Newsroom

March 7, 2012 – Rules to prevent mortgage servicers from "force-placing" insurance on borrowers unless they have a reasonable basis for doing so are on the list of things to come from the Consumer Financial Protection Bureau, CFPB Director Richard Cordray said Tuesday.

Cordray, speaking before a gathering of the National Association of Attorneys General, noted the above as one of several new mortgage rules on the CFPB's slate. The bureau is also working on a rule to require specific information on billing statements from servicers and also plans to issue new rules focusing on hybrid, adjustable-rate mortgages.

"Consumers will be notified months ahead of their first interest rate adjustment and they will receive a disclosure of their new monthly payment," he said, "along with any available options to head off the higher rate, such as refinancing and renegotiation of loan terms."

The CFPB is already working on a proposed rule implementing combined disclosure requirements under the Truth in Lending Act and Home Mortgage Disclosure Act. The latest round of the bureau's draft prototype may be the last before this proposal is released for comment. The CFPB has until this July 21 to release its proposed rule.

NAFCU and its members have been providing the bureau a steady stream of input on the proposed form and related rules, focusing on how to ensure the disclosure requirements aren't onerous for credit unions and that they give consumers information that will help them evaluate and understand mortgage rates and terms.

The CFPB is required under the Dodd-Frank Act, to publish a final rule by Jan. 1, 2013.