Posts Tagged ‘Truth in Lending’

HELP Act Designed to Expand Lending Opportunities in Rural Areas

March 23rd, 2016 Comments off

mortgage app   texaslendingtoday creditAs nationalmortgagenews tells MHProNews, the Consumer Financial Protection Bureau (CFPB) has put in motion a new rule that expands lenders’ ability to originate qualified mortgages in rural and underserved markets. The agency’s final rule, which will take effect March 31, implements the Helping Expand Lending Practices (HELP) in Rural Communities Act.

In a news release, CFPB Director Richard Cordray said, “This rule provides broader eligibility for lenders serving those areas to originate balloon-payment qualified and high-cost mortgages.”

While the CFPB has previously pushed for more flexibility for community banks that operate in rural and underserved areas, the HELP Act expands the category of rural lenders that can qualify to originate loans under the Truth in Lending Act. ##

(Image credit: texaslendingtoday)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Mortgage Industry Pushing for Four-month Grace Period from TRID

October 12th, 2015 Comments off

mortgage  housingwire creditAs the TRID (Truth in Lending Act, or TILA) and the Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure rules went into effect last week–also known as “Know Before you Owe”– mortgage industry groups continue to ask for a grace period of four months from enforcement actions and private lawsuits.

A survey of 71 Mortgage Bankers Association members revealed about one-third of them had not tested their new systems, and half of the respondents believe the new rules will lengthen the home-buying process and perhaps add costs to consumers, neither of which would be healthy for the industry.

The American Bankers Association (ABA) is concerned about the clarity of the rules, and that banks find it difficult to comply with these reforms. As scotmanguide tells MHProNews, a bill in the House of Representatives would extend the grace period until Feb. 1, 2016.

The industry has to produce new forms and change the way it discloses information to the buyer. It is also unclear where the trigger is that will unleash the might of the CFPB, or what might constitute a good faith effort to comply with the regs.

At the same time, two-thirds of the MBA respondents said they are ready and do not expect problems.

Tim Anderson, director of eServices at DocMagic, a document and compliance vendor, said, “It is just typical of this industry to push back on anything that is new. They don’t adapt well, especially if it is technology, and then [there is] the mistrust of this agency.

He stated the problems will not come until late next year when the CFPB starts auditing and possibly imposes hefty fines for non-compliance, which could mount up at the rate of $1,000. per day. However, CFPB Director Cordray said at a Senate hearing the agency’s approach will be more corrective than punitive, and that federal regulators will issue a letter explaining their policy.

CFPB spokesman Samuel Gilford reiterated the agency is seeking good-faith compliance. ##

(Image credit: housingwire)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Former Head of Manufactured Housing at HUD Urges Passage of S. 682

August 7th, 2015 Comments off

william_matchneer__bradley_arant_boult_cummings__housingwire__creditWilliam Matchneer, who once served as head of the Manufactured Housing Program at the Department of Housing and Urban Development (HUD), and from 2011 to 2014 with the Consumer Financial Protection Bureau (CFPB), recounts how implementation of the Dodd-Frank Act directives for High-Cost Mortgages under the Home Ownership and Equity Protections Act (HOEPA) negatively impacts the sale of MH under $20,000.

Now with Bradley Arant Boult Cummings LLP, Matchneer helped write the implementing regulations for the Dodd-Frank appraisal provisions, while other CFPB attorneys wrote the Dodd-Frank lending provisions to establish HOEPA thresholds.

Writing in jdsupra, he states, “Under current law, manufactured housing chattel loans are covered by HOEPA if the annual percentage rate (APR) exceeds the average prime offer rate (APOR) by more than 8.5% for loans of less than $50,000. However, given all the additional requirements for points and fees that come with the new HOEPA rules, chattel loans below $20,000 are simply not economical. As a result, most if not all lenders have simply stopped making these loans.

This hurts some of the most seriously disadvantaged, those with homes valued under $20,000, the very ones the CFPB says it is designed to protect, forcing them to accept cash offers in many case well below market value.

The Dodd-Frank statute does offer to the CFPB the authority to exempt certain loans from HOEPA coverage, but so far CFPB czar Richard Cordray has been unwilling to raise the thresholds.

H.R. 650, the bipartisan Preserving Access to Manufactured Housing Act did pass the House of Representatives in April, and it amends the thresholds in section 103 of the Truth in Lending Act (15 U.S.C. 1602) to APOR plus 10% for transactions under $75,000. This would protect the estimated 1.7 million manufactured homes with a loan balance below $20,000. It still manages to maintain consumer protections from predatory lending practices in Dodd-Frank. The companion bill in the Senate, S. 682, is currently in the hands of the Senate Banking Committee.

These bills would also exclude a retailer of manufactured homes or its employees from being classified as a loan originator and therefore subject to SAFE Act licensing and NMLS registration. Under current Dodd Frank/CFPB regulations, retailers cannot offer one iota of information to prospective consumers about MH financing.

