set of amendments and clarifications to the Consumer Financial Protection
Bureau's (CFPB) January 2013 mortgage rules will be released this afternoon. Today's release finalizes several changes announced
by CFPB in June in response to questions and suggestions from industry
participants and are intended to clarify interpretive issues and facilitate
are as follows:
The ruling prohibiting servicers
from certain activities during the first 120 days of a delinquency is amended
to allow sending borrowers certain early delinquency notices required under
state law that may provide beneficial information about legal aid, counseling,
or other resources.
Procedures are outlined for servicers
to follow when they fail to identify or inform a borrower about missing
information from loss mitigation applications.
Modifies procedures to simplify the offer
of short-term forbearance plans to borrowers suffering only temporary hardships.
Clarifies best practices for informing
borrowers about the address for error resolution documents.
Exempts all small creditors, even
those that do not operate predominantly in rural or underserved area from a new
ban on high-cost mortgages featuring balloon payments until a re-examination of
the definitions of rural or underserved is completed by the Bureau over the
next two years.
Clarifies the definition of "financing"
of credit insurance premiums to make clear that these premiums are "financed"
when the creditor allows the consumer to defer payment of the premium past the
month in which it is due. The rule also
explains how the rule applies to "level" or "levelized" premiums.
Clarifies the definition of a loan
originator to make clear the circumstances under which tellers or other
administrative staff may act as loan originators.
Clarifies the points and fees thresholds
and loan originator compensation rules for manufactured housing employees.
Revises effective dates of many loan
originator compensation rules from January 10, 2014 to January 1, 2014.
"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."
The complete set of amendments and clarifications will
be available here
after 3 p.m. today.