CFPB Finalizes Amendments to Mortgage Rules

The Consumer Financial Protection Bureau (“CFPB”) recently finalized several amendments and clarifications to the mortgage rules, proposed on June 24, 2013. The key changes include the following:

Mortgage Servicing

• The amendments include a process for servicers to offer short-term forbearance plans to delinquent borrowers, without completing the full loss-mitigation evaluation process. This allows a servicer to provide a six-month forbearance to a borrower suffering a short-term temporary hardship upon reviewing an incomplete loss mitigation application.
• The amended rule provides additional details on how to inform borrowers about the servicer’s contact address for the purpose of complaints and information requests.

Loan Originator Compensation

• The amended rule clarifies activities that administrative employees of a creditor or loan originator may engage in without being considered loan originators.

Financing Credit Insurance Premiums

• The amended rule includes clarifications regarding the prohibition on financing credit insurance premiums.

Ability To Repay

• The amended rule clarifies the types of fees and charges that must be counted toward points and fees thresholds under the ability-to-repay and high-cost mortgage rules. As proposed, (1) points and fees items paid by third parties are included in the points and fees calculation as if paid by the consumer, (2) points and fees items paid by the seller are included in the points and fees calculation as if paid by the consumer, except for seller’s points which are excluded from points and fees, and (3) points and fees items paid by the creditor are excluded from the points and fees calculation, except for compensation paid to a non-employee loan originator which must be included in points and fees.

The text of the amended final rule can be viewed at the CFPB’s website – www.consumerfinance.gov. Additionally, consumer resources can be found on the CFPB’s Regulator Implementation page.