Congress Introduced a Bill to Make Mortgages Portable

On August 3, a bill landed in the House that would require Fannie Mae and Freddie Mac to start buying and securitizing portable mortgages within 180 days of the day it became law. It is H.R. 10028, the Making Ownership Viable for Everyone Act, or the MOVE Act, introduced by Rep. Tom Kean Jr. of New Jersey and referred that same day to the House Committee on Financial Services. Back in February I wrote that we already know how to make mortgages portable, since commercial real estate has been swapping collateral on the same loan for decades, and now there is a bill in committee doing more or less that. (I would love to tell you I had something to do with it. I did not. I read it twice and got a little excited, which tells you what my Saturdays look like.)

What the MOVE Act Actually Says

The whole bill is two pages, and the operative part is one sentence. Fannie and Freddie would have to begin buying and securitizing conventional mortgages “under which the mortgagor is permitted by mortgagee to transfer the interest rate, terms and balance of such mortgage to a new property within 90 days of selling the property originally securing such mortgage.”

So that is collateral substitution with a stopwatch on it. Sell the house, keep the loan, hang it on the next house inside 90 days, same rate and same terms and same balance. That is not that complicated right. Nothing about the mechanism is new either, it has just never been available to a regular family sitting on a 3% conventional loan and a growing kid problem (or, in my case, a kid who has decided he needs a second gaming station).

Why the Conventional Part Is the Whole Ballgame

About a quarter of American mortgages are already portable in a different form, because FHA, VA and USDA loans are assumable and a buyer can step into that rate. The other three quarters are conventional, most of them backed by Fannie and Freddie, and they are not. That is the gap I wrote about in February, and this bill points straight at the two entities that decide what a loan is worth once it leaves the closing table.

And the size of the problem is not a guess. FHFA’s own Working Paper 24-03 counted 1.33 million home sales that simply did not happen between the second quarter of 2022 and the end of 2023, and found that every percentage point between the market rate and your existing rate drops your odds of selling by 18.1%. Kahneman’s whole thing is that a loss stings about twice as hard as the same size gain feels good, and handing back a 2.9% loan is the most literal version of that I have ever watched people do at a kitchen table.

The Parts I Would Not Skip Over

Ok, so the bill does not force a single lender to offer you a portable mortgage. Go back to the language, the borrower has to be “permitted by mortgagee” to move the loan, which means your lender still decides. What the bill does is guarantee somebody will buy that loan afterward, and that is the actual chokepoint, since nobody writes a product they cannot sell.

And it is not law. It was introduced and referred to committee, which is where most bills go to quietly retire (this is House bill number 10,028 of the current Congress, which should tell you something about the odds). There is no servicing fee in the text, no LTV rules, no answer for what happens when the new house costs $200,000 more than the old one. FHFA and Fannie and Freddie would write all of that later, and later is usually where these things get interesting.

So no, do not list your house in Bee Cave next week over a two page bill, that would be a terrible reason to move. But if you are one of the people sitting on a 3% note in Lakeway telling me you would sell the day the math works, this is the first time Congress has put your exact problem on paper, and that is worth watching right.

Thinking About Moving Anyway

If you are weighing a move in Austin or the Hill Country and the rate on your current loan is the thing holding you back, talk to Ed Neuhaus and lets run the actual numbers on your house before a bill decides them for you.