The Mortgage Choice Act Erodes Consumer Choice

HR3211 is a Bill deceptively entitled the Mortgage Choice Act. It should be called the Mortgage Elimination of Choice Act. It seeks to provide further advantages to affiliated business arrangements, something that hurts consumers and small business.

This Bill is opposed by the National Association of Consumer Advocates, the Consumer Federation of America, The Leadership Conference on Civil and Human Rights, Consumers Union, National Council of LaRaza, Americans for Financial Reform, the Center for Responsible Lending, Consumer Federation of America and Consumer Advocates in American Real Estate.

Affiliated business arrangements used to be called Controlled Business Arrangements, but the affiliated business lobby got the name changed because of the negative connotations. The name may have been changed, but the problems of course still exist. Affiliated business arrangements in residential real estate serve a few important anti-consumer purposes:

  • They eliminate consumer choice by allowing trusted real estate providers to steer their clients into their own over-priced title, mortgage and other firms;
  • They eliminate the impartiality of important decision makers like title companies by allowing parties at the closing table to influence the checks and balances;
  • They eliminate comparative shopping by allowing fiduciaries in the transaction to actually steer clients into their over price and biased in-house service providers. Eliminate competition in this manner and you cause prices to artificially inflate, service standards to drop and products to deteriorate.

If you are interested in calling your Congressman and asking them to stop HR3211, here is how you can find your Congressman’s contact information:

To find your representative in the House, please click here.
To find your representative in the Senate, please click here.