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Focus on Regulation

Consumer Financial Protection Bureau Issues Proposed Modifications to Mortgage Rules

FinancialOn June 24, 2013, the Consumer Financial Protection Bureau (CFPB) issued proposed modifications to mortgage rules the CFPB had finalized in January 2013. (For a summary of the January 2013 mortgage rules on qualified mortgages and the ability to repay, please see our update on the subject here.)

The CFPB’s June 24 proposal would provide “clarifications and some narrow revisions to [the] January 2013 mortgage rules.”  The CFPB states that the proposal:

  • Outlines procedures for a loan servicer obtaining follow-up information on loss-mitigation/loan modification applications;
  • Facilitates servicers’ offering of short-term forbearance plans for delinquent borrowers who only need temporary relief and not a full loss mitigation or loan modification process;
  • Facilitates lending in rural or underserved areas by expanding certain exceptions to a larger universe of “small creditors”;
  • Clarifies the definition of a loan originator, so that tellers or other administrative staff are not unintentionally classified as loan originators for engaging in routine customer service activities; and
  • Proposes to revise effective dates on the Loan Originator Rule to coincide with the beginning of the 2014 calendar year.

The full proposal can be found on the CFPB’s website.

Comments are due July 22, 2013.