CFPB Refines and Clarifies Mortgage Rules
The Consumer Financial Protection Bureau has issued a final rule that contains 273 pages of refinements to its qualified mortgage, loan officer compensation and servicing rules.
“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,” said CFPB director Richard Cordray.
The final rule expands certain exceptions for small creditors, such as banks and credit unions, that operate in rural and underserved areas.
These small creditors are exempt from a general prohibition on originating high-cost mortgages with balloon payments.
The bureau is extending this exemption to “all small creditors, regardless of whether they operate in predominately rural or underserved areas,” provided they meet certain requirements of the QM rule.
Like the QM rule, the LO compensation rule was set to go into effect Jan. 10, 2014. However, the CFPB is moving up the compliance date for the LO compensation regulations by nine days to Jan. 1. That will “simplify compliance,” the CFPB said, since most compensation and bonus plans are often structured on an annual basis.
The final rule also clarifies when a loan originator’s or creditor’s staff acts as a loan originator and comes under the restrictions of the LO compensation rule.
The CFPB relaxed its delinquency notification standards so servicers can comply with state requirements and disclosures that might provide beneficial information to troubled borrowers.