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From Banking and Finance Law Daily, November 11, 2013

CFPB guides lenders on HOEPA homeownership counseling as mortgage compliance date looms

By Katalina M. Bianco, J.D.

The Consumer Financial Protection Bureau is offering guidance related to the bureau’s 2013 final rule on the Home Ownership and Equity Protection Act (HOEPA). The rule implemented a requirement of the Dodd-Frank Act that lenders provide consumers with a list of homeownership counseling organizations. To assist lenders in developing the list, the bureau has issued an interpretive rule and a bulletin. In addition, the CFPB launched a tool intended to help consumers find local housing counseling agencies to answer questions or concerns they may have. The tool includes a HUD list of approved national and regional intermediaries. The guidance and tool are in anticipation of the January 2014 compliance date for the bureau’s 2013 mortgage rules.

Interpretive rule. The CFPB said in its statement that lenders that choose to build their own lists can refer to the bureau’s interpretive rule for instructions. The rule describes data instructions for lenders to use in complying with the requirement under the High-Cost Mortgage and Homeownership Counseling amendments to the Truth in Lending Act and its implementing regulation, Regulation Z, and Homeownership Counseling Amendments to the Real Estate Settlement Procedures Act (RESPA Homeownership Counseling Amendments) final rule to provide a homeownership counseling list using data made available by the bureau or the Department of Housing and Urban Development (HUD).

Section 1024.20(a)(1) of Regulation X, RESPA’s implementing regulation, requires lenders to provide a written list of homeownership counseling organizations. Consistent with this section, lenders comply with this requirement when they provide a list of 10 HUD-approved housing counseling agencies. The tool introduced by the CFPB will generate a list of 10 HUD-approved housing counseling agencies.

The rule takes effect Jan. 10, 2014.

Bulletin. Adding to the interpretive rule, the CFPB issued a bulletin providing guidance on homeownership counseling list requirements. The bulletin clarifies that a lender may fulfill the requirement in one of two ways: the lender may obtain the lists through the bureau’s website at; or lenders may generate lists by independently using the same HUD data that the bureau uses on HUD-approved counseling agencies, in accordance with the bureau’s list instructions. The CFPB published an interpretative rule on Nov. 8, 2013, which provides the list instructions and clarifies how lenders may generate their own lists.

Consumer tool. The new consumer tool launched by the CFPB is intended to provide guidance to consumers that are considering mortgage loans. Using a search box on the bureau’s website, consumers can find a housing counselor in their geographic area. The counseling agencies on the list provided by the bureau are approved by HUD and can offer independent advice about whether a particular set of mortgage loan terms is a good fit based on the consumer’s objectives and circumstances, often at little or no cost to the consumer.

Discussing the consumer tool developed by the bureau, CFPB Director Richard Cordray said, “Consumers need and deserve the best guidance when making the decision to purchase a home,” said CFPB Director Richard Cordray. “Buying a home may easily be the largest investment a consumer makes, and we want to make it easier for them to find a housing counselor that is a good fit for them.”

According to the CFPB, the consumer tool can:

  • show consumers their closest options;
  • provide contact information for HUD-approved counselors;
  • display services offered by counseling agencies; and
  • list the languages offered.

MainStory: TopStory CFPB CommunityDevelopment DoddFrankAct Loans Mortgages

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