On August 21, the CFPB issued a report which details mortgage servicing problems at banks and nonbanks, which include: (i) “sloppy” account transfers; (ii) poor payment processing; and (iii) loss mitigation mistakes. CFPB Release. CFPB Report.
cfpb
CFPB Update on Mortgage Regulation Exam Procedures
On August 15, the CFPB released a second update to its exam procedures in connection with mortgage regulations to cover: (i) ability-to-repay; (ii) qualified mortgages; (iii) high-cost mortgages; (iv) appraisals for higher-priced loans; and (v) amendments related to the escrows rule. CFPB Release. RESPA Exam Procedures. TILA Exam Procedures.
Appraisal Exemption for Higher-Priced Mortgages
On July 10, the Fed, the CFPB, the FDIC, the FHFA and the OCC issued a joint proposed rule which would create exemptions from certain appraisal requirements for a subset of higher-priced mortgage loans. The proposed rule would provide exemptions for: (i) transactions secured by existing manufactured homes and not land; (ii) certain “streamlined” refinancings; and (iii) transactions of $25,000 or less. Comments must be received on or before September 9. Joint Release. Proposed Rule.
CFPB Procedural Rule on Nonbank Supervision
On June 26, the CFPB, pursuant to the Dodd-Frank Act, issued a final rule that establishes supervisory procedures for nonbanks whose activities it has reasonable cause to determine pose risks to consumers. CFPB Release. CFPB Final Rule.
CFPB Proposed Modifications to Mortgage Rules
On June 24, the CFPB issued proposed clarifications and revisions to its January 2013 mortgage rules with respect to ability-to-repay and qualified mortgages. Among other items, the proposed rule would: (i) outline procedures for obtaining follow-up information on loss-mitigation activities; (ii) facilitate servicers’ offerings of short-term forbearance plans; (iii) facilitate lending in rural or underserved areas; (iv) make clarifications regarding the financing of credit insurance premiums; (v) clarify the definition of a loan originator; (vi) clarify the points and fees thresholds for manufactured housing employees; and (vii) revise the effective dates for the “Loan Originator rule” and the ban on financing of credit insurance to January 1, 2014 (instead of January 10, 2014). Comments on the proposed rules must be submitted by July 22. CFPB Release. CFPB Proposed Rule. CFPB Regulatory Implementation Page.
CFPB Exam Procedures for New Mortgage Rules
On June 4, the CFPB published an update to its exam procedures for the new mortgage regulations issued in January 2013 relating to appraisals, escrow accounts, and compensation and qualifications for loan originators. CFPB Release. Interim TILA Procedures. Interim ECOA Procedures.
CFPB Final Rule Amendments to Ability to Repay and QM Rule
On May 29, the CFPB issued a final rule amending its ability-to-repay and qualified mortgage (QM) rule. The amendments, effective in conjunction with the ability-to-repay rule on January 10, 2014, (i) exempt certain nonprofit and community-based lenders from the rule; (ii) facilitate lending by small creditors, including certain community banks and credit unions, by making changes to qualified mortgage status for loans issued by small creditors; and (iii) establish the calculation method for loan origination compensation. CFPB Release. CFPB Final Rule Amendments.
CFPB’s Escrows Final Rule
On May 16, the CFPB issued a final rule clarifying and making technical amendments to its Escrows Final Rule in January of this year. The Escrows Final Rule amends an existing rule that provides protections regarding assessments of consumers’ ability to repay and prepayment penalties on certain higher-priced mortgage loans, and the clarifications (i) ensure existing protections remain in place for higher-priced mortgage loans until the expanded provisions take effect in January 2014 and (ii) include guidance for determining whether a county is considered “rural” or “underserved” for the purposes of applying certain exemptions. CFPB Release. CFPB Final Rule.
CFPB Proposed Clarifications on Qualified Mortgage Rules
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.
CFPB Small Entity QM Compliance Guide
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.