The Consumer Financial Protection Bureau has provided small banks and credit unions that operate in rural and underserved counties with certain exemptions from its mortgages rules.
And now the bureau has updated the county list, which small creditors can rely on as the new rules go into effect in January 2014.
“We are committed to annually posting a list of such counties, which creditors may rely on as a safe harbor to determine whether a county is rural or underserved for a given calendar year,” according to CFPB managing counsel attorney Paul Mondor.
The CFPB has posted the 2014 list on its website.
A blog posted by Mondor notes that an escrow account rule that went into effect June 1 includes an exemption for
Other creditors are required to create escrows account for borrowers with “higher-priced mortgage loans.” However, “small creditors that operate predominately in rural and underserved counties are exempt from that requirement,” the blog says.
When the qualified mortgage goes into effect in January, most balloon mortgages will not qualify as QM loans and will not enjoy “safe harbor” from litigation in case of default.
But the CFPB has carved out an exemption for small creditors that operate in rural and underserved counties so they can originate balloon-payment QM loans.
The consumer bureau expanded this exemption in finalizing the QM rule to other small creditors. But this exemption to make balloon-payment QM loans is temporary and expires Jan. 10, 2016.
