These mortgage-backed securities (MBS) and collateralized debt obligations (CDO) initially offered attractive rates of return due to the higher interest rates on the mortgages; however, the lower credit quality ultimately caused massive defaults.

[4] There were many causes of the crisis, with commentators assigning different levels of blame to financial institutions, regulators, credit agencies, government housing policies, and consumers, among others.

[9] When U.S. home prices declined steeply after peaking in mid-2006, it became more difficult for borrowers to refinance their loans.

Global investors also drastically reduced purchases of mortgage-backed debt and other securities as part of a decline in the capacity and willingness of the private financial system to support lending.

[11] (An "affiliated business arrangement" is one in which: (1) a person who is in a position to refer business incident to or a part of a real estate settlement service involving a federally related mortgage loan, or an associate of such person, has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1% in a provider of settlement services; and (2) either of such persons directly or indirectly refers such business to that provider or affirmatively influences the provider's selection.

)[11] The bill would revise the additional requirement that such a reasonable charge be paid to a third party unaffiliated with the creditor.

[1] Under new rules issued by the Consumer Financial Protection Bureau (CFPB) for qualified mortgages, certain costs that are incidental to the loan amount and paid by the borrower—for example, title insurance fees, guarantee fees, and service charges—are limited to no more than 3 percent of the total loan amount.

3211 would exclude insurance held in escrow and, under certain circumstances, fees paid to companies affiliated with the creditor from the costs that would be considered in calculating the 3 percent limitation.

[1] The Mortgage Choice Act of 2013 was introduced into the United States House of Representatives on September 28, 2013 by Rep. Bill Huizenga (R, MI-2).

[12] The National Association of Federal Credit Unions (NAFCU) supported the bill calling it "bipartisan commonsense legislation.

"[2] This article incorporates public domain material from websites or documents of the United States Government.