In today’s Federal Register (79 FR 42765) the CFPB published a proposed policy statement requesting public comment regarding adding consumer complaint narrative data to its consumer complaint database. As stated in the proposed policy statement, the CFPB currently discloses certain complaint data it receives regarding consumer financial products and services through its web-based database (“Consumer Complaint Database”) that is available to the public. The CFPB proposes to expand that disclosure to include unstructured consumer complaint narrative data. Only those narratives for which consumer consent has been obtained and personal information scrubbing standard and methodology applied would be subject to disclosure. The proposed policy would supplement the CFPB’s existing policy statements establishing and expanding the Consumer Complaint Database.
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Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
Mortgage Credit Certificate Program
In the July 11, 2014 Texas Register (Volume 39, Number 28) the Texas Department of Housing and Community Affairs posted the following notice informing the public and all interested mortgage lenders about a new Mortgage Credit Certificate Program. The full text of the notice is reprinted below:
Ability-to-Repay Interpretive Rule Issued by CFPB – Loan Assumption
On July 8, 2014, the CFPB issued an interpretive rule (click here) clarifying that when a person (“successor”) who has previously acquired title to the successor’s principal dwelling subsequently agrees to be added as obligor or substituted for the existing obligor on a consumer credit transaction secured by that dwelling (“loan”), the creditor’s written acknowledgement of the successor as obligor is not subject to the Ability-to-Repay Rule (ATR Rule) in §1026.43 of Regulation Z because that transaction is not an assumption as defined by §1026.20(b) of Regulation Z.
Home Equity Lending – Proposed Amendments to Home Equity Lending Interpretations, §§153.1, 153.5, 153.15 and 153.51
In the July 4, 2014 issue of the Texas Register (Volume 39 Number 27), the Finance Commission of Texas and the Texas Credit Union Commission (“commissions”) jointly proposed amendments to the following home equity lending interpretations in the Texas Administrative Code (7 TAC Chapter 153), as set out below:
Federal Agencies Issue Guidance for Home Equity Lines of Credit Nearing End-of-Draw Periods
On July 1, 2014, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA) and the Conference of State Bank Supervisors (CSBS) issued guidance to financial institutions regarding home equity lines of credit (HELOCs) nearing their end-of-draw periods.
RESPA and TILA Violations Result in Significant Civil Penalties Paid to CFPB and FTC
This memorandum advises you of a $500,000 civil penalty paid to the Consumer Financial Protection Bureau (CFPB) pursuant to the following described Consent Order and of a $225,000 civil penalty paid to the Federal Trade Commission (FTC) pursuant to the following described Stipulated Order:
VA Issues Qualified Mortgage Interim Final Rule for Single Family Mortgages Guaranteed, Insured or Made by VA
In the May 9, 2014, issue of the Federal Register (79 FR 26620), click here, the Department of Veterans Affairs (VA) published an interim final rule defining qualified mortgage to mean any loan guaranteed, insured, or made by VA. The interim final rule establishes that almost all VA loans that meet current underwriting standards will be safe harbor qualified mortgages, but that some streamlined refinances, also known as Interest Rate Reduction Refinance Loans (IRRRLs), will be considered rebuttable presumption qualified mortgages. In the interim final rule VA is also specifying income verification requirements for IRRRLs. The rule does not change VA’s regulations or policies with respect to how lenders are to originate mortgages, except to the extent lenders want to make qualified mortgages.
CFPB Publishes Qualified Mortgage Points and Fees Proposed Amendments in May 6, 2014
As a follow-up to our April 30, 2014, memorandum (click here) notifying you of the CFPB’s proposed rule to add a cure provision to the qualified mortgage points and fees limitation in §1026.43(e)(3) of Regulation Z, this is to inform you that the CFPB has now published this proposed rule for public comment in the May 6, 2014, issue of the Federal Register (click here). The text of the proposed amendments and their proposed official interpretations are set out below:
Texas Finance Commission Amends Loan Status Forms in the Texas Administrative Code
In the April 25, 2014, issue of the Texas Register (39 TexReg 3392), the Finance Commission of Texas adopted amendments to the Loan Status Forms, Figure: 7 TAC §80.201(a) and Figure: 7 TAC §80.201(b). The amendments to the figures in §80.201(a) and (b) are adopted without changes to the text as published in the March 7, 2014, issue of the Texas Register (39 TexReg 1562). In general, the purpose of the amendments is to correct the placement of language in the figures. These amendments make no substantive changes to the existing Loan Status Forms.
CFPB Issues Proposed Amendments to Qualified Mortgage Points and Fees
Today the CFPB issued proposed amendments to the Qualified Mortgage points and fees requirement in §1026.43(e)(3) to permit, under limited circumstances, the refunding of excess points and fees within 120 days after closing in order for the loan to meet this Qualified Mortgage requirement (click here). Once the proposal is published in the Federal Register, we will advise you by subsequent memorandum so that you will be able to submit comments on it to the CFPB.