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In the December 19, 2014 issue of the Federal Register (79 FR 75746) the National Credit Union Administration (NCUA) published a final rule, effective January 20, 2015, revising the definition of the term “application” in §701.31 and two appraisal requirements in §701.31(c)(5) and §722.3(a)(5), respectively. Effective January 20, 2015, the revised regulations will read as follows (note: deletions are in brackets and additions are underlined):

In the December 19, 2014 issue of the Federal Register (79 FR 75742) the Federal Deposit Insurance Corporation (FDIC), as the “appropriate Federal banking agency” for State nonmember banks and State savings associations, published a final rule integrating and amending its flood insurance regulations by removing and rescinding 12 CFR part 391, subpart D, which applies to State savings associations, and amending 12 CFR part 339 to include State savings associations. Thus, the amended flood insurance regulations in 12 CFR part 339 (§§339.1 through 339.10 and Appendix A) will apply to both State nonmember banks and State savings associations, effective January 20, 2015.

Our November 24, 2014 memorandum is hereby revised to reflect that on December 15, 2014, the Consumer Financial Protection Bureau (CFPB) published in the Federal Register (79 FR 74176) its proposed rule proposing amendments to the Mortgage Servicing Rules (MSR) under Regulation X (12 CFR part 1024) and Regulation Z (12 CFR part 1026). The CFPB also issued a seven page summary of these proposed amendments.

On October 22, 2014, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission (“SEC”), and, with respect to residential mortgage assets, the Federal Housing Finance Agency (“FHFA”) and the Department of Housing and Urban Development, (collectively, the “Agencies”) issued a joint final rule (the “Final Rule”) that implements the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934 (the “Exchange Act”), as added by section 941 of the Dodd-Frank Act, Public Law 111-203. The rule was initially proposed in April 2011, and re-proposed in September 2013 with significant modifications based on industry and public comments. The Final Rule largely tracks the language of the re-proposed rule, with the exception of the cash flow restrictions, which the Agencies did not adopt.

On November 18, 2014 the CFPB issued Bulletin 2014-03 to remind lenders against discrimination in connection with verification of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) income (herein collectively referred to as “SS income”) received by mortgage applicants. To view and/or print the bulletin in full, click this hyperlink. Below is a brief summary of the main points of the bulletin:

On November 13, 2014 the CFPB ordered a California mortgage lender to pay $730,000 for illegal loan originator compensation bonus plan involving steering of consumers into higher interest rate loans. A redacted text of the CFPB news release is set out below with hyperlinks to the CFPB complaint filed with the United States District Court for the Central District of California and the CFPB proposed consent order.

In an announcement published in the November 3, 2014 Federal Register (79 FR 65140, click here), the FHA announced that it is not adopting the CFPB’s recently issued qualified mortgage points and fees cure amendments for FHA insured loans. Recall that in the December 11, 2013 Federal Register, FHA published a final rule establishing a definition of “qualified mortgage” for single family residential mortgages that FHA insures, guarantees, or administers (78 FR 75215, click here).