In the November 27, 2015, issue of the Federal Register (80 FR 73943, click here), the Consumer Financial Protection Bureau (CFPB), Federal Reserve Board (FRB), and Office of the Comptroller of the Currency (OCC) issued a final rule that the threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans during 2016 will remain $25,500.
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Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
CFPB Bulletin 2015-06 – Guidance on Preauthorized EFTs
On November 23, 2015, the Consumer Financial Protection Bureau (CFPB) issued Compliance Bulletin 2015-06 (click here) providing guidance on the requirements of the Electronic Fund Transfer Act (EFTA) and is implementing Regulation E (12 CFR §1005.1, et seq.) when obtaining consumer authorization for preauthorized electronic fund transfers (ETFs) from a consumer’s account. One of the primary objectives of the EFTA and Regulation E is the protection of individual consumers engaging in EFTs. The CFPB is authorized, subject to certain exceptions, to enforce the EFTA and Regulation E against any person subject to the EFTA and Regulation E. This impacts mortgage lending because many lenders and their servicers solicit and obtain authorization from consumers for payment of mortgage loans by preauthorized EFTs.
CFPB Implements Supervisory Appeals Policy
On November 3, 2015, the Consumer Financial Protection Bureau (CFPB) posted on its website a written policy implementing a supervisory appeals process (click here) if a supervised entity disagrees with (i) a less than satisfactory compliance rating, (ii) an adverse finding in an examination report, or (iii) an adverse finding in a supervisory letter.
CFPB Compliance Bulletin 2015-05– Marketing Services Agreements
On October 8, 2015, the Consumer Financial Protection Bureau (CFPB) issued Compliance Bulletin 2015-05 (Bulletin, click here) regarding Marketing Services Agreements (MSA). The purpose of the Bulletin is to advise the mortgage lending industry of the substantial risks posed by entering into MSAs and, based on the CFPB’s investigative efforts, that it appears many MSAs are designed to evade the RESPA prohibition on the payment and acceptance of kickbacks and referral fees. The Bulletin provides an overview of the RESPA prohibition on mortgage kickbacks and referral fees, and describes examples from the CFPB’s enforcement experience as well as the risks faced by lenders entering into MSAs.
Fannie Mae Lender Letter LL-2015-06, TRID Non-compliance
This is to advise that on October 6, 2015, Fannie Mae issued LL-2015-06, click here, advising lenders of Fannie Mae’s current policy regarding TRID noncompliance in connection with loans sold or assigned to Fannie Mae:
CFPB Revises Definitions for Small Creditor, Rural and Underserved Areas
In the October 2, 2015, issue of the Federal Register (80 FR 59944, click here) the Consumer Financial Protection Bureau (CFPB) issued a final rule (Rule) revising the definitions of small creditor, rural area and underserved area as currently provided in the following Regulation Z rules and official staff commentary: §1026.35(b)(2)(iii)(A), (B), (C), and (D), §1026.35(b)(2)(iv)(A) and (B) and official staff commentary, cross-referenced in §§1026.43(e)(5) and (e)(6), §§1026.43(f)(1) and (f)(2) and official staff commentary, and §1026.32(d)(1)(ii)(C). The Rule’s revisions to the definitions of small creditor and rural and underserved areas are effective for covered transaction consummated on or after January 1, 2016.
TRID Disclaimer on Texas Conditional Qualification Letters (“Form A”) and Conditional Approval Letters (“Form B”)
As you are aware, the TRID Rule will take effect on October 3. Among the new requirements, §1026.19(e)(2)(ii) of Regulation Z will require a disclaimer “[i]f a creditor or other person provides a consumer with a written estimate of terms or costs specific to that consumer” before the consumer receives the loan estimate. Recall that a loan estimate cannot be issued until the customer has submitted an application as defined by §1026.3(ii) of Regulation Z, which consists of the customer’s name, income, social security number, property address, estimated property value, and loan amount sought. The disclaimer must clearly and conspicuously state at the top of the written estimate in 12-point or larger font: “Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan.”
Regulation Z HOEPA and Qualified Mortgage Annual Threshold Adjustments
In the September 21, 2015, issue of the Federal Register (80 FR 56895), click here, the Consumer Financial Protection Bureau established the following 2016 thresholds for high-cost and qualified mortgages under §§1026.32 and 1026.43, respectively.
CFPB Issues Spanish-language Translation of Your home loan toolkit
In the September 22, 2015, issue of the Federal Register (80 FR 57154) the Consumer Financial Protection Bureau (CFPB) published notice of the availability of its Spanish-language translation of the settlement cost booklet, Your home loan toolkit, which will replace the current settlement cost booklet when the TILA-RESPA Integrated Disclosure Rule (TRID Rule) goes into effect for loan applications received on or after October 3, 2015. This new booklet is designed to be used in connection with the new Loan Estimate and Closing Disclosure forms required by the TRID Rule. The CFPB previously published notice of the availability of the English-language version of this new booklet in the April 1, 2015, issue of the Federal Register (80 FR 17414).
2015 Legislative Update from 84th Regular Session of the Texas Legislature
This legislative update summarizes the bills and one proposed constitutional amendment that we consider of interest to our clients, listed in order of importance and not when effective. The effective dates are noted in the applicable summary.