CFPB finalizes new mortgage rules

by Ryan Smith17 Sep 2013

The Consumer Financial Protection Bureau on Friday finalized modifications to its January 2013 mortgage rules, according to a CFPB press release.

“Our mortgage rules were designed to eliminate irresponsible practices and foster a thriving, more sustainable marketplace,” CFPB Director Richard Cordray said Friday. “Today’s rule amends and clarifies parts of our mortgage rules to ensure a smoother implementation process, which is helpful to both businesses and consumers.”

Among the rules finalized by the CFPB in January was the Ability-to-Repay rule, which requires lenders to make a good-faith determination about prospective borrowers’ ability to repay their loans, as well as rules that established protections for homeowners facing foreclosure and strengthened consumer protections for high-cost mortgages. In June, several amendments to the new rules were proposed. Among other things, the modifications adopted Friday:

  • Prohibits mortgage servicers from making the “first notice or filing” during the first 120 days that a borrower is delinquent. Under Friday’s modified rule, servicers can send “certain early delinquency notices required under state law to borrowers that may provide beneficial information about legal aid, counseling, or other resources,” according to the CFPB. 
  • Outlines procedures for obtaining follow-up information on loss mitigation applications
  • Makes it easier for mortgage servicers to offer short-term forbearance plans.
  • Clarifies the definition of a loan originator. Under the new rules, loan originators are required to meet certain requirements, as well as being subject to “certain restrictions on compensation practices,” according to the CFPB. 

A copy of the final rules can be found here


Should CFPB have more supervision over credit agencies?