On April 19, the CFPB released proposed rule amendments to the ability to repay/qualified mortgage (QM) rules. The proposals address: (i) clearer rules for determining DTI; (ii) confirmation regarding loans meeting eligibility requirements; (iii) that certain GSE or agency requirements do not impact the determination of QM status; (iv) that there is no field preemption under Regulation X; and (v) which mortgage loans to consider in determining whether a servicer qualifies as a ‘small servicer.’ Comments on the proposed amendments must be received within 30 days of publication in the Federal Register. CFPB Release. Proposed Rules.
On April 10 , the CFPB published a small entity compliance guide for the Ability-to-Repay and Qualified Mortgage rule, as well as a comparison chart which compares the general Ability-to-Repay requirements with the requirements for originating Qualified Mortgage loans. CFPB Compliance Guide. CFPB Comparison Chart.
On April 12, the CFPB issued a proposed rule clarifying and making technical amendments to the 2013 Escrows Final Rule issued in January relating to mandatory escrow requirements for certain mortgage loans. Comments on the proposed rule must be received within 15 days of publication in the Federal Register. CFPB Proposed Rule.
On March 14, the CFPB proposed a rule that would allow it to federally supervise certain nonbank student loan servicers. The CFPB currently oversees student loan servicing at larger banks. The rule would define certain nonbank student loan servicers as “larger participants” and would allow the Bureau to oversee their activity for compliance with federal consumer financial laws. CFPB Release.
February 11, the CFPB issued a bulletin advising mortgage companies about their legal obligations that protect consumers during loan transfers between mortgage servicers. The guidance also indicates that the CFPB will look at: (i) how a servicer has prepared for the transfer of servicing rights or responsibilities; (ii) how the new servicer handles the files it receives through a transfer; and (iii) what policies the servicers have to prevent borrower harm for loans with loss mitigations in process. CFPB Release. CFPB Bulletin.
On February 13, the CFPB announced a plan it will implement over the next year for the mortgage industry’s compliance with consumer protections that go into effect January 2014. Among the new rules are the “ability-to-pay” rule and new mortgage servicing rules. In implementing the rules, the CFPB will: (i) coordinate with other agencies; (ii) publish plain-language guides; (iii) publish updates to financial interpretations; (iv) publish readiness guides; and (v) educate consumers. CFPB Release.
On January 20, the CFPB issued a final rule implanting the requirements and restrictions imposed by the Dodd-Frank Act on: (i) loan originator compensation; (ii) qualifications of, and registration or licensing of loan originators; (iii) compliance procedures for depository institutions; (iv) mandatory arbitration; and (v) the financing of single-premium credit insurance. The rules relating to arbitration and credit insurance will be effective on June 1, with the remaining provisions of the rule becoming effective on January 10, 2014. CFPB Release. CFPB Summary. CFPB Final Rule.
On January 18, the CFPB issued a final rule, effective January 18, 2014, which amends the Equal Credit Opportunity Act to require mortgage loan creditors to: (i) automatically provide applicants with a copy of appraisal reports and other written valuations prepared in connection with first lien loans secured by a dwelling and (ii) provide applicants with a disclosure at the beginning of the application process. CFPB Release. CFPB Final Rule. CFPB Summary.
On January 18, the Fed, CFPB, FDIC, FHFA, NCUA and OCC issued a joint final rule, effective January 18, 2014, which establishes new appraisal requirements for “higher-priced mortgage loans”. For these loans, the rule requires creditors to: (i) use a licensed or certified appraiser who prepares a written appraisal report based on a physical visit of the interior of the property and (ii) disclose to applicants information about the purpose of the appraisal and provide consumers with a free copy of any appraisal report. Joint Release. Final Rule.
On January 18, the CFPB released final rules, effective January 10, 2014, which set forth national mortgage loan servicing standards. The final rules address, among other things, servicers’ obligations to: (i) correct errors asserted by borrowers; (ii) provide protections in connection with ‘force-placed’ insurance; (iii) establish reasonable policies and procedures; (iv) provide information about loss mitigation options to borrowers; and (v) evaluate applications for available loss mitigation options. CFPB Release. CFPB Final Rule. CFPB Fact Sheet. CFPB Summary.