On October 22, 2013, the CFPB, FDIC, FRB, NCUA, and OCC (“Agencies”) issued a statement (“Interagency Statement”) to address questions from residential mortgage lenders about disparate impact doctrine risks associated with offering only Qualified Mortgages under the new Ability-to-Repay and Qualified Mortgage Rule issued by the CFPB (“Ability-to-Repay Rule”).
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Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
HUD Issues Proposed Ability-To-Repay Qualified Mortgage Definition for Single Family Mortgages Insured and Guaranteed by HUD
In the September 30, 2013 issue of the Federal Register (78 FR 59890), click here, the Department of Housing and Urban Development (HUD) published a proposed rule that submits for public comment its definition of “qualified mortgage” for the types of loans that HUD insures, guarantees, or administers that aligns with the ability-to-repay criteria of the CFPB’s definition of “qualified mortgage” in its final rule. In this proposed rulemaking, HUD proposes that any forward single family mortgage insured or guaranteed by HUD shall meet the criteria of a qualified mortgage, as defined in the proposed rule, and HUD seeks comment on all components of its definition.
CFPB Files Federal Lawsuit Against Mortgage Company Alleging Violations of the Regulation Z Loan Originator Compensation Rule (§1026.36(d))
In a July 23, 2013 Press Release, the CFPB announced it had filed a federal civil complaint against a mortgage lender for violations of the Regulation Z loan originator compensation rule. The redacted text of the CFPB’s July 23, 2013 Press Release is reprinted below:
CFPB Amends Mortgage Servicing Rules under Regulation Z Effective on January 10, 2014
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:
CFPB Proposed Amendments to the 2013 Mortgage Rules Under Regulation B, Regulation X, and Regulation Z
In the July 2, 2013 issue of the Federal Register (78 FR 39902) the Consumer Financial Protection Bureau (CFPB) published a proposed rule, click here, to clarify or revise regulatory provisions and official interpretations primarily relating to the 2013 Mortgage Servicing Final Rules (see, 78 FR 10695 (Reg. X) and 78 FR 10901 (Reg. Z), Feb. 14, 2013) and the 2013 Loan Originator Compensation Final Rule (see, 78 FR 11279, Feb. 15, 2013). The proposed rule also proposes modifications to the effective dates for provisions adopted by the 2013 Loan Originator Compensation Final Rule, and certain technical corrections and minor refinements to Regulations B, X, and Z. In the July 2, 2013 issue of the Federal Register (78 FR 39902) the Consumer Financial Protection Bureau (CFPB) published a proposed rule, click here, to clarify or revise regulatory provisions and official interpretations primarily relating to the 2013 Mortgage Servicing Final Rules (see, 78 FR 10695 (Reg. X) and 78 FR 10901 (Reg. Z), Feb. 14, 2013) and the 2013 Loan Originator Compensation Final Rule (see, 78 FR 11279, Feb. 15, 2013). The proposed rule also proposes modifications to the effective dates for provisions adopted by the 2013 Loan Originator Compensation Final Rule, and certain technical corrections and minor refinements to Regulations B, X, and Z.
CFPB Delays Effective Date of the Regulation Z Prohibition on Financing Single-premium Credit Insurance to January 10, 2014
For certain consumer credit transactions for which a creditor receives an application on or after June 1, 2013, the Consumer Financial Protection Bureau (CFPB) amended Regulation Z by adding Section 1026.36 (i) prohibiting the financing of single-premium credit insurance (see our memorandum dated April 10, 2013). The effective date of Section 1026.36(i) was scheduled to be June 1, 2013, but the CFPB by final rule issued today has delayed its effective date until January 10, 2014. The text of Section 1026.36(i) is reprinted below:
CFPB Proposed Rule to Delay Effective Date of Prohibition on Financing Single-premium Credit Insurance (§1026.36(i) of Regulation Z)
In the May 10, 2013 issue of the Federal Register (Vol. 78 No. 91), click here, the Consumer Financial Protection Bureau (CFPB) published a proposed rule proposing to temporarily delay the June 1, 2013, effective date of a prohibition on creditors financing credit insurance premiums in connection with certain consumer credit transactions secured by a dwelling (i.e., §1026.36(i) of Regulation Z). (See our memorandum dated April 10, 2013) The prohibition was adopted in the Loan Originator Compensation Requirements under the Truth in Lending Act (Regulation Z) Final Rule, issued on February 15, 2013.
CFPB Proposed Amendments to Final Rules Published January 2013
In the May 2, 2013 issue of the Federal Register (Vol. 78 No. 85), click here, the Consumer Financial Protection Bureau (CFPB) published a proposed rule to amend the following Final Rules issued by the CFPB in January 2013: 1. Ability-to-Repay and Qualified Mortgage Standards Under the Truth in Lending Act (78 FR 6407, January 30, 2013).
New Regulation Z Requirements Effective June 1, 2013 – Prohibition on Mandatory Arbitration Clauses and Waivers of Consumer Rights; and Prohibition
Effective June 1, 2013, for certain consumer credit transactions for which a creditor receives an application on or after that date, the Consumer Financial Protection Bureau (CFPB) amends Section 1026.36 of Regulation Z by adding paragraphs (h) and (i):
New Escrow Account Requirements for Higher-Priced Mortgage Loans
In the January 22, 2013, issue of the Federal Register (Vol. 78, Pages 4726 – 4757, click here) the Bureau of Consumer Financial Protection (CFPB) published a final rule amending the escrow account requirement for first lien higher-priced mortgage loans under §1026.35 of Regulation Z.