Compliance

CFPB Adds to Stack of Mortgage Rules

Here’s a six-point overview of the CFPB’s new mortgage lending regulations.

February 28, 2013
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4. Home Ownership and Equity Protection Act (HOEPA) coverage will be expanded in 2014. This rule expands protections for “high-cost mortgages” to include all closed-end mortgages as well as HELOCs.

In general terms, high-cost mortgages currently are those with APRs oft en 8% to 10% above the yield on Treasury securities having comparable maturity periods to the loan term, or have high points and fees.

Very few credit unions make any high-cost mortgages today. But this expansion of coverage to include HELOCs might subject more credit union mortgages to HOEPA’s additional disclosure requirements and limitations.

Moreover, the CFPB is considering a broader definition of “finance charge” and, if adopted, could mean more loans will be classified as high-cost loans unless adjustments are made to the rate triggers.

NEXT: Additional MLO requirements

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