CFPB Finalizes Mortgage Rule Changes Announced in June

A secondrnset of amendments and clarifications to the Consumer Financial ProtectionrnBureau’s (CFPB) January 2013 mortgage rules will be released this afternoon.  Today’s release finalizes several changes announcedrnby CFPB in June in response to questions and suggestions from industryrnparticipants and are intended to clarify interpretive issues and facilitaterncompliance.  </p

Changesrnare as follows: </p<ul class="unIndentedList"<liThe ruling prohibiting servicersrnfrom certain activities during the first 120 days of a delinquency is amendedrnto allow sending borrowers certain early delinquency notices required underrnstate law that may provide beneficial information about legal aid, counseling,rnor other resources.</li<liProcedures are outlined for servicersrnto follow when they fail to identify or inform a borrower about missingrninformation from loss mitigation applications.</li<liModifies procedures to simplify the offerrnof short-term forbearance plans to borrowers suffering only temporary hardships.rn</li<liClarifies best practices for informingrnborrowers about the address for error resolution documents. </li<liExempts all small creditors, evenrnthose that do not operate predominantly in rural or underserved area from a newrnban on high-cost mortgages featuring balloon payments until a re-examination ofrnthe definitions of rural or underserved is completed by the Bureau over thernnext two years.</li<liClarifies the definition of "financing"rnof credit insurance premiums to make clear that these premiums are "financed"rnwhen the creditor allows the consumer to defer payment of the premium past thernmonth in which it is due. The rule alsornexplains how the rule applies to "level" or "levelized" premiums.</li<liClarifies the definition of a loanrnoriginator to make clear the circumstances under which tellers or otherrnadministrative staff may act as loan originators.</li<liClarifies the points and fees thresholdsrnand loan originator compensation rules for manufactured housing employees. </li<liRevises effective dates of many loanrnoriginator compensation rules from January 10, 2014 to January 1, 2014.</li</ul

“Our mortgage rules were designed to eliminate irresponsiblernpractices and foster a thriving, more sustainable marketplace,” said CFPBrnDirector Richard Cordray. “Today’s rule amends and clarifies parts of ourrnmortgage rules to ensure a smoother implementation process, which is helpful tornboth businesses and consumers.”</p

The complete set of amendments and clarifications willrnbe available here</aafter 3 p.m. today.