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All in Regulation Z
In this Compliance Clip (video), Adam answers the question of whether a financial institution can require a customer to sign and return an LE or CD. This topic is actually based off a new TRID FAQ that was released last quarter, and will be included in our upcoming Quarterly Compliance Update.
On 7/7/2020, the CFPB issued a final rule on small dollar lending which rescinds the mandatory underwriting provisions of the 2017 rule but does not rescind or alter the payments provisions of the 2017 rule. In their release, the CFPB stated…
On 7/2/2020, the CFPB released a notice of proposed rulemaking that would change Regulation Z to provide a new exemption available to certain banks and credit unions from the requirements to establish escrow accounts for certain higher-priced mortgage loans (HPMLs). This proposal is the Bureau’s last required rule under the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).
In June of 2020, the CFPB proposed two new rules to adjust the current Qualified Mortgage rules. The CFPB states that their objective with these proposals is to facilitate a smooth and orderly transition away from the Temporary GSE QM loan definition (which is a temporary QM category set to expire on 1/10/2021 that basically qualifies a mortgage as a QM if it is eligible for purchase or guarantee by Fannie or Freddie) and to ensure access to responsible, affordable mortgage credit upon its expiration.
On 6/23/2020, the CFPB issued an interpretive rule to provide guidance to creditors information on the way in which the CFPB determines which counties qualify as “underserved” for a given calendar year. The CFPB’s list of rural and underserved counties and areas is used by financial institutions for two main purposes: 1) for an exemption from the requirement to establish an escrow account for higher-priced mortgage loans and 2) to qualify for the ability to originate balloon-payment qualified mortgages and balloon-payment high cost mortgages.
In this Compliance Clip (video), Adam answers a question about providing the closing disclosure early in the application process. In other words, is it possible to provide the CD pretty close after the LE just to get it out to the customer and check off a box?
On April 29, 2020, the CFPB took steps to make it easier for consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of the COVID-19 pandemic. Specifically, the CFPB has issued an interpretive rule to clarify that consumers can exercise their rights to modify or waive certain required waiting periods under the TILA-RESPA Integrated Disclosure Rule and Regulation Z rescission rules. The Bureau also issued an FAQ document to address when creditors must provide appraisals or other written valuations to mortgage applicants in order to expedite access to credit for consumers affected by the COVID-19 pandemic.
On April 2016, the FFIEC announced the availability of two new computational tools: one for calculating APY and one for calculating APR. According to the FFIEC, the APR Computational Tool is designed to streamline the process by which examiners and financial institutions can verify finance charges and annual percentage rates included on consumer loan disclosures subject to the Truth in Lending Act and its implementing regulation, Regulation Z. The FFIEC explains that…
In this Compliance Clip (video), Adam explains what NMLS should go on the Closing Disclosure when one lender issued the Loan Estimate, but a different loan officer is now assigned to the loan. This situation can be tricky for financial institutions that don’t have much turnover with their lending staff. Fortunately, Adam busts out some commentary to guide the way on how to comply.
The CFPB has again updated the TRID FAQs on their website. This update incorporates five new questions and answers relating to providing loan estimates to consumers. As has been the case with the previously released FAQs, these five new questions don’t really tell us anything we didn’t already know. That said, we will be including a review of these FAQs in our 3Q 2019 Quarterly Compliance Update program (planned to be released sometime in October 2019.
