Jan. 17, 2013 – CFPB Director Richard Cordray, in a phone call with NAFCU President and CEO Fred Becker, last night indicated the final mortgage servicing rule slated for release today will provide an exemption for entities servicing 5,000 or fewer transactions.
Even so, Becker said NAFCU still has some concerns about the final rule, which is expected to impose additional regulatory burden on credit unions that will make the mortgage process more difficult for affected credit unions and their members.
During Wednesday’s telephone call, Cordray told Becker the final rule will utilize that 5,000-transaction exemption for most of the servicing rules.
The CFPB holds another field hearing on mortgage policy today in Atlanta. In a letter submitted for the hearing record, Becker urges the bureau to use “any and all authority and power” it has to ensure that its mortgage regulations have as little impact on credit unions as possible. Today’s hearing is at 11 a.m. Eastern.
Becker emailed members last night about the association’s expectations for the final mortgage servicing rule. The measure is expected to:
- require a periodic statement for mortgages;
- require additional notices of a rate adjustment for adjustable-rate mortgages;
- set new requirements on crediting of partial payments and payoff statements;
- place limits on when an issuer can force-place insurance coverage;
- create new requirements for error resolution and information requests;
- require servicers to implement information management policies;
- require early intervention with delinquent borrowers;
- require servicers to provide dedicated personnel to deal with delinquent loans, loss mitigation and related issues; and
- implement procedural requirements to ensure borrowers have access to information regarding loss mitigation prior to foreclosure.
NAFCU also expects the rule to include prohibitions against “dual tracking” if the borrower has applied for a loan modification; and foreclosures where the borrower is not 120 days or more delinquent.
Today or by week's end, the CFPB is also expected to issue final rules on appraisal requirements for “higher-priced” mortgage loans and loan originator compensation.
The appraisal regulation is an interagency rule by NCUA, CFPB, FDIC, Federal Reserve Board, Federal Housing Finance Agency and Office of the Comptroller of the Currency. (See previous story.) It would take effect next January.
The mortgage loan originator compensation rule is expected, among other things, to create a federal qualifications standard to replace the current system in place under the Secure and Fair Enforcement for Mortgage Licensing Act. The current system differs from state to state, and federal requirements differ from state requirements.
The NAFCU Compliance Blog addresses today's final rule on mortgage servicing and provides links to the summary and fact sheet.