Reverse Mortgage GuideInstructions for the reverse mortgage
The Consumer Financial Protection Bureau (CFPB) adopted in January 2013 a series of new definitive regulations implementing changes to the Truth in Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA) and the Equal Credit Opportunity Act (ECOA) of the Dodd-Frank Wall Street Reform and Consumer Credit Protection Act (together the "January Rules").
Among other things, the January regulations contained new mortgage service standards encoded in both Regulation X, which transposes RESPA, and Regulation Z, which transposes TILA, as well as changes to Regulation Z, which deal with lender remuneration matters. As a rule, the new mortgage service and lender indemnity regulations will apply from January 2014.
While CFPB has singled out one of its "core functions" as "working to make regulation and guidelines as clear and lean as possible", the mortgage service and lender policy exceeds more than 1,700 pages, as posted on the CFPB website. Mortgagors and mortgage service providers face a huge challenge in revising all the new January Rule requirement and driving forward transposition schedules to make sure the new requirement is met before it comes into force.
CFPB published its first in a set of Small Entity Compliance Guidelines ("Guides") covering the January Rule requirement on April 10, 2013. At the time of this invitation to tender, CFPB published the following guidance documents relating to various January Rule requirements: CFPB has pursued its January rule approach of rationalising through volumes.
There are 98 pages in the guide to the new definitive mortgage service regulations and 80 pages in the guide to the definitive lender indemnity regulations. They are not collected on a page on the CFPB website, but can be found through our company link above. "In general, small businesses" comprise business banking groups, saving societies and cooperative societies with $175 million or less in wealth and other mortgage banking groups and service providers with an aggregate of $7 million or less in a year.
Whilst the Guidelines have been developed for smaller providers of finance who may not have full-time employees for law and regulatory affairs, they are a useful source for mortgage creditors and service providers of all scales. Guidance notes contain easy-to-use abstracts of the new regulations in a Q&A form and implementing hints that can help all creditors and service providers further preparing to meet the new demands.
Whilst the guides should also provide a useful resource for the interpretation of the new rules, they do not substitute for the CFPB's formal comments on any of the January rules, so creditors and service providers should remain guided by the guidelines in the comments. CFPB intends to regularly revise the Guidelines when it completes the clarification of the rules.
CFPB published on You Television on 15 May 2013 clear text video on each of the new mortgage-related regulations, as well as the definitive mortgage service and lender indemnity regulations. Publishing the guides is a further stage in the CFPB's on-going effort to help mortgage creditors and service providers interpret and implement the January rule.
As many of the new January rule rules are only six month away from entry into force, the recent CFPB effort to make guidelines available to the sector should help those businesses that are already working hard to comply with the new rules and also act as a call for other businesses that may not be as far away as they need to do so.
CFPB reconfirmed in the guidance on the new mortgage service regulations that it expects to propose changes to the mortgage service regulations in June and August 2013. Few working days before the publication of the guide on the new lender indemnification regime, CFPB prolonged the entry into force of the ban on funding creditors' premium on certain mortgage loans, which was incorporated into the definitive lender indemnification regime published in January 2013.
Its entry into force was prolonged from 1 June 2013 to 10 January 2014.