For the MHLivingNews interview with Matchneer, please click here.##

Senate Bill 1711 Provides for TRID Hold-harmless Period

July 16th, 2015 Comments off

mortgage app   texaslendingtoday creditFollowing a story MHProNews posted July 8, 2015 regarding the Consumer Financial Protection Bureau’s (CFPB) postponement of implementing mortgage loan transactions under the Real Estate Settlement Procedures Act (RESPA) and Truth-in-Lending Act (TILA), or TRID, Senate bill S. 1711 would provide temporary safe harbor from that enforcement.

According to nationalmortgageprofessional, Senators Joe Donnelly (D-IN) and Tim Scott (R-SC) have sponsored the measure, much to the delight of housing and mortgage industry trade groups. “We salute the Senate sponsors of S. 1711….for taking the lead in providing for a reasonable amount of time for consumers, mortgage professionals, and other industry participants to test drive these new regulations,” said John Councilman, president of NAMB (The Association of Mortgage Professionals).

He adds, “It’s pretty clear that these very complex set of rules will cause some amount of distress for homebuyers and, while industry participants have been working overtime to be in compliance, a period of time for trial and error seems only reasonable.

Numerous professional organizations dealing with real estate, mortgages and appraisers also support the bill. A companion measure in the House, HR 2213, has received similar industry-wide support. ##

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matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

CFPB Issues Exam Procedures

June 5th, 2013 Comments off

According to mortgagenewsdaily, the Consumer Financial Protection Bureau (CFPB) has issued updates regarding what examiners will be checking lenders for when the new regulations go into effect Jan. 2014. Noting these are the first of what is anticipated will be numerous updates, the examination procedures concern the Truth in Lending Act (TILA) and the Equal Credit Opportunity Act (ECOA). “The CFPB recognizes that the easier we make it for financial institutions and mortgage companies to follow the new regulations, the better off consumers will be,” says CFPB Director Richard Cordray. “By releasing details of what our examiners will be looking for well in advance of the effective date of most of the rules, we are giving industry more time to adjust.” As MHProNews understands, the updates deal with compensation, appraisals, escrow accounts and qualifications for loan originators. The CFPB is coordinating its efforts with other federal government regulators that oversee financial institutions and mortgage companies to ensure there is a shared understanding of the rules.

(Image credit: HousingWire)

MH Excluded from Definition of Higher-Risk Mortgage Loans

August 16th, 2012 1 comment

The Truth in Lending Act (TILA) was set up to promote informed use of consumer credit and increase transparency by requiring disclosures about its costs and terms. A joint group of federal agencies that oversee truth-in-lending concerns, including the Consumer Financial Protection Bureau (CFPB), are proposing to amend Regulation Z, which implements TILA. The revisions include a provision added as part of Dodd-Frank that excludes loans for manufactured homes in communities from the definition of “higher-risk mortgage loan.” The Indiana Manufactured Housing Association (IMHA) reports some industry lenders say they would not be able to make more than half of the loans they currently make on manufactured homes without this exclusion. MHProNews has learned if the loan is secured by the home and the land on which it sits (italics added), it could be considered a “higher risk mortgage”. Public comment on the proposal will be open until Oct. 15, 2012. See pp. 14, 38, and 44 of the attached link to the entire document forwarded to MHProNews by D.J Pendleton of the Texas Manufactured Housing Association.

(Photo credit: MHProNews)

CFPB’s Cordray Attempts to Allay Congressional Fears

January 25th, 2012 Comments off

HousingWire tells Consumer Financial Protection Bureau (CFPB) Director Richard Cordray, appearing before a House subcommittee, says he is examining the exclusion of smaller banks from regulations targeted at larger firms responsible for the housing crisis. He says the bureau will analyze how the rules might impact banks with assets below $10 billion. Responding to lawmakers ongoing concerns that the CFPB might be prone to overstep its boundaries, Cordray reiterated the oversight provisions that apply to CFPB that do not apply to any other agency. He says the qualified mortgage requirements will be proposed soon, and the rule that conjoins the Truth-In-Lending-Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) will be released before summer. He also says the CFPB will continue to assume its regulatory role over the entire mortgage process as well as non-bank lenders.

(Photo credit: bankrate)

Federal Reserve to Withhold Final Regulation Z Rulemakings

February 5th, 2011 Comments off
On February 1, the Federal Reserve Board announced it would not finalize pending rulemakings under Regulation Z, which implements the Truth in Lending Act (TILA), prior to the transfer of authority to the Bureau of Consumer Financial Protection (CFPB). The CFPB is slated to assume jurisdiction over TILA, as outlined in the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203), on July 21, 2011. TILA rules currently pending before the Federal Reserve Board include consumer disclosures for closed-end mortgage loans and home equity lines of credit (Docket Nos. R-1366 and R-1367), as well as rules changing disclosures for consumers’ rights to rescind certain loans.