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house Bill H.R. 1210

Creating a Safe Harbor for Mortgage Lenders that Keep Loans on Their Balance Sheets

Argument in favor

Protecting mortgage lenders from lawsuits under circumstances where they hold the mortgage on their books for the life of the loan rather than selling it will make it easier for mortgage loans to be originated.

James's Opinion
Securitising allows for risk to be safely distributed instead of concentrated. We should not subsidize practices that lead to more instability and risk in the system.
SherryTX's Opinion
This is fine except they should also be able to offer lower rates and the definition of risk needs to be modified for those with limited, but not negative credit.
Marinating the life of the mortgage would preclude shifting faulty loans onto other corporations where they default, leaving big corporations holding the bag.

Argument opposed

Mortgage lenders should be able to be sued even if they’re holding the loans they make on their own books rather than selling them.

John's Opinion
NO NO NO. There is no justification for allowing a lender to grant a loan to someone who is not qualified for the loan. This type of BS is the reason for the Collapse in 2008. If they fail, those loans will have to be taken by the US taxpayer and that is not acceptable.
Like (4)
Patrick's Opinion
Don't create the same regulatory environment that caused the 2008 Financial Crisis.
Like (1)
Josh's Opinion
If a company does something to get sued, then there shouldn't be any law preventing their wrong doing if that be the case
Like (1)

What is House Bill H.R. 1210?

This bill would create a safe harbor for lenders, such as banks and credit unions, that hold residential mortgages on their balance sheet after origination and all of their prepayment penalties comply with certain limitations. The residential mortgages would not meet the definition of a qualified mortgage, meaning that:

  • The borrower’s debt to income ratio exceeds 43 percent;

  • The total principal of the loan could grow each year, which is known as negative amortization;

  • The borrower could be allowed to pay only the interest on a mortgage;

  • The borrower has limited documentation.

The safe harbor would shield lenders from lawsuits related to failure to comply with requirements related to residential mortgages as long as they meet the above criteria.

Mortgage originators would also be protected by the safe harbor for steering a consumer to a residential mortgage loan if:

  • The lender is a depository institution and has informed the mortgage originator that it intends to hold the loan on its balance sheet for the life of the loan;

  • The mortgage originator informs the consumer that the creditor intends to do so.


People applying for mortgages, mortgage originators and financial institutions, and the federal government.

Cost of House Bill H.R. 1210

The CBO estimates that this bill’s impact on spending would be insignificant.

More Information

In-Depth: Sponsoring Rep. Andy Barr (R-KY) described the purpose of this bill in his introductory press release:

“The aim of this legislation is simple: banks and credit unions should be given more discretion to originate mortgages as long as they agree to retain the risk of that loan. This reform would promote responsible lending practices that would help more Kentucky homebuyers qualify for a mortgage, and protect hardworking taxpayers from future bailouts.”

This bill has 54 cosponsors in the House, and was passed by the House Financial Services Committee by a 38-18 vote.


Summary by Eric Revell
(Photo Credit: Flickr user CJS*64 A man with a camera)


Portfolio Lending and Mortgage Access Act

Official Title

To amend the Truth in Lending Act to provide a safe harbor from certain requirements related to qualified mortgages for residential mortgage loans held on an originating depository institution's portfolio, and for other purposes.

bill Progress

  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
  • The house Passed November 18th, 2015
    Roll Call Vote 255 Yea / 174 Nay
      house Committees
      Committee on Financial Services
      Consumer Protection and Financial Institutions
    IntroducedMarch 3rd, 2015

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