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CFPB Issues Proposed Modifications to Mortgage Rules
Tuesday, June 25, 2013 9:00 AM

Yesterday, the Consumer Financial Protection Bureau (CFPB) proposed clarifications and some narrow revisions to its January 2013 mortgage rules. The proposal issued today would resolve questions that have been identified during the implementation process and would help the rules deliver their intended value for consumers.

The CFPB finalized several mortgage rules in January 2013 that are addressed by yesterday’s proposal. The Ability-to-Repay rule protects consumers from irresponsible mortgage lending by requiring that lenders make a reasonable, good-faith determination that prospective borrowers have the ability to repay their loans. The mortgage servicing rules established strong protections for homeowners facing foreclosure, and the loan originator compensation rules address certain practices that incentivized steering borrowers into risky and/or high-cost loans. The CFPB also finalized rules that strengthened consumer protections for high-cost mortgages, and instituted a requirement that escrow accounts be established for a minimum of five years for certain higher-priced mortgage loans.

The proposal issued yesterday involves clarifications and some narrow revisions to those mortgage rules.

Among other things, today’s proposal would:

  • Outline procedures for obtaining follow-up information on loss-mitigation applications.
  • Facilitate servicers’ offering of short-term forbearance plans.
  • Facilitate lending in rural or underserved areas.
  • Make clarifications about financing of credit insurance premiums.
  • Clarify the definition of a loan originator.
  • Clarify the points and fees thresholds for manufactured housing employees.
  • Revise effective dates of Loan Originator rule and ban on financing of credit insurance.

The CFPB recently published a new Regulatory Implementation web page, which consolidates all of the new 2013 mortgage rules and related implementation materials, and can be found here: http://www.consumerfinance.gov/regulatory-implementation.

Comments on yesterday’s proposal must be received on or before July 22, 2013.

A copy of the proposal can be found at: http://files.consumerfinance.gov/f/201306_cfpb_proposed-modifications_mortgage-rules.pdf