CFPB Imposes Fee Limits for Higher-Cost Mortgages
January 11, 2013
Along with its qualified mortgage rule, the Consumer Financial Protection Bureau (CFPB) has released final rules restricting fees and lump-sum payments for certain high-cost mortgages. They stipulate that balloon payments cannot be attached to such loans, except in rural and underserved areas. The rules ban certain fees on modifying high-cost loans and cap late fees at 4 percent of the payment that was missed. Additionally, lenders cannot incorporate closing costs into the loan amount for high-cost loans and cannot apply prepayment penalties; and borrowers are required to receive housing counseling prior to taking out a high-cost loan. "Today's changes will better help consumers to understand the real costs of owning a home while protecting them from harmful practices that can trap them into high-cost mortgages," said CFPB director Richard Cordray in a press release.
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