January 07, 2014

NCUA reg alert details HOEPA rule, housing counseling rules

Jan. 8, 2014 – NCUA released a regulatory alert on the January 2013 Home Ownership and Equity Protection Act rule from the CFPB, including the rule's counseling requirements for all federally related mortgage loans.

The alert explains how the bureau's rule requires that credit unions provide federally related mortgage loan applicants with a written list of homeownership counseling organizations within three days, regardless of whether they apply for a HOEPA or high-cost loan. The rule also requires that credit unions confirm first-time borrowers have received homeownership counseling if their loan permits negative amortization, also regardless of whether it is a high-cost loan.

Finally, if a high-cost loan or open-end credit line is secured by an applicant's principal dwelling, the rule requires that credit unions comply with new HOEPA consumer protections and homeowner counseling requirements.

The CFPB rule goes into effect on Friday, Jan. 10, the same day the bureau's qualified mortgage/ability-to-repay rule, among others, takes effect. After urging from NAFCU, NCUA announced on Monday it would take into account a credit union's good faith effort to comply with the new mortgage rules, including the new QM/ability-to-repay rules.

"As with any new requirement in its early stages after becoming effective, NCUA field staff will take into account a credit union's good-faith efforts to comply with the new rule," the agency wrote in Letter to Credit Unions 14-CU-01, which provides credit unions with a copy of the agency's supervisory letter to examiners on the new rule.

CFPB on Tuesday also released new resources for consumers related to the mortgage rules, including sample letters for consumers to send to mortgage servicers, tips for homebuyers, and frequently asked questions.