Last week the CFPB issued an interpretive rule, bulletin, and press release instructing lenders on how to comply with the counseling requirements set forth in the new mortgage rules, which go into effect in January.
Although included along with the 2013 HOEPA Final Rule, the counseling requirement is set forth in an amendment to Regulation X under RESPA that applies to all federally-related mortgages, not just HOEPA loans. Only reverse mortgages and loans for time-shares are excluded from this rule.
As described in the interpretive rule and bulletin, there are two ways lenders can comply with this requirement. A lender can either obtain a list through the CFPB’s website or independently generate its own list using the same HUD data used by the CFPB.
The CFPB acknowledged in the bulletin that because developing the systems necessary to comply with the second option will take some time, lenders may alternatively follow a prescribed interim procedure to comply with the rule. While working to build systems, lenders may direct borrowers to the CFPB’s housing counseling agency website to obtain a list of counselors. According to the bulletin, if lenders use the CFPB’s suggested format and text for this interim procedure while working in good faith to build their systems, these steps “would achieve the goals of the regulation and would not raise supervisory or enforcement concerns.”