On June 24, 2013, the Consumer Financial Protection Bureau (“CFPB”) issued its latest round of amendments to the January 2013 mortgage rules, stating that this set of changes resolves questions identified “during the implementation process.” Additioanlly, the CFPB indicated that this round of changes increases the value of the regulatory changes for consumers. For financial institutions that have undertaken significant efforts to amend policies and procedures governing mortgage origination and servicing, it is time to review another round of amendments to verify you are in compliance.
In the CFPB’s press release, the following areas were highlighted as subject to clarification and revision in the amended rules:
- Procedures for obtaining follow-up information on loss-mitigation applications and what servicers should do if they discover they do not have information needed to complete an assessment.
- Facilitating the ability of servicers to offer short-term forbearance plans.
- Facilitating lending in rural and underserved areas.
- Making clarifications about financing of credit insurance premiums.
- Clarifying the definition of a loan originator.
- Clarifying the points and fees thresholds for manufactured housing employees.
- Revising effective dates of Loan Originator rule and ban on financing of credit insurance.
A few days prior to the release of these amended rules, CFPB Director Richard Cordray gave a speech defending his agency’s regulatory process and track record. In the speech, he said that the mortgage rules will not be delayed beyond their January 2014 effective date. It is essential that financial institutions examine their processes and procedures, particularly in light of this new round of amendments that “fix” issues in the original CFPB mortgage reforms.
Please contact Spilman or knowledgeable counsel for additional information on these changes and to discuss any questions.