TopMortgage Compliance Update (1)

January 24, 2013    


CFPB's Gang of Seven (Final Rules)

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This has been a busy month for the Consumer Financial Protection Bureau (CFPB). Since the advent of the New Year, the CFPB has issued seven Final Rules that impact residential mortgage loan originations.

The finale was on Sunday, January 20, 2013, when the CFPB issued the seventh Final Rule, one day prior to the deadline set forth in the Dodd-Frank Act (Dodd-Frank), in � 1400(c), for automatic implementation of its Title XIV provisions.

By my count, these are the Final Rules, in order of their issuance:

1. Ability-to-Repay (ATR)
2. High-Cost Mortgage (HCM)
3. Escrow
4. Servicing
5. Appraisals for High-Risk Mortgages
6. Copies of Appraisals
7. Mortgage Loan Originator Compensation

I recently discussed the Final Rule regarding the Ability-to-Repay. I will soon provide an outline of the CFPB's important Final Rule for Mortgage Loan Originator Compensation.

With regards to the latter, we will be updating the FAQs Outline - Loan Originator Compensation for the rule changes affecting loan origination compensation. For your consideration, I plan to provide soon a useful and practical understanding of the compensation revisions. In the near future, I will notify you of and provide access to the forthcoming article I am publishing on these regulatory guidelines.

In this article, I want to briefly outline this Gang of Seven (Final Rules). Please keep in mind that I am providing a broad sketch of the Final Rules.

As is the case with many applications of legal and regulatory compliance, there are numerous statutory requirements and implementation guidelines that bring about consideration of some recourse to a competent risk management professional.

Best wishes!
Jonathan Foxx
President & Managing Director
Lenders Compliance Group

Chart: Final Rules Compliance Dates
Gang Member # 1: Ability-to-Repay (ATR)
Gang Member # 2: High-Cost Mortgage (HCM)
Gang Member # 3: Escrow
Gang Member # 4: Servicing
Gang Member # 5: Appraisals for High-Risk Mortgages
Gang Member # 6: Copies of Appraisals
Gang Member # 7: Mortgage Loan Originator Compensation

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Consumer Financial Protection Bureau

  • Summary of the Final Rule on Mortgage Loan Originator Qualifications and Compensation Practices (1/20/13)
  • Summary of the Final Rule - ECOA (Regulation B) Requirements for providing Appraisals and Valuations (1/18/13)
  • Summary of the Final Rule - HMPL Appraisals (1/18/13) 
  • Summary of the Final Rule - Mortgage Servicing (1/17/13)
  • Summary of the Final Rule amending Escrow Requirements under the Truth in Lending Act (Regulation Z) (1/10/13) 
  • Summary of the Final Rule to strengthen consumer protections for High-Cost mortgages (1/10/13)
  • Summary of the Final Rule - Ability-to-Repay and Qualified Mortgage Rule and the Concurrent Proposal (1/10/13)
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This communication is sent to our valued clients and colleagues, who regularly receive our Mortgage Compliance Updates, Compliance Alerts, Commentaries, and related publications.

These publications are free to subscribers. Information contained herein is not intended to be and is not a source of legal advice.

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