CFPB Issues Rule On Escrow Exemptions For High-Priced Mortgage Loans

Jul 02, 2020

The Consumer Financial Protection Bureau (CFPB) issued a notice of proposed rulemaking (NPRM) that would amend Regulation Z to provide a new exemption available to certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs). In issuing the NPRM, the CFPB commenced its last mandatory rulemaking to implement the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA).

HPMLs are closed-end consumer credit transactions secured by the consumer’s principal dwelling with an annual percentage rate that exceeds the average prime offer rate for a comparable transaction by specific amounts as of the date the interest rate is set. For the most part, first-lien HPMLs must have escrow accounts.

The proposed amendment would exempt from the Regulation Z HPML escrow requirement any loan made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if (1) the institution has assets of $10 billion or less; (2) the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and (3) certain other criteria are met.

The proposed amendment would further the goals EGRRCPA by reducing costs associated with escrow requirements.

About the author

NationalMortgageProfessional.com

Link copied

Published

Jul 02, 2020

Analysis and Data

Half Of All Loan Applicants Denied Since 2022 Rate Hikes

Bankrate survey finds 50% of Americans who’ve applied for a loan or financial product since March 2022 have been denied.

Half of Americans who’ve applied for a loan or financial product have been denied since the Federal Reserve started raising its key benchmark rate in March 2022, and 17% have been denied more than one loan, according to a new Bankrate survey. Credit lines are the main cul...

Analysis and Data

High Mortgage Rates, Payments Make For Slow Spring Market

Redfin report indicates monthly payment at all-time high of $2,894

Borrowers are paying more for their mortgages than ever before, and this spring's homebuying market is anything but normal. The median monthly housing payment hit an all-time high of $2,894 during the four weeks ending May 5, a new report from Redfin revealed. That’s 14% ...