The Consumer Finance Protection Bureau (CFPB) has announced the release of their Dodd-Frank Mortgage Rules Readiness Guideline (Version 1.0). The guide is meant to summarize rules passed down in January of 2013 and functions as a quick-guide for those looking for quick summation regarding some of the more nebulous aspects of the recent ruling.
Some of the more pertinent sections of the 2013 Dodd-Frank Mortgage Rules Readiness Guideline include the much-discussed Regulation Z. This particular regulation implements aspects of the Truth-in-Lending Act (TILA), which prohibits a creditor from forcing a higher-priced loan on a consumer who may not be able to meet the ability-to-pay requirements.
“The final rule also implements Section 1414 of the Dodd-Frank Act, which limits prepayment penalties. Finally, the final rule requires creditors to retain evidence of compliance with the rule for three years after a covered loan is consummated,” reads the Guideline.
The Guideline also offers some advice on how to offer products to consumers, including:
►Do you offer mortgage loans to consumers?
►Do you offer any of the following mortgage products: Home equity lines of credit secured by a dwelling (i.e., HELOCs)? Mortgages that qualify as higher-priced mortgages under section 1026.35 of Regulation Z? Mortgages that qualify as high-cost mortgages under section 1026.32 of Regulation Z? Loans that are intended to meet the criteria for Qualified Mortgages under section 1026.43 of Regulation Z? Second mortgages that meet the requirements of 1026.32 or 1026.35 of Regulation Z?
►Do you service mortgage loans or own servicing rights?
►Do you own mortgage notes that you have sold servicing rights to?
The Guideline also offers criteria for outlining mortgage servicing rules:
►Periodic billing statements
►Interest-rate adjustment notices for ARMs
►Prompt payment crediting and payoff statements
►Force-placed insurance
►Error resolution and information requests
►General servicing policies, procedures, and requirements
Some of the other aspects covered within the Guideline include liens, loan originator compensation and potential insurance issues. At a relatively brisk 22 pages, the Guideline should be an informative read for those looking to bolster their CFPB compliance while also seeking clarification on some of the more difficult to grasp issues in recent CFPB mandates.
