Last week, the CFPB launched a website tool to help consumers find local housing counseling agencies to answer their questions or address their concerns about home ownership. This tool can also be used by banks to generate a list of approved counselors for borrowers in connection with mortgage loan applications. You can find the new tool here:
If you make mortgage loans, you should click on the link above and bookmark the page. And here’s why.
The CFPB’s mortgage rules, which are set to take effect in January of 2014, introduce a few new homeownership counseling requirements. Under those rules, lenders will be required to provide a list of approved homeownership counselors to all applicants for a federally related mortgage loans (with some limited exceptions, all loans covered by RESPA). The list must be provided within three days following receipt of a mortgage loan application. So, after you bookmark the link above, make a note to update your mortgage application procedures for this requirement before January 2014.
While you are at it, you should also update your mortgage loan procedures for all higher-cost mortgages (generally as defined by HOEPA) and for all first-lien, dwelling-secured mortgages that have a negative amortization feature and which are made to first-time homebuyers. For those types of loans, lenders will be required to take the additional step of obtaining the borrower’s certification that they actually received homeownership counseling.
Bookmark the link, update your procedures and you will be one step closer to compliance in January 2014.