Consumer Financial Protection Bureau lays out implementation plan for new mortgage rules


WEBWIRE – Wednesday, February 13, 2013

Bureau to publish plain-language guides

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today announced a plan it will implement over the next year that focuses on the mortgage industry’s compliance with new consumer protections that go into effect in January 2014.

“Our plan is to work with the mortgage industry to ensure that the CFPB’s new rules are implemented accurately and expeditiously,” said CFPB Director Richard Cordray. “Both consumers and industry will win when the new rules are understood, applied, and carried out evenly and effectively. Mortgage borrowers, who have dealt with much heartache since the financial crisis, deserve this level of attentiveness.”

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB was required to issue new mortgage rules by Jan. 21, 2013. The CFPB met that deadline and set a January 2014 deadline for industry to comply.

Among the new mortgage rules is the Ability-to-Repay rule. The rule protects consumers from irresponsible mortgage lending by requiring that lenders make a reasonable, good faith determination that prospective borrowers have the ability to repay their mortgage. The rule also protects borrowers from risky lending practices, such as underwriting loans based only on low introductory “teaser” interest rates, which contributed to many homeowners ending up in delinquency and foreclosure after the 2008 housing collapse.

New mortgage servicing rules designed to protect borrowers from costly surprises and runarounds were also announced. These rules establish new, strong protections for all homeowners. Other new rules address appraisals, escrow accounts, protections for high-cost mortgages, and compensation and qualifications for loan originators.

In an effort to support rule implementation and ensure industry is ready for the new borrower protections, the CFPB will:

More information about the CFPB’s new mortgage rules can be found at: www.consumerfinance.gov/regulations

Any inquiries about the meaning or intent of the regulations may be directed to: CFPB_reginquiries@cfpb.gov or 202-435-7700.



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