The Consumer Finance Protection Bureau (CFPB) announced finalized amendments and clarification to its January 2013 mortgage rules today. The amendments and clarifications to the rules are to help the mortgage industry comply and and better protect consumers.
The changes today are designed to answer questions that have been identified during the implementation process:Our mortgage rules were designed to eliminate irresponsible practices and foster a thriving, more sustainable marketplace,” said CFPB Director Richard Cordray. “Today’s rule amends and clarifies parts of our mortgage rules to ensure a smoother implementation process, which is helpful to both businesses and consumers.
Among other things, today’s modification are intended to:
- Clarify what servicer activities are prohibited in the first 120 days of delinquency
- Outline procedures for obtaining follow-up information on loss-mitigation applications
- Facilitate servicers’ offering of short-term forbearance plans
- Clarify best practices for informing borrowers about the address for error resolution documents
- 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 and loan originator compensation rules for manufactured housing employees
- Revise effective dates of many loan originator compensation rule provisions
The CFPB is charged with the regulation and oversight of the mortgage industry by the Dodd-Frank Act and reports to the Federal Reserve Board. Throughout 2013, the CFPB has been working with industry to ensure a smooth transition. In addition to clarifying critical questions about the new mortgage rules, the Bureau has also published plain-language guides for each rule and interim examination procedures. The CFPB also plans to educate the public about their protections under the rules.
More information about the CFPB rules can be found on the Regulation Implementation website here.