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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6. Two new appraisal requirements are effective in 2014. The CFPB has amended Regulation B (Equal Credit Opportunity Act) requiring lenders to notify applicants in writing within three business days of receiving any loan application secured by the borrower’s dwelling that lenders will provide free copies of the appraisal and any written valuations.

The Dodd-Frank Act also requires CFPB, NCUA, and the federal banking agencies to adopt a separate appraisal rule for “higher-priced mortgages.” Starting next year, creditors must obtain an appraisal performed by a certified or licensed appraiser who sees the interior of the property, provide applicants with a notification regarding the use of the appraisals, and give applicants a copy of the written appraisals used.

Resource

CUNA’s e-Guide to Federal Laws and Regulations: (“regulations & compliance”). Refer to “Mortgage Lending Rules—New CFPB Rules Finalized in 2013.” Also, review the new Reg B, Z, and X requirements to determine if your mortgage lending programs comply. 5. Additional MLO requirements will be in place.

What’s missing?

The Dodd-Frank Act requires the CFPB address consumer confusion with the current information in Reg Z’s early disclosures and RESPA’s good faith estimate (GFE) form and the separate RESPA and TILA disclosures provided at closing.

The bureau is designing new forms to replace Reg Z’s early disclosures and RESPA’s GFEs, TILA, and RESPA closing documents with new “loan estimate” and “closing disclosure” forms to help consumers both with comparison shopping and tracking closing costs.

The CFPB expects final regulations for these forms in September. The effective date of those new rules is likely late 2014.

COLLEEN KELLY is CUNA’s federal regulatory counsel; 
MIKE MCLAIN is assistant general counsel; 
VALERIE MOSS is director of compliance information; and 
KATHY THOMPSON is senior vice president for compliance. 

Contact CUNA’s compliance team at cucomply@cuna.com.

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