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CFPB Amends Mortgage Servicing Rules under Regulation Z Effective on January 10, 2014

Published on Friday, July 19, 2013 in TILA

In the February 14, 2013 issue of the Federal Register (78 FR 10902), as amended in the July 24, 2013 issue of the Federal Register (78 FR 44686), the Bureau of Consumer Financial Protection (CFPB) published a final rule (“Reg. Z Servicing Rule”) that revises Regulation Z, as follows:

(i) amends §1026.17 by revising paragraphs (a)(1) and (b);
(ii) amends §1026.20 by revising paragraphs (c) and (d);
(iii) amends §1026.36 by revising paragraph (c);
(iv) adds §1026.41;
(v) amends Appendix H by deleting Form H-4(D), and adding model and    sample forms H-4(D)(1) through H-4(D)(4) and H-30(A) through H-30(D); and
(vi) amends Supplement I by revising comments 17(a)(1)-2.ii, 17(c)(1)-1, 19(b)-4, 19(b)-5.i.C, 19(b)(2)(xi)-1, 20(c), 36(c)(1)(i)-2, 36(c)(1)(ii), 36(c)(1)(iii), 36(c)(2), Appendix H-7.i and adding comments 20(d), 36(c)(3) and comments for new §1026.41; (herein “comments” or “comment,” as applicable).

The amendments to the Reg. Z Servicing Rule clarify the scope and application of the small servicer exemption in §1026.41(e)(4) and its comments in Supplement I. The CFPB’s preamble published with the amendments clarifies the implementation dates for the adjustable rate mortgage provisions of §1026.20(c) and (d) without revising the Reg. Z Servicing Rule or the comments in Supplement I.

The Reg. Z Servicing Rule implements provisions of the Dodd-Frank Act regarding mortgage loan servicing. Specifically, the Reg. Z Servicing Rule implements Dodd-Frank Act sections addressing initial interest rate adjustment notices for adjustable rate mortgages (ARMs), periodic statements for residential mortgage loans, prompt crediting of mortgage payments, and responses to requests for payoff amounts. It also amends current rules governing the scope, timing, content, and format of disclosures to consumers regarding the interest rate adjustments of their ARMs.

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