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:
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Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
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.
Proposed Amendments to 7 TAC Chap. 83, Subchap. A Memo
In the April 25, 2014 issue of the Texas Register (39 TexReg 3333), the Finance Commission of Texas (Commission) published proposed amendments to 7 TAC Chapter 83, Subchapter A, §§83.101, 83.102, 83.203, 83.301 – 83.304, 83.307, 83.309 – 83.311, 83.403 – 83.405, 83.501 – 83.505, 83.601 – 83.604, 83.606, 83.701 – 83.704, 83.708, 83.751, 83.752, 83.754, 83.756, 83.757, 83.801, 83.805, 83.809, 83.828, 83.829, 83.831, 83.836, 83.837, 83.851, and 83.858, concerning Rules for Regulated Lenders. The proposed changes affect rules contained in Division 1, concerning General Provisions; Division 2, concerning Authorized Activities; Division 3, concerning Application Procedures; Division 4, concerning License; Division 5, concerning Interest Charges on Loans; Division 6, concerning Alternate Charges for Consumer Loans; Division 7, concerning Interest and Other Charges on Secondary Mortgage Loans; Division 8, concerning Refunds for Precomputed Loans; Division 9, concerning Insurance; Division 10, concerning Duties and Authority of Authorized Lenders; and Division 11, Prohibitions on Authorized Lenders.
Proposed Rule on Minimum Requirements for Appraisal Management Companies
In the April 9, 2014 issue of the Federal Register (79 FR 19521) six federal regulatory agencies, CFPB, FDIC, FHFA, FRB, NCUA and OCC, published a proposed rule (click here) to implement minimum requirements to be applied by States in the registration and supervision of appraisal management companies (AMCs). In a memorandum dated March 24, 2014, we advised our clients of the of the proposed rule before its publication in the Federal Register and provided a redacted summary of the proposed rule taken from the press release issued by the above agencies (memo).
Texas Home Equity Lending Update
This memorandum will provide an overview of home equity lending embodied in Article XVI, Section 50, of the Texas Constitution and will also discuss some of the issues lenders face. The full text of Section 50, current to date, is attached to this memorandum (for ease of reference, the home equity and HELOC provisions are highlighted in bold typeface). All references to “sections,” “subsections,” and “parts” in this memorandum refer to the various provisions of Section 50, unless otherwise stated.
FTC and EEOC Issue Guidance on Employer Background Checks To Comply with Federal Nondiscrimination Laws and the FCRA
The Federal Trade Commission (FTC) and Equal Employment Opportunity Commission (EEOC) recently issued a joint publication titled “Background Checks – What Employers Need to Know” (click here) that explains to employers how to comply with the federal nondiscrimination laws and the Fair Credit Reporting Act (FCRA) when obtaining and using background information in making personnel decisions, such as hiring, retention, promoting, and reassignment.
Federal Agencies Issue Proposed Rule on Minimum Requirements for Appraisal Management Companies
Today six federal regulatory agencies, CFPB, FDIC, FHFA, FRB, NCUA and OCC, issued a proposed rule (click here) to implement minimum requirements to be applied by States in the registration and supervision of appraisal management companies (AMCs). Publication of the proposed rule in the Federal Register is expected shortly. In the meantime, a summary of the proposed rule is contained in the press release also released today by the above agencies. The text of the press release, redacted for brevity, is reprinted below: