisis and the resulting taxpayer bailouts of Fannie Mae, Freddie Mac, and too-big-to-fail financial institutions.

“By expanding the definition of a ‘qualified mortgage’ to include mortgages that are held on portfolio, this legislation recognizes the fact that when a bank or credit union retains 100 percent of the downside risk of default on a loan, it has a strong incentive to ensure sound underwriting,” said Congressman Barr.  “This in turn, will expand access to mortgage credit and the American dream of homeownership without producing the risky originate to distribute practices that caused the financial crisis and led to taxpayer bailouts.  We passed this bill with strong bipartisan support in the last Congress, and I am hopeful with a new administration we will now be able to get this needed reform signed into law.”

The Portfolio Lending and Mortgage Access Act was passed by the U.S. House of Representatives during the 114th Congress with bipartisan support by a vote of 255 -174.

The legislation reforms the Qualified Mortgage rule imposed by the Consumer Financial Protection Bureau to allow banks and credit unions to hold mortgages in portfolio, therefore retaining 100 percent of the risk, to satisfy the requirements of the rule. 

The Independent Community Bankers of America reports that 73 percent of community bankers have decreased their mortgage business or completely stopped providing mortgage loans due to the expense of complying with the Qualified Mortgage regulation.