CFPB Proposes Mortgage Rule Changes

June 25, 2013
Credit Union Times  
mortgage lending news

The Consumer Financial Protection Bureau (CFPB) has proposed seven clarifications to its January 2013 mortgage rules, in response to concerns raised among credit unions. One proposal is a change to the ban on financing credit insurance premiums, which is part of the CFPB’s mortgage originator compensation rule. The provision's ambiguous language created confusion, as it potentially could be applied to transactions other than the single-premium credit insurance premium it meant to address. The CFPB also is addressing concerns among small banks and credit unions about exceptions for rural lenders, particularly since many that serve agricultural communities do not qualify as rural under the CFPB definition. The regulator's proposed solution would be to extend an exception to a ban on high-cost mortgages featuring balloon payments to small creditors that do not operate predominantly in rural or underserved counties, provided that certain restrictions are satisfied. It also may revise an exemption to a requirement to maintain escrows on certain higher-priced mortgage loans for small creditors that operate mainly in rural or underserved areas. The agency also could make it easier for servicers to offer short-term forbearance plans for delinquent borrowers in need of temporary relief, without going through full loss-mitigation evaluation.
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